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Notice

Certain Tissue Paper Products and Certain Crepe Paper Products From the People's Republic of China: Notice of Preliminary Determinations of Sales at Less Than Fair Value, Affirmative Preliminary Determination of Critical Circumstances and Postponement of Final Determination for Certain Tissue Paper Products

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Start Preamble

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

DATES:

Effective: September 21, 2004.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Kit Rudd or John Conniff, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-1385, or 482-1009, respectively.

Preliminary Determination

We preliminarily determine that certain tissue paper products and certain crepe paper products 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 Tariff Act of 1930, as amended (“the Act”). The estimated margins of sales at LTFV are shown in the “Suspension of Liquidation” section of this notice.

Interested parties are invited to comment on these preliminary determinations. We will make our final determinations no later than 75 days after the date of publication of these preliminary determinations for certain crepe paper products and 135 days after the date of publication of this preliminary determination for certain tissue paper products.

Case History

On February 17, 2004, Seaman Paper Company of Massachusetts, Inc., American Crepe Corporation, Eagle Tissue LLC, Garlock Printing & Converting, Inc., and the Paper, Allied-Industrial, Chemical and Energy Workers International Union AFL-CIO, CLC (hereafter known as, “Petitioners”) filed, in proper form, a petition on imports of certain tissue paper products and certain crepe paper products from the PRC. On February 18, 2004, February 20, 2004, February 24, 2004, and February 27, 2004, the Department requested Petitioners to clarify certain aspects of the Petition. On February 23, 2004, February 24, 2004, February 27, 2004, and March 3, 2004, Petitioners submitted responses to the Department's requests for clarification. On March 15, 2004, the Department published the initiation of these antidumping duty investigations (see Notice of Initiation of Antidumping Duty Investigations: Certain Tissue Paper Products and Certain Crepe Paper Products from the People's Republic of China, 69 FR 12128) (“Initiation Notice”).

Respondent Selection

On March 17, 2004, the Department sent a letter to potential respondents requesting the quantity and value of all exports to the United States. On March 17, 2004, the Department notified the Commercial Secretary at the Embassy of the PRC of the initiation of these antidumping duty investigations and its request for quantity and value information with regard to exports to the United States. On March 25, 2004, Cleo Inc., Crystal Products Inc., and Marvel Products, Inc., importers of tissue paper products and China National Aero-Technology Import & Export Xiamen Corporation (“China National”), an exporter of tissue paper recommended the Department to collect separate quantity and value data for retail reams of tissue paper and for all other exports of tissue paper for the purposes of selecting mandatory respondents in the tissue paper investigation. On March 30, 2004, Petitioners urged the Department to reject the importers' and China National's request to collect separate quantity and value data on the basis that the Department considers all forms of tissue paper as one class or kind of merchandise.

On March 30, 2004, we received tissue paper quantity and value responses from the following companies: Standard Quality Corp., Fujian Xinjifu Enterprises, Co., Ltd. (“Fujian Xinjifu Enterprises”), Qingdao Start Printed Page 56408Wenlong Co., Ltd. (“Qingdao Wenlong”), Qingdao Kyung—E Gift Co., Ltd., Hunan Winco Light Industry Products Import & Export Co., Ltd. (“Hunan Winco Light”) , China National, Fuzhou Light Industry Import & Export Co., Ltd. (“Fuzhou Light”), Fujian Provincial Shaowu City Huaguang Special Co., Ltd. (“Huanguang”), Fujian Nanping Investment & Enterprise Co. (“Fujian Nanping”), Guilin Qifeng Paper Co. Ltd. (“Guilin”), Ningbo Feihong Stationary Limited Company (“Ningbo”), Everlasting Business & Industry Corporation, Ltd. (“Everlasting Business and Industry”), Anhui Light Industrial Import & Export Co., Ltd. (“Anhui Light”), Fujian Naoshan Paper Industry Group Co., Ltd. (“Fujian Naoshan”), Samsam Production Limited & Guangzhou Baxi Printing Products Limited (“Samsam”), Max Fortune Industrial Limited, and Fuzhou Magicpro Gifts Co., Ltd. (“Magicpro”).

On March 30, 2003, we received crepe paper quantity and value responses from the following companies: Huaguang, Fuzhou Light, Everlasting Business and Industry, Fujian Nanping, Fujian Xinjifu Enterprises, and Ningbo Spring.

On April 5, 2004, China National re-filed its quantity and value data noting that the company had found two errors in its quantity and value figures. On April 7, 2004, an interested party, who wished not to have his name disclosed to the public, filed a declaration with the Department in response to the quantity and value data filed by the Chinese exporters/producers. The interested party believed that there were instances of overstated export volumes, multiple companies reporting exports made by only one company, products not covered by these investigations, and the inclusion of sales to third countries. In response to this information, on April 12, 2004, the Department requested from parties who filed quantity and value responses to confirm their initially reported figures. All parties that initially filed quantity and value responses replied to the Department's request.

On April 27, 2004, the Department selected Fujian Naoshan and China National as mandatory tissue paper respondents and Huaguang and Fuzhou Light as mandatory crepe paper respondents. See Memorandum To Joseph A. Spetrini, Deputy Assistant Secretary for Import Administration, Group III, From, Edward C. Yang, Office Director, Selection of Respondents for the Antidumping Investigation of Certain Tissue Paper Products from the PRC, dated April 27, 2004 (“Tissue Respondent Selection Memo”) and Memorandum To Joseph A. Spetrini, Deputy Assistant Secretary for Import Administration, Group III, From, Edward C. Yang, Office Director, Selection of Respondents for the Antidumping Investigation of Certain Crepe Paper Products from the PRC, dated April 27, 2004 (“Crepe Respondent Selection Memo”). On April 28, 2004, the Department issued Sections A, C, and D of the antidumping questionnaire to the mandatory respondents and to the Commercial Secretary at the Embassy of the PRC. On April 29, 2004, Magicpro requested that the Department reconsider its limit of two mandatory respondents in each investigation and include Magicpro as a third mandatory respondent. Additionally, Magicpro requested that it be considered a voluntary respondent in both investigations. Magicpro withdrew its request to be a voluntary respondent in the tissue paper investigation on June 25, 2004.

Physical Characteristics

On April 5, 2004, the Department sent letters to all potential respondents who filed quantity and value responses requesting comments on the appropriate physical characteristics of tissue and crepe paper products. On April 16, 2004, the Department received comments from Petitioners, Fujian Naoshan, China National, Huaguang, Fuzhou Light, and Guilin. On May 10, 2004, the Department invited interested parties to comment on draft physical characteristics. On May 17, 2004, the Department received comments from Petitioners and China National. On May 24, 2004, the Department issued the final physical characteristics to the mandatory respondents.

Mandatory Respondents

Fujian Naoshan submitted its responses to the Department's standard questionnaire on May 25, 2004 and June 18, 2004. Petitioners submitted comments on Fujian Naoshan's A, C, and D responses on June 3, 2004, and July 2, 2004. The Department issued supplemental questionnaires to Fujian Naoshan on June 21, 2004, and July 12, 2004. Fujian Naoshan filed their responses to the Department's supplemental questionnaires on July 2, 2004, August 9, 2004, and August 11, 2004. Petitioners filed additional comments on Fujian Naoshan's supplemental responses on August 18, 2004.

China National submitted its responses to the Department's standard questionnaire on May 28, 2004 and June 28, 2004. Petitioners submitted comments on China National's A, C, and D responses on June 4, 2004, July 9, 2004, July 20, 2004, and August 13, 2004. The Department issued supplemental questionnaires to China National on June 21, 2004, July 19, 2004, August 6, 2004, and August 27, 2004. China National filed their responses to the Department's supplemental questionnaires on July 12, 2004, August 9, 2004, August 13, 2004, and September 3, 2004. Petitioners filed comments on China National's supplemental responses on August 13, 2004, and August 18, 2004. On August 19, 2004, China National filed rebuttal comments to Petitioners' August 13, 2004, comments. On August 20, 2004, China National filed rebuttal comments to Petitioners' August 18, 2004, comments.

