Polyvinyl Alcohol from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 67434-67440 [05-22143]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 70, Number 214 (Monday, November 7, 2005)]
[Notices]
[Pages 67434-67440]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-22143]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-879


Polyvinyl Alcohol from the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting 
the first administrative review of the antidumping duty order on 
polyvinyl alcohol (``PVA'') from the People's Republic of China 
(``PRC'') covering the period August 11, 2003, through September 30, 
2004. We have preliminarily determined that sales have been made below 
normal value. If these preliminary results are adopted in our final 
results of this 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 these preliminary 
results. We will issue the final results no later than 120 days from 
the date of publication of this notice.

EFFECTIVE DATE: November 7, 2005.

FOR FURTHER INFORMATION CONTACT: Lilit Astvatsatrian, 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-
6412.

SUPPLEMENTARY INFORMATION:

Background

    On October 1, 2003, the Department published in the Federal 
Register the antidumping duty order on PVA from the PRC. See 
Antidumping Duty Order: Polyvinyl Alcohol from the People's Republic of 
China, 68 FR 56620 (October 1, 2003). On October 1, 2004, the 
Department published a notice of opportunity to request an 
administrative review of the antidumping duty order on PVA from the PRC 
for the period March 20, 2003, through September 30, 2004. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation: Opportunity to Request Administrative Review, 69 FR 
58889 (October 1, 2004). On October

[[Page 67435]]

29, 2004, Petitioners\1\ requested an administrative review of Sinopec 
Sichuan Vinylon Works (``SVW''), a producer and exporter of the subject 
merchandise. SVW did not separately request an administrative review. 
On November 19, 2004, the Department published in the Federal Register 
a notice of the initiation of the antidumping duty administrative 
review of PVA from the PRC for the period March 20, 2003, through 
September 30, 2004. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews, 69 FR 67701 (November 19, 2004).\2\ On May 
9, 2005, the Department corrected the beginning of the POR date to 
August 11, 2003. See Memorandum to the File from Lilit Astvatsatrian, 
Case Analyst, through Robert Bolling, Program Manager, dated May 9, 
2005.
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    \1\ Celanese Chemicals, Ltd. and E.I. DuPont de Nemours and Co. 
(collectively ``Petitioners'').
    \2\ We note that the beginning date (i.e., March 20, 2003) of 
the announced POR was not correct. The Department inadvertently 
published an incorrect beginning date using the date of the 
preliminary determination of sales at less than fair value 
(``LTFV'') investigation. Because the only respondent in this 
proceeding had a de minimis rate in the preliminary determination, 
the correct beginning date for the POR should have been the date of 
the final determination in the investigation. Thus, the Department 
corrected the beginning date of the POR to reflect the correct POR 
which is August 11, 2003, through September 30, 2004. See Memorandum 
to the File from Lilit Astvatsatrian, Case Analyst, through Robert 
Bolling, Program Manager, dated May 9, 2005.
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    On June 23, 2005, the Department published a notice in the Federal 
Register extending the time limit for the preliminary results of review 
until August 2, 2005. See Extension of Time Limit for the Preliminary 
Results of the Antidumping Duty Administrative Review: Polyvinyl 
Alcohol from the People's Republic of China, 70 FR 36375 (June 23, 
2005). Additionally, on July 22, 2005, the Department published a 
notice in the Federal Register further extending the time limit for the 
preliminary results of review until September 16, 2005. See Extension 
of Time Limit for Preliminary Results of the Antidumping Duty 
Administrative Review: Polyvinyl Alcohol from the People's Republic of 
China, 70 FR 42309 (July 22, 2005). Finally, on September 6, 2005, the 
Department published a notice in the Federal Register further extending 
the time limit for the preliminary results of review until October 31, 
2005. See Extension of Time Limit for Preliminary Results of the 
Antidumping Duty Administrative Review: Polyvinyl Alcohol from the 
People's Republic of China, 70 FR 52984 (September 6, 2005).
    On December 9, 2004, the Department issued its standard antidumping 
questionnaire\3\ to SVW. SVW submitted its Section A questionnaire 
response on December 29, 2004, and its Sections C and D responses on 
January 18, 2005. The Department issued a Section A supplemental 
questionnaire to SVW on March 16, 2005, to which SVW responded on April 
4, 2005. The Department issued a Sections C and D supplemental 
questionnaire to SVW on May 3, 2005, to which SVW responded on May 17, 
2005. On June 15, 2005, the Department issued a second Sections A-D 
supplemental questionnaire to SVW, to which SVW responded on July 15, 
2005. On September 13, 2005, the Department issued a third Sections A-D 
supplemental questionnaire to SVW, to which SVW responded on September 
20, 2005. Finally, on October 6, 2005, the Department issued a fourth 
Section D supplemental questionnaire to SVW, to which SVW responded on 
October 17, 2005.
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    \3\ Section A: Organization, Accounting Practices, Markets and 
Merchandise.
    Section C: Sales to the United States.
    Section D: Factors of Production.
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Period of Review

