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Notice

Chlorinated Isocyanurates From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review

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Information about this document as published in the Federal Register.

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Start Preamble

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to requests from interested parties, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on chlorinated isocyanurates (chlorinated Start Printed Page 40690isos) from the People's Republic of China (PRC). The period of review (POR) for this administrative review is June 1, 2009, through May 31, 2010. This administrative review covers four producers/exporters of the subject merchandise, i.e., Hebei Jiheng Chemical Co., Ltd. (Jiheng); Zhucheng Taisheng Chemical Co., Ltd. (Zhucheng); Juancheng Kangtai Chemical Co., Ltd. (Kangtai); and Arch Chemicals (China) Co., Ltd. (Arch China). Jiheng is the only producer/exporter being individually examined as a mandatory respondent.

We preliminarily determine that Jiheng made sales in the United States at prices below normal value (NV). With respect to the three remaining respondents in this administrative review, we preliminarily determine that Zhucheng, Kangtai, and Arch China have demonstrated that they are entitled to a separate rate, and we are assigning to these companies Jiheng's calculated rate. If these preliminary results are adopted in our final results of review, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on entries of subject merchandise during the POR for which the importer-specific assessment rates are above de minimis. We invite interested parties to comment on these preliminary results.

DATES:

Effective Date: July 11, 2011.

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Emily Halle, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-0176.

End Further Info End Preamble Start Supplemental Information

SUPPLEMENTARY INFORMATION:

Background

On June 24, 2005, the Department published in the Federal Register the antidumping duty order on chlorinated isos from the PRC.[1] On June 1, 2010, the Department published in the Federal Register a notice of opportunity to request an administrative review of the antidumping duty order on chlorinated isos from the PRC for the period June 1, 2009, through May 31, 2010.[2] Between June 24 and June 30, 2010, in accordance with 19 CFR 351.213(b)(2), Zhucheng, Kangtai, and Jiheng, foreign producers/exporters of subject merchandise, each requested that the Department review their respective sales of subject merchandise. On June 30, 2010, in accordance with 19 CFR 351.213(b)(3), Arch Chemicals, Inc. (Arch USA), a U.S. importer of subject merchandise, requested that the Department review sales of subject merchandise made to the United States during the POR by Arch China, a PRC exporter of subject merchandise. On June 30, 2010, in accordance with 19 CFR 351.213(b)(1), Clearon Corporation and Occidental Chemical Corporation, domestic producers of chlorinated isos (collectively, Petitioners), requested that the Department review sales of subject merchandise produced during the POR by Jiheng and Kangtai.

On July 28, 2010, the Department initiated the administrative review of the antidumping duty order on chlorinated isos from the PRC covering the period June 1, 2009, through May 31, 2010.[3] In the Initiation Notice, parties were notified that, due to the administrative burden of reviewing each company, the Department might exercise its authority to limit the number of respondents selected for review in accordance with section 777A(c)(2) of the Tariff Act of 1930, as amended (the Act). Accordingly, the Department requested that all companies listed in the Initiation Notice wishing to qualify for separate rate status in this administrative review complete either a separate rate application or separate rate certification, as appropriate.[4] The Department also stated in the Initiation Notice its intention to select respondents based on CBP data for U.S. imports during the POR. For this administrative review, because the Department determined that it could only review one producer/exporter and based on CBP data, it selected Jiheng as the only mandatory respondent in this review.[5]

On September 1, 2010, the Department issued its antidumping duty questionnaire to Jiheng. Between September 22 and 27, 2010, Kangtai, Jiheng, Arch China, and Zhucheng each submitted either a separate rate application or certification, as appropriate. On September 29, 2010, Jiheng submitted its section A questionnaire response, and it submitted its sections C and D responses on October 25, 2010. On November 23, 2010, Petitioners submitted deficiency comments regarding Jiheng's questionnaire responses. In response, on December 1, 2010, Jiheng submitted reply comments to Petitioners' deficiency comments. The Department issued supplemental questionnaires to Jiheng on December 23, 2010, and March 15, 2011, for which Jiheng provided timely responses on January 18, 2011, and April 8, 2011, respectively.

On October 22, 2010, the Department issued a list of possible surrogate countries to use in this review,[6] and provided interested parties with an opportunity to comment on the surrogate country selection and surrogate values. On January 19, 2011, Petitioners submitted comments regarding the selection of a surrogate country. On January 26, 2011, Jiheng and Petitioners each submitted publicly available information in order to value Jiheng's factors of production (FOPs). On January 31, 2011, Arch USA submitted comments regarding Petitioners' surrogate country comments. On February 28, 2011, the Department published a notice in the Federal Register extending the time limit for the preliminary results of review from March 2, 2011, until June 30, 2011.[7] On March 7, 2011, the Start Printed Page 40691Department issued a memorandum to all interested parties requesting further information on surrogate values.[8] On March 21, 2011, Jiheng and Petitioners each provided additional surrogate value information. On March 22, 2011, the Department placed on the record an Indian company's annual financial statement for the 2009-2010 fiscal year for consideration in the calculation of certain surrogate values.[9] On May 16, 2011, Jiheng responded to the Department's request for further information on magnesium stearate.[10] Finally, on May 16, 2011, the Department placed on the record CBP rulings for magnesium stearate.[11]

