Import Administration, International Trade Administration, Department of Commerce.
November 13, 2008.
The Department of Commerce (“the Department”) is currently conducting a new shipper review of the antidumping duty order on cut-to-length carbon steel plate (“CTL Steel Plate”) from the People's Republic of China (“PRC”) covering the period November 1, 2006, through October 31, 2007. This new shipper review covers one producer/exporter.
We preliminarily determine that the new shipper has made sale(s) below normal value (“NV”), and the producer/exporter combination is entitled to a separate rate in this new shipper review. If these preliminary results are adopted in our final results of this new shipper review, we will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on entries of subject merchandise during the period of review (“POR”) for which the importer specific assessment rates are above de minimis. Interested parties are invited to comment on the preliminary results. We intend to issue the final results no later than 90 days from the date of publication of this notice.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Demitrios Kalogeropoulos, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230, telephone: (202) 482-2623.End Further Info End Preamble Start Supplemental Information
The antidumping duty order on CTL Steel Plate from the PRC was published on October 21, 2003. See Suspension Agreement on Certain Cut-to-Length Carbon Steel Plate From the People's Republic of China; Termination of Suspension Agreement and Notice of Antidumping Duty Order, 68 FR 60081 (October 21, 2003).
On November 30, 2007, we received a timely request for a new shipper review from Hunan Valin Xiangtan Iron & Steel Co., Ltd. (“Valin Xiangtan”) in accordance with 19 CFR 351.214(d)(2). In its request, Valin Xiangtan certified that it produced and exported the CTL Steel Plate on which it based its request for a new shipper review. Pursuant to 19 CFR 351.214(b)(2)(iv), Valin Xiangtan submitted documentation establishing the date on which the merchandise was first shipped for export to the United States, the volume of that first shipment, and the date of the first sale to an unaffiliated customer in the United States.
On December 27, 2007, the Department initially determined that Valin Xiangtan did not meet the requirements under which the Department can initiate a new shipper review. On January 7, 2008, upon further review of subsequent information submitted by the requester, the Department reconsidered its decision and initiated the new shipper review on January 17, 2008. See Certain Cut-to-Length Carbon Steel Plate From the People's Republic of China; Initiation of New Shipper Review, 73 FR 3236 (January 17, 2008). On January 14, Start Printed Page 671252008, we issued the antidumping duty questionnaire to Valin Xiangtan. We issued supplemental questionnaires to Valin Xiangtan in April, May, and September 2008. On April 18, 2008, the Department extended the POR by one month to enable the Department to capture the entries corresponding to the respondent's sales to the United States.
Period of Review
The POR covers November 1, 2006, through October 31, 2007.
On March 25, 2008, Nucor Corporation (“Nucor”) submitted comments regarding Valin Xiangtan's eligibility for a new shipper review and separate rate status. Specifically, Nucor argued that the Department should rescind the new shipper review because Valin Xiangtan is affiliated with exporters that shipped to the United States during the original period of investigation (“POI”). Because one of Valin Xiangtan's corporate parents is wholly owned by the Hunan-Supervision and Administration Commission (“Hunan SASAC”), Nucor contends that the Hunan SASAC and Valin Xiangtan are affiliated by an excess of five percent ownership. Since the PRC-wide entity had shipments of subject merchandise during the POI, and because the Hunan SASAC, as an organ of the central-Supervision and Administration Commission (“central SASAC”), is the same as the PRC-wide entity, Nucor argued that Valin Xiangtan is affiliated with a producer/exporter that exported subject merchandise to the United States during the POI.
Nucor also argued that affiliation exists between Valin Xiangtan and two respondents in the original investigation (i.e., AISCO/Anshan International/Sincerely Asia Ltd. (collectively “Anshan Steel”) and Bao/Baoshan International Trade Corp/Bao Steel Metals Trading Corp. (collectively “Baoshan Steel”)). Nucor contends these two companies' financial statements demonstrate that they are directly owned by and under the control of the central SASAC. Therefore, Nucor argued, Valin Xiangtan, through the Hunan SASAC and the central SASAC, is affiliated with producers/exporters that exported subject merchandise to the United States during the POI.
On October 21, 2008, in its pre-preliminary comments submission, Valin Xiangtan argued the Department has reviewed similar allegations in other proceedings and rejected them.1 Valin Xiangtan contended there is no rationale to justify the Department reversing its long-standing practice of allowing new shippers that are state-owned to request and receive reviews.