    The POR is August 11, 2003, through September 30, 2004.

Scope of Order

    The merchandise covered by this order is PVA. This product consists 
of all PVA hydrolyzed in excess of 80 percent, whether or not mixed or 
diluted with commercial levels of defoamer or boric acid, except as 
noted below.
    The following products are specifically excluded from the scope of 
this investigation:
    A. PVA in fiber form.
    2) PVA with hydrolysis less than 83 mole percent and certified not 
for use in the production of textiles.
    3) PVA with hydrolysis greater than 85 percent and viscosity 
greater than or equal to 90 cps.
    4) PVA with a hydrolysis greater than 85 percent, viscosity greater 
than or equal to 80 cps but less than 90 cps, certified for use in an 
ink jet application.
    5) PVA for use in the manufacture of an excipient or as an 
excipient in the manufacture of film coating systems which are 
components of a drug or dietary supplement, and accompanied by an end-
use certification.
    6) PVA covalently bonded with cationic monomer uniformly present on 
all polymer chains in a concentration equal to or greater than one mole 
percent.
    7) PVA covalently bonded with carboxylic acid uniformly present on 
all polymer chains in a concentration equal to or greater than two mole 
percent, certified for use in a paper application.
    8) PVA covalently bonded with thiol uniformly present on all 
polymer chains, certified for use in emulsion polymerization of non-
vinyl acetic material.
    9) PVA covalently bonded with paraffin uniformly present on all 
polymer chains in a concentration equal to or greater than one mole 
percent.
    10) PVA covalently bonded with silan uniformly present on all 
polymer chains certified for use in paper coating applications.
    11) PVA covalently bonded with sulfonic acid uniformly present on 
all polymer chains in a concentration level equal to or greater than 
one mole percent.
    12) PVA covalently bonded with acetoacetylate uniformly present on 
all polymer chains in a concentration level equal to or greater than 
one mole percent.
    13) PVA covalently bonded with polyethylene oxide uniformly present 
on all polymer chains in a concentration level equal to or greater than 
one mole percent.
    14) PVA covalently bonded with quaternary amine uniformly present 
on all polymer chains in a concentration level equal to or greater than 
one mole percent.
    15) PVA covalently bonded with diacetoneacrylamide uniformly 
present on all polymer chains in a concentration level greater than 
three mole percent, certified for use in a paper application.
    The merchandise subject to this order is currently classifiable 
under subheading 3905.30.00 of the Harmonized Tariff Schedule of the 
United States (``HTSUS''). Although the HTSUS subheading is provided 
for convenience and Customs purposes, the written description of the 
scope of this order is dispositive.