Huaguang filed its Section A response on May 27, 2004. On June 3, 2004, the Department issued a supplemental questionnaire to Huaguang requesting the company to clarify whether it had direct exports to the United States. On June 7, 2004, Huaguang filed its response stating that the company did not have any direct exports to the United States. On June 23, 2004, the Department de-selected Huaguang as a mandatory respondent because Huaguang is not an exporter of the subject merchandise. The Department selected Magicpro as a mandatory respondent (see Memorandum To Jeff May, From Edward Yang, titled De-selection of Mandatory Respondent, Huaguang and Selection of Magicpro In the Antidumping Investigation of Certain Crepe Paper Products from the PRC.) Additionally, the Department noted that it will not consider further whether a separate rate is appropriate for Huaguang, as separate rates in an investigation are applied only to exporters during the period of investigation.

Magicpro submitted its responses to the Department's standard questionnaire on May 19, 2004, June 25, 2004, and June 28, 2004. Petitioners submitted comments on Magicpro's A, C, and D responses on June 29, 2004, and July 7, 2004. The Department issued supplemental questionnaires to Magicpro on July 1, 2004, and July 19, 2004. Magicpro filed its supplemental section A responses on July 14, 2004. On August 2, 2004, Magicpro did not file its response to the Department's C and D supplemental questionnaire. On August 10, 2004, Magicpro filed a letter with the Department stating that it no longer wishes to participate in the crepe paper investigation.

Fuzhou Light submitted its responses to the Department's standard Start Printed Page 56409questionnaire on May 28, 2004 and June 18, 2004. Petitioners submitted comments on Fuzhou Light's A, C, and D responses on June 4, 2004, and June 29, 2004. The Department issued supplemental questionnaires to Fuzhou Light on June 22, 2004, and July 12, 2004. Fuzhou Light filed its response to the Department's section A supplemental questionnaire on July 13, 2004. On August 2, 2004, Fuzhou Light filed a letter with the Department stating that it is no longer participating in the crepe paper investigation. Petitioners filed comments regarding the crepe paper investigation on August 18, 2004.

On July 22, 2004, the Department issued a letter to all mandatory respondents clarifying the units of measure reporting requirements for the factors of production (“FOP”). On July 29, 2004, the Department issued a letter to Fujian Naoshan and Fuzhou Light requesting clarification on the respondents' selection of date of sale.

Critical Circumstances

On June 18, 2004, Petitioners alleged that critical circumstances exist with respect to imports of tissue paper and crepe paper products. On June 30, 2004, the Department requested that Fujian Naoshan, China National, Magicpro, and Fuzhou Light submit monthly shipment data for 2001, 2002, 2003 and January through June 2004. Fujian Naoshan submitted its monthly shipment data on July 15, 2004, and amended data on July 16, 2004. China National submitted monthly shipment data on July 20, 2004 and amended data on July 26, 2004, and August 13, 2004. Magicpro submitted its monthly shipment data on July 20, 2004. Fuzhou Light submitted its monthly shipment data on July 23, 2004.

Petitioners submitted comments on the respondents' critical circumstances data on the following dates: July 20, 2004 (Fujian Naoshan and China National), July 23, 2004 (Magicpro), and July 26, 2004 (China National), and August 6, 2004 (Fujian Naoshan). On August 2, 2004, the Department requested that China National segregate subject and non-subject merchandise in its monthly shipment data for 2004 to conform to its reporting methodology for 2003. On August 6, 2004, the Department asked China National to report its critical circumstances data on a per-kilogram basis rather than a per-package basis. China National submitted its critical circumstances data incorporating these changes on August 13, 2004. See Critical Circumstances section of this notice.

Surrogate Country and Surrogate Values

On June 9, 2004, the Department sent a letter to all interested parties requesting comments on the appropriate surrogate country and publicly available information to value FOPs. On June 16, 2004, Petitioners filed comments concerning the selection of the appropriate surrogate country in these investigations. On July 28, 2004, Petitioners, Magicpro, and China National filed publicly available information to value FOPs. On August 2, 2004, the Department selected India as the appropriate surrogate country for the purposes of these investigations. See Memorandum To The File, Through Edward C. Yang, Office Director, titled Antidumping Duty Investigations on Certain Tissue Paper Products and Certain Crepe Paper Products from the People's Republic of China: Selection of a Surrogate Country. On August 9, 2004, Petitioners filed additional comments on publicly available factor value information. On August 18, 2003, China National filed additional comments on publicly available factor value information.

Section A Respondents

On May 19, 2004, the Department received Section A responses from Fujian Xinjifu Enterprises (tissue and crepe), Anhui Light (tissue), B.A. Marketing and Industrial Co., Ltd. (“BA Marketing”) (tissue), Ningbo (tissue and crepe), Hunan Winco Light (tissue), and Magicpro (tissue), hereafter known as “Section A Respondents”. On May 26, 2004, the Department received Section A responses from Qingdao Wenlong (tissue), Max Fortune (tissue), and Samsam (tissue). On May 27, 2004, the Department received Section A responses from Everlasting Business and Industry (tissue and crepe) and Guilin (tissue and crepe). On May 28, 2004, the Department received Section A responses from Fujian Nanping (tissue and crepe) and Fuzhou Light (tissue).

On June 25, 2004, Magicpro withdrew its request to be considered as a voluntary respondent in the tissue paper investigation. On July 15, 2004, the Department asked Guilin to re-file its responses because the Department noted the tissue paper and crepe paper responses were identical in form and substance. On July 16, 2004, the Department issued supplemental Section A questionnaires to all companies that filed a Section A response with the Department except Guilin. On July 19, 2004, Guilin stated that it only sold tissue paper to the United States and therefore would like to be considered for only a tissue paper separate rate. Ningbo filed its supplemental Section A responses on July 28, 2004 (tissue), and on August 11, 2004 (crepe). On July 30, 2004, the Department received supplemental Section A responses from Fujian Xinjifu Enterprises and Hunan Winco Light. On August 4, 2004, the Department received supplemental Section A responses from Qingdao Wenlong, Everlasting Business & Industry, Magicpro, BA Marketing, Max Fortune, and Samsam. On August 6, 2004, the Department received supplemental Section A responses from Fuzhou Light and Fujian Nanping.

On July 29, 2004, Anhui Light filed its Supplemental Section A response. On August 4, 2004, the Department requested that Anhui Light re-file their supplemental Section A response due to improper filing. The Department did not receive a supplemental Section A response following the Department's August 4, 2004 letter. On August 10, 2004, the Department received a supplemental Section A response from Guilin.

Postponement of Preliminary Determination

On July 1, 2004, Petitioners requested that the Department extend the deadline for issuance of the preliminary determinations in these investigations by 30 days, or until August 25 2004, to allow the Department to fully analyze and consider the information and arguments presented by parties in these investigations. On July 12, 2004, the Department postponed the preliminary determination by 30 days, to August 25, 2004 (see Certain Tissue Paper Products and Certain Crepe Paper Products From the People's Republic of China: Postponement of the Preliminary Determinations of the Antidumping Duty Investigations 69 FR 41785). On August 25, 2004, the Department postponed the preliminary determination by an additional 20 days to no later than September 14, 2004. See Certain Tissue Paper Products and Certain Crepe Paper Products from the People's Republic of China: Postponement of the Preliminary Determination of the Antidumping duty Investigations, 69 FR 53414 (August 31, 2004). On September 10, 2004, Petitioners requested that the Department resort to total adverse facts available because China national failed to report complete and accurate company-specific FOP data.