For the preliminary results, in response to Nucor's claims that Valin Xiangtan is state-owned and therefore affiliated with Anshan Steel and Baoshan Steel, we note first that the Department has considered and granted NSR requests in the past where the requesting firm was state-owned (“owned by the whole people”). In this case, we determine that Valin Xiangtan is not affiliated with Anshan Steel and Baoshan Steel. In order to find these companies affiliated, section 771(33)(F) of the Act requires more than some degree of commonality of state ownership interest between them. Rather, to make a finding of affiliation between two or more entities, section 771(33)(F) of the Act requires the Department to find “common control.” Otherwise, all state-owned companies would automatically be found affiliated. Further, consistent with long-standing policy and practice, we find that ownership by a government entity such as the Hunan SASAC or central SASAC, in and of itself, is not germane to Valin Xiangtan's eligibility for a new shipper review. In the instant case, as discussed in the “Separate Rates” section below, there is no evidence that the Hunan SASAC or central SASAC exerted control over Valin Xiangtan's export activities. In other words, absent evidence of such de jure or de facto control, government ownership alone does not warrant denying Valin Xiangtan eligibility for a new shipper review. Indeed, the Department has in previous proceedings granted separate rates to companies that were wholly owned by government entities when evidence of actual government control over export activities was not present.4
Collapsing of Affiliated Producers
On May 23, 2008, Nucor submitted comments regarding Valin Xiangtan's affiliated producers. Nucor urged the Department to conduct a full collapsing analysis on all of the companies with a relationship to Valin Xiangtan or its owners in addition to all of the subsidiaries of each of these entities. Nucor argued that any steel producer with a rolling mill would be capable of producing subject merchandise with only minor retooling, thus satisfying the collapsing criteria under 19 CFR 351.401(f)(1).
For the preliminary results, we have determined not to collapse Valin Xiangtan with any of its affiliates. We have determined that based on record evidence of the four affiliates we identified as possible candidates for a collapsing analysis, two do not have any production capabilities at all, and the remaining two produce steel wire and steel rod, respectively. Further, we have determined that neither of the steel producing affiliates has a rolling mill,6 and it would be cost prohibitive (i.e., require substantial retooling) to build a rolling mill capable of producing subject merchandise. Thus the collapsing criteria under 19 CFR 351.401(f)(1) are not satisfied. In determining whether there is a significant potential for manipulation, as contemplated by 19 CFR 351.401(f)(2), the Department considers the totality of the circumstances of the situation and may place more reliance on some factors than others. In the instant case, because Valin Xiangtan's affiliates do not produce subject merchandise and do not have the capability to produce subject merchandise without a substantial retooling, the totality of the circumstances here shows that there is not a significant potential for the manipulation of price or production. Therefore, for the preliminary results, we have not collapsed Valin Xiangtan with its affiliates.
Scope of the Order
The products covered by the order include hot-rolled carbon steel universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 millimeters but not exceeding 1,250 millimeters and of a thickness of not less than 4 millimeters, not in coils and without patterns in relief), of rectangular shape, neither clad, plated nor coated with metal, whether or not Start Printed Page 67126painted, varnished, or coated with plastics or other nonmetallic substances; and certain hot-rolled carbon steel flat-rolled products in straight lengths, of rectangular shape, hot rolled, neither clad, plated, nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances, 4.75 millimeters or more in thickness and of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule of the United States (“HTSUS”) under item numbers 7208.40.3030, 7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, and 7212.50.0000. Included in the order are flat-rolled products of non-rectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been “worked after rolling”) for example, products which have been beveled or rounded at the edges. Excluded from the order is grade X-70 plate. Also excluded from the order is certain carbon cut-to-length steel plate with a maximum thickness of 80 mm in steel grades BS 7191, 355 EM, and 355 EMZ, as amended by Sable Offshore Energy Project specification XB MOO Y 15 0001, types 1 and 2. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope is dispositive.
In proceedings involving non-market economy (“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 subject merchandise 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. Exporters can demonstrate this independence through the absence of both de jure and de facto government control over export activities. 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 further developed in 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”). However, if the Department determines that a company is wholly foreign-owned or located in a market economy, then a separate-rate analysis is not necessary to determine whether it is independent from government control.
A. Separate-Rate Recipient
Valin Xiangtan is a wholly Chinese-owned company.7 Therefore, the Department must analyze whether Valin Xiangtan can demonstrate the absence of both de jure and de facto government control over its export activities.
a. Absence of De Jure Control
The Department considers the following de jure criteria in determining whether 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 at Comment 1.
In this case, Nucor, a domestic interested party, argued that Valin Xiangtan should not receive a separate rate because the State-owned entity (i.e., the central SASAC) exercised de jure control over Valin Xiangtan during the POR. Among other things, Nucor alleged that the existence of a SASAC demonstrates a recentralization of control over companies in which it maintains ownership, and that because of the nature of the central SASAC's authority Valin Xiangtan cannot establish the absence of de jure control. We solicited additional information from Valin Xiangtan regarding Nucor's allegations as they relate to the Department's criteria in determining whether there is de jure control by the PRC government over a company's export activities. In response, Valin Xiangtan submitted copies of relevant laws under which it operates including the Interim Measures for the Supervision and Administration of State-owned Assets of the Enterprises (“Interim Measures”) and the Company Law of the People's Republic of China (“Company Law”). After examining record evidence, we found no indication that these laws granted de jure government control. Moreover, review of Valin Xiangtan's business license indicates an absence of restrictive stipulations. Further, under Company Law, in addition to Valin Xiangtan's Articles of Association, indicates that control rests with the company's executive director and not the PRC government.12
The evidence provided by Valin Xiangtan supports a preliminary finding of de jure absence of government control based on the following: (1) an absence of restrictive stipulations associated with the individual exporters' business and export licenses; (2) there are applicable legislative enactments decentralizing control of the companies; and (3) there are formal measures by the government decentralizing control of companies. See, e.g., Valin Xiangtan's section A submissions dated March 5, 2008, and its supplemental questionnaire responses dated March 25, 2008, and October 18, 2008.
