Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Activated Carbon From the People's Republic of China, 59721-59738 [06-8622]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 196 (Wednesday, October 11, 2006)]
[Notices]
[Pages 59721-59738]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-8622]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-904]


Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Certain Activated Carbon From the 
People's Republic of China

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

EFFECTIVE DATE: October 11, 2006.

[[Page 59722]]

SUMMARY: We preliminarily determine that certain activated carbon from 
the People's Republic of China (``PRC'') is being, or is likely to be, 
sold in the United States at less than fair value (``LTFV''), as 
provided in section 733 of the Tariff Act of 1930, as amended (``the 
Act''). The estimated margins of sales at LTFV are shown in the 
``Preliminary Determination'' section of this notice.

FOR FURTHER INFORMATION CONTACT: Catherine Bertrand or Anya Naschak, 
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: 202-482-3207 
or 202-482-6375, respectively.

SUPPLEMENTARY INFORMATION: 

Case History

    On March 8, 2006, the Department of Commerce (``Department'') 
received a petition on imports of certain activated carbon from the 
People's Republic of China (``PRC'') from Calgon Carbon Corporation and 
Norit Americas Inc. (``Petitioners''). This investigation was initiated 
on March 28, 2006. See Initiation of Antidumping Duty Investigation: 
Certain Activated Carbon From the People's Republic of China, 71 FR 
16757 (April 4, 2006) (``Initiation Notice'').
    Since the initiation of this investigation, the following events 
have occurred. On April 4, 2006, the Department requested quantity and 
value (``Q&V'') information from the producers and exporters of certain 
activated carbon that Petitioners identified in the petition. Also, on 
April 4, 2006, the Department sent a letter requesting Q&V information 
to the China Bureau of Fair Trade for Imports & Exports (``BOFT'') of 
the Ministry of Commerce (``MOFCOM'') requesting that BOFT transmit the 
letter to all companies who manufacture and export subject merchandise 
to the United States, or produce the subject merchandise for the 
companies who were engaged in exporting the subject merchandise to the 
United States during the period of investigation (``POI'').
    The Q&V information was due on April 19, 2006. The Department 
received twenty-three responses. The Department did not receive any 
type of communication from BOFT regarding its request for Q&V 
information. For a complete list of all parties from which the 
Department requested Q&V information, see Memorandum to James C. Doyle, 
Director, AD/CVD Operations, Office 9, through Carrie Blozy, Program 
Manager, AD/CVD Operations, Office 9, from Catherine Bertrand, Senior 
Case Analyst, Office 9: Selection of Respondents for the Antidumping 
Investigation of Certain Activated Carbon From the People's Republic of 
China, dated May 3, 2006 (``Respondent Selection Memo'').
    On April 21, 2006, the United States International Trade Commission 
(``ITC'') issued its affirmative preliminary determination that there 
is a reasonable indication that an industry in the United States is 
materially injured or threatened with material injury by reason of 
imports from the PRC of certain activated carbon. The ITC's 
determination was published in the Federal Register on May 2, 2006. See 
Investigation No. 731-TA-1103 (Preliminary), Certain Activated Carbon 
From China, 71 FR 25858 (May 2, 2006).
    On May 3, 2006, the Department selected Calgon Carbon (Tianjin) 
Co., Ltd. (``CCT''), Tianjin Jacobi Int'l Trading Co., Ltd. (``Jacobi 
Tianjin''), and Datong Huibao Activated Carbon Co., Ltd and its 
affiliated company Beijing Hibridge Trading Co., Ltd. (``Huibao/
Hibridge''), as mandatory respondents in this investigation. See 
Respondent Selection Memo. On May 4, 2006, the Department issued the 
full antidumping questionnaire to the selected mandatory respondents.
    On May 15, 2006, the Department received a letter from Huibao/
Hibridge, informing the Department that Huibao/Hibridge was withdrawing 
from this investigation. See Memorandum to the File from Catherine 
Bertrand, Senior Case Analyst, dated May 15, 2006. Additionally, as 
described below, although Huibao/Hibridge filed a separate rate 
application, we have not considered its request for a separate rate in 
this investigation given its failure to participate as a mandatory 
respondent. Any references to the separate rate applicants in this 
notice specifically exclude Huibao/Hibridge.
    On May 19, 2006, the Department selected an additional mandatory 
respondent, Jilin Province Bright Future Chemicals Co. Ltd. (``JBF 
Chemical'') and its affiliated company Jilin Province Bright Future 
Industry & Commerce Co. Ltd. (``JBF Industry'') (collectively, ``Jilin 
Bright Future''). See Memorandum to James C. Doyle, Director, AD/CVD 
Operations, Office 9, through Carrie Blozy, Program Manager, AD/CVD 
Operations, Office 9, from Catherine Bertrand, Senior Case Analyst, 
Office 9: Selection of Additional Mandatory Respondent, dated May 19, 
2006, (``Additional Respondent Selection Memo''). On May 19, 2006, the 
Department issued the full antidumping questionnaire to Jilin Bright 
Future.
    On April 20, 2006, the Department requested comments from all 
interested parties on proposed product characteristics to be used in 
the designation of control numbers (``CONNUMs'') to be assigned to the 
subject merchandise. The Department received comments from Petitioners. 
On May 10, 2006, the Department released the product characteristics to 
be used in the designation of CONNUMs to be assigned the subject 
merchandise.
    On June 1, 2006, the Department determined that India, Indonesia, 
Sri Lanka, the Philippines, and Egypt are countries comparable to the 
PRC in terms of economic development. See Memorandum from Ron 
Lorentzen, Director, Office of Policy, to James C. Doyle, Office 
Director, Office 9: Antidumping Investigation of Certain Activated 
Carbon from the People's Republic of China: Request for a List of 
Surrogate Countries, dated June 1, 2006. (``Office of Policy Surrogate 
Countries Memorandum'').
    On June 6, 2006, the Department invited interested parties to 
comment on the Department's surrogate country selection and/or 
significant production in the potential surrogate countries and to 
submit publicly available information to value the factors of 
production. On July 25, 2006, we received comments from Petitioners on 
the selection of a surrogate country. No other party to the proceeding 
submitted information or comments concerning the selection of a 
surrogate country. For a detailed discussion of the selection of the 
surrogate country, See ``Surrogate Country'' section below, and the 
Memorandum to James C. Doyle, Director, AD/CVD Operations, Office 9, 
from Anya Naschak, Senior Case Analyst, AD/CVD Operations, Office 9: 
Antidumping Duty Investigation of Certain Activated Carbon from the 
People's Republic of China: Selection of a Surrogate Country, dated 
October 4, 2006 (``Surrogate Country Memo'').
    On July 25, 2006, Jacobi Tianjin submitted comments on information 
with which to value the factors of production in this investigation. 
Petitioners and Jilin Bright Future submitted comments on information 
with which to value the factors of production in this investigation on 
August 10, 2006. Petitioners submitted additional comments on August 
21, 2006.
    We received questionnaire responses from the mandatory respondents 
in June and July 2006, and we issued supplemental questionnaires and 
received responses in July, August, and September 2006. We received 
separate rate applications from 20 companies.

