Polyvinyl Alcohol From the People's Republic of China; Preliminary Results of Antidumping Duty Administrative Review, 38612-38616 [E6-10661]

Download as PDF 38612 Federal Register / Vol. 71, No. 130 / Friday, July 7, 2006 / Notices 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 Import Administration, International Trade Administration, Department of Commerce. SUMMARY: The Department of Commerce (the Department) is conducting the administrative review of the antidumping duty order on polyvinyl alcohol (PVA) from the People’s Republic of China (PRC) covering the period October 1, 2004, through September 30, 2005. We have preliminarily determined that sales have not been made below normal value (NV). If these preliminary results are adopted in our final results of this review, we will instruct U.S. Customs and Border Protection (CBP) to liquidate the appropriate entries without regard to antidumping duties. 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. DATES: Effective Date: July 7, 2006. FOR FURTHER INFORMATION CONTACT: Jill Pollack, AD/CVD Operations, Office 2, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482–4593. SUPPLEMENTARY INFORMATION: AGENCY: cprice-sewell on PROD1PC66 with NOTICES Background On October 3, 2005, 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 October 1, 2004, through September 30, 2005. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 70 FR 57558 (Oct. 3, 2005). On October 26, 2005, the Department received a request to conduct an administrative review of the antidumping duty order on PVA from the PRC from Sinopec Sichuan Vinylon Works (SVW), a producer and exporter of the subject merchandise. On October 27, 2005, Celanese Chemicals, Ltd. and E.I. DuPont de Neumours & Co. (collectively ‘‘the petitioners’’) also requested a review of SVW. On December 1, 2005, the Department published in the Federal Register a VerDate Aug<31>2005 15:46 Jul 06, 2006 Jkt 208001 notice of the initiation of the antidumping duty administrative review of PVA from the PRC for the period October 1, 2004, through September 30, 2005. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Deferral of Administrative Reviews, 70 FR 72107 (Dec. 1, 2005). In December 2005, the Department issued the antidumping duty questionnaire to SVW. We received SVW’s responses to this questionnaire in January and February 2006. On February 15, 2006, the Department invited interested parties to comment on surrogate country selection and to provide publicly available information for valuing the factors of production. In March 2006, we issued a supplemental section A questionnaire to SVW. We received SVW’s response to this supplemental questionnaire in March 2006. In April 2006, we issued a supplemental section C and D questionnaire to SVW. We received SVW’s response to this section C and D supplemental questionnaire in April 2006. On May 4, 2006, we received comments on surrogate country selection and information for valuing the factors of production from SVW and Solutia, Inc., a domestic interested party. We did not receive comments from the petitioners on surrogate country selection or the valuation of factors of production. Also in May 2006, we issued a second supplemental section C and D questionnaire to SVW. We received SVW’s response to this questionnaire in May 2006. In May and June 2006, we requested additional information related to the purity levels of reported inputs and the various grades of finished PVA. We received SVW’s response to these requests in June 2006. Period of Review The period of review (POR) is October 1, 2004, through September 30, 2005. 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 order: (1) PVA in fiber form. (2) PVA with hydrolysis less than 83 mole percent and certified not for use in the production of textiles. PO 00000 Frm 00015 Fmt 4703 Sfmt 4703 (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 E:\FR\FM\07JYN1.SGM 07JYN1 Federal Register / Vol. 71, No. 130 / Friday, July 7, 2006 / Notices written description of the scope of this order is dispositive. cprice-sewell on PROD1PC66 with NOTICES 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 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 (Feb. 14, 2003); Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People’s Republic of China: Final Results of 2001–2002 Administrative Review and Partial Rescission of Review, 68 FR 70488 (Dec. 18, 2003) (unchanged in the final results). None of the parties to this proceeding has contested such treatment. 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 to base NV 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, Sri Lanka, Indonesia, Philippines, and Egypt are countries comparable to the PRC in terms of economic development. See the February 9, 2006, memorandum from Ron Lorentzen, Director, Office of Policy, to Irene Darzenta Tzafolias, Acting Director, Office 2, entitled, ‘‘Antidumping Duty Administrative Review of Polyvinyl Alcohol from the People’s Republic of China (PRC): Request for a List of Surrogate Countries.’’ Customarily, we select an appropriate surrogate country based on the availability and reliability of data from the countries that are significant producers of comparable VerDate Aug<31>2005 15:46 Jul 06, 2006 Jkt 208001 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 found that India is a significant producer of comparable merchandise. See the June 6, 2006, memorandum to the file from Jill Pollack, Senior Analyst, entitled ‘‘Second Administrative Review of the Antidumping Duty Order on Polyvinyl Alcohol from the People’s Republic of China: Selection of a Surrogate Country.’’ The Department used India as the primary surrogate country and, accordingly, calculated NV using Indian prices to value the PRC producer’s 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 June 30, 2006, memorandum from Jill Pollack to the file entitled, ‘‘Preliminary Results of Review of the Antidumping Duty Order on Polyvinyl Alcohol from the People’s Republic of China: Factor Valuation Memorandum’’ (the Factor Valuation Memorandum). We obtained and relied upon publicly available information wherever possible. In accordance with 19 CFR 351.301(c)(3)(ii), for the final results of 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 (Apr. 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 a company should receive a separate rates, the Department focuses its attention on the exporter, in this case SVW, rather than the manufacturer. See Notice of Final Determination of Sales at Less Than Fair Value: Manganese Metal from the People’s Republic of China, 60 FR 56045 (Nov. 6, 1995). The Department analyzes each exporting entity under a test arising out of the Final Determination of Sales at PO 00000 Frm 00016 Fmt 4703 Sfmt 4703 38613 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 from the PRC). The Department’s separate rate test is not concerned, in general, with macroeconomic, bordertype 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 Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People’s Republic of China: Final Results of 2003–2004 Administrative Review and Partial Rescission of Review, 71 FR 2517 (Jan. 17, 2006) (Tapered Bearings 2003–2004 Administrative Review). SVW has provided separate rates information in its section A questionnaire response. SVW has stated that there is no element of government control over its export activities and has requested a separate, company-specific rate. 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 abiding by government laws and regulations, which includes paying taxes, it has no relationship with any level of the PRC government. See page A–3 of SVW’s January 26, 2006, Section A questionnaire response. 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 January 26 response. SVW also confirmed that the subject merchandise is not subject to export quotas or export control licenses. See pages A–5 and A– 6 of January 26 response. SVW reported that it is required to obtain a business license, which is issued by the Chongqing Municipal Industry and Commerce Administration. See page A– 4 of the January 26 response. We E:\FR\FM\07JYN1.SGM 07JYN1 38614 Federal Register / Vol. 71, No. 130 / Friday, July 7, 2006 / Notices cprice-sewell on PROD1PC66 with NOTICES 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 of SVW and provide evidence demonstrating the absence of government control associated with SVW’s business license. See 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). 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 (Dec. 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. In support of demonstrating an absence of de facto control, SVW provided documentation, where appropriate, to support the following assertions: (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–6 through A–9 of the January 26 response. Additionally, SVW’s section A questionnaire response indicates that it does not coordinate with other exporters in setting prices. See page A–6 of the January 26 VerDate Aug<31>2005 15:46 Jul 06, 2006 Jkt 208001 response. SVW also stated that it is an independent entity responsible for its own profits and losses. See page A–3 of the January 26 response. 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 de facto 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. Normal Value Comparisons To determine whether sales of PVA to the United States by SVW 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. 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 market-economy 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 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 FOB port 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. For valuation of these services provided by NME suppliers, see the June 30, 2006, memorandum to the file from Jill Pollack entitled, ‘‘U.S. Price and Factors of Production Adjustments for the Preliminary Results’’ (Preliminary Calculation PO 00000 Frm 00017 Fmt 4703 Sfmt 4703 Memorandum). See also the Factor Valuation 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 calculation of NV using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. 