b. Absence of De Facto Control
Typically the Department considers four factors in evaluating whether each respondent is subject to de facto government control of its export functions: (1) whether the export prices are set by or are subject to the approval of a government 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 government control which would preclude the Department from assigning separate rates.Start Printed Page 67127
In this case Nucor alleged that Valin Xiangtan should not receive a separate rate because there is indirect de facto control over Valin Xiangtan by the PRC government. See Nucor's March 25, 2008, submission regarding its comments on Valin Xiangtan eligibility for a new shipper review and separate rate status; and Nucor's May 27, 2008, submission regarding Valin Xiangtan's supplemental section A Questionnaire Response. Among other things, Nucor alleged that the authorities of the central SASAC as outlined in the Interim Measures demonstrate control over the companies in which the central SASAC invests. We solicited additional information from Valin Xiangtan regarding Nucor's allegations as they relate to the Department's criteria in determining whether there is de facto control by the PRC government over a company's export activities. In its responses, Valin Xiangtan reported that it sets its own export prices and has the authority to sign and negotiate its sales contracts without review or guidance from any governmental organization (e.g., the sales contract and correspondence between it and its U.S. customer). See Valin Xiangtan's section A supplemental submission dated April 28, 2008, at Exhibits A-24 and A-25. Valin Xiangtan further submitted evidence indicating autonomy in the process by which its managers and directors were elected to their positions (e.g., Valin Xiangtan's Articles of Association) See Valin Xiangtan's section A supplemental submission dated April 28, 2008, at Exhibit A-33. The mere fact that the Hunan SASAC has shareholder ownership in companies that have shareholder ownership in Valin Xiangtan does not in itself demonstrate that Valin Xiangtan is controlled by the PRC central government. Indeed, the Department has in the past granted separate rates to companies that were wholly owned by government entities when evidence of actual government control was not present. In this case, we have found no record evidence indicating that the Hunan SASAC exercised control over Valin Xiangtan's export activities or the disposition of its profits during the POR. Therefore, we have determined that the roles and duties undertaken by the Hunan SASAC do not confer de facto government control over the day-to-day activities and decisions regarding Valin Xiangtan's export activities. Furthermore, Valin Xiangtan has supported its claim that it negotiates its own contracts and does not need approval from any government authority before making a sale (i.e., the sales contract and correspondence between Valin Xiangtan and its U.S. customer).17
The evidence placed on the record of this new shipper review by Valin Xiangtan demonstrate an absence of de jure and de facto government control with respect to its exports of the merchandise under review, in accordance with the criteria identified in Sparklers and Silicon Carbide. Accordingly, the Department has preliminarily determined that Valin Xiangtan is eligible for a separate rate because it has demonstrated an absence of government control both in law and in fact.
Bona Fide Sales Analysis
In evaluating whether or not sales are commercially reasonable, and therefore bona fide, the Department has considered, inter alia, such factors as: (1) the timing of the sale; (2) the price and quantity of the sale; (3) the expenses arising from the transaction; (4) whether the goods were resold at a profit; and (5) whether the transaction was made on an arm's-length basis. See Tianjin Tiancheng Pharmaceutical Co., Ltd. v. United States, 366 F. Supp. 2d 1246 (CIT 2005) (“TTPC”) at 1249-1250, citing Am. Silicon Techs. v. United States, 110 F. Supp. 2d 992, 995 (CIT 2000). Therefore, the Department examines a number of factors, all of which may speak to the commercial realities surrounding the sale of subject merchandise. While some bona fides issues may share commonalities across various cases, each case is company-specific and the analysis may vary with the facts surrounding each sale. See, e.g., Certain Preserved Mushrooms From the People's Republic of China: Final Results and Partial Rescission of the New Shipper Review and Final Results and Partial Rescission of the Third Antidumping Duty Administrative Review, 68 FR 41304 (July 11, 2003). The weight given to each factor investigated will depend on the circumstances surrounding the sale. See TTPC, 366 F. Supp at 1263.
For the reasons stated below, we preliminarily find that Valin Xiangtan's reported U.S. sales during the POR appear to be bona fide sales, as required by 19 CFR 351.214(b)(2)(iv)(c), based on the totality of the facts on the record. Specifically, we find that the unit prices for Valin Xiangtan's sales were comparable to the unit values of other U.S. imports of CTL Steel Plate from the PRC during the POR. Further we find that the quantity of Valin Xiangtan's sales is commercially reasonable.18 Furthermore, we found no unusual circumstances surrounding the sales (e.g., no unusual freight terms). Therefore, for the reasons mentioned above, the Department preliminarily finds that Valin Xiangtan's U.S. sale during the POR is a bona fide commercial transaction.