Scope of the Order

The products covered by the order are chlorinated isocyanurates, which are derivatives of cyanuric acid, described as chlorinated s-triazine triones. There are three primary chemical compositions of chlorinated isos: (1) Trichloroisocyanuric acid (Cl3 (NCO)3), (2) sodium dichloroisocyanurate (dihydrate) (NaCl2 (NCO)3 (2H2 O), and (3) sodium dichloroisocyanurate (anhydrous) (NaCl2 (NCO)3). Chlorinated isos are available in powder, granular, and tableted forms. The order covers all chlorinated isos. Chlorinated isos are currently classifiable under subheadings 2933.69.6015, 2933.69.6021, 2933.69.6050, 3808.40.50, 3808.50.40 and 3808.94.50.00 of the Harmonized Tariff Schedule of the United States (HTSUS). The tariff classification 2933.69.6015 covers sodium dichloroisocyanurates (anhydrous and dihydrate forms) and trichloroisocyanuric acid. The tariff classifications 2933.69.6021 and 2933.69.6050 represent basket categories that include chlorinated isos and other compounds including an unfused triazine ring. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.

Respondent Selection

In accordance with section 777A(c)(2) of the Act, the Department selected the largest exporter (by quantity) of chlorinated isos from the PRC (i.e., Jiheng) based on the CBP data for entries of subject merchandise during the POR as the mandatory respondent in this review.[12]

On September 9, 2010, and November 1, 2010, Kangtai and Petitioners, respectively, requested that the Department reconsider its selection of mandatory respondents. In addition, on November 5, 2010, Petitioners requested that the Department conduct a verification of Kangtai, Zhucheng, and Arch China if they were selected for review as mandatory or voluntary respondents. On September 22, 2010, Kangtai submitted an unsolicited response to section A of the Department's antidumping duty questionnaire, and on October 8, 2010, it submitted responses to sections C and D of the questionnaire. Subsequently, on November 17, 2010, Kangtai submitted a request to be considered as a voluntary respondent. However, for the reasons explained in the Respondent Selection Memorandum, e.g., the complexities expected to arise and the workload required for this review, the Department is continuing to review only Jiheng as a mandatory respondent in this administrative review.[13]

Non-Market Economy Country

The Department has treated the PRC as a non-market economy (NME) country in all past antidumping duty investigations and administrative reviews and continues to do so in this review.[14] No interested party in this case has argued that we should do otherwise. Designation as an NME country remains in effect until it is revoked by the Department.[15] Accordingly, we calculated NV in accordance with section 773(c) of the Act, which applies to NME countries.

Surrogate Country

When the Department is investigating imports from an NME country, section 773(c)(1) of the Act directs it, in most instances, to base NV on the NME producer's FOPs. The Act further instructs that valuation of the FOPs shall be based on the best available information in the surrogate market economy (ME) country or countries considered to be appropriate by the Department.[16] When valuing the FOPs, the Department shall utilize, to the extent possible, the prices or costs of 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.[17] Further, the Department normally values all FOPs in a single surrogate country.[18] The sources of the surrogate factor values are discussed under the “Normal Value” section, below, and in the Preliminary Surrogate Value Memorandum,[19] which is on file in the Central Records Unit, Room 7046 of the main Commerce building. In examining which country to select as its primary surrogate for this proceeding, the Department determined that India, Indonesia, the Philippines, Ukraine, Thailand, and Peru are countries comparable to the PRC in terms of economic development.[20]

In their January 19, 2011 comments regarding the selection of a surrogate country, Petitioners argue that there are several countries besides India that are both economically comparable to the PRC and produce a significant amount of subject merchandise, including Peru, Pakistan (which has a gross national income similar to India, but was not included in the Surrogate Country List), and Egypt (also not included in the Surrogate Country List). On January 31, 2011, Arch USA responded to Petitioners' comments, contending that the Department should continue to use India as the surrogate country for this segment of the proceeding, as it has in previous segments, because, in this case, India produces a significant amount of comparable merchandise and there are publicly available data with which to value the reported FOP information. We note that all parties which submitted Start Printed Page 40692surrogate value data submitted only Indian-sourced data.

After evaluating the interested parties' comments, the Department finds that India is the appropriate surrogate country to use in this review. The Department based its decision on the following facts: (1) India is at a level of economic development comparable to that of the PRC; (2) India is a significant producer of comparable merchandise, i.e., calcium hypochlorite; and (3) India provides more sources of reliable, publicly available data to value the FOPs. On the record of this review, we have usable surrogate financial data from India, but no such surrogate financial data from any other potential surrogate country. Therefore, we have selected India as the surrogate country and, accordingly, have calculated NV using Indian prices to value the respondents' FOPs, when available and appropriate.[21] We have obtained and relied upon publicly available information wherever possible.

In accordance with 19 CFR 351.301(c)(3)(ii), interested parties may submit publicly available information to value FOPs until 20 days after the date of publication of these preliminary results.[22]

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 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.