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. 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 (Jan. 31, 2003); Notice of Final Antidumping Duty Determination of Sales at Less Than Fair Value and Affirmative Critical Circumstances: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 FR 37116 (June 23, 2003) (unchanged in the final determination). In accordance with section 773(c) of the Act, we calculated NV based on the factors of production reported by SVW for the POR for materials, energy, labor, by-products, and packing. As the basis for NV, SVW reported factors-ofproduction 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 selfproduced input for purposes of the preliminary results, in accordance with our practice. See Notice of Final Determination of Sales at Less Than Fair Value: Polyvinyl Alcohol from the People’s Republic of China, 68 FR 47538 (Aug. 11, 2003) (Polyvinyl Alcohol from the PRC Investigation); Polyvinyl Alcohol From the People’s Republic of China: Final Results of Antidumping Duty Administrative Review, 71 FR 27991 (May 15, 2006) (Polyvinyl Alcohol 2003–2004 Review). In accordance with 19 CFR 351.408(c)(1), the Department will normally use publicly available information in the surrogate country to E:\FR\FM\07JYN1.SGM 07JYN1 Federal Register / Vol. 71, No. 130 / Friday, July 7, 2006 / Notices cprice-sewell on PROD1PC66 with NOTICES 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 surrogate values come from an NME country or where the Department has reason to believe or suspect that such prices may be distorted by subsidies, the Department will disregard the marketeconomy purchase prices and use surrogate values to determine the NV. See Tapered Bearings 2003–2004 Administrative Review. SVW reported that all of its inputs were sourced from NMEs and paid for in an NME currency. See the Factor Valuation Memorandum for a list of these inputs. Therefore, we did not use respondents’ actual prices for any NME purchases. Factor Valuations 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 the Indian import surrogate values a surrogate freight cost calculated using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest port of export 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 the respondent, see the Factor Valuation Memorandum. It is the Department’s practice to date 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 VerDate Aug<31>2005 15:46 Jul 06, 2006 Jkt 208001 Rescission of Review, and Determination Not to Revoke Order in Part, 66 FR 1953 (Jan. 10, 2001) and accompanying Issues and Decision Memorandum at Comment 1; Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People’s Republic of China; Final Results of 1999–2000 Administrative Review, Partial Rescission of Review, and Determination Not To Revoke Order in Part, 66 FR 57420 (Nov. 15, 2001) and accompanying Issues and Decision Memorandum at Comment 1; and China National Machinery Imp & Exp. Corp. v. United States, 293 F. Supp. 2d 1334, 1339 (CIT 2003). Therefore, in instances where we relied on Indian import data to value inputs, in accordance with the Department’s practice, we excluded imports from both NME countries and Indonesia, Thailand and the Republic of Korea to value the factors of production. In its section D questionnaire response, SVW allocated the raw material inputs for producing acetylene and acetylene tail gas using a heat of combustion methodology. For the preliminary results of this review, we have reallocated the raw material inputs for producing acetylene and acetylene tail gas based on the market value of these products rather than the heat of combustion. We note that the Department used a market value-based reallocation of raw material inputs for the production of acetylene and acetylene tail gas in the prior segments of this proceeding. See Polyvinyl Alcohol from the PRC Investigation at Comment 3; Polyvinyl Alcohol 2003– 2004 Review at Comment 1. Further, the use of this methodology in this proceeding has been affirmed by the Court. See Sinopec Sichuan Vinylon Works v. United States, 366 F. Supp. 2d 1339, 1347–1348 (CIT 2005) (Sinopec v. United States). For additional information, see the Preliminary Calculation 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, phosphoric acid (antiprecipitate), freon, 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, poly ferrosulfate, liquid ammonia, and acetic acid using India import statistics as published by the World Trade Atlas, contemporaneous with the POR. See id. We valued natural gas using a price obtained from the Web site of the Gas PO 00000 Frm 00018 Fmt 4703 Sfmt 4703 38615 Authority of India Ltd., a supplier of natural gas in India, contemporaneous with the POR. For further discussion, see id. We valued steam coal using the 2003/ 2004 Tata Energy Research Institute’s Energy Data Directory & Yearbook (TERI Data). See id. 