Non-Market Economy Country
In every case conducted by the Department involving the PRC, the PRC has been treated as an NME country. In the investigation of certain lined paper products from the PRC, the Department examined the PRC's market status and determined that NME status should continue for the PRC.19 In accordance with section 771(18)(C)(i) of the Tariff Act of 1930, as amended (“the Act”), any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. See, e.g., Freshwater Crawfish Tail Meat from the People's Republic of China: Notice of Final Results of Antidumping Duty Administrative Review, 71 FR 7013 (February 10, 2006). The presumption of the NME status of the PRC has not been revoked by the Department and, therefore, remains in effect for purposes of this new shipper review. Accordingly, we calculated NV in accordance with section 773(c) of the Act, which applies to NME countries.
Section 773(c)(1) of the Act directs the Department to base NV on the NME producer's factors of production Start Printed Page 67128(“FOPs”), valued in a surrogate market economy (“ME”) country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, in valuing the FOPs, the Department shall use, to the extent possible, the prices or costs of the FOPs in one or more ME countries that are: (1) at a level of economic development comparable to that of the NME country; and (2) significant producers of comparable merchandise. For a detailed discussion of the surrogate values (“SVs”) used in this proceeding, see the “Factor Valuations” section below and the Department's memorandum to the file entitled, “New Shipper Review of Certain Cut-to-Length Carbon Steel Plate from the People's Republic of China: Factor Valuations for the Preliminary Determination,” dated concurrently with this notice (“Factor Valuation Memorandum”).
On January 14, 2008, the Department determined that India, Indonesia, Thailand, the Philippines, and Colombia are countries comparable to the PRC in terms of economic development.20 On January 16, 2008, the Department requested comments on the selection of a surrogate country from the interested parties in this new shipper review. Valin Xiangtan submitted comments on February 6, 2008, providing information regarding CTL Steel Plate production in Indonesia, Thailand and India.
Customarily, we select an appropriate surrogate country from the Policy Memorandum based on the availability and reliability of data from the countries that are significant producers of comparable merchandise. In this case, we found that India is at a level of economic development comparable to that of the PRC; is a significant producer of comparable merchandise (i.e., CTL Steel Plate); and has publicly available and reliable data. Accordingly, we selected India as the primary surrogate country for purposes of valuing the FOPs in the calculation of NV because it meets the Department's criteria for surrogate country selection. We obtained and relied upon publicly available information wherever possible. In accordance with 19 CFR 351.301(c)(3)(ii), for the final results in an antidumping new shipper review, interested parties may submit publicly available information to value FOPs under 19 CFR 351.408(c) within 20 days after the date of publication of these preliminary results.23
Fair Value Comparisons
To determine whether sales of the subject merchandise by Valin Xiangtan to the United States were made at prices below NV, we compared its export prices to NV, as described in the “Export Price” and “Normal Value” sections of this notice, below.
We used export price (“EP”) methodology in accordance with section 772(a) of the Act because the subject merchandise was first sold prior to importation by the exporter outside the United States directly to an unaffiliated purchaser in the United States, and constructed export price was not otherwise indicated.
We calculated EP based on the packed delivery duty paid ex-docks delivered prices to unaffiliated purchasers in, or for exportation to, the United States. We made deductions, as appropriate, for any movement expenses (e.g., foreign inland rail and barge freight from the plant to the port of exportation, domestic brokerage, marine insurance, U.S. Customs duty, U.S. brokerage and handling charges, other U.S. transportation expense, international freight expense, etc.) in accordance with section 772(c)(2)(A) of the Act,24 Where foreign inland freight, foreign brokerage and handling fees and foreign marine insurance were provided by PRC service providers or paid for in renminbi, we based those charges on surrogate value rates from India. See “Factor Valuations” section below for further discussion of surrogate value rates.
In determining the most appropriate SVs to use in a given case, the Department's stated practice is to use period-wide price averages, prices specific to the input in question, prices that are net of taxes and import duties, prices that are contemporaneous with the POR, and publicly available data. The data we used for brokerage and handling expenses fulfill all of the foregoing criteria except that they are not specific to the subject merchandise. There is no information of that type on the record of this new shipper review. The Department used two sources to calculate a surrogate value for domestic brokerage expenses: (1) data from the January 9, 2006, public version of the Section C questionnaire response from Kejriwal Paper Ltd. (“Kejriwal”) in the investigation of certain lined paper products from India; and (2) data from Agro Dutch Industries Ltd. in the administrative review of certain preserved mushrooms from India. Because these values were not concurrent with the POR of this new shipper review, we adjusted these rates for inflation using the Wholesale Price Indices (“WPI”) for India as published in the International Monetary Fund's International Financial Statistics, available at http://ifs.apdi.net/imf, and then calculated a simple average of the two companies' brokerage expense data.28 See Factor Valuation Memorandum at Attachment 9.
Section 773(c)(1) of the Act provides that the Department shall determine NV using an FOP methodology if the merchandise is exported from an NME and the information does not permit the calculation of NV using home-market Start Printed Page 67129prices, third-country prices, or constructed value under section 773(a) of the Act. The Department bases NV on the FOPs because the presence of government controls on various aspects of NMEs renders price comparisons and the calculation of production costs invalid under its normal methodologies. The Department's questionnaire requires that the respondent provide information regarding the weighted-average FOPs across all of the company's plants that produce the subject merchandise, not just the FOPs from a single plant. This methodology ensures that the Department's calculations are as accurate as possible.29
For purposes of calculating NV, we valued the PRC FOPs in accordance with section 773(c)(1) of the Act. The FOPs 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 the FOPs reported by Valin Xiangtan for materials, energy, and labor. See section 773(c)(3) of the Act.