In the Initiation Notice, the Department notified parties of the process by which exporters and producers may obtain separate-rate status. This process requires exporters and producers wishing to qualify for separate-rate status in this administrative review to complete, as appropriate, either a separate rate application or certification.[23] In particular, companies for which a review was requested, and which were assigned a separate rate in the most recent segment of the same proceeding in which they participated, need to certify that they continue to meet the criteria for obtaining a separate rate.[24] For companies that have not previously been assigned a separate rate, the companies must submit a separate rate application demonstrating eligibility for a separate rate.

Kangtai and Jiheng were assigned a separate rate in the most recent segment of this proceeding in which they participated, and they timely certified in this administrative review that they continue to meet the criteria for obtaining a separate rate. In addition, Arch China and Zhucheng timely filed separate rate applications.

In order to establish independence from the NME entity, exporters must demonstrate 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 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 an ME country, then a separate-rate analysis is not necessary to determine whether it is independent from government control.

Separate Rate Analysis

1. Wholly Foreign-Owned Companies

Arch China's separate rate application provided evidence that it is wholly owned by individuals or companies located in an ME. Therefore, because it is wholly foreign-owned, and the Department has no evidence indicating that it is under the control of the PRC, a separate rate analysis is not necessary to determine that Arch China is independent from government control.[25] Accordingly, the Department has preliminarily granted Arch China a separate rate.

2. Joint Ventures or Wholly Chinese-Owned Companies

Jiheng, Kangtai, and Zhucheng stated that they are either joint ventures between Chinese and foreign companies or are wholly Chinese-owned companies. Thus, the Department has analyzed whether each of these companies has demonstrated the absence of de jure and de facto governmental control over their respective 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.[26]

The evidence Jiheng, Kangtai and Zhucheng provided in their separate rate certifications and separate rate application supports a preliminary finding of absence of de jure government control based on the following factors: (1) An absence of restrictive stipulations associated with the individual exporter's business and export licenses; (2) applicable legislative enactments decentralizing control of the companies; and (3) formal measures by the government decentralizing control of PRC companies.

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 Start Printed Page 40693losses.[27] 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.

The evidence Jiheng and Kangtai provided in their separate rate certifications, and the evidence Zhucheng provided in its separate rate application, supports a preliminary finding of absence of de facto government control based on the following factors: (1) An absence of restrictive government control on export prices; (2) a showing of authority to negotiate and sign contracts and other agreements; (3) a showing that Jiheng, Kangtai, and Zhucheng maintain autonomy from the government in making decisions regarding the selection of management; and (4) a showing that Jiheng, Kangtai, and Zhucheng retain the proceeds of their respective export sales and make independent decisions regarding disposition of profits or financing of losses.

Ultimately, the evidence placed on the record of this administrative review by Jiheng, Kangtai, and Zhucheng demonstrates an absence of de jure and de facto government control, in accordance with the criteria identified in Sparklers and Silicon Carbide. Therefore, the Department has preliminarily granted Jiheng, Kangtai, and Zhucheng a separate rate.

Margin for Separate-Rate Companies

In accordance with section 777A(c)(2)(B) of the Act, the Department employed a limited examination methodology, as it did not have the resources to examine all companies for which a review request was made. As stated above, the Department selected Jiheng as the mandatory respondent in this review. In addition to the mandatory respondent, Arch China, Kangtai, and Zhucheng submitted timely information as requested by the Department and remain subject to review as cooperative separate rate respondents.

We note that the statute and the Department's regulations do not directly address the establishment of a rate to be applied to individual companies not selected for examination where the Department limited its examination in an administrative review pursuant to section 777A(c)(2) of the Act. The Department's practice in cases involving limited selection based on exporters accounting for the largest volumes of trade has been to look to section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in an investigation, for guidance. Section 735(c)(5)(A) of the Act instructs that we are not to calculate an all-others rate using any zero or de minimis margins or any margins based entirely on facts available. Section 735(c)(5)(B) of the Act also provides that, where all margins are zero rates, de minimis rates, or rates based entirely on facts available, we may use “any reasonable method” for assigning the rate to non-selected respondents. In this instance, we have calculated a de minimis rate for the sole mandatory respondent, Jiheng.

In exercising this discretion to determine a non-examined rate, the Department considers relevant the fact that section 735(c)(5) of the Act: (a) Is explicitly applicable to the determination of an all-others rate in an investigation; and (b) articulates a preference that the Department avoid zero, de minimis rates or rates based entirely on facts available when it determines the all others rate. The statute's statement that averaging of zero/de minimis margins and margins based entirely on facts available may be a reasonable method, and the Statement of Administrative Action's (SAA) indication that such averaging may be the expected method, should be read in the context of an investigation.[28] First, if there are only zero or de minimis margins determined in the investigation (and there is no other entity to which a facts available margin has been applied), the investigation would terminate and no order would be issued. Thus, the provision necessarily only applies to circumstances in which there are either both zero/de minimis and total facts available margins, or only total facts available margins. Second, when such rates are the only rates determined in an investigation, there is little information on which to rely to determine an appropriate all-others rate. In this context, therefore, the SAA's stated expected method is reasonable: The zero/de minimis and facts available margins may be the only or best data the Department has available to apply to non-selected companies.