Nonmarket Economy 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 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

[[Page 67436]]

administering authority. See Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, From the People's Republic of China: 
Preliminary Results 2001-2002 Administrative Review and Partial 
Rescission of Review, 68 FR 7500 (February 14, 2003). None of the 
parties to this proceeding has contested such treatment. Accordingly, 
we calculated normal value (``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 to base normal value on the NME 
producer's factors of production, valued in a surrogate market-economy 
country or countries considered to be appropriate by the Department. In 
accordance with section 773(c)(4) of the Act, in valuing the factors of 
production, the Department shall utilize, to the extent possible, the 
prices or costs of factors of production in one or more market-economy 
countries that are: (1) at a level of economic development comparable 
to that of the NME country; and (2) significant producers of comparable 
merchandise.
    The Department has determined that India, Indonesia, Sri Lanka, the 
Philippines, and Egypt are countries comparable to the PRC in terms of 
economic development. See Memorandum from Ron Lorentzen to Wendy 
Frankel: Antidumping Administrative Review of Polyvinyl Alcohol from 
the People's Republic of China (PRC): Request for a List of Surrogate 
Countries, dated March 7, 2005. Customarily, we select an appropriate 
surrogate country based on the availability and reliability of data 
from the countries that are significant producers of comparable 
merchandise. For PRC cases, the primary surrogate country has often 
been India if it is a significant producer of comparable merchandise. 
In this case, we have found that India is a significant producer of 
comparable merchandise. See Memo to Wendy Frankel and Robert Bolling 
from Lilit Astvatsatrian: Polyvinyl Alcohol from the People's Republic 
of China: Selection of a Surrogate Country, June 13, 2005.
    The Department used India as the primary surrogate country and, 
accordingly, has calculated normal value using Indian prices to value 
the PRC producers' factors of production, when available and 
appropriate. The sources of the surrogate factor values are discussed 
under the ``Normal Value'' section below and in the Preliminary Results 
of Review of the Order on Polyvinyl Alcohol from the People's Republic 
of China: Factor Valuation Memorandum from Lilit Astvatsatrian, Case 
Analyst, through Robert Bolling, Program Manager, Office VIII to the 
File, dated October 31, 2005 (``Factor Valuation Memorandum''). We have 
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 administrative review, interested parties may submit publicly 
available information to value factors of production within 20 days 
after the date of publication of these preliminary results.

Separate Rates

    In an NME proceeding, the Department presumes that all companies 
within the country are subject to government control and should be 
assigned a single antidumping duty rate unless the respondent 
demonstrates the absence of both de jure and de facto government 
control over its export activities. See Notice of Final Determination 
of Sales at Less Than Fair Value: Bicycles From the People's Republic 
of China, 61 FR 19026 (April 30, 1996). SVW provided company-specific 
separate rates information and stated that it met the standards for the 
assignment of a separate rate. In determining whether companies should 
receive separate rates, the Department focuses its attention on the 
exporter, in this case SVW, rather than the manufacturer, as our 
concern is the manipulation of dumping margins. See Notice of Final 
Determination of Sales at Less Than Fair Value: Manganese Metal from 
the People's Republic of China, 60 FR 56045 (November 6, 1995). 
Consequently, the Department analyzed whether the exporter of the 
subject merchandise, SVW, should receive a separate rate.
    The Department's separate rate test is not concerned, in general, 
with macroeconomic, border-type controls (e.g., export licenses, 
quotas, and minimum export prices), particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level. See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From 
Ukraine, 62 FR 61754 (November 19, 1997); Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, from the People's Republic of 
China; Final Results of Antidumping Duty Administrative Review, 62 FR 
61276 (November 17, 1997); and Notice of Preliminary Determination of 
Sales at Less than Fair Value: Honey from the People's Republic of 
China, 60 FR 14725 (March 20, 1995).
    To establish whether a firm is sufficiently independent from 
government-control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test arising out of the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991), as modified by, 
Notice of Final Determination of Sales at Less Than Fair Value: Silicon 
Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) 
(``Silicon Carbide''). Under the separate rates test, the Department 
assigns separate rates in NME cases only if the respondent can 
demonstrate the absence of both de jure and de facto government control 
over export activities. See Silicon Carbide and Notice of Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from 
the People's Republic of China, 60 FR 22544 (May 8, 1995) (``Furfuryl 
Alcohol'').
    A. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual exporter may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; and (2) any 
legislative enactments decentralizing control of companies.
    SVW has placed on the record statements and documents to 
demonstrate absence of de jure control. In its questionnaire responses, 
SVW reported that, other than paying taxes, it has no relationship with 
any level of the PRC government. See page A-2 of SVW's December 29, 
2004, Section A questionnaire response (``AQR''). SVW stated that it 
legally became an independent entity responsible for its own profits 
and losses. See page A-6 of the AQR. SVW submitted a copy of the 
Foreign Trade Law of the PRC to demonstrate that there is no 
centralized control over its export activities. See Attachment A-1 of 
the AQR. SVW also confirmed that the subject merchandise is not subject 
to export quotas or export control licenses. See page A-4 of the AQR. 
Furthermore, SVW stated that the Chongqing City Economic and Trade 
Commission has no involvement in SVW's daily activities and price 
negotiations with its customers. See page SA-5 of SVW's April 4, 2005, 
supplemental Section A response (``SAQR''). SVW reported that it is 
required to obtain a business license,