In accordance with 19 CFR 351.408(c)(1), the Department will normally use publicly available information to find appropriate SVs to value FOPs, but when a producer sources an input from a market economy and pays for it in market-economy currency, the Department will normally value the factor using the actual price paid for the input. See 19 CFR 351.408(c)(1); see also Lasko Metal Products, Inc. v. United States, 43 F.3d 1442, 1446 (Fed. Cir. 1994). In examining SVs, we selected, where possible, the publicly available value, which was an average non-export value, representative of a range of prices within the POR or most contemporaneous with the POR, product-specific, and tax-exclusive. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Chlorinated Isocyanurates From the People's Republic of China, 69 FR 75294, 75300 (December 16, 2004) (unchanged in final determination). For a detailed explanation of the methodology used to calculate SVs, see Factor Valuation Memorandum.
Valin Xiangtan reported that during the production process of CTL Steel Plate, it generated certain by-products that were recycled and resold during the POR. However, Valin Xiangtan failed to provide the requested documentation for each sale of its by-products and each transaction of recycled by-product. Nor did Valin Xiangtan provide an explanation as to why it did not provide the requested documentation. In the original and supplemental questionnaires, we instructed Valin Xiangtan to provide evidence for the full amount of by-products that were sold or returned to production. Valin Xiangtan provided incomplete documentation that amounted to a non-response to this request. For example, Valin Xiangtan provided one by-product sales invoice for each type of by-product sold, which did not reconcile to its reported by-product sales. Further, Valin Xiangtan provided inadequately translated screen prints from its internal accounting system for some recycled by-products. These screen prints were also not reconciled to Valin Xiangtan's reported recycled product. The amount of products reused or sold during the POR is an integral part of the factor calculation for by-products.35 See Notice of Final Determination of Sales at Less Than Fair Value: Urea Ammonium Nitrate Solutions from Belarus, 68 FR 9055 (February 27, 2003), and accompanying Issues and Decision Memorandum at Comment 3 (“The Department allows such credits, but only for the amount of the by-product/recovery actually sold or reused.”); 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 6; and Saccharin from the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 71 FR 7515 (February 13, 2006), and accompanying Issues and Decision Memorandum at Comment 2. Because Valin Xiangtan has not provided the Department with the requested information in order to determine whether Valin Xiangtan is entitled to its claimed offsets, for the preliminary results, we have determined to not grant any of Valin Xiangtan's claimed offsets. For further details, see Valin Xiangtan Preliminary Analysis Memorandum.
In accordance with section 773(c) of the Act, we calculated NV based on the FOPs reported by Valin Xiangtan for the POR. To calculate NV, we multiplied the reported per-unit factor-consumption rates by publicly available Indian SVs. In selecting the SVs, we considered the quality, specificity, and contemporaneity of the data.36 As appropriate, we adjusted input prices by including freight costs to make them delivered prices. Specifically, we added to Indian import SVs 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 U.S. Court of Appeals for the Federal Circuit decision in Sigma Corp. v. United States, 117 F.3d 1401, 1407-1408 (Fed. Cir. 1997). In those instances where we could not obtain publicly available information contemporaneous with the POI with which to value FOPs, we adjusted the SVs using, where appropriate, the Indian WPI, as published in the International Financial Statistics of the International Monetary Fund. For a detailed description of all SVs used for respondent, see the Factor Valuation Memorandum.
Except where discussed below, we valued raw material inputs using November 2006 through October 2007, weighted-average unit import values derived from the Monthly Statistics of the Foreign Trade of India, as published by the Directorate General of Commercial Intelligence and Statistics of the Ministry of Commerce and Industry, Government of India and compiled by the World Trade Atlas (“WTA”), available at http:www.gtis.com/wta.htm. The Indian WTA import data is reported in rupees and is contemporaneous with the POR.37 Indian SVs denominated in Indian rupees were converted to U.S. dollars using the applicable daily exchange rate for India for the POR. See http://www.ia.ita.doc.gov/exchange/index.html.Start Printed Page 67130
Valin Xiangtan reported that certain of its reported raw material inputs were sourced from an ME country and paid for in ME currencies. Pursuant to 19 CFR 351.408(c)(1), when a respondent sources inputs from an ME supplier in meaningful quantities (i.e., not insignificant quantities), we use the actual price paid by respondent for those inputs, except when prices may have been distorted by findings of dumping by the PRC and/or subsidies. Valin Xiangtan's reported information demonstrates that it has both significant and insignificant quantities of certain raw materials purchased from ME suppliers. Where we found ME purchases to be of significant quantities, in accordance with our statement of policy as outlined in Antidumping Methodologies: Market Economy Inputs, we used the actual purchases of these inputs to value the inputs. Accordingly, we valued Valin Xiangtan's inputs using the ME prices paid for in ME currencies for the inputs where the total volume of the input purchased from all ME sources during the POR exceeds or is equal to 33 percent of the total volume of the input purchased from all sources during the period. Where the quantity of the reported input purchased from ME suppliers was below 33 percent of the total volume of the input purchased from all sources during the POI, and were otherwise valid, we weight averaged the ME input's purchase price with the appropriate surrogate value for the input according to their respective shares of the reported total volume of purchases.41 Where appropriate, we added freight to the ME prices of inputs. For a detailed description of the actual values used for the ME inputs reported, see Valin Xiangtan Preliminary Analysis Memorandum.