We note that the Department has sought other reasonable means to assign separate-rate margins to non-reviewed companies in instances with calculated zero rates, de minimis rates, or rates based entirely on facts available for the mandatory respondents.[29]

In Vietnam Shrimp, the Department assigned to those separate rate companies with no history of an individually calculated rate the margin calculated for cooperative separate rate respondents in the underlying investigation. However, for those separate rate respondents that had received a calculated rate in a prior segment, concurrent with or more recent than the calculated rate in the underlying investigation, the Department assigned that calculated rate as the company's separate rate in the review at hand.

Thus, we find that a reasonable method in the instant review is to assign to the non-reviewed company, Kangtai, its most recent calculated rate. Pursuant to this method, we are preliminarily assigning a rate of 20.54 percent to Kangtai, its calculated rate in its new shipper review.[30] We find that a reasonable method in the instant review is to assign to the non-reviewed companies, Arch China and Zhucheng, each with no history of an individually calculated rate, the margin calculated for cooperative separate rate respondents in the underlying investigation. Pursuant to this method, we are preliminarily assigning a rate of 137.69 percent to Arch China and Zhucheng, the calculated rate for cooperative separate rate respondents in the underlying investigation.[31] In assigning these separate rates, the Department did not impute the actions of any other companies to the behavior of the non-individually examined company, but based this determination on record evidence that may be deemed reasonably reflective of the potential dumping margin for the non-individually examined companies in this administrative review.

Date of Sale

We preliminarily determine that the invoice date is the most appropriate date to use as Jiheng's date of sale in accordance with 19 CFR 351.401(i). According to Jiheng's questionnaire Start Printed Page 40694responses, the material terms of the sale are not fixed until invoice date. Thus, the Department finds that the invoice date is the date of sale. Evidence on the record also demonstrates that, with respect to Jiheng's sales to the United States, for some sales the shipment date occurs prior to the invoice date.[32] In such cases, we limit the sales date (i.e., invoice date) to no later than shipment date.[33]

Fair Value Comparisons

To determine whether sales of chlorinated isos to the United States by Jiheng were made at less than NV, we compared export price (EP) to NV, as described in the “Export Price” and “Normal Value” sections of this notice, pursuant to section 771(35) of the Act.

Export Price

Jiheng sold the subject merchandise directly to unaffiliated purchasers in the United States prior to importation into the United States. Therefore, we have used EP in accordance with section 772(a) of the Act because the use of the constructed export price methodology is not otherwise indicated. We calculated EP based on the price, including the appropriate shipping terms, to the first unaffiliated purchasers reported by Jiheng. To this price, we added amounts for components that were supplied free of charge or reimbursed by the customer, where applicable, pursuant to section 772(c)(1)(A) of the Act and consistent with our treatment of Jiheng's sales in prior reviews.[34] For free raw materials and packing materials, we added the surrogate values for these materials, multiplied by the reported FOPs for these items, to the U.S. price paid by Jiheng's customer.[35] The reimbursed raw materials were always listed separately on sales invoices, and were not included in the U.S. prices reported by Jiheng.[36] Since these reimbursed items were raw materials, we added the amount paid by the U.S. customer for these materials to the U.S. price.

Normal Value

Section 773(c)(1) of the Act provides that, in an NME proceeding, 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 prices, third-country prices, or constructed value under section 773(a) of the Act.

The Department bases NV on FOPs in NMEs because the presence of government controls on various aspects of these economies renders price comparisons and the calculation of production costs invalid under the Department's normal methodologies. Therefore, we calculated NV based on FOPs in accordance with sections 773(c)(3) and (4) of the Act and 19 CFR 351.408(c). The FOPs include: (1) Hours of labor required; (2) quantities of raw materials consumed; (3) amounts of energy and other utilities consumed; and (4) representative capital costs. We used the FOPs reported by the respondent for materials, energy, labor, by-products, and packing. These reported FOPs included FOPs for various materials provided free of charge or reimbursed by the customer as discussed in the “Export Price” section, above.

In accordance with 19 CFR 351.408(c)(1), the Department will normally use publicly available information to value the FOPs, but when a producer sources an input from a market-economy country and pays for this input in a market-economy currency, the Department may value the factor using the actual price paid for this input.[37] Jiheng reported that it did not purchase any inputs from ME suppliers for the production of the subject merchandise.[38]

With regard to the Indian import-based surrogate values, we have disregarded prices that we have reason to believe or suspect may be subsidized, such as those imports from Indonesia, South Korea, and Thailand. 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.[39] 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.[40] Rather, the Department bases its decision on information that is available to it at the time it is making its determination. Therefore, we have not used prices from these countries in calculating the Indian import-based surrogate values. Additionally, we disregarded prices from NME countries.[41] Finally, imports that were labeled as originating from an “unspecified” country were excluded from the average value, because the Department could not be certain that they were not from either an NME country or a country with general export subsidies.

