Petroleum Wax Candles From the People's Republic of China: Preliminary Results of the 2004-2005 Administrative Review, 35613-35616 [E6-9800]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 119 (Wednesday, June 21, 2006)]
[Notices]
[Pages 35613-35616]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-9800]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-504]


Petroleum Wax Candles From the People's Republic of China: 
Preliminary Results of the 2004-2005 Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (``the Department'') is currently 
conducting an administrative review of the antidumping duty order on 
petroleum wax candles from the People's Republic of China (``PRC'') 
covering the period August 1, 2004, through July 31, 2005. This review 
covers imports of subject merchandise from one manufacturer/exporter: 
Qingdao Youngson Industrial Co., Ltd. (``Youngson'').
    We preliminarily find that adverse facts available (``AFA'') are 
appropriate for Youngson. 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 all appropriate 
entries in accordance with these results. We invite interested parties 
to comment on these preliminary review results and will issue the final 
review results no later than 120 days from the date of publication of 
this notice.

DATES: Effective Date: June 21, 2006.

FOR FURTHER INFORMATION CONTACT: Alex Villanueva or Cindy Lai Robinson, 
AD/CVD Operations, Office 9, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3208 or 202 482-3797, respectively.

SUPPLEMENTARY INFORMATION: 

Case History

    On August 28, 1986, the Department published in the Federal 
Register the antidumping duty order on petroleum wax candles from the 
PRC. See Antidumping Duty Order: Petroleum Wax Candles From the 
People's Republic of China, 51 FR 30686 (August 28, 1986) (``Candles 
Order'').
    On September 28, 2005, in response to Youngson's request and in 
accordance with section 751(a)(1) of the Tariff Act of 1930, as amended 
(the ``Act''), and section 351.213(b) of the Department's regulations, 
the Department initiated the 2004-2005 administrative review of 
petroleum wax candles from the PRC on one company. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Request 
for Revocation in Part, 70 FR 56631 (September 28, 2005).
    On October 19, 2005, the Department issued an antidumping duty 
questionnaire to Youngson. On November 23, 2005, Youngson submitted its 
Section A response to the Department's antidumping duty 
questionnaire.\1\ On December 9, 2005, Youngson submitted its Sections 
C and D questionnaire response. On December 23, 2005, the Department 
issued its first Section A supplemental questionnaire to Youngson, and 
on January 17, 2006, Youngson submitted its response. On January 24, 
2006, the Department issued its first Sections C&D supplemental 
questionnaire to Youngson, and on February 21, 2006, Youngson submitted 
its response. On February 21, 2006, the Department issued a second 
Section A supplemental questionnaire, and on March 20, 2006, Youngson 
submitted its response. On March 9, 2006, the Department issued a 
second Sections C&D supplemental questionnaire to Youngson. On March 
20, 2006, Youngson requested a two-week extension to respond to the 
Department's March 9, 2006, supplemental questionnaire; the Department 
granted a one-week extension until March 30, 2006. On March 24, 2006, 
the Department issued its third Sections A, C, and D supplemental 
questionnaires to Youngson. Youngson did not submit any responses to 
the Department's second Sections C&D supplemental questionnaires. 
Additionally, Youngson did not submit responses to the Department's 
third Sections A, C, and D supplemental questionnaires.
---------------------------------------------------------------------------

    \1\ Section A (Organization, Accounti8ng Practices, Markets and 
Merchandise), C (Sales to the United States), D (Factors of 
Production), E (Cost of Further Manufacturing Performed in the 
United States) and Sales and Factors of Production Reconciliations.
---------------------------------------------------------------------------