[[Page 67437]]

which is issued by the Chongqing Municipal Industry and Commerce 
Administration. See page A-3 of the AQR. We examined the laws and SVW's 
business license which it provided in its questionnaire responses, and 
determined that these documents demonstrate an authority for 
establishing the absence of de jure control over the export activities 
and provide evidence demonstrating the absence of government control 
associated with SVW's business license.
    B. Absence of De Facto Control
    As stated in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Final Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255 (December 
31, 1998). Therefore, 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 Department typically 
considers four factors in evaluating whether a particular exporter is 
subject to de facto government control of its export functions: (1) 
whether the exporter sets its own export prices independent of the 
government and without the approval of a government authority; (2) 
whether the exporter has authority to negotiate and sign contracts, and 
other agreements; (3) whether the exporter has autonomy from the 
government in making decisions regarding the selection of its 
management; and (4) whether the exporter retains the proceeds of its 
export sales and makes independent decisions regarding disposition of 
profits or financing of losses.
    SVW states it is owned by ``all the people'' and has provided 
separate rates information in its AQR, SAQR, and in its July 25, 2005, 
supplemental response. SVW has stated that there is no element of 
government control and has requested a separate, company-specific rate.
    As stated in Furfuryl Alcohol, ownership of the company by ``all 
the people'' does not require the application of a single rate. 
Accordingly, SVW is eligible for consideration of a separate rate.
    In support of demonstrating an absence of de facto control, SVW has 
asserted the following: (1) SVW established its own export prices; (2) 
SVW negotiated contracts without guidance from any government entities 
or organizations; (3) SVW made its own personnel decisions; and (4) SVW 
retained the proceeds of its export sales and independently used 
profits according to its business needs. See pages A-4 through A-7 of 
the AQR. Additionally, SVW's questionnaire responses indicate that it 
does not coordinate with other exporters in setting prices. See page A-
5 of the AQR. This information supports a preliminary finding that 
there is an absence of de facto government control of the export 
functions of SVW. Consequently, we preliminarily determine that SVW has 
met the criteria for the application of a separate rate.
    The evidence placed on the record of this administrative review by 
SVW demonstrates an absence of government control, both in law and in 
fact, with respect to its exports of the merchandise under review. As a 
result, for the purposes of these preliminary results, the Department 
is granting a separate, company-specific rate to SVW, the exporter 
which shipped the subject merchandise to the United States during the 
POR.