Factor Valuations

In accordance with section 773(c) of the Act, we calculated NV based on the FOPs reported by Jiheng for the POR. To calculate NV, we multiplied the reported per-unit factor quantities by publicly available Indian surrogate values (except as noted below). In selecting the surrogate values, we selected, where possible, publicly available data, which represent an average non-export value and are contemporaneous with the POR, product-specific, and tax-exclusive. As appropriate, we adjusted input prices by including freight costs to render 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. This adjustment is in accordance with the decision of the U.S. Court of Appeals for the Federal Circuit Start Printed Page 40695(CAFC) in Sigma Corp. v. United States, 117 F.3d 1401, 1408 (Fed. Cir. 1997).[42]

Except as noted 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 Global Trade Atlas, available at http://www.gtis.com/​gta (GTA). Where we could not obtain publicly available information contemporaneous with the POR with which to value FOPs, we adjusted the surrogate values using, where appropriate, the Indian Wholesale Price Index as published in the International Financial Statistics of the International Monetary Fund.[43] We further adjusted these prices to account for freight expenses incurred between the input supplier and respondent. For business proprietary factors, valuation descriptions are provided in the Preliminary Surrogate Value Memorandum.

To value calcium chloride, barium chloride, zinc sulfate, and sulfuric acid, we used Chemical Weekly data because Indian import data was unavailable in the GTA. We adjusted these values for taxes and to account for freight expenses incurred between the supplier and the respondent.[44]

Jiheng reported that a U.S. customer provided certain raw materials and packing materials free of charge. For Jiheng's products that included raw materials and packing materials provided free of charge, consistent with the Department's practice and section 773(c)(1)(B) of the Act, we used the built-up cost (i.e., the surrogate value for these raw materials and packing materials multiplied by the reported FOPs for these items) in the NV calculation.[45] The raw materials that were reimbursed by the U.S. customer and included in the EP are considered part of the cost of manufacturing, and must be included when calculating NV. We added the built-up costs for the raw materials that were reimbursed by the U.S. customers to the NV. Where applicable, we also adjusted these values to account for freight expenses incurred between the nearest port of entry and Jiheng's plants.[46]

To value water, we used the Maharashtra Industrial Development Corporation water rates.[47]

For packing materials, we used the per-kilogram values obtained from the GTA and made adjustments to account for freight expense incurred between the PRC supplier and Jiheng's plants.[48]

Jiheng reported chlorine, hydrogen gas, ammonia gas, and sulfuric acid as by-products in the production of subject merchandise. We find in this administrative review that Jiheng has appropriately explained how by-products are produced during the manufacture of chlorinated isos and has appropriately supported its claim that a by-product offset to NV should be granted. We valued ammonia gas and sulfuric acid using GTA data. Because our record indicates that chlorine and hydrogen are rarely traded via ocean transport on an international basis, we used Indian financial statements to provide more representative values for chlorine and hydrogen gas.[49] We valued chlorine with POR data obtained from the financial statements of Kanoria Chemicals & Industries Limited (Kanoria) and DCM Shriram Consolidated LTD (DCM), both of which are Indian producers and sellers of chlorine gas and other chemicals. We valued hydrogen gas with POR data obtained from the financial statements of DCM.[50]

To value steam coal for these preliminary results, we have obtained and selected the grades B and C steam coal prices from Coal India Ltd.'s price list effective October 15, 2009.[51] To value steam, we used data obtained from the 2009-2010 financial statements of Hindalco Industries Limited.[52]

For electricity, we used an average price data for small, medium, and large industries, as published by the Central Electricity Authority of the Government of India in its publication entitled Electricity Tariff & Duty and Average Rates of Electricity Supply in India, dated March 2008. These electricity rates represent actual country-wide, publicly-available information on tax-exclusive electricity rates charged to industries in India.[53]

To calculate the labor input, on June 21, 2011, the Department revised its methodology for valuing the labor input in NME antidumping proceedings.[54] Section 773(c) of the Act provides that the Department will value FOPs in NME cases using the best available information regarding the value of such factors in an ME country or countries considered to be appropriate by the administering authority. The Act requires that when valuing FOPs, the Department utilize, to the extent possible, the prices or costs of FOPs in one or more ME countries that are (1) At a comparable level of economic development and (2) significant producers of comparable merchandise.[55]

Previously, the Department used regression-based wages that captured the worldwide relationship between per capita Gross National Income and hourly manufacturing wages, pursuant to 19 CFR 351.408(c)(3), to value the respondent's cost of labor. However, on May 14, 2010, the CAFC, in Dorbest Ltd. v. United States, 604 F.3d 1363, 1372 (Fed. Cir. 2010) (Dorbest), invalidated 19 CFR 351.408(c)(3). As a consequence of the CAFC's ruling in Dorbest, the Department no longer relies on the regression-based wage rate methodology described in its regulations. On February 18, 2011, the Department published in the Federal Register a request for public comment on the interim methodology, and the data sources.[56]

In Labor Methodologies, the Department determined that the best methodology to value the labor input is to use industry-specific labor rates from the primary surrogate country. Additionally, the Department determined that the best data source for industry-specific labor rates is Chapter 6A: Labor Cost in Manufacturing, from the International Labor Organization (ILO) Yearbook of Labor Statistics (Yearbook).Start Printed Page 40696

In these preliminary results, the Department calculated the labor input using the wage method described in Labor Methodologies. To value the respondent's labor input, the Department relied on data reported India to the ILO in Chapter 6A of the Yearbook. The Department further finds the two-digit description under ISIC-Revision 3 (Manufacture of Chemicals and Chemical Products) to be the best available information on the record because it is specific to the industry being examined, and is therefore derived from industries that produce comparable merchandise. This is the same classification used in the prior review of this case when the Department relied on Chapter 5B data. Accordingly, relying on Chapter 6A of the Yearbook, the Department calculated the labor input using labor data reported by India to the ILO under Sub-Classification 24 of the ISIC-Revision 3 standard, in accordance with Section 773(c)(4) of the Act. For these preliminary results, the calculated industry-specific wage rate is $1.54. A more detailed description of the wage rate calculation methodology is provided in the Preliminary Surrogate Value Memorandum.