Postponement of Final Determination

Section 735(a) of the Act provides that a final determination may be postponed until no later than 135 days after the Start Printed Page 56410date 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 or, in the event of a negative preliminary determination, a request for such postponement is made by the Petitioners. Section 351.210(e)(2) of the Department's regulations requires that requests by respondents for postponement of a final determination be accompanied by a request for an extension of the provisional measures from a four-month period to not more than six months.

On September 14, 2004, China National requested that, in the event of an affirmative preliminary determination in the tissue paper investigation, the Department postpone its final determination for tissue paper products until 135 days after the publication of the preliminary determination. All requests included a request to extend the provisional measures to not more than six months after the publication of the preliminary determination. Accordingly, because we have made an affirmative preliminary determination and the requesting parties account for a significant proportion of the exports of the subject merchandise, we have postponed the final determination for tissue paper products until no later than 135 days after the date of publication of the preliminary determination and are extending the provisional measures accordingly as requested by China National.

We have received no such requests from any of the respondents in the investigation of certain crepe paper products at this time, and thus the investigation will proceed as scheduled.

Period of Investigation

The POI is July 1, 2003, through December 31, 2003. This period corresponds to the two most recent fiscal quarters prior to the month of the filing of the Petition (February 17, 2004). See 19 CFR 351.204(b)(1).

Scope of Investigation

Tissue Paper Products

The tissue paper products subject to investigation are cut-to-length sheets of tissue paper having a basis weight not exceeding 29 grams per square meter. Tissue paper products subject to this investigation may or may not be bleached, dye-colored, surface-colored, glazed, surface decorated or printed, sequined, crinkled, embossed, and/or die cut. The tissue paper subject to this investigation is in the form of cut-to-length sheets of tissue paper with a width equal to or greater than one-half (0.5) inch. Subject tissue paper may be flat or folded, and may be packaged by banding or wrapping with paper or film, by placing in plastic or film bags, and/or by placing in boxes for distribution and use by the ultimate consumer. Packages of tissue paper subject to this investigation may consist solely of tissue paper of one color and/or style, or may contain multiple colors and/or styles.

The merchandise subject to this investigation does not have specific classification numbers assigned to them under the Harmonized Tariff Schedule of the United States (HTSUS). Subject merchandise may be under one or more of several different subheadings, including: 4802.30; 4802.54; 4802.61; 4802.62; 4802.69; 4804.39; 4806.40; 4808.30; 4808.90; 4811.90; 4823.90; 4820.50.00; 4802.90.00; 4805.91.90; 9505.90.40. The tariff classifications are provided for convenience and U.S. Customs and Border Protection (“CBP”) purposes; however, the written description of the scope of these investigations is dispositive.

Excluded from the scope of this investigation are the following tissue paper products: (1) Tissue paper products that are coated in wax, paraffin, or polymers, of a kind used in floral and food service applications; (2) tissue paper products that have been perforated, embossed, or die-cut to the shape of a toilet seat, i.e., disposable sanitary covers for toilet seats; (3) toilet or facial tissue stock, towel or napkin stock, paper of a kind used for household or sanitary purposes, cellulose wadding, and webs of cellulose fibers (HTS 4803.00.20.00 and 4803.00.40.00).

Crepe Paper Products

Crepe paper products subject to this investigation have a basis weight not exceeding 29 grams per square meter prior to being creped and, if appropriate, flame-proofed. Crepe paper has a finely wrinkled surface texture and typically but not exclusively is treated to be flame-retardant. Crepe paper is typically but not exclusively produced as streamers in roll form and packaged in plastic bags. Crepe paper may or may not be bleached, dye-colored, surface-colored, surface decorated or printed, glazed, sequined, embossed, die-cut, and/or flame-retardant. Subject crepe paper may be rolled, flat or folded, and may be packaged by banding or wrapping with paper, by placing in plastic bags, and/or by placing in boxes for distribution and use by the ultimate consumer. Packages of crepe paper subject to this investigation may consist solely of crepe paper of one color and/or style, or may contain multiple colors and/or styles.

The merchandise subject to this investigation does not have specific classification numbers assigned to them under the HTSUS. Subject merchandise may be under one or more of several different subheadings, including: 4802.30; 4802.54; 4802.61; 4802.62; 4802.69; 4804.39; 4806.40; 4808.30; 4808.90; 4811.90; 4818.90; 4823.90; 9505.90.40. The tariff classifications are provided for convenience and customs purposes; however, the written description of the scope of these investigations is dispositive.

Facts Available

Section 776(a)(2) of the Act provides that the Department shall apply “facts otherwise available” if, inter alia, an interested party or any other person (A) withholds information that has been requested; (B) fails to provide information within the deadlines established, or in the form or manner requested by the Department, subject to subsections (c)(1) and (e) of section 782; (C) significantly impedes a proceeding; or (D) provides information that cannot be verified as provided by section 782(I) of the Act. Section 776(b) of the Act further provides that an adverse inference may be used when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information.

Where the Department determines that a response to a request for information does not comply with the request, section 782(d) of the Act provides that the Department will so inform the party submitting the response and will, to the extent practicable, provide that party the opportunity to remedy or explain the deficiency. If the party fails to remedy the deficiency within the applicable time limits, the Department may, subject to section 782(e) of the Act, disregard all or part of the original and subsequent responses, as appropriate. Section 782(e) of the Act provides that the Department “shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all applicable requirements established by the administering authority” if the information is timely, can be verified, and is not so incomplete that it cannot be used, and if the interested party acted to the best of its ability in providing the information. Where all of these conditions are met, the statute requires the Department to use the information, Start Printed Page 56411if it can do so without undue difficulties.

For the reasons discussed below, we determine that the use of partial adverse facts available (“AFA”) is appropriate for the preliminary determination with respect to China National in the tissue paper investigation and total AFA is appropriate for the preliminary determination with respect to Magicpro and Fuzhou Light in the crepe paper investigation.

Tissue Paper Investigation

China National's Missing Factors of Production

In the course of this investigation, China National stated that its affiliated converters of subject merchandise, Putian City Hongye Paper Products, Co. Ltd. (“Hongye”), Putian City Xingan Paper & Plastic Co., Ltd. (“Xingan”), and Putian City Chengxiang Qu Li Feng Paper Products Ltd. (“Lifeng”) receive either jumbo rolls of tissue paper or sheets of tissue paper from five suppliers, both affiliated and unaffiliated. In China National's original Section C and D filing, the company provided FOPs from Hongye and Guilin. The company stated that it attempted to obtain FOPs from Fujian Naoshan, however, Fujian Naoshan, “a competitor {and mandatory respondent in this investigation}, declined to provide data directly to China National and instead has indicated that it will submit Section D data directly to the Department in the context of its own Section D response.” See Response to the Questionnaire, Section D dated June 28, 2004 (“Supplemental C and D”). Additionally, China National did not provide FOPs for merchandise received from Fuzhou Hunan Paper Products Co., Ltd. ( “Hunan”) and Fuzhou Bonded Zone Jianye Packing Products Co., Ltd. (“Jianye”) in its original Section C and D response.