Partial Facts Available

    Section 776(a)(2) of the Act provides that if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides information that cannot be verified, the 
Department shall use facts available in reaching the applicable 
determination. As discussed in detail below, we have preliminarily 
determined that the use of partial facts available is warranted for 
production labor hours not reported by SVW.
    SVW failed to provide information regarding its classification of 
selling, general, and administrative labor (``SG&A''). In its October 
6, 2005, fourth supplemental questionnaire, the Department requested 
that SVW describe the types of labor included in its general and 
administrative labor hours and discuss the rationale behind this 
classification. In response, SVW explained that the workers in this 
category do not directly participate in the production process and 
therefore, are considered to be general and administrative labor. See 
page 5 of SVW October 17, 2005, fourth supplemental Section D response 
(``FSDQR''). Further, SVW provided a worksheet indicating the number of 
workers and hours under different SG&A categories. See Attachment S4-7 
of id. However, SVW did not explain why some of the categories are 
considered SG&A when they appear to be oriented toward production 
labor, in particular ``Production management'' and ``Engineering 
management.'' Since SVW withheld the descriptions that the Department 
requested, the Department determines that the workers and labor hours 
under the headings of ``Production management'' and ``Engineering 
management'' represent production workers and labor hours. Therefore, 
after determining the percentage of subject merchandise, we have 
allocated the same portion of ``Production management'' and 
``Engineering management'' to direct labor of PVA production. See 
Exhibit 5 of Sinopec Sichuan Vinylon Works Program Analysis for the 
Preliminary Results of Review, October 31, 2005 (``SVW Analysis 
Memorandum'').

Normal Value Comparisons

    To determine whether sales of PVA to the United States by SVW were 
made at less than normal value (``NV''), we compared export price 
(``EP'') to NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice.

Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act. In accordance with section 772(a) of the Act, we used EP for 
all of SVW's U.S. sales because the subject merchandise was sold 
directly to the unaffiliated customers in the United States prior to 
importation and because constructed export price was not otherwise 
indicated for those transactions.
    We calculated EP for SVW based on delivered prices to unaffiliated 
purchaser(s) in the United States. We made deductions from the U.S. 
sale price for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These included foreign inland freight from the 
plant to the port of exportation and domestic brokerage and handling 
charges. See SVW Analysis Memorandum.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using a factors-of-production methodology if: (1) the 
merchandise is exported from an NME country; and (2) the information 
does not permit the

[[Page 67438]]