Where we could not obtain publicly available information contemporaneous with the POR with which to value factors, we adjusted the SVs for inflation using the WPI for India. See Factor Valuation Memorandum.
Furthermore, with regard to the WTA Indian import-based SVs, we have disregarded prices from NME countries and those we have reason to believe or suspect may be subsidized, because we have found in other proceedings that the exporting countries maintain broadly available, non-industry-specific export subsidies and, therefore, there is reason to believe or suspect all exports to all markets from such countries may be subsidized.43 We are also guided by the statute's legislative history that explains that it is not necessary to conduct a formal investigation to ensure that such prices are not subsidized. See H.R. Rep. No. 576 100th Cong., 2. Sess. 590-91 (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 excludes export prices from Indonesia, South Korea, Thailand, and India when calculating the Indian import-based SVs. See Factor Valuation Memorandum. Finally, we excluded imports that were labeled as originating from an “unspecified” country from the average value, because we could not be certain that they were not from either an NME or a country with general export subsidies.
We used Indian transport information to value the inland truck, rail, and waterway freight cost of the raw materials. The Department determined the best available information for valuing truck freight to be from the following website: http://www.infobanc.com/logistics/logtruck.htm. The logistics section of this source contains inland truck freight rates from four major points of origin to 25 destinations in India. The Department obtained inland truck freight rates updated through September 2008 from each point of origin to each destination and averaged the data accordingly. Since this value is not contemporaneous with the POI, we deflated the rate using the WPI. See Factor Valuation Memorandum. The Department determined the best available information for valuing rail freight to be from http://www.indianrailways.gov.in. To value waterway freight, we used an Indian domestic ship rate from Indian Waterways Authority. For data that were not contemporaneous with the POR, we adjusted the rates for inflation using WPI, where applicable.
We valued electricity using price data for small, medium, and large industries, as published by the Central Electricity Authority of the Government of India in its publication titled Electricity Tariff & Duty and Average Rates of Electricity Supply in Indi a, dated July 2006. These electricity rates represent actual country-wide, publicly available information on tax-exclusive electricity rates charged to industries in India. Since the rates are not contemporaneous with the POR, we inflated the values using the WPI. See Factor Valuation Memorandum.
The Department valued water using data from the Maharashtra Industrial Development Corporation (www.midcindia.org) because it includes a wide range of industrial water tariffs. This source provides 386 industrial water rates within the Maharashtra province from June 2003: 193 for the “inside industrial areas” usage category and 193 for the “outside industrial areas” usage category. Because the value was not contemporaneous with the POR, we adjusted the rate for inflation. See Factor Valuation Memorandum.
For direct and indirect labor, consistent with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate as reported on Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, revised in May 2008, available at http://www.trade.gov/ia/. Because this regression-based wage rate does not separate the labor rates into different skill levels or types of labor, we have applied the same wage rate to all skill levels and types of labor reported by the respondent. For further details on the labor calculation, see Factor Valuation Memorandum.
Interested parties submitted financial statements for the year ending March 31, 2007, of three Indian producers of identical merchandise: Essar Steel Limited (“Essar”), Steel Authority of India Limited (“SAIL”), and TATA Steel Limited (“TATA”). Because neither SAIL's nor TATA's financial statements were complete, the Department has determined to disregard each statement Start Printed Page 67131in calculating surrogate financial ratios, for the preliminary results.45
For the preliminary results, we have determined to use Essar's year ending March 31, 2007, financial statements to calculate surrogate financial ratios because they appear to be complete, are publicly available, and are contemporaneous with the POR. Therefore, for factory overhead, selling, general, and administrative expenses, and profit, consistent with 19 CFR 351.408(c)(4), we used the public information from Essar's year ending March 31, 2007, financial statements. For a full discussion of the calculation of these ratios, see Factor Valuation Memorandum.
Finally, Valin Xiantan did not provide a full description of certain of its FOPs to the Department nor has it provided recommendations for valuing certain FOPs. For the preliminary results, the Department is using SVs either recommended by the parties or found in its own research to value FOPs in its margin calculation. For further details regarding each FOP, see Factor Valuation Memorandum and Valin Xiangtan Preliminary Analysis Memorandum.
For the final results, the Department is providing Valin Xiangtan an opportunity to provide a full description as requested by the Department in the original questionnaire issued on January 14, 2008, and recommendations for valuing these FOPs. A full description of certain FOPs, including all support documentation is hereby due to the Department no later than 14 days after its receipt of our supplemental questionnaire, which we intend to issue shortly to Valin Xiangtan.