[[Page 59723]]

We issued deficiency questionnaires to all applicants. See ``Separate 
Rates'' section below, and the Memorandum to James C. Doyle, Director, 
AD/CVD Operations, Office 9, from Anya Naschak, Senior Case Analyst, 
AD/CVD Operations, Office 9: Antidumping Duty Investigation of Certain 
Activated Carbon from the People's Republic of China: Separate Rates 
Memorandum, dated October 4, 2006 (``Separate Rates Memo'').
    On July 21, 2006, Petitioners made a timely request pursuant to 
733(c)(1)(A) of the Act and 19 CFR 351.205(e) for a fifty-day 
postponement of the preliminary determination, until October 4, 2006. 
On August 2, 2006, the Department published a postponement of the 
preliminary antidumping duty determination on certain activated carbon 
from the PRC. See Postponement of Preliminary Determination of 
Antidumping Duty Investigation: Certain Activated Carbon from the 
People's Republic of China, 71 FR 43714 (August 2, 2006).

Postponement of Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until no later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise or, in the event of a negative 
preliminary determination, a request for such postponement is made by 
the Petitioners. The Department's regulations at 19 CFR 351.210(e)(2) 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for an extension of the 
provisional measures from a four-month period to not more than six 
months.
    On September 26, 2006, CCT requested the Department postpone its 
final determination by 60 days until 135 days after the publication of 
the preliminary determination. Additionally, CCT requested that the 
Department extend the provisional measures under Section 733(d) of the 
Act. Accordingly, because we have made an affirmative preliminary 
determination and the requesting parties account for a significant 
proportion of the exports of the subject merchandise, pursuant to 
735(a)(2) of the Act, we have postponed the final determination until 
no later than 135 days after the date of publication of the preliminary 
determination and are extending the provisional measures accordingly.

Period of Investigation

    The period of investigation (``POI'') is July 1, 2005, through 
December 31, 2005.
    This period corresponds to the two most recent fiscal quarters 
prior to the month of the filing of the petition (March 8, 2006). See 
19 CFR 351.204(b)(1).

Scope of Investigation

    The merchandise subject to this investigation is certain activated 
carbon. Certain activated carbon is a powdered, granular, or pelletized 
carbon product obtained by ``activating'' with heat and steam various 
materials containing carbon, including but not limited to coal 
(including bituminous, lignite, and anthracite), wood, coconut shells, 
olive stones, and peat. The thermal and steam treatments remove organic 
materials and create an internal pore structure in the carbon material. 
The producer can also use carbon dioxide gas (CO2) in place 
of steam in this process. The vast majority of the internal porosity 
developed during the high temperature steam (or CO2 gas) 
activated process is a direct result of oxidation of a portion of the 
solid carbon atoms in the raw material, converting them into a gaseous 
form of carbon.
    The scope of this investigation covers all forms of activated 
carbon that are activated by steam or CO2, regardless of the 
raw material, grade, mixture, additives, further washing or post-
activation chemical treatment (chemical or water washing, chemical 
impregnation or other treatment), or product form. Unless specifically 
excluded, the scope of this investigation covers all physical forms of 
certain activated carbon, including powdered activated carbon 
(``PAC''), granular activated carbon (``GAC''), and pelletized 
activated carbon.
    Excluded from the scope of the investigation are chemically-
activated carbons. The carbon-based raw material used in the chemical 
activation process is treated with a strong chemical agent, including 
but not limited to phosphoric acid, zinc chloride sulfuric acid or 
potassium hydroxide, that dehydrates molecules in the raw material, and 
results in the formation of water that is removed from the raw material 
by moderate heat treatment. The activated carbon created by chemical 
activation has internal porosity developed primarily due to the action 
of the chemical dehydration agent. Chemically activated carbons are 
typically used to activate raw materials with a lignocellulosic 
component such as cellulose, including wood, sawdust, paper mill waste 
and peat.
    To the extent that an imported activated carbon product is a blend 
of steam and chemically activated carbons, products containing 50 
percent or more steam (or CO2 gas) activated carbons are 
within this scope, and those containing more than 50 percent chemically 
activated carbons are outside this scope.
    Also excluded from the scope are reactivated carbons. Reactivated 
carbons are previously used activated carbons that have had adsorbed 
materials removed from their pore structure after use through the 
application of heat, steam and/or chemicals.
    Also excluded from the scope is activated carbon cloth. Activated 
carbon cloth is a woven textile fabric made of or containing activated 
carbon fibers. It is used in masks and filters and clothing of various 
types where a woven format is required.
    Any activated carbon meeting the physical description of subject 
merchandise provided above that is not expressly excluded from the 
scope is included within this scope. The products under investigation 
are currently classifiable under the Harmonized Tariff Schedule of the 
United States (``HTSUS'') subheading 3802.10.00. Although HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the scope of this investigation is dispositive.

Scope Comments

    In accordance with the preamble to our regulations (see Antidumping 
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), in 
our initiation notice we set aside a period of time for parties to 
raise issues regarding product coverage and encouraged all parties to 
submit comments within 20 calendar days of publication of the 
initiation notice. See Initiation Notice 71 FR at 16758.
    On May 4, 2006, Carbochem Inc. (``Carbochem'') submitted timely 
scope comments in which it argued that the Department should issue a 
ruling that the scope of these investigations does not cover certain 
grades of Carbochem[supreg] activated carbon. Carbochem argued that 
these certain grades are not manufactured in the United States by the 
Petitioners. Carbochem further argued that it has developed a number of 
unique and proprietary grades of activated carbon that exceed the 
performance capabilities of the products produced by Petitioners.
    On August 24, 2006, Petitioners submitted comments on Carbochem's 
scope request. Petitioners argued that