    On January 4, 2006, the Department issued an importer questionnaire 
to Youngson's importer. The Department received the importer's response 
on February 9, 2006.
    On February 1, 2006, the National Candle Association (``NCA''), the 
Petitioner, submitted its comments on Youngson's Sections A (original 
and supplemental), C, and D responses. On March 14, 2006, the 
Petitioner submitted its second set of comments on Youngson's original 
and supplemental Section D responses. On March 29, 2006, the Petitioner 
submitted its third set of comments on Youngson's responses.
    On February 24, 2006, the Department provided all interested 
parties the opportunity to submit information pertinent to selecting a 
surrogate country and valuing factors of production (``FOP'') for this 
administrative review. On March 16, 2006, Youngson requested, and the 
Department granted, a six-week extension of time to file its surrogate 
values submission. The deadline for submitting surrogate values 
information was extended until May 1, 2006. On March 20, 2006, the 
Department issued a surrogate country memorandum to all interested 
parties. See Memorandum to the File ``Antidumping Duty Administrative 
Review of Petroleum Wax Candles from the People's Republic of China: 
Selection of a Surrogate Country'' dated March 20, 2006, from Cindy Lai 
Robinson through Alex Villanueva, Program Manager, Office 9, Import 
Administration and James C. Doyle, Director, Office 9, Import 
Administration.
    On March 30, 2006, the Department extended the time limit for the 
preliminary results of this administrative review from May 3, 2006, to 
June 19, 2006. See Petroleum Wax Candles from the People's Republic of 
China: Extension of Time Limit for Preliminary Results of the 
Antidumping Duty Administrative Review, 71 FR 16120 (March 30, 2006).
    On March 30, 2006, Youngson advised the Department by telephone 
that it would not submit responses to the Department's letters dated 
March 9 and 24, 2006. Furthermore, Youngson stated that it was 
withdrawing from the instant proceeding. See Memorandum to the File 
from Cindy Robinson, Case Analyst, 7th Administrative Review of the 
Antidumping Duty Order on Petroleum Wax Candles from the People's 
Republic of China: Regarding Telephone Call with Counsel to Qingdao 
Youngson Industrial Co., Ltd. (``Youngson'',) dated March 30, 2006. On 
March 31, 2006, Youngson filed a letter withdrawing its request for an 
administrative review. Youngson did

[[Page 35614]]

not reply to the Department's third supplemental questionnaire.

Period of Review

    The POR covers August 1, 2004, through July 31, 2005.

Scope of the Order

    The products covered by Candles Order are certain scented or 
unscented petroleum wax candles made from petroleum wax and having 
fiber or paper-cored wicks. They are sold in the following shapes: 
Tapers, spirals, and straight-sided dinner candles; round, columns, 
pillars, votives; and various wax-filled containers. The products were 
classified under the Tariff Schedules of the United States (``TSUS'') 
755.25, Candles and Tapers. The product covered are currently 
classified under the Harmonized Tariff Schedule of the United States 
(``HTSUS'') item 3406.00.00. Although the HTSUS subheading is provided 
for convenience purposes, our written description remains dispositive. 
See Candles Order and Notice of Final Results of the Antidumping Duty 
New Shipper Review: Petroleum Wax Candles from the People's Republic of 
China, 69 FR 77990 (December 29, 2004).

Youngson's Request for Withdrawal of Administrative Review

    As noted above, Youngson submitted a letter to the Department 
withdrawing its request for an administrative review on March 31, 2006. 
Pursuant to 19 CFR 351.213(d)(1), ``the Secretary will rescind an 
administrative review under this section, in whole or in part, if a 
party that requested a review withdraws the request within 90 days of 
the date of publication of notice of initiation of the requested 
review. The Secretary may extend this time limit if the Secretary 
decides that it is reasonable to do so.'' The 90-day deadline for 
withdrawing from this administrative review expired on December 28, 
2005. Therefore, Youngson's request to withdraw from the administrative 
review was submitted 94 days after the deadline established by the 
Department.
    During the course of conducting this review, the Department 
reviewed Youngson's submissions and prepared and sent questionnaires to 
Youngson and Youngson's importer. As a result of Youngson's deficient 
and/or incomplete questionnaire responses, the Department sent three 
supplemental questionnaires for each section of the Department's 
questionnaire in an attempt to gather necessary information from 
Youngson. Although Youngson submitted two Section A and the first 
Sections C&D supplemental questionnaire responses, Youngson did not 
submit the second Sections C&D supplemental questionnaire responses or 
the third Sections A, C&D supplemental questionnaire responses. Because 
of Youngson's supplemental questionnaire responses, the Department had 
also extended the preliminary results and selected a surrogate country. 
The Department expended considerable effort and resources in its 
analysis of Youngson, prior to its late withdrawal during an advanced 
stage of the review. Therefore, the Department is not rescinding the 
review of the Candles Order with respect to Youngson. This is 
consistent with past Department practice. See Antifriction Bearings and 
Parts Thereof from France, Germany, Italy, Japan, Singapore, and the 
United Kingdom: Preliminary Results of Antidumping Duty Administrative 
Reviews, Partial Rescission of Administrative Reviews, Notice of Intent 
to Rescind Administrative Reviews, And Notice of Intent to Revoke Order 
in Part, 69 FR 5950 (February 9, 2004) (``Although we have accepted 
untimely withdrawals of requests for review elsewhere, the 
circumstances surrounding the review of INA \2\ are different from 
other situations * * * we had expended effort and resources in our 
analysis of INA prior to the untimely withdrawal such that we were 
quite advanced in the review''). See, also, Antifriction Bearings and 
Parts Thereof From France, Germany, Italy, Japan, Singapore, and the 
United Kingdom: Final Results of Antidumping Duty Administrative 
Reviews, Rescission of Administrative Reviews in Part, and 
Determination To Revoke Order in Part, 69 FR 55574 (September 15, 2004) 
(the Department's decision remained unchanged in the final results).
---------------------------------------------------------------------------