In the Department's supplemental questionnaire, dated July 19, 2004, the Department requested that China National obtain missing FOPs from Hunan, Jianye, and Fujian Naoshan. The Department also requested that if China National was unable to obtain FOPs from Hunan, Jianye, and Fujian Naoshan that it provide documentary evidence showing that these suppliers are unwilling to supply their FOPs. In China National's supplemental C and D response dated August 9, 2004, China National stated that Fujian Naoshan, Hunan, and Jianye refused to supply their FOPs to China National. China National provided correspondences between itself and its suppliers showing China National's requests for FOP data and Fujian Naoshan's, Hunan's, and Jianye's responses. In lieu of the FOPs from Fujian Naoshan, Hunan, and Jianye, China National stated that it has calculated “applied percentages” to “merge small amounts supplied by unaffiliated suppliers into other amounts supplied in order to avoid fragmentation of calculations.” See Supplemental C and D at page 21. China National stated that “given the small amounts involved and the generally homogeneous nature of the product, we believe this method is not distortive and will facilitate the Department's calculations.” See Supplemental C and D at 21. In place of the paper making factors from Fujian Naoshan, China National has reported its own usage rates for jumbo rolls and cut-to-length tissue paper purchased from Fujian Naoshan. China National stated that “allocations between paper-making, jumbo rolls, and cut-to-length sheets were made on the basis of usage by each affiliated producer of white jumbo roll, colored jumbo roll, white cut-to-length sheets, colored cut-to-length sheets, and printed sheets.” See Second Supplemental C and D Response at 6. After careful consideration, the Department finds that China National appropriately allocated usage rates among paper making, jumbo rolls, and cut-to-length tissue paper for production of tissue paper.

In accordance with section 776(b) of the Act, if the Department finds that “an interested party failed to cooperate by not acting to the best of its ability to comply with a request for information,” an adverse inference may be used in determining the facts otherwise available. Because Fujian Naoshan, Jianye, and Hunan, which, as producers of subject merchandise, are interested parties to China National's segment of this proceeding, did not act to the best of their ability by failing to provide the FOP information requested by the Department, we preliminary determine that it is appropriate to make an adverse inference pursuant to section 776(b) of the Act with respect to the cut-to-length tissue paper purchased by China National from Fujian Naoshan, Jianye, and Hunan. As AFA for the missing FOPs for cut-to-length tissue paper produced by Fujian Naoshan, we have assigned a surrogate value of the Petition normal value in U.S. dollars for 100 units of 7 x 20, 20-count, white fold tissue paper converted to U.S. dollars per kilogram. See Petition at Exhibit 30. As facts available for the FOPs not provided by Jianye and Hunan, we calculated the percentage of missing factors by summing the quantity of cut-to-length tissue paper purchased by China National from Jianye and Hunan and dividing this quantity by the total quantity of cut-to-length paper purchases to arrive at a missing FOP factor. We increased China National's usage rate for Fujian Naoshan cut-to-length tissue paper with this calculated missing FOP factor. See China National Analysis Memo for calculation and Supplemental C and D Response at Exhibit 8.

China National's Inks and Dyes

In China National's Section D response submitted to the Department on June 28, 2004, the company did not report its ink and dye usage on a CONNUM-specific basis. Instead, China National provided worksheets showing the calculation of ink and dye usage based on the color or pattern produced. In the FOP databases, China National reported the sum of the several dye usage rates to make a single color and the sum of various ink usage rates to produce a particular pattern. Reporting on the sum of dye and ink usage does not permit the Department to assign surrogate values to individual dyes and individual inks. Therefore, in the supplemental questionnaire dated September 3, 2004, the Department requested that China National revise its ink and dye databases to “calculate actual dye and ink usage on a CONNUM specific basis rather than a pattern or color specific basis.” In China National's second C and D response, the company stated that it had provided links between the ink and dye databases and the FOP databases to allocate ink and dye usage on a CONNUM-specific basis. However, the Department finds that the links provided in China National's September 3, 2004 data filing do not permit a CONNUM-specific allocation for dyes and inks.

In accordance with section 776(a)(2)(B) of the Act the Department is assigning a facts available usage rate to China National because it failed to provide the data in the manner the Department requested, which was to revise its ink and dye databases so the Department would be able to calculate their usage on a CONNUM rather than color-specific basis. Furthermore, in accordance with section 776(b) of the Act, if the Department finds that “an interested party failed to cooperate by not acting to the best of its ability to comply with a request for information,” an adverse inference may be used in determining the facts otherwise available. Because China National did not act to the best of its ability by not attempting to provide adequate linkages between its ink and dye databases and Start Printed Page 56412the FOP databases to allocate dyes and inks on a CONNUM-specific basis, we preliminary determine that it is appropriate to make an adverse inference pursuant to section 776(b) of the Act with respect to all China National entities usage rates of inks and dyes. The Department has selected the highest surrogate value for dye and ink from Indian Import Statistics and applied this value to the sum of dyes and the sum of inks, respectively, reported in the company's FOP databases.

Crepe Paper Investigation

Section 776(a)(2) of the Act provides that, if an interested party withholds information requested by the Department, fails to provide such information by the deadline or in the form or manner requested, significantly impedes a proceeding, or provides information which cannot be verified, the Department shall use facts otherwise available in reaching the applicable determination. As noted above, both Magicpro and Fuzhou Light informed the Department in the course of this investigation that they no longer wish to participate in the crepe paper investigation. As such Fuzhou Light and Magicpro failed to demonstrate entitlement to a separate rate and therefore, we preliminarily determined that the PRC-wide rate should apply to them. See, e.g. Notice of Final Determination of Sales at Less Than Fair Value: Polyethylene Retail Carrier Bags from the People's Republic of China, 69 FR 34125, 34127 (June 18, 2004).

Non-Market Economy Country

For purposes of initiation, the Petitioners submitted LTFV analyses for the PRC as a non-market economy. See Initiation Notice. In every case conducted by the Department involving the PRC, the PRC has been treated as a non-market economy (“NME”) country. In accordance with section 771(18)(C)(I) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. See also Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Preliminary Results 2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 7500 (February 14, 2003). When the Department is investigating 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 an economically comparable market economy that is a significant producer of comparable merchandise. The sources of individual factor prices are discussed under the “Factor Valuations” section, below.

Surrogate Country

When the Department is investigating imports from an NME country, section 773(c)(1) of the Act directs it to base normal value (“NV”), in most circumstances, on the NME producer's factors of production, valued in a surrogate market economy country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, in valuing the factors of production, 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 that of the NME country and are significant producers of comparable merchandise. The sources of the surrogate values we have used in this investigation are discussed under the NV section below.

The Department determined that India, Indonesia, Sri Lanka, the Philippines, Morocco, and Egypt are countries comparable to the PRC in terms of economic development. See Memorandum from Ron Lorentzen to James Doyle: Antidumping Duty Investigation of Certain Tissue Paper Products from the People's Republic of China: Request for a List of Surrogate Countries, dated June 9, 2004 and See Memorandum from Ron Lorentzen to James Doyle: Antidumping Duty Investigation of Certain Crepe Paper Products from the People's Republic of China: Request for a List of Surrogate Countries, dated June 9, 2004. We select an appropriate surrogate country based on the availability and reliability of data from the countries. See Department Policy Bulletin No. 04.1: Non-Market Economy Surrogate Country Selection Process (“Policy Bulletin”), dated March 1, 2004. In this case, we have found that India is a significant producer of comparable merchandise, certain tissue paper and crepe paper products, and there is a greater availability and reliability of data from India on such merchandise than there is from other potential surrogate countries. See Antidumping Duty Investigations on Certain Tissue Paper Products and Certain Crepe Paper Products from the People's Republic of China: Selection of a Surrogate Country, August 2, 2004 (“Surrogate Country Memo”). Since our issuance of the Surrogate Country Memo, we have not received comments from interested parties regarding this issue.

Separate Rates

In proceedings involving NME countries, the Department has a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty rate. It is the Department's policy to assign all exporters of merchandise subject to investigation in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. The two tissue paper mandatory respondents and the Section A tissue paper and crepe paper respondents have provided company-specific information and each has stated that it met the standards for the assignment of a separate rate.

We have considered whether each PRC company is eligible for a separate rate. The Department's separate-rate test is not concerned, in general, with macroeconomic/border-type controls, e.g., export licenses, quotas, and minimum export prices, particularly if these controls are imposed to prevent dumping. The test focuses, rather, on controls over the investment, pricing, and output decision-making process at the individual firm level. See Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final Determination of Sales at Less than Fair Value, 62 FR 61754, 61757 (November 19, 1997), and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 (November 17, 1997).