[[Page 59724]]

the domestic industry does manufacture products with the same or 
competitive properties and performance characteristics as the products 
for which Carbochem proposed an exclusion. Petitioners further argued 
that the domestic industry is not required to produce every product 
that is within the scope of the investigation but simply has to be able 
to produce the class or kind of products covered by the scope, which 
Petitioners argue that they do. Petitioners assert that there is no 
basis on which to exclude the products requested by Carbochem. On 
September 14, 2006, Carbochem filed rebuttal comments in response to 
Petitioners' August 24, 2006 submission stating that its products are 
not comparable to those produced by Petitioners.
    The Department has analyzed the comments received by Carbochem and 
Petitioners. For this preliminary determination, the Department has 
determined to deny the request by Carbochem. For a detailed discussion 
of this issue, see the Memorandum to James C. Doyle, Office Director, 
AD/CVD Operations, Office 9 from Catherine Bertrand, Senior Case 
Analyst, AD/CVD Operations, Office 9: Antidumping Duty Investigation of 
Certain Activated Carbon From the People's Republic of China: Comments 
on the Scope of the Investigation, dated October 4, 2006 (``Scope 
Memorandum''). We will afford interested parties an opportunity to 
provide comments on our preliminary finding on this issue in their case 
and rebuttal briefs, and, if any are provided, we will revisit this 
issue in our final determination.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual weighted-average dumping margins for each known exporter and 
producer of the subject merchandise. Section 777A(c)(2) of the Act 
gives the Department discretion, when faced with a large number of 
exporters/producers, to limit its examination to a reasonable number of 
such companies if it is not practicable to examine all companies. Where 
it is not practicable to examine all known producers/exporters of 
subject merchandise, this provision permits the Department to 
investigate either (A) a sample of exporters, producers, or types of 
products that is statistically valid based on the information available 
to the Department at the time of selection or (B) exporters/producers 
accounting for the largest volume of the merchandise under 
investigation that can reasonably be examined. After consideration of 
the complexities expected to arise in this proceeding and the available 
resources, the Department determined that it was not practicable in 
this investigation to examine all known producers/exporters of subject 
merchandise. Instead, we limited our examination to the three exporters 
accounting for the largest volume of shipments of the subject 
merchandise to the United States during the POI pursuant to section 
777A(c)(2)(B) of the Act. We selected CCT, Jacobi Tianjin, and Huibao/
Hibridge to be mandatory respondents, as they are the exporters 
accounting for the largest volume of exports to the United States 
during the POI of subject merchandise from the PRC. After Huibao/
Hibridge informed the Department that it was withdrawing from this 
investigation, the Department selected Jilin Bright Future as a 
mandatory respondent. Jilin Bright Future was the next largest 
producer/exporter of those companies that submitted quantity and value 
responses. See Respondent Selection Memo and Additional Respondent 
Selection Memo.

Non-Market-Economy Country

    For purposes of initiation, Petitioners submitted LTFV analyses for 
the PRC as a non-market economy (``NME''). See Initiation Notice. In 
every case conducted by the Department involving the PRC, the PRC has 
been treated as an NME country. In accordance with section 
771(18)(C)(i) of the Act, any determination that a foreign country is 
an NME country shall remain in effect until revoked by the 
administering authority. See Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, From the People's Republic of China: 
Preliminary Results 2001-2002 Administrative Review and Partial 
Rescission of Review, 68 FR 7500 (February 14, 2003), unchanged in 
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
From the People's Republic of China: Final Results of 2001-2002 
Administrative Review, 68 FR 70488 (December 18, 2003). No party has 
challenged the designation of the PRC as an NME country in this 
investigation. Therefore, we have treated the PRC as an NME country for 
purposes of this preliminary determination.

Surrogate Country

    When the Department is investigating imports from an NME, section 
773(c)(1) of the Act directs it to base normal value, in most 
circumstances, 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 at a level 
of economic development comparable to that of the NME country and are 
significant producers of comparable merchandise. The sources of the 
surrogate values we have used in this investigation are discussed under 
the normal value section below.
    On July 25, 2006, the Department received comments from Petitioners 
on the appropriate surrogate country for valuing the factors of 
production (``FOP''). Petitioners argue that India is the most 
appropriate surrogate country in this investigation because India is at 
a comparable level of economic development with the PRC based on the 
Department's repeated use of India as a surrogate. Petitioners also 
provided evidence demonstrating that India is a significant producer of 
identical and comparable merchandise. Additionally, Petitioners contend 
that India provides publicly available information on which to base 
surrogate values. See Surrogate Country Memo for a complete description 
of Petitioners' surrogate country arguments.
    As detailed in the Surrogate Country Memo, the Department has 
preliminarily selected India as the surrogate country on the basis 
that: (1) It is a significant producer of comparable merchandise; (2) 
it is at a similar level of economic development pursuant to 733(c)(4) 
of the Act; and (3) we have reliable data from India that we can use to 
value the FOP. See Surrogate Country Memo. Thus, we have calculated 
normal value using Indian prices, when available and appropriate, to 
value the FOP of the certain activated carbon producers. We have 
obtained and relied upon publicly available information wherever 
possible. See Memorandum to the File from Anya Naschak, Senior Case 
Analyst, AD/CVD Operations, Office 9: Certain Activated Carbon from the 
People's Republic of China: Surrogate Values for the Preliminary 
Determination, dated October 4, 2006 (``Surrogate Value Memo'').
    In accordance with 19 CFR 351.301(c)(3)(i), for the final 
determination in an antidumping investigation, interested parties may 
submit publicly available information to value the FOP within forty 
days after the date of publication of the preliminary determination.

[[Page 59725]]

Affiliation

    Based on the evidence on the record of this investigation, we 
preliminarily find that Jacobi Tianjin, Jacobi Carbons AB (``Jacobi 
AB''), and Jacobi Carbons Inc. (``Jacobi US'') (collectively, 
``Jacobi'') are affiliated pursuant to sections 771(33)(D), (E), and 
(G) of the Act. Due to the proprietary nature of this issue, for a 
detailed discussion of our analysis, see Memorandum to the File from 
Anya Naschak, Senior Case Analyst, AD/CVD Operations, to James C. 
Doyle, Director, AD/CVD Operations: Certain Activated Carbon from the 
People's Republic of China: Affiliation and Treatment of Sales of 
Jacobi Tianjin International Trading Co., Ltd., Jacobi Carbons AB, and 
Jacobi Carbons, Inc., dated October 4, 2006 (``Jacobi Affiliation and 
Treatment of Sales Memo'').
    With respect to Jilin Bright Future, JBF Chemical and JBF Industry 
submitted separate rate applications on May 4, 2006. In their 
applications, JBF Chemical and JBF Industry certified that they were 
affiliated with each other. See JBF Chemical and JBF Industry's 
separate rate applications dated May 4, 2006. In their Section A 
questionnaire responses, dated June 9, 2006, JBF Chemical and JBF 
Industry stated that both companies are under common ownership. See JBF 
Chemical's Section A questionnaire response dated June 9, 2006, at 2 
and Exhibit A-3; JBF Industry's Section A questionnaire response dated 
June 9, 2006, at 2 and Exhibit A-3. Based on the evidence on the record 
of this investigation, we preliminarily find that JBF Chemical and JBF 
Industry are affiliated pursuant to section 771(33)(E) of the Act.