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. See id. Regarding N-methyl-2pydrolidone, industrial grade salt, chlorine dioxide, 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 NV. See Polyvinyl Alcohol from the People’s Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 70 FR 67434, 67439 (Nov. 7, 2005) (unchanged in the final results); 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 the 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 (Dec. 15, 1997) and the 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 (Oct. 25, 1991). 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 website, Expected Wages of Selected NME Countries, revised in November 2005, http://ia.ita.doc.gov/wages/03wages/ 110805–2003-Tables/03wages110805.html#table1. 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 regressionbased 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 E:\FR\FM\07JYN1.SGM 07JYN1 cprice-sewell on PROD1PC66 with NOTICES 38616 Federal Register / Vol. 71, No. 130 / Friday, July 7, 2006 / Notices labor reported by the respondent. See the Preliminary Calculation Memorandum. To determine factory overhead, depreciation, selling, general, and administrative expenses, interest expenses, and profit for the finished product, we relied on rates derived from the financial statements of Jubilant Organosys Ltd. (Jubilant), an Indian producer of comparable merchandise. We applied these ratios to SVW’s costs (determined as noted above) for materials, labor, and energy. See id. Finally, SVW reported that it generated certain other by-products as a result of the production of PVA or the inputs used to produce PVA. We valued methyl acetate, PVA scrap, and recovered methanol, using Indian domestic market prices reported in Chemical Weekly. We valued acetic acid using import values from the World Trade Atlas. Because SVW did not provide sufficient information to permit the accurate valuation of certain other reported 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.1 Regarding acetic acid, SVW recovers a significant portion of this input in the last stage of production of PVA (i.e., the hydrolysis process). Because Jubilant is a producer of polyvinyl acetate (PVAc), a precursor polymer of PVA, it does not perform the hydrolysis process necessary to recover acetic acid. See Polyvinyl Alcohol from the PRC Investigation at Comment 3. Therefore, given the difference in the production process between the surrogate company and the respondent, we find that deducting this by-product from the cost of manufacturing would result in an understated overhead expense derived from Jubilant’s financial statements. As a result, we have made a by-product offset to SVW’s NV. This methodology has been upheld by the CIT. See Sinopec v. United States, 366 F. Supp. 2d at 1351 remanded on other grounds by, 2006 Ct. Intl. Trade LEXIS; Slip Op. 2006–78 (May 25, 2006). Consequently, consistent with the CIT’s previous determination in this matter, the Department has continued to make an adjustment for the recovered acetic acid after the application of the surrogate financial ratios for purposes of these preliminary results. See the Preliminary Calculation Memorandum. 1 These by-products included alkynes gas, bottled oxygen and nitrogen, liquid oxygen and nitrogen, argon, and recovered low pressure nitrogen. VerDate Aug<31>2005 15:46 Jul 06, 2006 Jkt 208001 Weighted-Average Dumping Margin The weighted-average dumping margin is as follows: Manufacturer/producer/exporter Sinopec Sichuan Vinylon Works ................................ with the requirement set forth in 19 CFR 351.106(c)(2), we calculated importerspecific ad valorem ratios based on the estimated entered value. Margin percentage 0.00 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. We note that SVW did not report the entered value for its U.S. sales. Accordingly, we have calculated importer-specific assessment rates for the merchandise in question by aggregating the dumping margins calculated for all U.S. sales to each importer and dividing this amount by the total quantity of those sales. To determine whether the duty assessment rates were de minimis, in accordance PO 00000 Frm 00019 Fmt 4703 Sfmt 4703 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 SVW, the cash deposit rate will be that established in the final results of this review (except, if the rate is zero or de minimis, no cash deposit will be required); (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 which have not been found to be entitled to a separate rate, the cash deposit rate will be the PRC-wide rate of 97.86 percent; and (4) 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 nonPRC 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: June 30, 2006. David M. Spooner, Assistant Secretary for Import Administration. [FR Doc. E6–10661 Filed 7–6–06; 8:45 am] BILLING CODE 3510–DS–P E:\FR\FM\07JYN1.SGM 07JYN1