To establish whether a firm is sufficiently independent from government control of its export activities to be entitled to a separate rate, the Department analyzes each entity exporting the subject merchandise under a test arising from the Notice of Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (“Sparklers”), as amplified by Notice of 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”). In accordance with the separate-rates criteria, the Department assigns separate rates in NME cases only if respondents can demonstrate the absence of both de jure and de facto governmental control over export activities.

1. Absence of De Jure Control

The Department considers the following de jure criteria in determining Start Printed Page 56413whether an individual company may be granted a separate rate: (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) other formal measures by the government decentralizing control of companies. See Sparklers, 56 FR at 20589. Our analysis shows that the evidence on the record supports a preliminary finding of de jure absence of governmental control based on the following: (1) An absence of restrictive stipulations associated with the individual exporter's business and export licenses; (2) the applicable legislative enactments decentralizing control of the companies; and (3) any other formal measures by the government decentralizing control of companies. See Memorandum to Edward C. Yang, Senior Enforcement Coordinator, China/NME Group, Import Administration, from Hallie Zink, Case Analyst through James C. Doyle, Program Manager, Certain Tissue Paper Products and Certain Crepe Paper Products from the People's Republic of China: Separate Rates for Producers/Exporters that Submitted Questionnaire Responses, dated September 14, 2004 (“Separate Rates Memo”).

2. Absence of De Facto Control

Typically the Department considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) Whether the export prices are set by or are subject to the approval of a governmental agency; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995). The Department has determined that an analysis of de facto control is critical in determining whether respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates.

We determine that, for the mandatory tissue paper respondents and certain Section A tissue and crepe paper respondents, the evidence on the record supports a preliminary finding of de facto absence of governmental control based on record statements and supporting documentation showing the following: (1) Each exporter sets its own export prices independent of the government and without the approval of a government authority; (2) each exporter retains the proceeds from its sales and makes independent decisions regarding disposition of profits or financing of losses; (3) each exporter has the authority to negotiate and sign contracts and other agreements; and (4) each exporter has autonomy from the government regarding the selection of management.

Therefore, the evidence placed on the record of this investigation by the mandatory tissue paper respondents and certain Section A tissue and crepe paper respondents demonstrates an absence of government control, both in law and in fact, with respect to each of the exporter's exports of the merchandise under investigation, in accordance with the criteria identified in Sparklers and Silicon Carbide. As a result, for the purposes of this preliminary determination, we have granted separate, company-specific rates to the tissue paper mandatory respondents and certain Section A respondents which shipped certain tissue paper and certain crepe paper to the United States during the POI. For a full discussion of this issue and list of Section A respondents, please see the Separate-Rates Memo.

PRC-Wide Rate

The Department has data that indicates there are more known exporters of certain tissue paper and certain crepe paper products from the PRC during the POI than responded to our quantity and value (“Q&V”) questionnaire. See Tissue Respondent Selection Memo and Crepe Respondent Selection Memo. We issued the Q&V questionnaire to 74 known Chinese exporters of tissue paper and 73 known Chinese exporters of crepe paper, as identified in the petition. We received 24 tissue paper Q&V questionnaire responses and seven crepe paper Q&V questionnaire responses, including those from the four mandatory respondents. Also, on April 28, 2004, we issued a questionnaire to the Government of the PRC (i.e., Ministry of Commerce). Although all known exporters were given an opportunity to provide information showing they qualify for separate rates, not all of these other exporters provided a response to either the Department's Q&V questionnaire or its Section A questionnaire. Additionally, the two mandatory respondents in crepe paper Fuzhou Light and Magicpro both withdrew from the crepe paper investigation. Further, the Government of the PRC did not respond to the Department's questionnaire. Therefore, the Department determines preliminarily that there were exports of the merchandise under investigation from other PRC producers/exporters, which are treated as part of the countrywide entity.

Information on the record of this investigation indicates that there are numerous producers/exporters of certain tissue paper and crepe paper products in the PRC. As described above, all exporters were given the opportunity to respond to the Department's questionnaire. Based upon our knowledge of the volume of imports of subject merchandise from the PRC and the fact that information indicates that the responding companies did not account for all imports into the United States from the PRC, we have preliminary determined that certain PRC exporters of certain tissue paper and crepe paper products failed to respond to our questionnaires. As a result, use of facts available (“FA”) pursuant to section 776(a)(2)(A) of the Act is appropriate. Additionally, in this case, the Government of the PRC did not respond to the Department's questionnaire, thereby necessitating the use of FA to determine the PRC-wide rate.

Section 776(b) of the Act provides that, in selecting from among the facts available, the Department may employ adverse inferences if an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information. See “Statement of Administrative Action” accompanying the URAA, H.R. Rep. No. 103-316, 870 (1994) (“SAA”). We find that, because the PRC-wide entity and certain producers/exporters did not respond at all to our request for information, they have failed to cooperate to the best of their ability. Therefore, the Department preliminarily finds that, in selecting from among the facts available, an adverse inference is appropriate.

In accordance with our standard practice, as AFA, we have assigned the PRC-wide entity the higher of the highest margin stated in the notice of initiation (i.e., the recalculated petition margin) or the highest margin calculated for any respondent in this investigation. See e.g., Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Quality Steel Products from the People's Republic of China 65 FR 34660 (May 31, 2000) and accompanying Issues and Start Printed Page 56414Decision Memorandum, at Comment 1. In this case, we have applied a rate of 163.36 percent for tissue paper and 266.83 percent for crepe paper, the highest rate calculated in the Initiation Notice of these investigations from information provided in the petition. See e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod From Germany, 63 FR 10847 (March 5, 1998).

Corroboration of Information

Section 776(c) of the Act provides that, when the Department relies on secondary information rather than on information obtained in the course of an investigation as facts available, it must, to the extent practicable, corroborate that information from independent sources reasonably at its disposal. Secondary information is described in the SAA as “information derived from the petition that gave rise to the investigation or review, the final determination concerning subject merchandise, or any previous review under section 751 concerning the subject merchandise.” See SAA at 870. The SAA provides that to “corroborate” means simply that the Department will satisfy itself that the secondary information to be used has probative value. Id. The SAA also states that independent sources used to corroborate may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. Id. As explained in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, from Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996), to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.

The Petitioners' methodology for calculating the export price and NV in the petition is discussed in the initiation notice. See Initiation Notice, 69 FR at 12128. To corroborate the AFA margin of 163.36 percent for tissue paper, we compared that margin to margins we found for a significant exporting respondent. The Department did not calculate any margins for the mandatory crepe paper respondents. Therefore, to corroborate the AFA margin of 266.83 percent for crepe paper, we compared the U.S. price of a significant exporter of crepe paper to the U.S. price in the petition. We also compared the paper usage rate between a significant producer of crepe paper and the paper usage rate calculated in the petition.

As discussed in the Memorandum to the File regarding the corroboration of the AFA rate, we found that the margins of 163.36 percent for tissue paper and 266.83 percent for crepe paper have probative value. See Memorandum to the File from Michael Ferrier, Senior Case Analyst through James C. Doyle, Program Manager and Edward C. Yang, Senior Enforcement Coordinator, China/NME Group, Preliminary Determination in the Investigation of Certain Tissue Paper Products and Certain Crepe Paper Products from the People's Republic of China, Corroboration Memorandum (“Corroboration Memo”), dated September 14, 2004. Accordingly, we find that the margin, based on the petition information as described above, of 163.36 percent for tissue paper and 266.83 percent for crepe paper are corroborated within the meaning of section 776(c) of the Act.

Consequently, we are applying a single antidumping rate—the PRC-wide rate—to producers/exporters that failed to respond to the Q&V questionnaire or Section A questionnaire, as well as to exporters which did not demonstrate entitlement to a separate rate. 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 the merchandise under investigation except for entries from the two tissue paper mandatory respondents and certain Section A respondents in both the tissue and crepe paper investigations.