Separate Rates

    CCT has reported that it is wholly foreign-owned. CCT reported that 
100 percent of its shares are held by Calgon Carbon Corporation, which 
is located in the United States. Therefore, there is no PRC ownership 
of CCT, and because we have no evidence indicating that it is under the 
control of the PRC, a separate rates analysis is not necessary to 
determine whether it is independent from government control. See Brake 
Rotors From the People's Republic of China: Preliminary Results and 
Partial Rescission of the Fourth New Shipper Review and Rescission of 
the Third Antidumping Duty Administrative Review, 66 FR 1303, 1306 
(January 8, 2001), unchanged in the final determination; Notice of 
Final Determination of Sales at Less Than Fair Value: Creatine 
Monohydrate From the People's Republic of China, 64 FR 71104 (December 
20, 1999). Accordingly, we have preliminarily granted a separate rate 
for CCT.
    As discussed in detail in the Jacobi Affiliation and Treatment of 
Sales Memo, the Department has preliminarily determined that Jacobi 
Tianjin should not be considered the mandatory respondent in this 
investigation. The Department has preliminarily determined that Jacobi 
Tianjin's affiliated company, Jacobi AB, conducted all sales-related 
activities with respect to exports made by Jacobi Tianjin of the 
merchandise under investigation and sold to unaffiliated U.S. customers 
through Jacobi US. See Jacobi Affiliation and Treatment of Sales Memo. 
All exports made by Jacobi Tianjin were negotiated and sold by Jacobi 
AB and Jacobi Tianjin made no sales during the POI; therefore, Jacobi 
Tianjin has not demonstrated that it qualifies for a separate rate.\1\ 
However, because the Department has preliminarily determined that 
Jacobi AB is the respondent in this investigation, because Jacobi AB is 
a market economy company located in Sweden (see Jacobi's Section A 
questionnaire response dated June 1, 2006 at page 14), and consistent 
with the Department's practice where the seller is located in a market 
economy country, we have preliminarily granted Jacobi AB its own rate. 
See Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Silicomanganese From Kazakhstan, 66 FR 56639, 56641 (November 9, 
2001), unchanged in Notice of Final Determination of Sales at Less Than 
Fair Value: Silicomanganese From Kazakhstan, 67 FR 15535 (April 2, 
2002). Further, where Jacobi Tianjin acted as an export facilitator for 
Jacobi AB, those exports are also eligible for Jacobi AB's antidumping 
duty cash deposit rate. See 19 CFR 351.107(b)(2); Final Determination 
of Sales at Less Than Fair Value and Final Partial Affirmative 
Determination of Critical Circumstances: Diamond Sawblades and Parts 
Thereof from the People's Republic of China, 71 FR 29303 (May 22, 2006) 
and accompanying Issues and Decision Memorandum at Comment 18. See also 
Jacobi Affiliation and Treatment of Sales Memo.
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    \1\ The Department notes that although Jacobi Tianjin submitted 
a separate rate application and complete information in its Section 
A questionnaire response, all documents contained therein 
demonstrate that Jacobi AB was the seller of the merchandise. See 
Jacobi Affiliation and Treatment of Sales Memo.
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    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to investigation in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. As 
explained below, Jilin Bright Future and certain companies who 
submitted separate rate applications have provided company-specific 
information in order to demonstrate that they operate independently of 
de jure and de facto government control, and, therefore, satisfy the 
standards for the assignment of a separate rate.
    The separate rate application issued in this investigation (see 
https://www.trade.gov/ia/) explained that all applications are due sixty 
calendar days after publication of the Initiation Notice, and the 
Department will not consider applications that remain incomplete by 
that deadline. We received 20 applications by the deadline. On June 14, 
2006, the Department received a request from Ningxia Fengyuan Activated 
Carbon Co., Ltd. (``NFAC'') to extend the time limits with which to 
submit a response to the Department's quantity and value information, 
and to submit a separate rate application, until June 28, 2006. On June 
27, 2006, the Department noted that NFAC had received notice of the 
deadlines with respect to the quantity and value questionnaire and the 
separate rates application in the Initiation Notice, and that the 
deadline had passed for submitting a separate rate application. The 
Department informed NFAC that it would be unable to grant NFAC's 
request for an extension of time to file the quantity and value 
questionnaire and the separate rate application. See Letter from Carrie 
Blozy, Program Manager, AD/CVD Operations, Office 9, dated June 27, 
2006.
    We have considered whether each mandatory respondent and each 
separate rate applicant \2\ is eligible for a separate rate. The 
Department's separate-rate test is not concerned, in

[[Page 59726]]

general, with macroeconomic/border-type controls, e.g., export 
licenses, quotas, and minimum export prices, particularly if these 
controls are imposed to prevent dumping. Rather, the test focuses on 
controls over the investment, pricing, and output decision-making 
process at the individual firm level. See Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate from Ukraine, 62 FR 61754, 61757 (November 19, 1997), and Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, From the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 62 FR 61276, 61279 (November 17, 1997).
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    \2\ We received separate rate applications from the following: 
Datong Yunguang Chemicals Plant; Hebei Foreign Trade & Advertising 
Corp.; Ningxia Guanghua Cherishmet Activated Carbon Co. Ltd.; 
Ningxia Huahui Activated Carbon Co. Ltd.; Ningxia Mineral & Chemical 
Ltd.; Shanxi DMD Corp; Shanxi Industry Technology Trading Co. Ltd.; 
Shanxi Newtime Co. Ltd.; Shanxi Qixian Foreign Trade Corp.; Shanxi 
Sincere Industrial Co. Ltd.; Shanxi Xuanzhong Chemical Industry Co. 
Ltd.; Tangshan Solid Carbon Co., Ltd.; United Manufacturing Int'l 
(Beijing) Ltd. Xi'an Shuntong Int'l Trade & Industries Co. Ltd.; 
Panshan Import and Export Corp; and, Tianjin Maijin Industries Co. 
Ltd.
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    To establish whether a firm is sufficiently independent from 
government control of its export activities to be entitled to a 
separate rate, the Department analyzes each entity exporting the 
subject merchandise under a test arising from the Final Determination 
of Sales at Less Than Fair Value: Sparklers from the People's Republic 
of China, 56 FR 20588 (May 6, 1991) (``Sparklers''), as amplified 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''), 59 FR at 22586-87. In accordance with the 
separate-rates criteria, the Department assigns separate rates in NME 
cases only if respondents can demonstrate the absence of both de jure 
and de facto governmental control over export activities.

1. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589.
    The information provided by Jilin Bright Future and the separate 
rate applicants supports a preliminary finding of de jure absence of 
governmental control based on the following: (1) An absence of 
restrictive stipulations associated with the individual exporter's 
business and export licenses; (2) the applicable legislative enactments 
decentralizing control of the companies; and (3) any other formal 
measures by the government decentralizing control of companies. See 
Separate Rates Memo.

2. Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a governmental agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See Silicon Carbide, 59 FR at 22587; see also 
Notice of Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 
22545 (May 8, 1995). 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 governmental control which would preclude 
the Department from assigning separate rates.
    As noted above, the Department considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions. In the instant case, we determine that, with 
regard to Jilin Bright Future and the separate rate applicants, except 
for Panshan Import and Export Corporation (``Panshan'') (hereinafter 
referred to as the Separate Rate Companies), the evidence on the record 
supports a preliminary finding of de facto absence of governmental 
control based on record statements and supporting documentation showing 
the following: (1) Each exporter sets its own export prices independent 
of the government and without the approval of a government authority; 
(2) each exporter retains the proceeds from its sales and makes 
independent decisions regarding disposition of profits or financing of 
losses; (3) each exporter has the authority to negotiate and sign 
contracts and other agreements; and (4) each exporter has autonomy from 
the government regarding the selection of management.
    With regard to Panshan, it failed to provide any evidence that it 
had autonomy in making decisions regarding the selection of management. 
The separate rate application requires that the applicant provide 
specific documentation that evidences independence in the selection of 
management. Panshan did not provide any evidence of independent 
selection of management in its application nor in its supplemental 
response in regard to a specific question from the Department asking 
for this documentation. See Separate Rates Memo. Therefore, as the 
application requires the applicant to provide proof of the independent 
selection of management, Panshan has not met the basic requirements of 
the application. The Department finds that Panshan's application is 
deficient and therefore finds that Panshan is not eligible for a 
separate rate.
    The evidence placed on the record of this investigation by Jilin 
Bright Future and the separate rate applicants, except for Panshan, 
demonstrates an absence of de jure and de facto government control with 
respect to each of the exporter's exports of the merchandise under 
investigation, in accordance with the criteria identified in Sparklers 
and Silicon Carbide. CCT is wholly-owned by a market economy entity and 
has therefore been granted a separate rate. Jacobi AB is a market 
economy entity and has therefore been granted its own rate. As a 
result, for the purposes of this preliminary determination, we have 
granted separate, company-specific rates to CCT, Jacobi AB, Jilin 
Bright Future, and to the Separate Rate Companies, a weight-averaged 
margin of the mandatory respondents. For a full discussion of this 
issue, see Separate Rates Memo.

Use of Adverse Facts Available and the PRC-Wide Rate

    CCT, Jacobi, Jilin Bright Future, and Huibao/Hibridge were given 
the opportunity to respond to the Department's questionnaire. As 
explained above, we received complete separate rates information from 
CCT, Jacobi, and Jilin Bright Future, and these entities will receive 
their own rate. The PRC-wide rate applies to all entries of subject 
merchandise except for entries from PRC producers/exporters that have 
their own calculated rate. See ``Separate Rates'' section above. As 
discussed in the Separate Rates Memo, Huibao/Hibridge is appropriately 
considered to be part of the PRC-wide entity because it failed to 
establish its eligibility for a separate rate.
    We note that Section 776(a)(1) of the Act mandates that the 
Department use the facts available if necessary information is not 
available on the record of an antidumping proceeding. In addition, 
section 776(a)(2) of the Act provides that if an interested party or 
any other person: (A) Withholds information that has been requested by

[[Page 59727]]

the administering authority; (B) fails to provide such information by 
the deadlines for the submission of the information or in the form and 
manner requested, subject to subsections (c)(1) and (e) of section 782; 
(C) significantly impedes a proceeding under this title; or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the Department shall, subject to section 
782(d) of the Act, use the facts otherwise available in reaching the 
applicable determination under this title. Where the Department 
determines that a response to a request for information does not comply 
with the request, section 782(d) of the Act provides that the 
Department shall promptly inform the party submitting the response of 
the nature of the deficiency and shall, to the extent practicable, 
provide that party with an opportunity to remedy or explain the 
deficiency. Section 782(d) further states that if the party submits 
further information that is unsatisfactory or untimely, the 
administering authority may, subject to subsection (e), disregard all 
or part of the original and subsequent responses. Section 782(e) of the 
Act provides that the Department shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all the applicable requirements 
established by the administering authority if (1) the information is 
submitted by the deadline established for its submission, (2) the 
information can be verified, (3) the information is not so incomplete 
that it cannot serve as a reliable basis for reaching the applicable 
determination, (4) the interested party has demonstrated that it acted 
to the best of its ability in providing the information and meeting the 
requirements established by the administering authority with respect to 
the information, and (5) the information can be used without undue 
difficulties.
    As addressed below separately for each company, we find that the 
PRC-wide entity, Huibao/Hibridge, and certain suppliers of CCT, did not 
respond to our request for information, and necessary information 
either was not provided, or the information provided cannot be verified 
and is not sufficiently complete to enable the Department to use it for 
this preliminary determination. Therefore, we find it necessary, under 
section 776(a)(2) of the Act, to use facts otherwise available as the 
basis for the preliminary determination of this review for the PRC-wide 
entity, Huibao/Hibridge, and certain suppliers of CCT.
    In their pre-preliminary determination comments, Petitioners have 
argued for the application of total adverse facts available (``AFA'') 
with respect to Huibao/Hibridge, Datong Huibao Activated Carbon Co., 
Ltd. (``Datong Huibao'') as a supplier to CCT and Jacobi, as well as 
for total AFA for Jacobi and Jilin Bright Future. As discussed below, 
we find that total AFA is warranted for Huibao/Hibridge, but AFA is 
unwarranted for Datong Huibao as a supplier to CCT and Jacobi, and 
total AFA is unwarranted for Jacobi and Jilin Bright Future.