As stated above, the Department used India ILO data reported under Chapter 6A of the Yearbook, which reflects all costs related to labor, including wages, benefits, housing, training, etc. Since the financial statements used to calculate the surrogate financial ratios include itemized detail of indirect labor costs, the Department made adjustments to the surrogate financial ratios.[57]

To value truck freight, we used the freight rates published by Infobanc, The Great Indian Bazaar, Gateway to Overseas Markets.[58] The logistics section of the Web site contains inland freight truck rates between many large Indian cities. The truck freight rates are for the period June 2009 through May 2010 and, therefore, are contemporaneous with the POR.[59]

The Department valued brokerage and handling using a price list for export procedures necessary to export a standardized cargo of goods from India. The price list is compiled based on a survey case study of the procedural requirements for trading a standard shipment of goods by ocean transport in India that is published in Doing Business 2010: India, published by the World Bank.[60]

Financial Ratios

To calculate surrogate values for factory overhead, selling, general, and administrative expenses (SG&A), and profit for these preliminary results, we used financial information from Kanoria Chemicals & Industries Limited (a producer of similar merchandise—stable bleaching powder) for the fiscal year ending March 31, 2010.[61] From this information, we were able to determine average factory overhead as a percentage of the total raw materials, labor, and energy (ML&E), average SG&A as a percentage of ML&E plus overhead (i.e., cost of manufacture), and an average profit rate as a percentage of the cost of manufacture plus SG&A.[62]

Currency Conversion

Where the factor valuations were reported in a currency other than U.S. dollars, in accordance with section 773A(a) of the Act, we made currency conversions into U.S. dollars based on the exchange rates in effect on the dates of the U.S. sales, as certified by the Federal Reserve Bank.

Preliminary Results

We preliminarily determine that the following weighted-average dumping margins exist:

ExporterWeighted-average margin percentage
Hebei Jiheng Chemical Co., Ltd1 0
Juancheng Kangtai Chemical Co., Ltd20.54
Arch Chemicals (China) Co., Ltd137.69
Zhucheng Taisheng Chemical Co., Ltd137.69
1 (de minimis.)

Assessment Rates

Upon issuance of the final results, the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries covered by this review. The Department intends to issue assessment instructions to CBP 15 days after the publication date of the final results of this review. In accordance with 19 CFR 351.212(b)(1), we are calculating importer- (or customer-) specific assessment rates for the merchandise subject to this review. Where the respondent has reported reliable entered values, we calculate importer- (or customer-) specific ad valorem rates by aggregating the dumping margins calculated for all U.S. sales to each importer (or customer) and dividing this amount by the total entered value of the sales to each importer (or customer). Where an importer- (or customer-) specific ad valorem rate is greater than de minimis, we will apply the assessment rate to the entered value of the importers'/customers' entries during the POR, pursuant to 19 CFR 351.212(b)(1).

Where we do not have entered values for all U.S. sales to a particular importer/customer, we calculate a per-unit assessment rate by aggregating the antidumping duties due for all U.S. sales to that importer (or customer) and dividing this amount by the total quantity sold to that importer (or customer).[63] To determine whether the duty assessment rates are de minimis, in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we calculated importer- (or customer-) specific ad valorem ratios based on the estimated entered value. Where an importer- (or customer-) specific ad valorem rate is zero or de minimis, we will instruct CBP to liquidate appropriate entries without regard to antidumping duties.[64]

Cash Deposit Requirements

The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For the exporter's listed above, the cash deposit rate will be the rate established in the final results of this review (except, if the rate is zero or de minimis, i.e., less than 0.5 percent, a zero cash deposit rate will be required for that company); (2) for previously investigated or reviewed PRC and non-PRC exporters not listed above that have separate rates, the cash deposit rate will continue to be the exporter-specific rate published for the most recent period; (3) for all PRC exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be the PRC-wide rate of 285.63 percent; [65] and (4) for all non-PRC Start Printed Page 40697exporters of subject merchandise which have not received their own rate, the cash deposit rate will be the rate applicable to the PRC exporter(s) that supplied that non-PRC exporter. These deposit requirements, when imposed, shall remain in effect until further notice.

Disclosure and Public Comment

We will disclose the calculations used in our analysis to parties to this proceeding within five days of the publication date of this notice, in accordance with 19 CFR 351.224(b). Interested parties are invited to comment on the preliminary results and may submit case briefs within 30 days of the date of publication of this notice, pursuant to 19 CFR 351.309(c)(1)(ii). Rebuttal briefs, limited to issues raised in case briefs, may be filed no later than five days after the time limit for filing the case briefs, as specified by 19 CFR 351.309(d). The Department requests that parties submitting case or rebuttal briefs provide an executive summary and a table of authorities as well as an electronic copy.

