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Import Administration, International Trade Administration, Department of Commerce.
In response to requests from interested parties, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on polyethylene retail carrier bags (PRCBs) from the People's Republic of China (PRC). The review covers Rally Plastics Co., Ltd. The period of review (POR) is August 1, 2007, through July 31, 2008.
We have preliminarily determined that sales have been made at prices below normal value by the company subject to this review. If these preliminary results are adopted in our final results of administrative review, we will instruct U.S. Customs and Border Protection to assess antidumping duties on all appropriate entries.
We invite interested parties to comment on these preliminary results. Parties who submit comments in this review are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument.
July 29, 2009.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Catherine Cartsos or Minoo Hatten, AD/CVD Operations, Office 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-1757 or (202) 482-1690, respectively.End Further Info End Preamble Start Supplemental Information
On August 9, 2004, the Department published the antidumping duty order on PRCBs from the PRC. See Antidumping Duty Order: Polyethylene Retail Carrier Bags From the People's Republic of China, 69 FR 48201 (August 9, 2004). In accordance with 19 CFR 351.213(b), the Department received requests for a review of Rally Plastics Co., Ltd. (Rally). In accordance with 19 CFR 351.213(g) and 19 CFR 351.221(b) we published a notice of initiation of administrative review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 73 FR 56795 (September 30, 2008).
Since initiation of the review, we have extended the due date for completion of these preliminary results from May 3, 2009, to July 22, 2009. See Polyethylene Retail Carrier Bags From Malaysia, Thailand, and the People's Republic of China: Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Reviews, 74 FR 17633 (April 16, 2009), and Polyethylene Retail Carrier Bags From the People's Republic of China: Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review, 74 FR 32884 (July 9, 2009).
We are conducting this review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act).
Scope of the Order
The merchandise subject to the antidumping duty order is PRCBs, which may be referred to as t-shirt sacks, merchandise bags, grocery bags, or checkout bags. The subject merchandise is defined as non-sealable sacks and bags with handles (including drawstrings), without zippers or integral extruded closures, with or without gussets, with or without printing, of polyethylene film having a thickness no greater than 0.035 inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm), and with no length or width shorter than 6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of the bag may be shorter than 6 inches but not longer than 40 inches (101.6 cm).
PRCBs are typically provided without any consumer packaging and free of charge by retail establishments, e.g., grocery, drug, convenience, department, specialty retail, discount stores, and restaurants, to their customers to package and carry their purchased products. The scope of the order excludes (1) polyethylene bags that are not printed with logos or store names and that are closeable with drawstrings made of polyethylene film and (2) polyethylene bags that are packed in consumer packaging with printing that refers to specific end-uses other than packaging and carrying merchandise from retail establishments, e.g., garbage bags, lawn bags, trash-can liners.
As a result of changes to the Harmonized Tariff Schedule of the United States (HTSUS), imports of the subject merchandise are currently classifiable under statistical category 3923.21.0085 of the HTSUS. Furthermore, although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of the order is dispositive.
As provided in section 782(i) of the Act, we have verified information provided by Rally using standard verification procedures including on-site inspection of the manufacturer's facilities and the examination of relevant sales and financial records. Our verification results are outlined in the public version of the verification report on file in the Central Records Unit, Room 1117 of the main Department building.
NME Country Status
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 Brake Rotors From the Start Printed Page 37695People's Republic of China: Final Results and Partial Rescission of the 2004/2005 Administrative Review and Notice of Rescission of 2004/2005 New Shipper Review, 71 FR 66304 (November 14, 2006). None of the parties to this proceeding has contested such treatment. Accordingly, we have calculated normal value in accordance with section 773(c) of the Act, which applies to NME countries.
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 assigned a single antidumping duty rate. It is the Department's policy to assign all exporters of merchandise subject to review 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 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 developed further in the 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). If the Department determines that a company is wholly foreign-owned or located in a market economy, however, then a separate-rate analysis is not necessary to determine whether it is independent from government control.