Jacobi

    Petitioners argue that the Department should apply total AFA to 
Jacobi, as the U.S. sales and factors of production data provided are 
unreliable. Petitioners allege the information on the record 
demonstrates a lack of cooperation and that the data is of poor quality 
and is inconsistent. Petitioners argue that Jacobi's data are based on 
unsubstantiated estimates and certain documentation has been destroyed, 
and that, though Jacobi has been given an opportunity to remedy its 
mistakes, the mistakes still exist. Petitioners also assert that the 
application of partial AFA is not practicable due to the cumulative 
effect of the errors, which renders the data unusable. Specifically, 
Petitioners argue that the omissions and errors include: Failure to 
identify the composition of carbonized materials and coal inputs for 
appropriate surrogate valuation; failure to report factors of 
production for sales of powdered activated carbon; unsubstantiated 
electricity and water consumption; refusal to report product-specific 
consumption of impregnation inputs; and its use of standard consumption 
amounts without appropriate documentation. See Petitioners' September 
8, 2006, submission for a detailed discussion of their allegations. 
Petitioners further argue the use of undocumented standards creates 
distortions of a degree that the application of AFA is necessary.
    The Department disagrees with Petitioners that the use of AFA is 
appropriate with respect to Jacobi. As noted above, Jacobi responded to 
the Department's original questionnaire, and several supplemental 
questionnaires. See Jacobi's Section A response dated June 1, 2006 
(``Section A''), Jacobi's Section C and D response dated July 10, 2006 
(``Section C&D''), Jacobi's Supplemental Section A, C and D response 
dated August 23, 2006 (``Jacobi's Supplemental''), Jacobi's Second 
Supplemental response dated September 15, 2006 (``Jacobi's Second 
Supplemental'').
    Contrary to Petitioners' assertions, Jacobi has provided detailed 
and potentially verifiable information on its allocation methodologies 
(see, e.g., Jacobi's Supplemental at Exhibit 52), and for each of its 
suppliers, reconciled the information reported to the financial 
statements of the respective suppliers. See Jacobi's Section C&D at 
Exhibits II-5, III-5, IV-5, V-5, and Jacobi's Supplemental at Exhibit 
49. Because Jacobi's suppliers do not maintain CONNUM-specific records, 
Jacobi has constructed an allocation methodology based on records 
maintained by each of its suppliers. In addition, Petitioners' 
allegation that Jacobi's data are based on unsubstantiated estimates is 
unfounded. Jacobi has provided detailed and potentially verifiable 
information on the standards used in the ordinary course of business by 
certain suppliers for raw materials including coal and carbonized 
material. See Jacobi's Supplemental at Exhibits 48 and 48b. In 
addition, Jacobi has provided samples of daily production reports, 
demonstrating that estimated and actual yields are used in the ordinary 
course of business by its suppliers. See Jacobi's Supplemental at 
Exhibit 99b. Further, Jacobi has explained that each of its suppliers 
maintains records on the consumption of all raw materials. Jacobi notes 
that certain suppliers do not have complete POI records, but claims 
that it has acted to the best of its ability in providing the 
information requested by the Department and used the information 
maintained by the suppliers in providing the requested information, 
from production records, raw material consumption records, etc. See 
Jacobi's Second Supplemental at 11. With respect to the U.S. sales 
information, except where indicated, we have determined to rely on the 
information provided. Therefore, on the basis of the data submitted by 
Jacobi, which the Department intends to carefully scrutinize at 
verification, the Department determines that the use of total adverse 
facts available is not warranted for the preliminary determination. 
However, as discussed in the ``Normal Value'' section below, the 
Department has applied facts available with respect to the unreported 
factors of production for one control number of powdered activated 
carbon.

CCT

    For certain of its suppliers, CCT did not report the factors of 
production used to produce the subject merchandise. Therefore, in 
accordance with sections 776(a)(2)(A) and (B) of the Act, the

[[Page 59728]]

Department must use the facts otherwise available in determining the 
normal value for these sales because CCT withheld the factors 
information and otherwise failed to provide the information in a timely 
manner and in the form requested. For the reasons described below, the 
Department has determined to apply an adverse inference to the 
unreported factors of production. CCT stated that one of its suppliers, 
Nuclear Ningxia Activated Carbon Co., Ltd. (``NC''), ceased production 
after the POI. CCT stated that NC refused to provide the data necessary 
to prepare an FOP response. See CCT's August 7, 2006, response at page 
2. CCT stated that another of its suppliers, Ningxia Luyuanheng 
Activated Carbon Co., Ltd. (``HD'') also ceased production after the 
POI and also refused to provide data necessary to prepare an FOP 
response. See id. CCT provided documentation of its attempts to obtain 
the necessary data from these two companies. See June 29, 2006, letter 
at Exhibits 2 and 3, and CCT's August 7, 2006, supplemental response at 
Exhibit M. On September 8, 2006, HD submitted a letter to the 
Department stating that, due to restructuring, HD temporarily suspended 
production of activated carbon but resumed production in August 2006. 
See September 8, 2006 Memorandum to the File from Catherine Bertrand, 
Senior Case Analyst, AD/CVD Operations, Office 9.
    The Department preliminarily finds that, in accordance with 
sections 776 (a)(2)(A) and (B) of the Act, CCT did not cooperate to the 
best of its ability regarding its suppliers HD and NC and has 
determined to use adverse facts available for the preliminary 
determination with regard to these suppliers and will apply the highest 
calculated normal value for CCT to the sales of merchandise supplied by 
HD and NC. See CCT's Prelim Analysis Memo. Due to the proprietary 
nature of the factual information concerning these suppliers, these 
issues are addressed in a separate business proprietary memorandum. See 
Memorandum to James C. Doyle, Director, AD/CVD Operations, Office 9, 
from Catherine Bertrand, Senior Case Analyst, AD/CVD Operations, Office 
9: Application of Adverse Facts Available for Calgon Carbon (Tianjin) 
Co., Ltd., in the Preliminary Determination in the Antidumping Duty 
Investigation of Certain Activated Carbon from the People's Republic of 
China, dated October 4, 2006.
    Further, CCT also informed the Department that certain of its 
suppliers purchased activated carbon from other producers which was 
then sold to CCT. CCT did not provide the FOP information for these 
ultimate suppliers. On August 18, 2006, a full month after CCT's 
original Section D response was due, CCT informed the Department that 
certain of the companies that it had previously identified as 
producers, had in fact sourced activated carbon from upstream 
producers, which was then sold to CCT. CCT specifically identified 
suppliers Shanxi Xuanzhong Chemical Industry Co., Ltd. (``SXZ''), 
Huairen Jinbei Chemical Co. Ltd. (``JB'') and Jiaocheng Xinxin 
Purification Material Co., Ltd. (``XX'') as having sourced activated 
carbon from upstream producers. In CCT's September 12, 2006 response, 
CCT identified SXZ's suppliers as Datong Changtai Activated Carbon Co., 
Ltd. (``DCA''), and Yuyang Activated Carbon Co., Ltd. (``YAC'') and 
XX's suppliers as Datong Kangda Activated Carbon Factory (``DKA'') and 
Datong Runmei Activated Carbon Factory (``DRA''). See CCT's September 
12, 2006 response at 4. While CCT noted that JB's supplier was Fangyuan 
Carbonization Co., Ltd., it also noted that all activated carbon sold 
to the United States from that supply chain was further manufactured in 
the United States and would be subject to the exclusion under the 
Department's application of the special rule. For SXZ, and its 
suppliers, and XX's suppliers, CCT stated that it attempted to obtain 
the FOP information but was unable to do so. See CCT's September 12, 
2006, response.
    CCT provided documentation of its attempts to obtain the data from 
the companies, and also argued that alternative data is available to 
the Department because certain products are also produced by other 
suppliers from whom we have FOP information. CCT provided declarations 
from officials from DCA, DKA, and DRA which stated that these are small 
companies that do not have the time and labor to provide the requested 
data. See September 12, 2006, supplemental response at Exhibit D-42.
    As stated above, CCT stated that its supplier XX purchased 
activated carbon produced by DKA and DRA which was then sold to CCT. 
See CCT's September 12, 2006 response at 4. Further, CCT stated that 
``{d{time} uring the POI most of the merchandise under consideration 
that XX produced for CCT was made from activated carbon that XX 
purchased from unaffiliated suppliers.'' See July 11, 2006, Section D 
response at D-H. XX reported that the merchandise it purchased from DKA 
and DRA underwent a second activation at XX's facilities before being 
sold to CCT. The Department finds that XX should have reported the 
factors of production for its suppliers, as instructed, because the 
material it purchased from DKA and DRA was already steam activated 
carbon. See Id. at 2. Therefore, although XX did provide a FOP 
database, the Department is applying the highest normal value for CCT 
to the sales of XX's merchandise by CCT because XX purchased the 
activated carbon from the ultimate producers and that FOP information 
was not reported.
    On September 19, 2006, CCT informed the Department that it was also 
supplied by Ningxia Yinchuan Lanqiya Activated Carbon Co., Ltd. 
(``LQY''), and that sales of merchandise produced by LQY were made by 
CCT pursuant to municipal contracts awarded during the POI. As 
discussed below in the ``Date of Sale'' Section, CCT reported that the 
appropriate date of sale for municipal contracts is the date of the 
contract award, which is the date when the price and quantity are 
fixed. Therefore, although certain sales of LQY were invoiced in 2006, 
which is after the POI, they were made pursuant to municipal contracts 
from the POI and the appropriate date of sale for these sales is the 
date the municipal contract was awarded. CCT did include these sales in 
its U.S. sales database, but did report the FOP information for these 
sales.
    On September 28, 2006, CCT also informed the Department that it was 
also supplied by Dushanzi Chemical Factory (``DSZ''). See September 28, 
2006, supplemental response at page 2. On September 29, 2006, CCT 
indicated that another supplier, Xingtai Coal Chemical Co., Ltd. 
(``TX'') also supplied CCT. See September 29, 2006, supplemental 
response.
    The Department's original questionnaire asked CCT to report the 
factors of production for the ultimate producer of the merchandise 
under consideration. The original questionnaire states, ``If your 
company did not produce the merchandise under consideration, we request 
that this section be immediately forwarded to the company that produces 
the merchandise and supplies it to you or to your customers.'' See May 
4, 2006 Questionnaire to CCT at page D-2. Further, on August 21, 2006, 
the Department sent CCT a letter which stated, in part,