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[Federal Register Volume 71, Number 130 (Friday, July 7, 2006)]
[Notices]
[Pages 38612-38616]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10661]



[[Page 38612]]

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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 
administrative review of the antidumping duty order on polyvinyl 
alcohol (PVA) from the People's Republic of China (PRC) covering the 
period October 1, 2004, through September 30, 2005. We have 
preliminarily determined that sales have not been made below normal 
value (NV). If these preliminary results are adopted in our final 
results of this review, we will instruct U.S. Customs and Border 
Protection (CBP) to liquidate the appropriate entries without regard to 
antidumping duties.
    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.

DATES: Effective Date: July 7, 2006.

FOR FURTHER INFORMATION CONTACT: Jill Pollack, AD/CVD Operations, 
Office 2, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-4593.

SUPPLEMENTARY INFORMATION:

Background

    On October 3, 2005, 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 October 1, 2004, through 
September 30, 2005. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 70 FR 57558 (Oct. 3, 2005). On October 26, 2005, 
the Department received a request to conduct an administrative review 
of the antidumping duty order on PVA from the PRC from Sinopec Sichuan 
Vinylon Works (SVW), a producer and exporter of the subject 
merchandise. On October 27, 2005, Celanese Chemicals, Ltd. and E.I. 
DuPont de Neumours & Co. (collectively ``the petitioners'') also 
requested a review of SVW. On December 1, 2005, 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 October 1, 2004, through September 30, 2005. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Deferral 
of Administrative Reviews, 70 FR 72107 (Dec. 1, 2005).
    In December 2005, the Department issued the antidumping duty 
questionnaire to SVW. We received SVW's responses to this questionnaire 
in January and February 2006.
    On February 15, 2006, the Department invited interested parties to 
comment on surrogate country selection and to provide publicly 
available information for valuing the factors of production.
    In March 2006, we issued a supplemental section A questionnaire to 
SVW. We received SVW's response to this supplemental questionnaire in 
March 2006.
    In April 2006, we issued a supplemental section C and D 
questionnaire to SVW. We received SVW's response to this section C and 
D supplemental questionnaire in April 2006.
    On May 4, 2006, we received comments on surrogate country selection 
and information for valuing the factors of production from SVW and 
Solutia, Inc., a domestic interested party. We did not receive comments 
from the petitioners on surrogate country selection or the valuation of 
factors of production.
    Also in May 2006, we issued a second supplemental section C and D 
questionnaire to SVW. We received SVW's response to this questionnaire 
in May 2006.
    In May and June 2006, we requested additional information related 
to the purity levels of reported inputs and the various grades of 
finished PVA. We received SVW's response to these requests in June 
2006.

Period of Review

    The period of review (POR) is October 1, 2004, through September 
30, 2005.

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 order:
    (1) 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

[[Page 38613]]

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 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 (Feb. 14, 2003); Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: Final 
Results of 2001-2002 Administrative Review and Partial Rescission of 
Review, 68 FR 70488 (Dec. 18, 2003) (unchanged in the final results). 
None of the parties to this proceeding has contested such treatment. 
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 to base NV 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, Sri Lanka, Indonesia, 
Philippines, and Egypt are countries comparable to the PRC in terms of 
economic development. See the February 9, 2006, memorandum from Ron 
Lorentzen, Director, Office of Policy, to Irene Darzenta Tzafolias, 
Acting Director, Office 2, entitled, ``Antidumping Duty Administrative 
Review of Polyvinyl Alcohol from the People's Republic of China (PRC): 
Request for a List of Surrogate Countries.'' 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 found that India is a significant producer of 
comparable merchandise. See the June 6, 2006, memorandum to the file 
from Jill Pollack, Senior Analyst, entitled ``Second Administrative 
Review of the Antidumping Duty Order on Polyvinyl Alcohol from the 
People's Republic of China: Selection of a Surrogate Country.''
    The Department used India as the primary surrogate country and, 
accordingly, calculated NV using Indian prices to value the PRC 
producer's 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 June 30, 2006, memorandum from Jill 
Pollack to the file entitled, ``Preliminary Results of Review of the 
Antidumping Duty Order on Polyvinyl Alcohol from the People's Republic 
of China: Factor Valuation Memorandum'' (the Factor Valuation 
Memorandum). We obtained and relied upon publicly available information 
wherever possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
of 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 (Apr. 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 a company should 
receive a separate rates, the Department focuses its attention on the 
exporter, in this case SVW, rather than the manufacturer. See Notice of 
Final Determination of Sales at Less Than Fair Value: Manganese Metal 
from the People's Republic of China, 60 FR 56045 (Nov. 6, 1995).
    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 from the PRC). 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 Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: Final 
Results of 2003-2004 Administrative Review and Partial Rescission of 
Review, 71 FR 2517 (Jan. 17, 2006) (Tapered Bearings 2003-2004 
Administrative Review).
    SVW has provided separate rates information in its section A 
questionnaire response. SVW has stated that there is no element of 
government control over its export activities and has requested a 
separate, company-specific rate.

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 abiding by government laws and 
regulations, which includes paying taxes, it has no relationship with 
any level of the PRC government. See page A-3 of SVW's January 26, 
2006, Section A questionnaire response. 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 January 26 response. SVW also confirmed that the subject 
merchandise is not subject to export quotas or export control licenses. 
See pages A-5 and A-6 of January 26 response. SVW reported that it is 
required to obtain a business license, which is issued by the Chongqing 
Municipal Industry and Commerce Administration. See page A-4 of the 
January 26 response. We

[[Page 38614]]

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 of SVW and provide evidence 
demonstrating the absence of government control associated with SVW's 
business license. See 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).