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. See http://www.ia.ita.doc.gov/exchange/index.html.
Preliminary Results of Reviews
We preliminarily find the weighted-average dumping margin for Valin Xiangtan for the period November 1, 2006, through October 31, 2007, to be 133.38 percent.
The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department intends to issue appropriate appraisement instructions for the company subject to this new shipper review directly to CBP 15 days after publication of the final results of this new shipper review. Pursuant to 19 CFR 351.212(b)(1), we will calculate importer- specific ad valorem duty assessment rates based on the ratio of the total amount of the dumping margins calculated for the examined sales to the total entered value of those same sales. We will instruct CBP to assess antidumping duties on all appropriate entries covered by this new shipper review if any importer-specific assessment rate calculated in the final results of this new shipper review is above de minimis.
Cash Deposit Requirements
Upon completion of this new shipper review, we will require cash deposits at the rate established in the final results as further described below. Bonding will no longer be permitted to fulfill security requirements for shipments of CTL Steel Plate from the PRC produced and exported by Valin Xiantan that are entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of the new shipper review. The following cash deposit requirements will be effective upon publication of the final results of this new shipper review for shipments of subject merchandise from Valin Xiangtan entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) Subject merchandise produced and exported by Valin Xiangtan, the cash deposit rate will be that established in the final results of this review; (2) subject merchandise exported by Valin Xiangtan but not produced by Valin Xiangtan, the cash deposit rate will continue to be the PRC-wide rate of 128.59 percent; (3) for subject merchandise produced by Valin Xiangtan, and exported by any party but themselves, the cash deposit rate will be the rate applicable to the exporter.
These requirements, when imposed, shall remain in effect until further notice.
Notification to Importers
This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This new shipper review and notice are in accordance with sections 751(a)(1) of the Act and 19 CFR 351.214.Start Signature
Dated: November 6, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
1. Citing previous cases such as Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the People's Republic of China, 71 FR 29303 (May 22, 2006) (“Diamond Sawblades”) and accompanying Issues and Decision Memorandum at Comment 9.Back to Citation
2. See, e.g., Pure Magnesium From the People's Republic of China: Final Results of Antidumping Duty New Shipper Administrative Review, 63 FR 3085 (January 21, 1998) (“Pure Magnesium”).Back to Citation
3. See, e.g., Pure Magnesium and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Preliminary Results of New Shipper Reviews, 66 FR 59569 (November 29, 2001)Back to Citation
5. See the Department's Memorandum to the File entitled, “Cut-To-Length Carbon Steel Plate from the People's Republic of China: Analysis of the Preliminary Determination Margin Calculation for Valin Xiangtan,” dated concurrent with this notice (“Valin Xiangtan Preliminary Analysis Memorandum”).Back to Citation
6. See Valin Xiangtan's second supplemental submission dated October 16, 2008, at 3.Back to Citation
7. See Valin Xiangtan's business license in its Section A response, dated March 5, 2008, at Exhibit A-4.1.Back to Citation
8. See Nucor's March 25 and May 23, 2008, submissions regarding its comments on the section A and supplemental section A questionnaire responses of Valin Xiangtan.Back to Citation
9. See, e.g., Valin Xiangtan's March 25, 2008, and October 18, 2008, supplemental questionnaire responses.Back to Citation
10. See Valin Xiangtan's March 25, 2008, submission.Back to Citation
11. See Valin Xiangtan's March 5, 2008, submission at Exhibit 4.1Back to Citation
12. See Valin Xiangtan's April 25, 2008, supplemental submission at Exhibit A-23 Article 11.Back to Citation
13. See, e.g., Valin Xiangtan's section A submission dated March 5, 2008, and its supplemental questionnaire responses dated March 25, 2008, and October 18, 2008.Back to Citation
14. See, e.g., Lightweight Thermal Paper From the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 73 FR 57329 (October 2, 2008) and accompanying Issues and Decision Memorandum at Comment 7.Back to Citation
15. See, e.g., Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the People's Republic of China, 71 FR 29303 (May 22, 2006) and accompanying Issues and Decision Memorandum at Comment 16.Back to Citation
16. See, e.g., Valin Xiangtan's section A response dated March 5, 2008 at pages 14 through 16.Back to Citation
17. See Valin Xiangtan's section A supplemental submission dated April 28, 2008 at Exhibits A-24 and A-25.Back to Citation
18. For further information, see the Department's memorandum entitled “2006-2007 New Shipper Review of the Antidumping Duty Order on CTL Steel from the People's Republic of China: Bona Fide Analysis of Hunan Valin Xiangtan Iron § Steel Company Ltd.,” dated concurrent with this notice.Back to Citation
19. See the Department's memorandum entitled, “Antidumping Duty Investigation of Certain Lined Paper Products from the People's Republic of China (“China”) China's status as a non-market economy (“NME”),” dated August 30, 2006. This document is available online at: http:// ia.ita.doc.gov/download/prc-nmestatus/ prc-lined-paper-memo-08302006.pdf.Back to Citation