    We are also requiring CCT to report the FOP information for the 
ultimate producer of the merchandise under consideration. Therefore, 
for those suppliers of CCT who purchased merchandise under 
consideration from another supplier, whether affiliated or 
unaffiliated, which was then sold to CCT, we

[[Page 59729]]

are requiring CCT to report the FOP information of these ultimate 
suppliers for the products sold during the POI. This includes, but 
is not limited to, reporting the FOP information for Shanxi 
Xuanzhong Chemical Industry Co., Ltd. (``SXZ'') and the unnamed 
suppliers of Huairen Jinbei Chemical Co. Ltd. (``JB'') which CCT 
identified on page 8 of its August 18, 2006 extension request.

    See August 21, 2006, letter to CCT.
    CCT did not provide any FOP data from SXZ, DCA, YAC, DSZ, TX, LQY, 
DRA, or DKA. Furthermore, XX purchased most of the activated carbon it 
sold to CCT from DRA and DKA. As such, since CCT did not provide the 
FOP data from these suppliers after being given two opportunities to do 
so, the Department finds that the application of adverse facts 
available is warranted because CCT did not act to the best of its 
ability. It is the Department's practice to obtain the FOP data from 
the actual producer of the merchandise under consideration. CCT was 
therefore required to provide this FOP information and did not do so. 
Pursuant to section 776(b) of the Act, the Department may use 
information that is adverse to the interest of that party when the 
party fails to cooperate by not acting to the best of its ability in 
responding to the Department's request for information. See Nippon 
Steel Corp. v. United States, 337 F.3d 1373, 1382 (Fed. Cir. 2003). 
Further, section 776(b) of the Act authorizes the Department to use as 
AFA information derived from the petition, the final determination from 
the LTFV investigation, a previous administrative review, or any other 
information placed on the record. In selecting a rate for adverse facts 
available, the Department selects a rate that is sufficiently adverse 
``as to effectuate the purpose of the facts available rule to induce 
respondents to provide the Department with complete and accurate 
information in a timely manner.'' See Notice of Final Determination of 
Sales at Less Than Fair Value: Static Random Access Memory 
Semiconductors from Taiwan, 63 FR 8909, 8932 (February 23, 1998) 
(``Semiconductors'').
    In order for the Department to fulfill its obligation to calculate 
dumping margins as accurately as possible, it is essential that 
respondents provide the Department with accurate, complete, and 
verifiable information. In striving to obtain this information, the 
Department has discretion to modify its reporting requirements when an 
interested party explains why it is unable to submit the information in 
the requested form and manner and suggests alternative reporting forms. 
However, if the necessary information is not on the record, section 
776(a)(1) of the Act provides for the use of facts available.
    Moreover, if 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 may apply adverse inferences where the use 
of facts available is appropriate. See section 776(b) of the Act. We 
have determined that these ultimate producers have failed to cooperate 
by not acting to the best of their ability to comply with a request for 
information and thus an adverse inference is warranted. This position 
is consistent with that taken by the Department in 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), and accompanying Issue and Decision Memorandum at Comment 
10, which cited Ferrovanadium and Nitrided Vanadium From the Russian 
Federation: Notice of Final Results of Antidumping Duty Administrative 
Review, 62 FR 65656, 65658 (December 15, 1997) (``Ferrovanadium and 
Nitrided Vanadium''). In Ferrovanadium and Nitrided Vanadium, the 
Department stated that ``by failing to respond Chusovoy {the 
producer{time}  is an interested party which has not cooperated to the 
best of its ability under section 776 (b) of the Act. Therefore, we 
have continued to use an adverse inference in selecting from the facts 
available to determine the margins for Galt's sales of Chusovoy-
produced merchandise * * *''.
    In the instant investigation, as partial AFA, we have assigned the 
highest calculated normal value for CCT to the sales of the following 
suppliers for which CCT did not provide FOP information: SXZ (which 
includes its ultimate suppliers DCA and YAC); DSZ; TX; LQY; and, XX 
(which includes its ultimate suppliers DKA and DRA). It was not 
necessary to apply the highest calculated normal value for CCT to JB's 
supplier, Fangyuan Carbonization Co., Ltd., because all activated 
carbon sold in that supply chain was further manufactured in the United 
States and was subject to exclusion pursuant to the special rule.