calculation of NV using home-market prices, third-country prices, or 
constructed value under section 773(a) of the Act. The Department will 
base NV on factors of production because the presence of government 
controls on various aspects of these economies renders price 
comparisons and the calculation of production costs invalid under our 
normal methodologies.
    Factors of production include: (1) hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We used 
factors of production reported by respondents for materials, energy, 
labor, by-products, and packing.
    Our general policy, consistent with section 773(c)(1)(B) of the 
Act, is to value the factors of production that a respondent uses to 
produce the subject merchandise, based on the best available 
information regarding the values of such factors in a market economy 
country. See Notice of Preliminary Determination of Sales at Less Than 
Fair Value, Affirmative Preliminary Determination of Critical 
Circumstances and Postponement of Final Determination: Certain Frozen 
Fish Fillets from the Socialist Republic of Vietnam, 68 FR 4986 
(January 31, 2003). In accordance with section 773(c) of the Act, we 
calculated NV based on factors of production reported by SVW for the 
POR. As the basis for NV, SVW reported factors of production 
information for each separate stage of production, including the 
factors used in the production of all self-produced material and energy 
inputs, and by-products. We have valued the factors reported for each 
self-produced input for purposes of the preliminary results.
    If the NME respondent is an integrated producer, we take into 
account the factors utilized in each stage of the production process. 
For example, in the case of preserved canned mushrooms produced by a 
fully integrated firm, the Department valued the factors used to grow 
the mushrooms, the factors used to further process and preserve the 
mushrooms, and any additional factors used to can and package the 
mushrooms, including any used to manufacture the cans (if produced in-
house). If, on the other hand, the firm was not integrated, but simply 
a processor that bought fresh mushrooms to preserve and can, the 
Department valued the purchased mushrooms and not the factors used to 
grow them. See the final results valuation memorandum for Final Results 
of First New Shipper Review and First Antidumping Duty Administrative 
Review: Certain Preserved Mushrooms From the People's Republic of 
China, 66 FR 31204 (June 11, 2001). This policy has been applied to 
both agricultural and industrial products. See, e.g., Persulfates from 
the People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 68 FR 6712 (February 10, 2003) and Notice of 
Final Determinations of Sales at Less Than Fair Value: Brake Drums and 
Brake Rotors From the People's Republic of China 62 FR 9160 (February 
28, 1997). Accordingly, our standard NME questionnaire asks respondents 
to report the factors used in the various stages of production.
    There are, however, two limited exceptions to this general rule. 
First, in some cases a respondent may report factors used to produce an 
intermediate input that accounts for a small or insignificant share of 
total output. The Department recognizes that, in those cases, the 
increased accuracy in our overall calculations that would result from 
valuing (separately) each of those factors may be so small so as to not 
justify the burden of doing so. Therefore, in those situations, the 
Department would value the intermediate input directly. See Notice of 
Final Determination of Sales at Less Than Fair Value: Polyvinyl Alcohol 
from the People's Republic of China, 68 FR 47538 (August 11, 2003) 
(``Polyvinyl Alcohol'').
    Second, in certain circumstances, it is clear that attempting to 
value the factors used in a production process yielding an intermediate 
product would lead to an inaccurate result because a significant 
element of cost would not be adequately accounted for in the overall 
factors buildup. For example, in a recent case, we addressed whether we 
should value the respondent's factors used in extracting iron ore an 
input to its wire rod factory. The Department determined that, if it 
were to use those factors, it would not sufficiently account for the 
capital costs associated with the iron ore mining operation given that 
the surrogate used for valuing production overhead did not have mining 
operations. Therefore, because ignoring this important cost element 
would distort the calculation, the Department declined to value the 
inputs used in mining iron ore and valued the iron ore instead. See 
Notice of Final Determination of Sales at Less Than Fair Value: Carbon 
and Certain Alloy Steel Wire Rod From Ukraine, 67 FR 55785 (August 30, 
2002); Final Determination of Sales at Less Than Fair Value: Certain 
Hot-Rolled Carbon Steel Flat Products From the People's Republic of 
China; 66 FR 49632 (September 28, 2001); Final Determination of Sales 
at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From 
the People's Republic of China; 62 FR 61964 (November 20, 1997); and 
Furfuryl Alcohol, 60 FR 22544.
    We have examined the information on the record of this review 
related to the purity level of PVA and issued several supplemental 
questionnaires to SVW on this issue. We find that despite its responses 
to these supplemental questionnaires, SVW has not demonstrated clearly 
that it accounted for the actual purity level of PVA in its calculation 
of the vinyl acetate monomer (``VAM'') usage factors. See page 4 of 
SVW's September 20, 2005 third supplemental questionnaire response; and 
pages 2-3 and Attachments 3 and 4 of FSDQR. The burden is on the 
respondent in an antidumping proceeding to create a complete and 
accurate record upon which the Department can make its determination. 
Therefore, consistent with our determination in the investigation, we 
have preliminarily determined to adjust the reported VAM factor for 
each type of PVA to reflect the actual PVA purity level. Accordingly, 
we have adjusted the reported VAM utilization factor for each type of 
PVA by the ratio of the actual purity level for each type of PVA to the 
standard purity level reported by SVW. See SVW Analysis Memorandum, and 
Polyvinyl Alcohol, 68 FR 47538 and its accompanying Issues and Decision 
Memorandum, at Comment 4.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to value factors of 
production, 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 v. United 
States, 43 F. 3d 1442, 1445-1446 (Fed. Cir. 1994). However, when the 
Department has reason to believe or suspect that such prices may be 
distorted by subsidies, the Department will disregard the market-
economy purchase prices and use surrogate values to determine the NV. 
See Notice of Amended Final Determination of Sales at Less than Fair 
Value: Automotive Replacement Glass Windshields from the People's 
Republic of China, 67 FR 11670 (March 15, 2002).
    SVW reported that all of its inputs were sourced from non-market 
economies and paid for in a non-market-economy currency. See Factor 
Valuation Memorandum for a listing of