20. See the Department's Office of Policy memorandum entitled, “New Shipper Review of the Antidumping Duty Order on Certain Cut-To-Length Carbon Steel Plate from the People's Republic of China (PRC): Request for a List of Surrogate Countries,” dated January 14, 2008 (“Policy Memorandum”).Back to Citation
21. See the Department's memorandum entitled, “New Shipper Review of the Antidumping Duty Order of Cut-To-Length Steel Plate from the People's Republic of China: Selection of a Surrogate Country,” dated February 11, 2008 (“Surrogate Country Memorandum”).Back to Citation
22. See Surrogate Country Memorandum.Back to Citation
23. In accordance with 19 CFR 351.301(c)(2), for the final results of this review, interested parties may submit factual information to rebut, clarify, or correct factual information submitted by an interested party less than ten days before, on, or after, the applicable deadline for submission of such factual information. However, the Department notes that 19 CFR 351.301(c)(2) permits new information only insofar as it rebuts, clarifies, or corrects information recently placed on the record. The Department generally cannot accept the submission of additional information previously absent-from-the-record alternative surrogate value information pursuant to 19 CFR 351.301(c)(2). See Glycine from the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Final Rescission, in Part, 72 FR 58809 (October 17, 2007) and accompanying Issues and Decision Memorandum at Comment 2.Back to Citation
24. F or a detailed description of all adjustments, see Valin Xiangtan Preliminary Analysis Memorandum.Back to Citation
25. See, e.g., Certain Cased Pencils from the People's Republic of China; Final Results and Partial Rescission of Antidumping Duty Administrative Review, 71 FR 38366 (July 6, 2006), and accompanying Issues and Decision Memorandum at Comment 1.Back to Citation
26. Kejriwal was a respondent in the certain lined paper products from India investigation for which the period of investigation was July 1, 2004, to June 30, 2005. See Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Affirmative Preliminary Determination of Critical Circumstances in Part: Certain Lined Paper Products From India, 71 FR 19706 (April 17, 2006) (“CLPP”) (unchanged in final determination).Back to Citation
27. See Certain Preserved Mushrooms From India: Final Results of Antidumping Duty Administrative Review, 70 FR 37757 (June 30, 2005) (unchanged in final results).Back to Citation
28. See, e.g., Helical Spring Lock Washers From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 72 FR 52073, 52076 (September 12, 2007) (unchanged in final results).Back to Citation
29. See, e.g., Final Determination of Sales at Less Than Fair Value and Critical Circumstances: Certain Malleable Iron Pipe Fittings From the People's Republic of China, 68 FR 61395 (October 28, 2003), and accompanying Issues and Decision Memorandum at Comment 19.Back to Citation
30. See Valin Xiantan's March 14, 2008, section D submission at 17 and Exhibit D-6Back to Citation
31. See Valin Xiantan's section D submission at 17 and Exhibit D-6; and its supplemental section D response at 6 through 7 and Exhibits D-15, D-16, and D-19 through D-25, dated March 14 and May 28, 2008, respectively.Back to Citation
32. See id.Back to Citation
33. See Valin Xiantan's supplemental section D response at 6 through 7 and Exhibit D-20 dated May 28, 2008.Back to Citation
34. See Valin Xiantan's supplemental section D response at 6 through 7 and Exhibits D-23 and D-24 dated May 28, 2008.Back to Citation
35. See id.Back to Citation
36. See, e.g., Folding Metal Tables and Chairs from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 71 FR 71509 (December 11, 2006), and accompanying Issues and Decision Memorandum at Comment 9.Back to Citation
37. See Factor Valuation Memorandum at Attachments 1 and 3.Back to Citation
38. See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997).Back to Citation
39. See Antidumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request for Comments, 71 FR 61716, 61717 (October 19, 2006) (“Antidumping Methodologies: Market Economy Inputs”).Back to Citation
40. See Valin Xiangtan's May 28, 2008, supplemental D submission at Exhibit D-8.Back to Citation
41. See Antidumping Methodologies: Market Economy Inputs, 71 FR at 61718.Back to Citation
42. The NME countries are Armenia, Azerbaijan, Belarus, Georgia, Kyrgyz Republic, Moldova, PRC, Tajikistan, Turkmenistan, Uzbekistan, and Vietnam.Back to Citation
43. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results of the 1998-1999 Administrative Review, Partial Rescission of Review, and Determination Not to Revoke Order in Part, 66 FR 1953 (January 10, 2001), and accompanying Issues and Decision Memorandum at Comment 1; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results of 1999-2000 Administrative Review, Partial Rescission of Review, and Determination Not To Revoke Order in Part, 66 FR 57420 (November 15, 2001), and accompanying Issues and Decision Memorandum at Comment 1; and China National Machinery Imp. & Exp. Corp. v. United States, 293 F. Supp. 2d 1334, 1339 (CIT 2003), as affirmed by the Federal Circuit, 104 Fed. Appx. 183 (Fed. Cir. 2004).Back to Citation
44. See Valin Xiangtan's and IPSCO's surrogate value submissions dated March 14, 2008.Back to Citation
45. See IPSCO's surrogate value submission dated March 14, 2008.Back to Citation
[FR Doc. E8-26992 Filed 11-12-08; 8:45 am]
BILLING CODE 3510-DS-S