Jilin Bright Future

    Petitioners also argue in their pre-preliminary comments on Jilin 
Bright Future, dated September 13, 2006, that total AFA is warranted 
with respect to Jilin Bright Future because Jilin Bright Future has 
failed to provide reliable factors of production data. Petitioners 
assert that Jilin Bright Future's submissions to date demonstrate a 
lack of cooperation due to the low quality and internal inconsistency 
of the data. Petitioners allege that the information submitted is based 
on unsubstantiated and unexplained estimates based on aggregate 
allocations irrespective of product characteristics. Petitioners argue 
that despite an opportunity to remedy its errors, Jilin Bright Future 
failed to do so. Therefore, Petitioners argue, the totality of the 
deficiencies support the application of total AFA. Petitioners assert 
that the range of the problems with Jilin Bright Future's response 
precludes the application of partial AFA. Further, Petitioners argue 
that some of the information with respect to normal value is not 
available on the record making the data unusable, and AFA is warranted. 
Petitioners argue that Jilin Bright Future does not warrant a separate 
rate due to unexplained connections with its predecessor companies. 
Further, Petitioners assert that it has provided no support for the 
reported FOPs of Zuoyun Bright Future Activated Carbon Plant (``ZBF''), 
one of Jilin Bright Future's suppliers of subject merchandise during 
the POI. Petitioners discuss in detail claimed deficiencies with ZBF's 
reported FOPs in their September 13, 2006, submission, a proprietary 
discussion that cannot be summarized here. In addition, Petitioners 
assert that Jilin Bright Future's reported standard consumption amounts 
for ZBF are based on a value-based allocation methodology rather than 
the physical amounts actually consumed, an allocation methodology that 
Jilin Bright Future has not supported. Petitioners also argue that the 
basis for this value-based allocation, that granular activated carbon 
has higher costs than powdered activated carbon, is unsupported by 
Jilin Bright Future's own statements that the production process for 
these products is the same prior to the screening process. See 
Petitioners' September 13, 2006, submission for a detailed discussion 
of this issue. Therefore, Petitioners argue, the application of total 
AFA is warranted.
    The Department disagrees with Petitioners that the use of total AFA 
is appropriate with respect to Jilin Bright Future. As noted above, 
Jilin Bright Future responded to the Department's original 
questionnaire, and several supplemental questionnaires. See JBF Chem 
and JBF Industry's separate rate application and Section A, dated May 
4, 2006, and June 9, 2006, respectively (``JBF Section As''), Jilin 
Bright Future's Section C and D response dated June 24, 2006 (``JBF 
Section C&D''), Jilin Bright Future's Supplemental Section C and D

[[Page 59730]]

response dated August 25, 2006 (``JBF Supplemental''), Jilin Bright 
Future's Second Supplemental response dated September 21, 2006 (``JBF 
Second Supplemental''). Contrary to Petitioners' assertions, Jilin 
Bright Future has provided detailed and potentially verifiable 
information on its allocation methodologies (see, e.g., JBF's 
Supplemental at Exhibits S2-D-33 and S2-D-70; JBF's Second Supplemental 
at Exhibit S3-5), and for each of its suppliers, reconciled the 
information reported to the financial statements of the respective 
suppliers. See JBF's Section C&D at Exhibits D-ZY-10, D-TH-6, and D-XH-
6. Because Jilin Bright Future's suppliers do not maintain CONNUM-
specific records, Jilin Bright Future has constructed an allocation 
methodology based on records maintained by each of its suppliers.
    In addition, Petitioners' allegation that Jilin Bright Future's 
data are based on unsubstantiated estimates is unfounded. Jilin Bright 
Future has provided potentially verifiable information on the standards 
used in the ordinary course of business by its suppliers for raw 
materials, including coal, and constructed a reasonable allocation when 
Jilin Bright Future's suppliers' normal books and records do not 
maintain the information requested by the Department. In addition, 
Jilin Bright Future has provided samples of daily production reports 
that were used by ZBF and standards that were used by Shanxi Xinhua 
Activated Carbon Co., Ltd. (``Xinhua'') to report utilization 
quantities to the Department, demonstrating that actual yields are used 
in the ordinary course of business by its suppliers. See JBF's 
Supplemental at Exhibits S2-D-33 and S2-D-70. Further, Jilin Bright 
Future has explained that its suppliers maintain records on the total 
POI consumption of raw materials. Jilin Bright Future notes that 
certain suppliers do not have complete, product-specific POI records, 
but the Department finds that its allocations are reasonable, given the 
records maintained by Jilin Bright Future's suppliers. Therefore, on 
the basis of the data submitted by Jilin Bright Future, which the 
Department intends to carefully scrutinize at verification, the 
Department preliminarily determines that the use of total adverse facts 
available is not warranted for the preliminary determination.

Datong Huibao and Huibao/Hibridge

    Petitioners argue that Datong Huibao should receive total AFA, 
consistent with the law and past practice because it withdrew from the 
proceeding as a mandatory respondent (a.k.a., mandatory respondent 
Huibao/Hibridge). See section 776 of the Act; Notice of Final 
Determination of Sales at Less Than Fair Value and Affirmative Final 
Determination of Critical Circumstances of the Antidumping 
Investigation: Certain Lined Paper Products from Indonesia, 71 FR 47171 
(August 9, 2006), and accompanying Issues and Decision memorandum at 
Comments 1 through 11. Petitioners also argue that the Department 
should apply AFA to sales made by Jacobi and CCT that were supplied by 
Datong Huibao. See Petitioners' September 8, 2006, submission. 
Petitioners argue that Datong Huibao's withdrawal from the proceeding 
makes its information unverifiable, which should apply to Datong Huibao 
as both a mandatory respondent and a supplier to Jacobi and CCT. 
Petitioners contend that Datong Huibao should receive the highest rate 
in the petition, 333.66 percent, as a mandatory respondent (a.k.a. 
Huibao/Hibridge), and should not qualify for a potentially lower rate 
through a different export channel. Petitioners assert that Datong 
Huibao's factors of production information should be deemed 
unverifiable as a mandatory respondent, and, thus, should also be 
considered unverifiable as a supplier. Therefore, Petitioners argue, 
the Department should assign a margin of 333.66 percent to all U.S. 
sales of products which were produced by Datong Huibao as AFA.
    The Department does not find that Peti