Any interested party may request a hearing within 30 days of publication of this notice, as provided by 19 CFR 351.310(c). Hearing requests should contain the following information: (1) The party's name, address, and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. Oral presentations will be limited to issues raised in the case briefs. If a request for a hearing is made, parties will be notified of the time and date for the hearing to be held at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

The Department intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in any comments, within 120 days of publication of these preliminary results, pursuant to section 751(a)(3)(A) of the Act, unless otherwise extended.

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 Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

These preliminary results are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Start Signature

Dated: June 30, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

End Signature End Supplemental Information

Footnotes

1.  See Notice of Antidumping Duty Order: Chlorinated Isocyanurates from the People's Republic of China, 70 FR 36561 (June 24, 2005). On October 13, 2010, upon conclusion of the first sunset review of chlorinated isos from the PRC, the Department published in the Federal Register a notice of continuation of the antidumping duty order on chlorinated isos from the PRC. See Chlorinated Isocyanurates From Spain and the People's Republic of China: Continuation of Antidumping Duty Order, 75 FR 62764 (October 13, 2010).

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2.  See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 75 FR 30383, 30384 (June 1, 2010).

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3.  See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocations in Part, 75 FR 44224 (July 28, 2010) (Initiation Notice).

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4.  In order to demonstrate separate rate eligibility, the Department requires companies for which a review was requested that were assigned a separate rate in the previous segment of this proceeding to certify that they continue to meet the criteria for obtaining a separate rate. See Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Final Results of 2005-2006 Administrative Review and Partial Rescission of Review, 72 FR 56724 (October 4, 2007) (TRBs from the PRC); upheld by Peer Bearing Co.-Changshan v. United States, 587 F. Supp. 2d 1319 (Court of International Trade 2008) (Peer Bearing Co.). For companies that have not previously been assigned a separate rate, the Department requires that they demonstrate eligibility for a separate rate by submitting a separate rate application. See Separate Rates and Combination Rates in Antidumping Investigations involving Non-Market Economy Countries, 70 FR 17233 (April 5, 2005).

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5.  See the Memorandum regarding “Administrative Review of the 2009-2010 Antidumping Duty Order on Chlorinated Isocyanurates from the People's Republic of China: Respondent Selection,” dated August 31, 2010 (Respondent Selection Memorandum).

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6.  See Memorandum regarding “Request for Surrogate Country Selection: 2009-2010 Administrative Review of the Antidumping Duty Order on Chlorinated Isocyanurates from the People's Republic of China,” dated October 1, 2010; see also Memorandum regarding “Request for a List of Surrogate Countries for an Administrative Review of the Antidumping Duty Order on Chlorinated Isocyanurates from the People's Republic of China,” dated October 22, 2010 (Surrogate Country List).

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7.  See Chlorinated Isocyanurates From the People's Republic of China: Extension of Time Limit for the Preliminary Results of the Antidumping Duty Administration Review, 76 FR 10875 (February 28, 2011).

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8.  See Memorandum regarding “2009-2010 Administrative Review of the Antidumping Duty Order on Chlorinated Isocyanurates from the People's Republic of China,” dated March 7, 2011.

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9.  See Memorandum regarding “Placing an Indian Company Annual Statement on the Record of this Administrative Review,” dated March 22, 2011.

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10.  See Memorandum regarding “Request for Magnesium Stearate Details,” dated May 19, 2011, memorializing an e-mail exchange with parties that took place on May 9, 2011.

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11.  See Memorandum regarding “Tariff Classification of Magnesium Stearate,” dated May 9, 2011.

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12.  See Respondent Selection Memorandum.

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13.  See id.

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14.  See, e.g., Chlorinated Isocyanurates From the People's Republic of China: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review, 75 FR 27302, 27304 (May 14, 2010), unchanged in Chlorinated Isocyanurates From the People's Republic of China: Final Results of 2008-2009 Antidumping Duty Administrative Review, 75 FR 70212 (November 17, 2010); see also Folding Metal Tables and Chairs from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Intent to Revoke in Part, 73 FR 40285, 40287 (July 14, 2008), unchanged in Folding Metal Tables and Chairs from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 74 FR 3560 (January 21, 2009).

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15.  See section 771(18)(C)(i) of the Act.

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16.  See section 773(c)(1) of the Act.

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17.  See section 773(c)(4) of the Act.

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19.  See Memorandum regarding “Preliminary Results of the 2009-2010 Administrative Review of the Antidumping Duty Order on Chlorinated Isocyanurates from the People's Republic of China: Surrogate Value Memorandum,” dated concurrently with this notice (Preliminary Surrogate Value Memorandum).

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20.  See Surrogate Country List.

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21.  See Preliminary Surrogate Value Memorandum.

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22.  In accordance with 19 CFR 351.301(c)(1), for the final results of this administrative 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)(1) permits new information only insofar as it rebuts, clarifies, or corrects information placed on the record. The Department generally will not accept the submission of additional, previously absent-from-the-record alternative surrogate value information pursuant to 19 CFR 351.301(c)(1). See e.g., 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.

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23.  See Initiation Notice, 75 FR at 44224.

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24.  See TRBs from the PRC, 72 FR at 56726 and accompanying Issues and Decision Memorandum at Comment 2; upheld by Peer Bearing Co., 587 F. Supp. 2d at 1324-25.