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 (Dec. 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.
    In support of demonstrating an absence of de facto control, SVW 
provided documentation, where appropriate, to support the following 
assertions: (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-6 through A-9 of 
the January 26 response. Additionally, SVW's section A questionnaire 
response indicates that it does not coordinate with other exporters in 
setting prices. See page A-6 of the January 26 response. SVW also 
stated that it is an independent entity responsible for its own profits 
and losses. See page A-3 of the January 26 response. 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 de facto 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.

Normal Value Comparisons

    To determine whether sales of PVA to the United States by SVW 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.

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 market-economy 
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 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 FOB port 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. For valuation of these services provided by NME suppliers, see 
the June 30, 2006, memorandum to the file from Jill Pollack entitled, 
``U.S. Price and Factors of Production Adjustments for the Preliminary 
Results'' (Preliminary Calculation Memorandum). See also the Factor 
Valuation 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 calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act. 
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. 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 (Jan. 31, 2003); Notice of Final 
Antidumping Duty Determination of Sales at Less Than Fair Value and 
Affirmative Critical Circumstances: Certain Frozen Fish Fillets from 
the Socialist Republic of Vietnam, 68 FR 37116 (June 23, 2003) 
(unchanged in the final determination).
    In accordance with section 773(c) of the Act, we calculated NV 
based on the factors of production reported by SVW for the POR for 
materials, energy, labor, by-products, and packing. 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, in accordance with our practice. See Notice 
of Final Determination of Sales at Less Than Fair Value: Polyvinyl 
Alcohol from the People's Republic of China, 68 FR 47538 (Aug. 11, 
2003) (Polyvinyl Alcohol from the PRC Investigation); Polyvinyl Alcohol 
From the People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 71 FR 27991 (May 15, 2006) (Polyvinyl Alcohol 
2003-2004 Review).
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information in the surrogate country to

[[Page 38615]]

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 surrogate values come from an NME country or where 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 Tapered Bearings 2003-2004 Administrative Review.
    SVW reported that all of its inputs were sourced from NMEs and paid 
for in an NME currency. See the Factor Valuation Memorandum for a list 
of these inputs. Therefore, we did not use respondents' actual prices 
for any NME purchases.

Factor Valuations

    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 the Indian import surrogate 
values a surrogate freight cost calculated using the shorter of the 
reported distance from the domestic supplier to the factory or the 
distance from the nearest port of export 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 the respondent, see the Factor Valuation Memorandum.
    It is the Department's practice to date 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 (Jan. 10, 2001) 
and accompanying Issues and Decision Memorandum at Comment 1; Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, from the 
People's Republic of China; Final Results of 1999-2000 Administrative 
Review, Partial Rescission of Review, and Determination Not To Revoke 
Order in Part, 66 FR 57420 (Nov. 15, 2001) and accompanying Issues and 
Decision Memorandum at Comment 1; and China National Machinery Imp & 
Exp. Corp. v. United States, 293 F. Supp. 2d 1334, 1339 (CIT 2003). 
Therefore, in instances where we relied on Indian import data to value 
inputs, in accordance with the Department's practice, we excluded 
imports from both NME countries and Indonesia, Thailand and the 
Republic of Korea to value the factors of production.
    In its section D questionnaire response, SVW allocated the raw 
material inputs for producing acetylene and acetylene tail gas using a 
heat of combustion methodology. For the preliminary results of this 
review, we have reallocated the raw material inputs for producing 
acetylene and acetylene tail gas based on the market value of these 
products rather than the heat of combustion. We note that the 
Department used a market value-based reallocation of raw material 
inputs for the production of acetylene and acetylene tail gas in the 
prior segments of this proceeding. See Polyvinyl Alcohol from the PRC 
Investigation at Comment 3; Polyvinyl Alcohol 2003-2004 Review at 
Comment 1. Further, the use of this methodology in this proceeding has 
been affirmed by the Court. See Sinopec Sichuan Vinylon Works v. United 
States, 366 F. Supp. 2d 1339, 1347-1348 (CIT 2005) (Sinopec v. United 
States). For additional information, see the Preliminary Calculation 
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, 
phosphoric acid (anti-precipitate), freon, 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, poly 
ferrosulfate, liquid ammonia, and acetic acid using India import 
statistics as published by the World Trade Atlas, contemporaneous with 
the POR. See id.
    We valued natural gas using a price obtained from the Web site of 
the Gas Authority of India Ltd., a supplier of natural gas in India, 
contemporaneous with the POR. For further discussion, see id.
    We valued steam coal using the 2003/2004 Tata Energy Research 
Institute's Energy Data Directory & Yearbook (TERI Data). See id.
    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. See id.
    Regarding N-methyl-2pydrolidone, industrial grade salt, chlorine 
dioxide, 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 NV. See Polyvinyl 
Alcohol from the People's Republic of China: Preliminary Results of 
Antidumping Duty Administrative Review, 70 FR 67434, 67439 (Nov. 7, 
2005) (unchanged in the final results); 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 the 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 (Dec. 15, 1997) and 
the 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 (Oct. 
25, 1991).
    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 website, Expected Wages of 
Selected NME Countries, revised in November 2005, http://
ia.ita.doc.gov/wages/03wages/110805-2003-Tables/03wages-
110805.html#table1. 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