Rally submitted information that demonstrates it is a wholly foreign-owned company located in Hong Kong. See Rally's November 26, 2008, Section A Response, e.g., articles of association, business license, and export license. Therefore, we have not conducted a separate-rate analysis of Rally.
When the Department analyzes imports from an NME country, section 773(c)(1) of the Act directs it to base normal value, in most circumstances, on the NME producer's factors of production (FOP), valued in a surrogate market-economy country or countries the Department considers to be appropriate. 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 FOPs in one or more market-economy countries that are at a level of economic development comparable to that of the NME country and significant producers of comparable merchandise.
On December 22, 2008, the Department's Office of Policy issued a memorandum identifying India as being at a level of economic development comparable to the PRC for the POR. See Memorandum entitled “Request for a List of Surrogate Countries for an Administrative Review of the Antidumping Duty Order on Polyethylene Retail Carrier Bags from the People's Republic of China” dated December 22, 2008. In the Department's March 16, 2009, letter to interested parties requesting surrogate-country and surrogate-value comments, the Department indicated that India is among the countries comparable to the PRC in terms of overall economic development. In addition, based on publicly available information placed on the record (i.e., export data), India is a significant producer of the subject merchandise. See Memorandum entitled “Polyethylene Retail Carrier Bags from the People's Republic of China: Selection of a Surrogate Country,” dated July 22, 2009.
Furthermore, India has been the primary surrogate country in determinations for past segments of this proceeding and the Polyethylene Retail Carrier Bag Committee  submitted surrogate values based on Indian data that are contemporaneous with the POR, giving further credence to the use of India as a surrogate country. See, e.g., Polyethylene Retail Carrier Bags From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 73 FR 52282 (September 9, 2008). The sources of the surrogate values are discussed under the “Normal Value” section below and in the Memorandum entitled “Polyethylene Retail Carrier Bags from the People's Republic of China: Surrogate-Values Memorandum,” dated July 22, 2009 (Surrogate-Value Memorandum).
A. Export Price
In accordance with section 772(a) of the Act, we based U.S. price on the export price (EP) for sales to the United States because the first sale to an unaffiliated party was made before the date of importation and the use of constructed EP was not otherwise warranted. We calculated EP for Rally based on the prices to unaffiliated purchasers in the United States.
In accordance with section 772(c) of the Act, we first added adjustments to the gross unit price and then deducted from the price to unaffiliated purchasers, where appropriate, foreign inland freight, brokerage and handling, international freight, and marine insurance. See Memorandum from Catherine Cartsos to the File, “Administrative Review of Polyethylene Retail Carrier Bags from the People's Republic of China: Preliminary Results Memorandum for Rally Plastics Co., Ltd.,” dated July 22, 2009 (Analysis Memorandum). Consistent with Certain Orange Juice from Brazil: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 73 FR 46584 (August 11, 2008) (OJ Brazil Final), and accompanying Issues and Decision Memorandum at Comment 7, we have incorporated freight-related revenues as offsets to movement expenses because they relate to the movement and transportation of subject merchandise. We also incorporated packing-related revenue as an offset to packing expenses because these items relate to the packing of subject merchandise (see OJ Brazil Final).
For certain transactions, Rally requested an adjustment for remuneration for samples. Because Rally has not adequately supported its claim, we have denied this claim for an adjustment to U.S. price. See Analysis Memorandum.
B. Surrogate Values for Expenses Incurred in the PRC for U.S. Sales
Rally reported that, for certain U.S. sales, foreign inland freight was provided by an NME vendor or it paid for freight using an NME currency. In such instances, we based the deduction of these charges on surrogate values. We valued foreign inland freight with the surrogate value for truck freight. For foreign brokerage and handling, marine insurance, and international freight, Rally reported using market-economy vendors and stated that it paid these expenses in a market-economy currency. Where movement services were provided by a market-economy vendor and the respondent paid in a market-economy currency, we deducted the actual cost per kilogram of the freight. See Surrogate-Value Memorandum.