    \2\ A ball bearings company in Germany, INA-Schaeffler KG (INA).
---------------------------------------------------------------------------

Separate Rates

    The Department has treated the PRC as a non-market economy 
(``NME'') country in all previous antidumping cases. See Brake Rotors 
From the People's Republic of China: Final Results of the Twelfth New 
Shipper Review, 71 FR 4112 (January 25, 2006). In accordance with 
section 771(18)(C)(i) of the Act, any determination that a foreign 
country is an NME country shall remain in effect until revoked by the 
administering authority. We have no evidence suggesting that this 
determination should be changed. Therefore, we treated the PRC as an 
NME country for purposes of this review and calculated normal value 
(``NV'') by valuing the FOPs in a surrogate country.
    It is the Department's policy to assign all exporters of the 
merchandise subject to reviews that are located in NME countries, a 
single antidumping duty rate unless an exporter can demonstrate an 
absence of governmental control, both in law (de jure) and in fact (de 
facto), with respect to its export activities. To establish whether an 
exporter is sufficiently independent of governmental control to be 
entitled to a separate rate, the Department analyzes the exporter using 
the criteria established in 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 amplified in the Final 
Determination of Sales at Less Than Fair Value: Silicon Carbide from 
the People's Republic of China, 59 FR 22585 (May 2, 1994) (``Silicon 
Carbide''). Under the separate rates criteria established in these 
cases, the Department assigns separate rates to NME exporters only if 
they can demonstrate the absence of both de jure and de facto 
governmental control over their export activities.
    Because Youngson withdrew from the current administrative review 
with critical data potentially relevant to separate rates still 
outstanding, the Department was prevented from conducting a thorough 
separate rates analysis or from verifying Youngson's information. 
Therefore, we find that Youngson has not demonstrated that it is 
entitled to a separate rate, and it is deemed to be included in the 
PRC-wide entity and will be assigned a single margin as discussed 
below.

Application of Adverse Facts Available (``AFA'')

    Section 776(a)(2) of the Act provides that, if an interested party: 
(A) Withholds information that has been requested by the Department; 
(B) fails to provide such information in a timely manner or in the form 
or manner requested, subject to sections 782(c)(1) and (e) of the Act; 
(C) significantly impedes a proceeding under the antidumping statute; 
or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    Furthermore, section 776(b) of the Act states that if the 
Department ``finds that an interested party has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information,'' the Department, ``in

[[Page 35615]]