[[Page 38616]]

labor reported by the respondent. See the Preliminary Calculation 
Memorandum.
    To determine factory overhead, depreciation, selling, general, and 
administrative expenses, interest expenses, and profit for the finished 
product, we relied on rates derived from the financial statements of 
Jubilant Organosys Ltd. (Jubilant), an Indian producer of comparable 
merchandise. We applied these ratios to SVW's costs (determined as 
noted above) for materials, labor, and energy. See id.
    Finally, SVW reported that it generated certain other by-products 
as a result of the production of PVA or the inputs used to produce PVA. 
We valued methyl acetate, PVA scrap, and recovered methanol, using 
Indian domestic market prices reported in Chemical Weekly. We valued 
acetic acid using import values from the World Trade Atlas. Because SVW 
did not provide sufficient information to permit the accurate valuation 
of certain other reported 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.\1\
---------------------------------------------------------------------------

    \1\ These by-products included alkynes gas, bottled oxygen and 
nitrogen, liquid oxygen and nitrogen, argon, and recovered low 
pressure nitrogen.
---------------------------------------------------------------------------

    Regarding acetic acid, SVW recovers a significant portion of this 
input in the last stage of production of PVA (i.e., the hydrolysis 
process). Because Jubilant is a producer of polyvinyl acetate (PVAc), a 
precursor polymer of PVA, it does not perform the hydrolysis process 
necessary to recover acetic acid. See Polyvinyl Alcohol from the PRC 
Investigation at Comment 3. Therefore, given the difference in the 
production process between the surrogate company and the respondent, we 
find that deducting this by-product from the cost of manufacturing 
would result in an understated overhead expense derived from Jubilant's 
financial statements. As a result, we have made a by-product offset to 
SVW's NV. This methodology has been upheld by the CIT. See Sinopec v. 
United States, 366 F. Supp. 2d at 1351 remanded on other grounds by, 
2006 Ct. Intl. Trade LEXIS; Slip Op. 2006-78 (May 25, 2006). 
Consequently, consistent with the CIT's previous determination in this 
matter, the Department has continued to make an adjustment for the 
recovered acetic acid after the application of the surrogate financial 
ratios for purposes of these preliminary results. See the Preliminary 
Calculation Memorandum.

Weighted-Average Dumping Margin

    The weighted-average dumping margin is as follows:

------------------------------------------------------------------------
                                                              Margin
             Manufacturer/producer/exporter                 percentage
------------------------------------------------------------------------
Sinopec Sichuan Vinylon Works...........................            0.00
------------------------------------------------------------------------

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.
    We note that SVW did not report the entered value for its U.S. 
sales. Accordingly, we have calculated importer-specific assessment 
rates for the merchandise in question by aggregating the dumping 
margins calculated for all U.S. sales to each importer and dividing 
this amount by the total quantity of those sales. To determine whether 
the duty assessment rates were de minimis, in accordance with the 
requirement set forth in 19 CFR 351.106(c)(2), we calculated importer-
specific ad valorem ratios based on the estimated entered value.

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 SVW, the cash 
deposit rate will be that established in the final results of this 
review (except, if the rate is zero or de minimis, no cash deposit will 
be required); (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 which have not been found to be entitled to a separate 
rate, the cash deposit rate will be the PRC-wide rate of 97.86 percent; 
and (4) 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 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: June 30, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-10661 Filed 7-6-06; 8:45 am]
BILLING CODE 3510-DS-P