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25.  See Notice of Final Determination of Sales at Less Than Fair Value: Creatine Monohydrate From the People's Republic of China, 64 FR 71104, 71104 (December 20, 1999) (where the respondent was wholly foreign-owned and, thus, qualified for a separate rate).

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26.  See Sparklers, 56 FR at 20589.

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27.  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).

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28.  See SAA accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316 at 872 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4200.

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29.  See Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam: Final Results and Final Partial Rescission of Antidumping Duty Administrative Review, 74 FR 47191, 47194 (September 15, 2009) (Vietnam Shrimp).

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30.  See Chlorinated Isocyanurates From the People's Republic of China: Final Results of June 2008 Through November 2008 Semi-Annual New Shipper Review, 74 FR 68575, 68576 (December 28, 2009).

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31.  See Notice of Final Determination of Sales at Less Than Fair Value: Chlorinated Isocyanurates From the People's Republic of China, 70 FR 24502, 24505 (May 10, 2005).

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32.  See Jiheng's October 25, 2010 questionnaire response at exhibit C-1.

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33.  See, e.g., Narrow Woven Ribbons with Woven Selvedge from the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 75 FR 7244, 7251. (February 18, 2010), unchanged in Narrow Woven Ribbons With Woven Selvedge From the People's Republic of China: Final Determination of Sales at Less Than Fair Value, 75 FR 41808 (July 19, 2010).

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34.  See Memorandum regarding “Analysis for the Preliminary Results of the 2009-2010 Administrative Review of Chlorinated Isocyanurates from the People's Republic of China: Hebei Jiheng Chemical Company Ltd.,” dated concurrently with this notice.

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35.  See, e.g., Notice of Final Determination of Sales at Less Than Fair Value, and Affirmative Critical Circumstances, In Part: Certain Lined Paper Products From the People's Republic of China, 71 FR 53079 (September 8, 2006), and accompanying Issues and Decision Memorandum at Comment 17.

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36.  See Jiheng's April 8, 2011 Supplemental Questionnaire response at page SS-9.

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37.  See 19 CFR 351.408(c)(1); see also Shakeproof Assembly Components, Div. of Illinois Tool Works, Inc. v. United States, 268 F.3d 1376, 1382-1383 (Fed. Cir. 2001) (affirming the Department's use of market-based prices to value certain FOPs).

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38.  See Jiheng's October 25, 2010 Section D response at page D-10.

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39.  See, e.g., Frontseating Service Valves from the People's Republic of China; Preliminary Determination of Sales at Less Than Fair Value, Preliminary Negative Determination of Critical Circumstances, and Postponement of Final Determination, 73 FR 62952, 62957 (October 22, 2008), unchanged in Frontseating Service Valves From the People's Republic of China: Final Determination of Sales at Less Than Fair Value and Final Negative Determination of Critical Circumstances, 74 FR 10886 (March 13, 2009); and China National Machinery Import & Export Corporation v. United States, 293 F. Supp. 2d 1334, 1339 (CIT 2003), affirmed 104 Fed. Appx. 183 (Fed. Cir. 2004).

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40.  See H.R. Rep. No. 100-576 (1988), at 590.

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41.  The list of excluded NME countries includes: Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, China, Tajikistan, Turkmenistan, Uzbekistan, and Vietnam.

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42.  For a detailed description of all surrogate values used for Jiheng, see Preliminary Surrogate Value Memorandum.

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43.  See Preliminary Surrogate Value Memorandum.

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44.  See id.

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45.  See, e.g., Notice of Final Determination of Sales at Less Than Fair Value, and Affirmative Critical Circumstances, In Part: Certain Lined Paper Products From the People's Republic of China, and accompanying Issues and Decision Memorandum at Comment 17.

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46.  See Preliminary Surrogate Value Memorandum.

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48.  See Preliminary Surrogate Value Memorandum.

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49.  See Memorandum to the File, “Transporting Chlorine and Hydrogen,” dated June 30, 2011. Furthermore, the use of Indian financial statements to value chlorine and hydrogen is consistent with previous reviews' methodology. See also Chlorinated Isocyanurates From the People's Republic of China: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review, 75 FR at 27307.

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50.  See Preliminary Surrogate Value Memorandum.

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51.  See id.

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52.  See id.

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53.  See id.

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54.  See Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production: Labor, 76 FR 36092 (June 21, 2011) (Labor Methodologies).

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55.  See section 773(c)(4) of the Act.

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56.  See Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production: Labor; Request for Comment, 76 FR 9544 (February 18, 2011).

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57.  See Labor Methodologies and Surrogate Value Memorandum for details of adjustments.

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59.  See Preliminary Surrogate Value Memorandum.

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60.  See id.

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61.  See Preliminary Surrogate Value Memorandum for a discussion on the selection of financial statements to value financial ratios.

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62.  See Preliminary Surrogate Value Memorandum.

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65.  For an explanation on the derivation of the PRC-wide rate, see Notice of Final Determination of Sales at Less Than Fair Value: Chlorinated Isocyanurates From the People's Republic of China, 70 FR at 24505.

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[FR Doc. 2011-17276 Filed 7-8-11; 8:45 am]

BILLING CODE 3510-DS-P