Because this is a preliminary determination, 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. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Saccharin from the People's Republic of China, 67 FR 79054 (December 27, 2002).

Margins for Section A Respondents

The exporters which submitted responses to Section A of the Department's antidumping questionnaire and had sales of the subject merchandise to the United States during the POI but were not selected as mandatory respondents in this investigation (Section A respondents) have applied for separate rates and provided information for the Department to consider for this purpose. Therefore, for the tissue paper Section A respondents which provided sufficient evidence that they are separate from the countrywide entity and answered other questions in section A of the questionnaire, we have established a weighted-average margin based on the rates we have calculated for the two mandatory tissue paper respondents, excluding any rates that are zero, de minimis, or based entirely on adverse facts available. Tissue paper companies receiving this rate are identified by name in the “Suspension of Liquidation” section of this notice.

For the crepe paper Section A respondents which provided sufficient evidence that they are separate from the country-wide entity and answered other questions in section A of the questionnaire, we have established a 266.83 margin based the petition rate. Section 735(c)(5)(B) of the Act provides that, where the estimated weighted-average dumping margins established for all exporters and producers individually investigated are zero or de minimis, or are determined entirely under Section 776 of the Act, the Department may use any reasonable method to establish the estimated “all others” rate for exports not individually investigated. This provision contemplates that the Department may weight-average margins other than zero, de minimis, and facts available margins to establish the “all others” rate. Where the data do not permit weight-averaging such rates, the SAA, at 873, provides that we may use other reasonable methods. Because the petition contained only a single price-to-NV dumping margin, there are no other estimated margins available with which to create the rate for the crepe paper Section A respondents. Therefore, we applied the petition margin of 266.83 percent as the rate for the crepe paper Section A respondents. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Quality Steel Flat Products From Indonesia, 66 FR 22163 (May 3, 2001), Notice of Preliminary Determination of Sales at Less Than Fair Value: High and Ultra-High Voltage Ceramic Station Post Insulators from Japan, 68 FR 35627 (June 16, 2003), and Notice of Final Determination of Sales at Less Than Fair Value: High and Ultra-High Voltage Ceramic Station Post Insulators from Japan 68 FR 62560 (November 5, 2003).

Date of Sale

Section 351.401(I) of the Department's regulations states that “in identifying the date of sale of the subject merchandise or foreign like product, the Secretary normally will use the date of Start Printed Page 56415invoice, as recorded in the exporter or producer's records kept in the normal course of business. However, the Secretary may use a date other than the date of invoice if the Secretary is satisfied that a different date better reflects the date on which the exporter or producer establishes the material terms of sale.” Fujian Naoshan stated and provided sample sales contracts and invoices demonstrating that during the POI there were changes in delivery terms between the sales confirmation and the sales invoices. See Fujian Naoshan's Supplemental C and D Response, dated August 9, 2004, at page C-3 and Exhibit S-20. China National stated that there are changes up to the date of shipment. China National stated the quantity shipped is not confirmed until after loading of the shipment. China National stated that it will revise the invoiced quantity to reflect the actual amount of material shipped but not revise the date on the commercial invoice. After examining the sales documentation placed on the record by Fujian Naoshan and China National we preliminary determine that invoice date and date of shipment are the most appropriate date of sale for these respondents, respectively. We made this determination because, at this time, there is not enough evidence on the record to determine that the contracts used by the respondent establish the material terms of sale to the extent required by our regulations in order to rebut the presumption that invoice date is the proper date of sale. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Saccharin From the People's Republic of China, 67 FR 79054 (December 27, 2002).

Fair Value Comparisons

To determine whether sales of certain tissue paper products to the United States of the mandatory respondent were made at less than fair value, we compared export price (“EP”) or constructed export price (“CEP”) to NV, as described in the “U.S. Price” and “Normal Value” sections of this notice.

U.S. Price

In accordance with section 772(a) of the Act, we used EP for the mandatory tissue paper respondents, because the subject merchandise was first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States, and because the use of CEP price was not otherwise indicated.

We calculated EP 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 any movement expenses (e.g., foreign inland freight from the plant to the port of exportation, domestic brokerage, ocean freight, marine insurance, U.S. brokerage, and inland freight from warehouse to unaffiliated U.S. customer) in accordance with section 772(c)(2)(A) of the Act. For a detailed description of all adjustments, see the company-specific analysis memorandum dated September 14, 2004.

We compared NV to weighted-average EPs in accordance with section 777A(d) of the Act. For a discussion of the surrogate values used for the movements deductions, see Memorandum to The File, From Kit Rudd, Case Analyst, Selection of Factor Values for Fujian Naoshan Paper Industry Group Co. Ltd. (“Factor Valuation Memo”) at Exhibit 5.

Normal Value

Section 773(c)(1) of the Act provides that the Department shall determine NV using a factors-of-production methodology if the merchandise is exported from an NME country and 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. The Department will base NV on FOPs because the presence of government controls on various aspects of these economies renders price comparisons and the calculation of production costs invalid under its normal methodologies.

For purposes of calculating NV, we valued the PRC FOPs in accordance with section 773(c)(1) of the Act. FOPs include, but are not limited to hours of labor required, quantities of raw materials employed, amounts of energy and other utilities consumed, and representative capital costs, including depreciation. In examining surrogate values, we selected, where possible, the publicly available value which was an average non-export value, representative of a range of prices within the POI or most contemporaneous with the POI, product-specific, and tax-exclusive. We used the usage rates reported by respondents for materials, energy, labor, by-products, and packing. For a more detailed explanation of the methodology used in calculating various surrogate values, see Factor-Valuation Memo.

Mixed Packages

During the POI, China National sold packages of merchandise that contained both tissue paper and non-subject merchandise to the Untied States. China National stated that the non-subject merchandise consisted of mulberry paper, mylar film, iridescent film, oriented poly propylene, and crepe paper. China National noted that the percentage of these sales of mixed packages constitutes less than five percent of its total sales to the United States and urged the Department to exclude these sales from the margin calculation. In Petitioners' August 9, 2004 submission, Petitioners provided publicly available information to value the non-subject merchandise components of these mixed packages. For this preliminary determination, the Department has included these sales of mixed packages in the margin calculation because the products under investigation are cut-to-length sheets of tissue paper, and not packages of tissue paper. Packaging the subject merchandise with non-subject merchandise does not transform the subject merchandise into merchandise outside the scope of the investigation. See Final Determination of Sales at Less Than Fair Value: Fresh Cut Roses from Ecuador, 60 FR 7019 (February 6, 1995). Additionally, CBP disaggregates cut-to-length tissue paper from non-subject merchandise, requiring separate reporting and collection of duties on individual cut-to-length sheets of tissue paper regardless of how they are imported. As a result, CBP, in this case, will collect duty deposits only on cut-to-length sheets of tissue paper, not the entire package of tissue paper combined with non-subject merchandise.

As part of the margin calculation we valued mulberry paper, mylar film, iridescent film, oriented polypropylene (“OPP”), and crepe paper using Indian import statistics and surrogate values provided by Petitioners. In the margin calculation, we added the value of this non-subject merchandise to NV, analogous to the Department's practice of adding a respondent's packing costs (e.g., cartons, adhesive tape, labels) to NV. Interested parties are invited to provide additional surrogate values for mulberry paper, mylar film, iridescent film, OPP, and crepe paper for consideration in the final determination. In addition, interested parties are invited to comment on the appropriateness of including the non-subject merchandise component of these mixed packages in the dumping margin calculation. Start Printed Page 56416

Factor Valuations

In accordance with section 773(c) of the Act, we calculated NV based on FOPs reported by respondents for the POI. To calculate NV, we multiplied the reported per-unit factor quantities by publicly available Indian surrogate values. 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. Specifically, we added to Indian import surrogate values a surrogate freight cost using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest seaport to the factory where appropriate. This adjustment is in accordance with the Court of Appeals for the Federal Circuit's decision in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997). For a detailed description of all surrogate values used for respondents, see Factor-Valuation Memo. For a detailed description of all actual values used for market-economy inputs, see Fujian Naoshan's analysis memorandum dated September 13, 2004.