Section 773(c)(1)(B) of the Act provides that the Department shall determine the normal value using an Start Printed Page 37696FOP methodology if the merchandise is exported from an NME country and the information does not permit the calculation of normal value using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. The Department bases normal value on the FOPs because the presence of government controls on various aspects of NME countries renders price comparisons and the calculation of production costs invalid under the Department's normal methodologies. See Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Notice of Intent to Rescind in Part, 70 FR 39744 (July 11, 2005) (unchanged in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of 2003-2004 Administrative Review and Partial Rescission of Review, 71 FR 2517 (January 17, 2006)).
In accordance with 19 CFR 351.408(c)(1), when a producer sources an input from a market-economy country and pays for it in a 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 v. United States, 43 F.3d 1442, 1445-1446 (CAFC 1994) (affirming the Department's use of market-based prices to value certain FOPs). Where a portion of the input is purchased from a market-economy supplier and the remainder from an NME supplier, the Department will normally use the price paid for the inputs sourced from market-economy suppliers to value all of the input, provided the volume of the market-economy inputs as a share of total purchases from all sources is “meaningful.” See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997), and Shakeproof v. United States, 268 F.3d 1376, 1382 (CAFC 2001). See also 19 CFR 351.408(c)(1).
The Department has instituted a rebuttable presumption that market-economy input prices are the best available information for valuing an input when the total volume of the input purchased from all market-economy sources during the POR exceeds 33 percent of the total volume of the input purchased from all sources during the same period. In such cases, unless case-specific facts provide adequate grounds to rebut the Department's presumption, the Department will use the weighted-average market-economy purchase price to value the input.
Alternatively, when the volume of an NME firm's purchases of an input from market-economy suppliers during the period is equal to or below 33 percent of its total volume of purchases of the input during the period but where these purchases are otherwise valid and there is no reason to disregard the prices, the Department will weight-average the weighted-average market-economy purchase price with an appropriate surrogate value according to their respective shares of the total volume of purchases unless case-specific facts provide adequate grounds to rebut the presumption. When a firm has made market-economy input purchases that may have been dumped or subsidized, are not bona fide, or are otherwise not acceptable for use in a dumping calculation, the Department will exclude them from the numerator of the ratio to ensure a fair determination of whether valid market-economy purchases meet the 33-percent threshold. See Antidumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request for Comments, 71 FR 61716, 61717-19 (October 19, 2006). Also, where the quantity of the input purchased from market-economy suppliers is insignificant, the Department will not rely on the price paid by an NME producer to a market-economy supplier because it cannot have confidence that a company could fulfill all its needs at that price. Id.
We have found in other proceedings that Indonesia, South Korea, and Thailand maintain broadly available, non-industry-specific export subsidies. Therefore, it is reasonable to infer that all exports to all markets from these countries may be subsidized and it is our practice to disregard input prices from such countries. See China Nat'l Mach. Import & Export Corp. v. United States, 293 F. Supp. 2d 1334, 1336 (CIT 2003), aff'd 104 Fed. Appx. 183 (Fed. Cir. 2004), and Certain Cut-to-Length Carbon Steel Plate from Romania: Notice of Final Results and Final Partial Rescission of Antidumping Duty Administrative Review, 70 FR 12651 (March 15, 2005), and accompanying Issues and Decision Memorandum at Comment 4. The legislative history reflects the Department's practice that, in making its determination as to whether input values may be subsidized, the Department does not conduct a formal investigation; rather, the Department bases its decision on information that is available to it at the time it makes its determination. See H.R. Rep. 100-576, at 590 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24.
The FOPs for PRCBs include the following elements: (1) quantities of raw materials employed; (2) hours of labor required; (3) amounts of energy and other utilities consumed; (4) representative capital and selling costs; (5) packing materials. We used the FOPs reported by the respondent for materials, labor, energy, by-products, and packing.
B. FOP Valuation
In accordance with section 773(c) of the Act, we calculated normal value based on the FOPs reported by the respondent for the POR. To calculate normal value, we multiplied the reported per-unit factor-consumption rates by publicly available surrogate values. In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data.