[[Page 67439]]

these inputs. Therefore, we did not use respondents' actual prices for 
any NME purchases, and also did not use import statistics from 
Indonesia, Thailand or Korea in valuing any factors of production, 
i.e., for material inputs, packing materials, and by-product credits. 
It is the Department's consistent practice that, where the facts 
developed in U.S. or third-country countervailing duty findings include 
the existence of subsidies that appear to be used generally (in 
particular, broadly available, non-industry specific export subsidies), 
it is reasonable for the Department to consider that it has particular 
and objective evidence to support a reason to believe or suspect that 
prices of the inputs from the country granting the subsidies may be 
subsidized. 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; see 
also 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; 
China National Machinery Imp & Exp. Corp. V. United States, 293 F. 
Supp. 2d 1334, 1339 (CIT 2003).

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by the respondent 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 considered the quality, 
specificity, and contemporaneity of the data. As appropriate, we 
adjusted input prices by including freight costs to make them delivered 
prices. Specifically, we added to Indian import surrogate values a 
surrogate freight cost using the shorter of the reported distance from 
the domestic supplier to the factory or the distance from the nearest 
seaport to the factory where appropriate (i.e., where the sales terms 
for the market-economy inputs were not delivered to the factory). This 
adjustment is in accordance with the decision of the Court of Appeals 
for the Federal Circuit in Sigma Corp. v. United States, 117 F. 3d 1401 
(Fed. Cir. 1997). For a detailed description of all surrogate values 
used for respondents, see Factor Valuation Memorandum.
    We valued D-tartaric acid, sodium hexametaphosphate, sodium 
nitrite, sulfuric acid, sodium carbonate, caustic soda, liquid caustic 
soda, hydroquinone, N-butyl acetate, hydrochloric acid, zinc sulfate, 
acrylic acid-acrylic ester, methyl acetate, and zinc oxide using Indian 
domestic market prices reported in Chemical Weekly, contemporaneous 
with the POR. We valued azodisisobutyronitrile, bacteria killer, de-
sulfur agent, solid activated carbon, quinone, liquid chlorine, steam 
coal, solid sodium hydroxide, poly ferro-sulfate, and acetic acid using 
India import statistics as published by the World Trade Atlas, 
contemporaneous with the POR.
    We valued natural gas using a price obtained from the website of 
the Gas Authority of India Ltd., a supplier of natural gas in India, 
contemporaneous with the POR. For further discussion, see Factor 
Valuation Memorandum.
    To value paper bags and polyethylene plastic bags (i.e., the 
packing materials reported by the respondent), we used import values 
from the World Trade Atlas, contemporaneous with the POR.
    Regarding N-methyl-2pydrolidone, alkynes gas, and anti-erosion 
agent, reported by SVW, we did not value these factors because: 1) 
surrogate value information was not available; and 2) the materials 
were reported as being used in minimal amounts. In previous cases, 
where certain materials were reportedly consumed in very small amounts 
and the surrogate values for these materials were not available, the 
Department did not include surrogate values for these materials in its 
calculation of normal value. See Preliminary Determination of Sales at 
Less Than Fair Value and Postponement of Final Determination: Polyvinyl 
Alcohol from the People's Republic of China, 68 FR 13680 (March 20, 
2003); Synthetic Indigo from the People's Republic of China: Notice of 
Final Determination of Sales at Less Than Fair Value, 65 FR 25706 (May 
3, 2000), and its accompanying Issues and Decision Memorandum at 
Comment 8; Ferrovanadium and Nitrided Vanadium from the Russian 
Federation: Notice of Final Results of Antidumping Duty Administrative 
Review, 62 FE 65656 (December 15, 1997), and its accompanying Issues 
and Decision Memorandum at Comment 11; and Final Determination of Sales 
at Less Than Fair Value: Oscillating Fans and Ceiling Fans from the 
People's Republic of China, 56 FR 55273 (October 25, 1991). For the 
same reasons we did not value industrial grade salt, and chlorine 
dioxide used in treated water in our calculation of NV. In addition, 
for the same reasons we did not value freon. Although Petitioners 
provided a surrogate value for freon, the value provided reflected a 
price between affiliated parties. See Attachment D of Petitioners' 
April 21, 2005, submission of surrogate values. In selecting surrogate 
values, the Department prefers, among other things, publicly available 
prices that are representative of a range of prices, and the proposed 
surrogate value does not meet this criteria.
    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 Import Administration's home page, Import Library, 
Expected Wages of Selected NME Countries, revised in November 2004, 
https://ia.ita.doc.gov/wages/corrected02wages/02wages-corrected.html. 
The source of these wage rate data on the Import Administration's web 
site is the Yearbook of Labour Statistics 2002, ILO, (Geneva: 2002), 
Chapter 5B: Wages in Manufacturing. 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.
    To determine factory overhead, depreciation, SG&A expenses, 
interest expenses, and profit for the finished product, we relied on 
rates derived from the financial statements of Jubilant Organosys Ltd., 
an Indian producer of comparable merchandise. We applied these ratios 
to SVW's costs (determined as noted above) for materials, labor, and 
energy. For further discussion, see the Factor Valuation Memorandum.
    Finally, SVW reported that it generated certain by-products as a 
result of the production of PVA or the inputs used to produce PVA.\4\ 
Because SVW did not provide sufficient information to permit the 
accurate valuation of these by-products and we were unable to obtain 
appropriate surrogate value data for them, we did not value these by-
products for these preliminary results.
---------------------------------------------------------------------------