Except as discussed below, we valued raw material inputs using the weighted-average unit import values derived from the Indian Import Statistics. See Factor-Valuation Memorandum. The Indian Import Statistics we obtained from the World Trade Atlas were published by the DGCI&S, Ministry of Commerce of India, which were reported in rupees and are contemporaneous with the POI. Where we could not obtain publicly available information contemporaneous with the POI with which to value factors, we adjusted the surrogate values using the Indian Wholesale Price Index (“WPI”) as published in the International Financial Statistics of the International Monetary Fund.

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 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 may be subsidized. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Automotive Replacement Glass Windshields From The People's Republic of China, 67 FR 6482 (February 12, 2002). 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, Congress directed the Department to base its decision on information that is available to it at the time it makes 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. See Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China (“CTVs from the PRC”), 69 FR 20594 (April 16, 2004).

Indian surrogate values denominated in foreign currencies were converted to USD using the applicable average exchange rate for India for the POI. The average exchange rate was based on exchange rate data from the Department's website. The POI exchange rate used is 45.76 Rupees per USD.

Surrogate Values

Wood Pulp Surrogate Value

The Department notes that the value of the main input, wood pulp, is an important factor of production in our dumping calculation as it accounts for a significant percentage of NV. As a general matter, the Department prefers to use publicly available data to value surrogate values from the surrogate country to determine factor prices that, among other things: represent a broad market average; are contemporaneous with the POI; and are specific to the input in question. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Saccharin from the People's Republic of China, 68 FR 27530, (May 20, 2003) and accompanying Issues and Decision Memorandum, at Comment 1.

The companies produce tissue paper with softwood pulp, hardwood pulp, bamboo pulp, kraft pulp, and waste paper. We valued softwood pulp for Fujian Naoshan and China National using the companies respective market economy purchases. We valued the remaining forms of pulp and paper, except for bamboo pulp, by selecting all Harmonized Tariff Schedule (“HTS”) categories of Indian Import Statistics that contain the type of wood in the HTS description, analogous to Petitioners' proposed calculation of this value. However, China National recommended “mechanical wood pulp” as a surrogate value for hardwood pulp. Since China National has not explained why mechanical wood pulp is an appropriate surrogate value for hardwood pulp, we have not included these HTS values in the surrogate value for hardwood pulp. We valued bamboo pulp using HTS values of softwood pulp since no HTS value for bamboo pulp was located. See Factor Valuation Memo at Exhibit 3.

Both Petitioners and China National proposed specific HTS classifications for waste paper and imported waste paper. To encompass all forms of waste paper and imported waste paper, we selected an HTS category that covered waste from all forms of paper and paperboard in the HTS description. See Factor Valuation Memo at Exhibit 3.

To value dyes, the Department used data obtained from Indian Chemical Weekly (“ICW”) for prices in effect on the Mumbai Dyes Market during the POI. The Department used the highest available dye value from the ICW price quotes to value all dyes. The Department used these price quotes because they were contemporaneous and more closely descriptive than the dye HTS classifications. To value inks, the Department selected HTS classification 3215.19 from Indian Import Statistics. See Factor Valuation Memo at Exhibit 3. To value chemicals used in the production of tissue paper (i.e., optical brightener, talcum powder, and whitener), the Department searched Indian Import Statistics for HTS classifications with the specific chemical name. See Factor Valuation Memo at Exhibit 3.

We valued electricity using rates from Key World Energy Statistics 2003, published by the International Energy Agency (“IEA”). The Department valued steam using a surrogate value calculated in the investigation of hot-rolled steel from China. See Preliminary Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Steel Flat Products from the Peoples' Republic of China Factors of Production: Valuation for Preliminary Determination (May 3, 2001) and Factor Valuation Memo at Exhibit 7.

To value scrap, the Department searched Indian Import Statistics for HTS 4707.00, “waste and scrap of paper or paperboard.” The Department valued water with the Asian Development Bank's Second Water Utilities Data Book (1997) and adjusted for inflation.

To value packing materials (cartons, plastic bags, and adhesive tape), the Department used Indian Import Start Printed Page 56417Statistics published by WTA. See Factor Valuation Memo at Exhibits 3 and 4.

To value Factory Overhead (“FOH”), Selling, General & Administrative (“SG&A”) expenses and Profit for all respondents, we used the 2002-2003 financial statement of Pudumjee Pulp & Paper Mills, Ltd. (“Pudumjee”), an integrated producer of tissue paper and other paper products. See Factor Valuation Memo at Exhibit 8. Consistent with Department practice, we have included “consumption of stores, colors, chemicals, etc.” in factory overhead. There is no evidence that they are related solely to production. See Notice of Final Determination of Sales at Less Than Fair Value: Polyethylene Retail Carrier Bags From the People's Republic of China, 39 FR 34125 (June 18, 2004) and accompanying Issues and Decision Memorandum at Comment 3 and Factor Valuation Memo at Exhibit 8.

Critical Circumstances

On June 18, 2004, the Petitioners alleged that there is a reasonable basis to believe or suspect critical circumstances exist with respect to the antidumping investigations of certain tissue paper and certain crepe paper from the PRC. In accordance with 19 CFR 351.206(c)(2)(i), because the Petitioners submitted critical circumstances allegations more than 20 days before the scheduled date of the preliminary determination, the Department must issue preliminary critical circumstances determinations not later than the date of the preliminary determination.

Section 733(e)(1) of the Act provides that the Department will preliminarily determine that critical circumstances exist if there is a reasonable basis to believe or suspect that: (A)(i) There is a history of dumping and material injury by reason of dumped imports in the United States or elsewhere of the subject merchandise; or (ii) the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales; and (B) there have been massive imports of the subject merchandise over a relatively short period. Section 351.206(h)(1) of the Department's regulations provides that, in determining whether imports of the subject merchandise have been “massive,” the Department normally will examine: (i) The volume and value of the imports; (ii) seasonal trends; and (iii) the share of domestic consumption accounted for by the imports. In addition, section 351.206(h)(2) of the Department's regulations provides that an increase in imports of 15 percent during the “relatively short period”of time may be considered “massive.” Section 351.206(I) of the Department's regulations defines “relatively short period” as normally being the period beginning on the date the proceeding begins (i.e., the date the petition is filed) and ending at least three months later. The regulations also provide, however, that if the Department finds that importers, exporters, or producers had reason to believe, at some time prior to the beginning of the proceeding, that a proceeding was likely, the Department may consider a period of not less than three months from that earlier time.

In determining whether the relevant statutory criteria have been satisfied, we considered: (i) The evidence presented by Petitioners in their June 18, 2004, filing; (ii) new evidence obtained since the initiation of the LTFV investigation (i.e., additional import statistics released by the U.S. Census Bureau); and (iii) the International Trade Commission's (“ITC”) preliminary determination of material injury by reason of imports.

To determine whether there is a history of injurious dumping of the merchandise under investigation, in accordance with section 733(e)(1)(A)(I) of the Act, the Department normally considers evidence of an existing antidumping duty order on the subject merchandise in the United States or elsewhere to be sufficient. See Preliminary Determination of Critical Circumstances: Steel Concrete Reinforcing Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). With regard to imports of certain tissue paper products and certain crepe paper products from the PRC, Petitioners make no statement concerning a history of dumping for the PRC. We are not aware of any antidumping order in the United States or in any country on certain tissue paper products and certain crepe paper products from the PRC. For this reason, the Department does not find a history of injurious dumping of the subject merchandise from the PRC pursuant to section 733(e)(1)(A)(I) of the Act.