During the POR, Rally purchased some of the inputs exclusively from market-economy suppliers in a market-economy currency. We valued these inputs at the weighted-average market-economy purchase price the respondent reported. Consistent with our practice as described above, we have disregarded all market-economy input prices from all countries that we suspect subsidize the input price. For further analysis, see Surrogate-Value Memorandum.
During the POR, Rally purchased some of the inputs from market-economy suppliers in an market-economy currency and from NME suppliers in NME currency. Accordingly, we have weight-averaged the market-economy input price with the appropriate surrogate value. Consistent with our practice as described above, we have disregarded all market-economy input prices from all countries that we suspect subsidize the input price. For further analysis, see Surrogate-Value Memorandum.
During the POR, Rally purchased certain inputs exclusively from NME suppliers in an NME currency. We have valued these inputs using surrogate values from a market-economy country that is at a level of economic development comparable to that of the PRC and a significant producer of comparable merchandise. For further analysis, see Surrogate-Value Memorandum.
It is the Department's practice to calculate price-index adjustors to inflate or deflate, as appropriate, surrogate values that are not contemporaneous with the POR using the wholesale price index for the subject country. See, e.g., Certain Preserved Start Printed Page 37697Mushrooms from the People's Republic of China: Preliminary Results of the Antidumping Duty New Shipper Review, 71 FR 38617, 38619 (July 7, 2006) (unchanged in Certain Preserved Mushrooms from the People's Republic of China: Final Results of the Antidumping Duty New Shipper Review, 71 FR 66910 (November 17, 2006)). Therefore, where we could not obtain publicly available information contemporaneous with the POR, we adjusted surrogate values using the Wholesale Price Index (WPI) for India as published in the International Financial Statistics of the International Monetary Fund.
Except as indicated below, we valued raw-material inputs using the 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 in the World Trade Atlas (WTA), available at http://www.gtis.com/wta.htm. Consistent with our practice as described above, for those surrogate values based upon Indian import statistics, we disregarded input prices from all countries that we suspect subsidize the input price.
We have also disregarded Indian import data concerning raw materials from countries that we have previously determined to be NME countries as well as imports originating from “unspecified” countries because we could not be certain that they were not from either an NME country or a country with generally available export subsidies. See 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 Notice of Final Determination of Sales at Less Than Fair Value: Chlorinated Isocyanurates From the People's Republic of China, 70 FR 24502 (May 10, 2005)). For a comprehensive list of the sources and data we used to determine the surrogate vales for the FOPs, by-products, and the surrogate financial ratios for factory overhead, selling, general and administrative expenses (SG&A), and profit, see Surrogate-Value Memorandum.
Where appropriate, we adjusted the Indian import prices by including freight costs to make them delivered prices. Specifically, we added to the Indian import prices a surrogate freight cost using the shorter of the reported distance from the domestic supplier to the production factory or the distance from the nearest seaport to the production factory where appropriate. This adjustment is in accordance with the decision by the Court of Appeals for the Federal Circuit in Sigma Corp. v. United States, 117 F.3d 1401, 1407-1408 (CAFC 1997). Where we did not use Indian import data as the basis of the surrogate value, we calculated inland freight based on the reported distance from the supplier to the factory. We valued truck-freight expenses using a per-unit average rate calculated from data on the following Web site: http://www.infobanc.com/logistics/logtruck.htm. See Surrogate-Value Memorandum. The logistics section of this Web site contains inland-freight truck rates between many large Indian cities. Because this value is not contemporaneous with the POR, we deflated the rate using the WPI. See Surrogate-Value Memorandum.
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 India, dated July 2006. These electricity rates represent actual country-wide, publicly available information on tax-exclusive electricity rates charged to industries in India. Because the rates are not contemporaneous with the POR, we deflated the values using the WPI. See Surrogate-Value Memorandum.
For direct labor, indirect labor, and packing labor, consistent with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate as reported on the Import Administration web site. See Corrected 2007 Calculation of Expected Non-Market Economy Wages, 73 FR 27795, 27796 (May 14, 2008) (available at http://ia.ita.doc.gov/wages). The source of these wage-rate data on the Import Administration website is the Yearbook of Labour Statistics 2003, ILO (Geneva: 2003), Chapter 5B: Wages in Manufacturing. The years of the reported wage rates range from 2003 through 2004. 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. See Surrogate-Value Memorandum.