reaching the applicable determination under this title, may use an 
inference that is adverse to the interests of that party in selecting 
from among the facts otherwise available.'' See also Statement of 
Administrative Action (``SAA'') accompanying the Uruguay Round 
Agreements Act (``URAA''), H.R. Rep. No. 103-316 at 870 (1994).
    Despite the Department having issued two supplemental Sections A, 
C&D questionnaires, significant questions affecting separate rates and 
the margin calculation remain. For example, Youngson failed to provide 
clarification on its relationship with a ``start-up company,'' which 
Youngson claimed never received a business license and was owned by 
someone who later became an officer of Youngson. The Department 
requested that Youngson clarify whether the start-up company is the 
predecessor of Youngson in the Department's first and second Section A 
supplemental questionnaires. Information regarding Youngson's 
relationship with this start-up company potentially affects Youngson's 
U.S. sales, factors of production and separate rates. Additionally, 
Youngson failed to provide the information in the manner requested. 
Finally, Youngson's actions have impeded the administrative review 
procedures such that a verification of Youngson's sales, cost and 
separate rates information could not be performed. Therefore, the 
Department has no choice but to rely on the facts otherwise available 
in order to determine a margin for Youngson, pursuant to section 
776(a)(2) of the Act. See Stainless Steel Sheet and Strip in Coils From 
Japan: Preliminary Results of Antidumping Duty Administrative Review, 
70 FR 18369 (April 11, 2005), (``because this company refused to 
participate in this administrative review, we find that, * * * the use 
of total facts available is appropriate'') and Notice of Preliminary 
Determination of Sales at Less Than Fair Value and Affirmative 
Preliminary Determination of Critical Circumstances: Wax and Wax/Resin 
Thermal Transfer Ribbons From Japan, 68 FR 71072 (December 22, 2003), 
(``Since UC and DNP withheld information requested by the Department, 
the Department has no choice but to rely on the facts otherwise 
available in order to determine a margin for these parties''). As facts 
available, we find Youngson is not separate from the PRC-wide entity.
    In applying facts otherwise available, section 776(b) of the Act 
states that if an interested party has failed to cooperate by not 
acting to the best of its ability to comply with a request for 
information from the administering authority or the International Trade 
Commission, the administering authority or the Commission, in reaching 
the applicable determination under section 776(b) of the Act, may use 
an inference that is adverse to the interests of that party in 
selecting from among the facts otherwise available. In the instant 
proceeding, we find it appropriate to use an inference that is adverse 
to the interests of Youngson in selecting from among the facts 
otherwise available. By withdrawing from this administrative review 94 
days after the Department's established deadline rather than submitting 
a response to the Department's March 9 and 24, 2006, supplemental 
questionnaires, Youngson has failed to cooperate to the best of its 
ability in this proceeding. In addition, because we have determined 
that Youngson is not entitled to a separate rate and is part of the 
PRC-wide entity, the PRC-wide entity is under review. As the PRC-wide 
entity, in this instance, was uncooperative, we have determined an 
antidumping duty margin for it based on total AFA pursuant to section 
776(b) of the Act. See e.g., Certain Cased Pencils from the People's 
Republic of China; Final Results and Partial Rescission of Antidumping 
Duty Administrative Review, 67 FR 48612 (July 25, 2002). See, also, 
Porcelain-on-Steel Cooking Ware from the People's Republic of China: 
Notice of Final Results of Antidumping Duty Administrative Review, 71 
FR 24641 (April 26, 2006). As a result, Youngson receives the 108.3 
percent, the PRC-wide entity rate. See the ``Corroboration'' section 
below for a discussion of the probative value of the PRC-wide 108.30 
percent rate.

Corroboration of AFA Rate for Youngson

    Section 776(c) of the Act requires that the Department corroborate, 
to the extent practicable, a figure which it applies as facts 
available. To be considered corroborated, information must be found to 
be both reliable and relevant. We are applying as AFA the PRC-wide 
rate, which is the highest rate from any segment of this administrative 
proceeding.
    The information upon which the AFA rate being assigned to Youngson 
(the PRC-wide rate of 108.30 percent) is based on the highest rate in 
this proceeding, a rate calculated in the 2001-2002 administrative 
review. See Amended Notice of Final Results of the Antidumping Duty 
Administrative Review: Petroleum Wax Candles from the People's Republic 
of China (``Amended Final) 69 FR 20858 (April 19, 2004). For purposes 
of corroboration, the Department will consider whether that margin is 
both reliable and relevant. The AFA rate we are applying for the 
current review was corroborated in the most recently completed new 
shipper review subsequent to the Amended Final. See Notice of Final 
Results of the Antidumping Duty New Shipper Review: Petroleum Wax 
Candles from the People's Republic of China (``2002-2003 New Shipper 
Review'') 69 FR 77990 (December 29, 2004). Furthermore, no information 
has been presented in the current review that calls into question the 
reliability of this information.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. For example, in Fresh Cut Flowers from Mexico: 
Final Results of Antidumping Administrative Review, 61 FR 6812 
(February 22, 1996), the Department disregarded the highest margin in 
that case as adverse best information available (the predecessor to 
``facts available'') because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D&L Supply Co. v. United States, 113 F.3d 1220, 1221 
(Fed. Cir. 1997) (the Department will not use a margin that has been 
judicially invalidated). The information used in calculating this 
margin was based on sales and production data submitted by the 
respondents in the 2001-2002 administrative review, together with the 
most appropriate surrogate value information available to the 
Department, chosen from submissions by the parties in the 2001-2002 
administrative review, as well as gathered by the Department itself. 
Furthermore, the calculation of this margin was subject to comment from 
interested parties in the proceeding. Moreover, as there is no 
information on the record of this review that demonstrates that this 
rate is not appropriately used as AFA, we determine that this rate has 
relevance.
    Based on our analysis as described above, we find that the margin 
of 108.30 percent is reliable and has relevance. As the rate is both 
reliable and relevant, we determine that it has probative value. 
Accordingly, we determine that the calculated rate of 108.30 percent, 
which is the current PRC-wide rate, is in accordance with the 
requirement of