To determine whether the person by whom, or for whose account, the merchandise was imported knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales in accordance with section 733(e)(1)(A)(ii) of the Act, the Department normally considers margins of 25 percent or more for export price sales transactions sufficient to impute knowledge of dumping. See Preliminary Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from the People's Republic of China, 62 FR 31972, 31978 (October 19, 2001). Because the preliminary dumping margins of the mandatory respondents and the Section A Respondents for both tissue paper and crepe paper are greater than 15 percent for EP, we find there is a reasonable basis to impute to importers knowledge of dumping with respect to all imports of tissue paper and crepe paper from the PRC. See Critical Circumstance Memo at Attachment I.

In determining whether there are “massive imports” over a “relatively short period,” pursuant to section 733(e)(1)(B) of the Act, the Department normally compares the import volumes of the subject merchandise for at least three months immediately preceding the filing of the petition (i.e., the “base period”) to a comparable period of at least three months following the filing of the petition (i.e., the “comparison period”). However, as stated in section 351.206(I) of the Department's regulations, if the Secretary finds importers, exporters, or producers had reason to believe at some time prior to the beginning of the proceeding that a proceeding was likely, then the Secretary may consider a time period of not less than three months from that earlier time. Imports normally will be considered massive when imports during the comparison period have increased by 15 percent or more compared to imports during the base period.

For the reasons set forth in the Critical Circumstances Memo, we find sufficient bases exist for finding importers, or exporters, or producers knew or should have known an antidumping case was pending on certain tissue paper imports and certain crepe paper imports from the PRC by February 2004, at the latest. In addition, in accordance with section 351.206(I) of the Department's regulations, we determined December 2003 through February 2004 should serve as the “base period,” while March 2004 through May 2004 should serve as the “comparison period” in determining whether or not imports have been massive in the comparison period as these periods represent the most recently available data for analysis.

In this case, the volume of imports of certain tissue paper products and crepe paper products from the PRC, which are both classified within the same HTSUS U.S. subheadings, increased 51 percent from the critical circumstances base period (December 2003 through Start Printed Page 56418February 2004) to the critical circumstances comparison period (March 2004 through May 2004). See Critical Circumstances Memo at Attachment III.

For the two tissue paper mandatory respondents, China National and Fujian Naoshan, that submitted critical circumstances data, we preliminarily determine, as noted above, that importers knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales in accordance with section 733(e)(1)(A)(ii) of the Act. For China National in the tissue paper investigation, we also found massive imports over a relatively short period. See Critical Circumstance Memo at Attachment II. China National satisfies the imputed knowledge of injurious dumping criterion under section 733(e)(1)(A)(ii) of the Act and the massive imports in accordance with section 733(e)(1)(B) of the Act. Therefore, we preliminarily find that critical circumstances exist for China National. Critical circumstances do not exist for Fujian Naoshan. See Critical Circumstance Memo at Attachment II.

With regard to the PRC-wide entities in both cases and the crepe paper Section A respondents, as noted above, we preliminary find that importers knew or should have known that the exporter was selling the subject merchandise at less than its fair value and that there was likely to be material injury by reason of such sales in accordance with section 733(e)(1)(A)(ii) of the Act. In addition, we also find massive imports over a relatively short period because the volume of imports of certain tissue paper products and crepe paper products from the PRC-wide entity increased more than 15 percent. See Critical Circumstance Memo at Attachment II. Therefore, we preliminary find that critical circumstances exist for the PRC-wide entities in both cases and the crepe paper Section A respondents.

Given the analysis summarized above, and described in more detail in the Critical Circumstances Memo, we preliminarily determine that critical circumstances exist for imports of certain tissue paper products and crepe paper products from China National (tissue paper) and the PRC-wide entity (tissue paper and crepe paper). However, for Fujian Naoshan and the tissue paper Section A respondents receiving a separate rate, we preliminarily determine that no critical circumstances exist because we do not find massive imports over a relatively short period.

We will make a final determination concerning critical circumstances for all producers/exporters of subject merchandise from the PRC when we make our final dumping determinations in this investigation, which will be 135 days after publication of the preliminary dumping determination.

Verification

As provided in section 782(I)(1) of the Act, we intend to verify the information upon which we will rely in making our final determination.

Preliminary Determination

The weighted-average dumping margins are as follows:

Manufacturer/exporterWeighted- average margin (percent)
Certain Tissue Paper Products From the PRC
Mandatory Respondents:
Fujian Naoshan9.55
China National125.58
PRC-Wide Rate163.36
Section A Respondents:
BA Marketing and Industrial Co., Ltd.91.32
Everlasting Business and Industry Co., Ltd.91.32
Fujian Xinjifu Enterprises Co., Ltd.91.32
Fujian Nanping Investment and Enterprise Co., Ltd.91.32
Fuzhou Magicpro Gifts Co., Ltd.91.32
Fuzhou Light Industry Import and Export Co., Ltd.91.32
Guiling Qifeng Paper Co., Ltd.91.32
Max Fortune Industrial Limited91.32
Ningbo Spring Stationary Co., Ltd.91.32
Qingdao Wenlong Co., Ltd.91.32
Samsam Production Limited and Guangzhou Baxi Products Co., Ltd.91.32
Certain Crepe Paper Products From the PRC
PRC-Wide Rate266.83
Section A Respondents:
Everlasting Business and Industry Co. Ltd.266.83
Fujian Nanping Investment and Enterprise Co., Ltd266.83
Fujian Xinjifu Enterprises Co., Ltd.266.83
Ningbo Spring Stationary Co., Ltd.266.83

Disclosure

We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).

Suspension of Liquidation

In accordance with section 733(d) of the Act, with respect to Fujian Naoshan and the tissue paper Section A respondents receiving a separate rate, we will instruct the CBP to suspend liquidation of all entries of subject merchandise, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. With respect to China National, the crepe paper Section A Respondents receiving a separate rate and the PRC-wide entities for tissue paper and crepe paper, the Department will direct CBP to suspend liquidation of all entries of certain tissue paper products and certain crepe paper products from the PRC that are entered, or withdrawn from warehouse, for consumption on or after 90 days prior to the date of publication in the Federal Register of our preliminary determinations in these investigations. We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds U.S. price, as indicated above. The suspension of liquidation will remain in effect until further notice.

International Trade Commission Notification

In accordance with section 733(f) of the Act, we have notified the ITC of the Department's preliminary affirmative determinations of sales at less than fair value. Section 735(b)(2) of the Act 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 determinations whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of certain tissue paper products and certain crepe paper products, or sales (or the likelihood of sales) for importation, of the subject merchandise.

Public Comment

Case briefs may be submitted to the Assistant Secretary for Import Administration no later than seven days after the date of the final verification reports issued in these proceedings 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 used and an executive summary of issues should accompany any briefs submitted to the Department. Start Printed Page 56419This 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. If a request for a hearing is made, we will intend to hold the hearing three days after the deadline of submission of 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 after the date of publication of this notice. See 19 CFR 351.310(c). Requests should contain the party's name, address, and telephone number, the number of participants, and 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.

We will make our final determinations no later than 75 days after the date of publication of this preliminary determination for certain crepe paper products and 135 days after the date of publication of this preliminary determination for certain tissue paper products, pursuant to section 735(a)(2) of the Act.

These determinations are issued and published in accordance with sections 733(f) and 777(I)(1) of the Act.

Start Signature

September 14, 2004.

James J. Jochum,

Assitant Secretary for Import Administration.

End Signature End Further Info End Preamble

[FR Doc. E4-2285 Filed 9-20-04; 8:45 am]

BILLING CODE 3510-P