To value factory overhead, SG&A, and profit values, we used information from M/S Synthetic Packers Private Ltd. for the fiscal year ending March 31, 2008. From this information, we were able to determine factory overhead as a percentage of the total raw materials, labor and energy (ML&E) costs, SG&A as a percentage of ML&E plus overhead (i.e., cost of manufacture), and profit as a percentage of the cost of manufacture plus SG&A. See Surrogate-Value Memorandum.
For packing materials, we used the per-kilogram values obtained from the WTA and made adjustments to account for freight costs incurred between the PRC suppliers and the respondent's production facilities. See Surrogate-Value Memorandum.
Preliminary Results of the Review
As a result of our review, we preliminarily determine that a weighted-average dumping margin of 17.95 percent exists for Rally for the period August 1, 2007, through July 31, 2008.
We will disclose the calculations used in our analysis to parties in this review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Interested parties may submit publicly available information to value FOPs no later than 20 days after the date of publication of these preliminary results of review. See 19 CFR 351.301(c)(3)(ii). Any interested party may request a hearing within 30 days of the date of publication of this notice. See 19 CFR 351.310. Interested parties who wish to request a hearing or to participate in a hearing if a hearing is requested must submit a written request to the Assistant Secretary for Import Administration within 30 days of the date of publication of this notice. Requests should contain the following: (1) the party's name, address, and telephone number; (2) the number of participants; (3) a list of issues to be discussed. See 19 CFR 351.310(c).
Issues raised in the hearing will be limited to those raised in the case briefs. See 19 CFR 351.310(c). Case briefs from interested parties may be submitted not later than 30 days after the date of publication of this notice of preliminary results of review. See 19 CFR 351.309(c)(1)(ii). Rebuttal briefs from interested parties, limited to the issues raised in the case briefs, may be submitted not later than five days after the time limit for filing the case briefs or comments. See 19 CFR 351.309(d)(1). If requested, any hearing will be held two days after the scheduled date for submission of rebuttal briefs. See 19 CFR 351.310(d). Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument a statement of the issue, a summary of the arguments not exceeding five pages, and a table of Start Printed Page 37698statutes, regulations, and cases cited. See 19 CFR 351.309(c)(2).
The Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs or at the hearing, if held, not later than 120 days after the date of publication of this notice. See section 751(a)(3)(A) of the Act.
The Department shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated importer-specific (or customer-specific) assessment rates for merchandise subject to this review.
For these preliminary results, we divided the total dumping margins (calculated as the difference between normal value and EP) for each of Rally's importers or customers by the total number of units the exporter sold to that importer or customer. We will direct CBP to assess the resulting per-unit dollar amount against each unit of merchandise in each of that importer's/customer's entries during the review period.
We intend to issue assessment instructions to CBP 15 days after the date of publication of the final results of review.
The following cash deposit requirements will be effective upon publication of the notice of final results of the administrative review for all shipments of PRCBs from the PRC entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) for subject merchandise exported by Rally, the cash-deposit rate will be that established in the final results of review; (2) for previously reviewed or investigated companies not listed above that have separate rates, the cash-deposit rate will continue to be the company-specific rate published for the most recent period; (3) for all other PRC exporters of subject merchandise which have not been found to be entitled to a separate rate, the cash-deposit rate will be the PRC-wide rate of 77.57 percent; (4) for all non-PRC exporters of subject merchandise, the cash-deposit rate will be the rate applicable to the PRC exporter that supplied that exporter. These deposit requirements, when imposed, shall remain in effect until further notice.
Notification to Importers
This notice also 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 administrative review and this notice are in accordance with sections 751(a)(1) and 777(i) of the Act.Start Signature
Dated: July 22, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
1. Consisting of Hilex Poly Company, LLC, and the Superbag Corporation (collectively, the petitioners).Back to Citation
[FR Doc. E9-18086 Filed 7-28-09; 8:45 am]
BILLING CODE 3510-DS-S