    \4\ These by-products included alkynes gas and recovered low 
pressure nitrogen.
---------------------------------------------------------------------------

Weighted-Average Dumping Margin

    The weighted-average dumping margin is as follows:

[[Page 67440]]



                     Polyvinyl Alcohol from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
           Producer/Manufacturer/Exporter              Margin (Percent)
------------------------------------------------------------------------
SVW.................................................              8.04 %
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b). Any 
interested party may request a hearing within 30 days of publication of 
these preliminary results. See 19 CFR 351.310(c). Any hearing, if 
requested, will generally be held two days after the scheduled date for 
submission of rebuttal briefs. See 19 CFR 351.310(d). Interested 
parties may submit case briefs and/or written comments no later than 30 
days after the date of publication of these preliminary results of 
review. See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in such briefs or comments, 
may be filed no later than 37 days after the date of publication. See 
19 CFR 351.309(d). Further, parties submitting written comments should 
provide the Department with an additional copy of those comments on 
diskette. The Department will issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any comments, and at a hearing, within 120 days of 
publication of these preliminary results, pursuant to section 
751(a)(3)(A) of the Act.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
Within 15 days of the completion of this review, the Department will 
instruct CBP to assess antidumping duties on all appropriate entries of 
subject merchandise. The Department will issue appropriate assessment 
instructions directly to CBP upon completion of this review. If these 
preliminary results are adopted in our final results of review, we will 
direct CBP to assess the resulting rate against the entered customs 
value for the subject merchandise on each importer's/customer's entries 
during the POR.

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) the cash deposit 
rate for the reviewed company will be the rate listed in the final 
results of review (except where the rate for a particular company is de 
minimis, i.e., less than 0.5 percent, no cash deposit will be required 
for that company); (2) for previously investigated companies not listed 
above that have separate rate, the cash deposit rate will continue to 
be the company-specific rate published for the most recent period; (3) 
the cash deposit rate for all other PRC exporters will be 97.86 
percent, the current PRC-wide rate; and (4) the cash deposit rate for 
all non-PRC exporters will be the rate applicable to the PRC exporter 
that supplied that exporter. These deposit requirements, when imposed, 
shall remain in effect until publication of the final results of the 
next administrative review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) 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.
    We are issuing and publishing these preliminary results of review 
in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 
CFR 351.221(b).

    Dated: October 31, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-22143 Filed 11-4-05; 8:45 am]
BILLING CODE 3510-DS-S