[[Page 35616]]

section 776(c) of the Act that secondary information be corroborated 
(that it have probative value). Consequently, we have assigned this AFA 
rate to exports of the subject merchandise from Youngson subject to the 
PRC-wide rate.

Preliminary Results of Review

    We preliminarily determine that the following margin exists during 
the period August 1, 2004, through July 31, 2005:

                   Petroleum Wax Candles From the PRC
------------------------------------------------------------------------
                                                       Weighted-average
                Manufacturer/Exporter                  margin (percent)
------------------------------------------------------------------------
PRC-wide Entity (including Qingdao Youngson                       108.30
 Industrial Co., Ltd.)..............................
------------------------------------------------------------------------

Public Comment

    The Department will disclose to parties of this proceeding the 
information utilized in reaching the preliminary results within ten 
days of the date of announcement of the preliminary results. An 
interested party may request a hearing within 30 days of publication of 
the preliminary results. See 19 CFR 351.310(c). Interested parties may 
submit written comments (case briefs) within 30 days of publication of 
the preliminary results and rebuttal comments (rebuttal briefs), which 
must be limited to issues raised in the case briefs, within five days 
after the time limit for filing case briefs. See 19 CFR 
351.309(c)(1)(ii) and 19 CFR 351.309(d). Parties who submit arguments 
are requested to submit with the argument: (1) A statement of the 
issue; (2) a brief summary of the argument; and (3) a table of 
authorities. Further, the Department requests that parties submitting 
written comments provide the Department with a diskette containing the 
public version of those comments. Unless the deadline is extended 
pursuant to section 751(a)(3)(A) of the Act, the Department will issue 
the final results of this administrative review, including the results 
of our analysis of the issues raised by the parties in their comments, 
within 120 days of publication of the preliminary results. The 
assessment of antidumping duties on entries of merchandise covered by 
this review and future deposits of estimated duties shall be based on 
the final results of this review.

Assessment Rates

    Upon issuing the final results of the review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries. The Department will issue appropriate appraisement 
instructions for the company subject to this review directly to CBP 
within 15 days of publication of the final results of this review. 
Pursuant to 19 CFR 351.212(b)(1), we will calculate importer-specific 
ad valorem duty assessment rates based on the ratio of the total amount 
of the dumping margins calculated for the examined sales to the total 
entered value of those same sales. We will instruct CBP to assess 
antidumping duties on all appropriate entries covered by this review if 
any importer-specific assessment rate calculated in the final results 
of this review is above de minimis.

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 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; (2) for 
all PRC exporters of subject merchandise which have not been found to 
be entitled to a separate rate (including Youngson), the cash deposit 
rate will be the PRC-wide rate of 108.30 percent; and (3) the cash 
deposit rate for all non-PRC exporters of subject merchandise which 
have not received their own rate, the cash deposit rate will be the 
rate applicable to the PRC exporters that supplied that non-PRC 
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 serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this determination in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: June 12, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
 [FR Doc. E6-9800 Filed 6-20-06; 8:45 am]
BILLING CODE 3510-DS-P