Polyethylene Retail Carrier Bags from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 12762-12764 [E7-4946]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 52 (Monday, March 19, 2007)]
[Notices]
[Pages 12762-12764]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-4946]



[[Page 12762]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-886]


Polyethylene Retail Carrier Bags from the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') published the 
preliminary results of administrative review of the antidumping duty 
order on polyethylene retail carrier bags (``PRCBs'') from the People's 
Republic of China (``PRC'') on September 13, 2006.\1\ The period of 
review (``POR'') is January 26, 2004, through July 31, 2005. We invited 
interested parties to comment on the Preliminary Results. Based on our 
analysis of the comments received, we have made changes to our margin 
calculations. Therefore, the final results differ from the Preliminary 
Results. The final dumping margins for this review are listed in the 
``Final Results of Review'' section below.
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    \1\ See Polyethylene Retail Carrier Bags from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, 71 FR 54021 (September 13, 2006) 
(``Preliminary Results'').

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EFFECTIVE DATE: March 19, 2007.

FOR FURTHER INFORMATION CONTACT: Laurel LaCivita or Matthew Quigley, 
AD/CVD Operations, Office 8, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-4243 
or (202) 482-4551, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On September 28, 2005, the Department initiated this administrative 
review with respect to Dongguan Nozawa Plastic Products Co. Ltd. and 
United Power Packaging Ltd. (collectively ``Nozawa''), Crown 
Polyethylene Products (International) Ltd. (``Crown''), Rally Plastics 
Co., Ltd. (``Rally''), Sea Lake Polyethylene Enterprise Ltd. (``Sea 
Lake''), Shanghai Glopack, Inc. (``Glopack''), High Den Enterprises 
Ltd. (``High Den''), and Shanghai New Ai Lian Import & Export Co., Ltd. 
(``New Ai Lian'').\2\ On October 25, 2005, the Department amended its 
initiation to include Ampac Packaging (Nanjing) Co. (``Ampac''), which 
was inadvertently omitted from the September 28, 2005 initiation 
notice.\3\
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    \2\ See, Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 70 FR 
56631, 56632 (September 28, 2005) (``Initiation Notice''), which 
refers to Nozawa with the following names: Dongguan Nozawa Plastics 
and United Power Packaging (collectively ``Nozawa''), Dongguan 
Nozawa Plastics, Dongguan Nozawa Plastic Co., Ltd., Dong Guan (Dong 
Wan) Nozawa Plastic Co., Ltd., Dongguan Nozawa Plastic Products Co., 
Ltd., United Power Packaging, United Power Packaging Limited, United 
Power Packaging Ltd.
    \3\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, 70 FR 61601 (October 25, 2005).
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    On November 16, 2005, New Ai Lian withdrew its request for an 
administrative review. On November 22, 2005, Rally withdrew its request 
for an administrative review. On December 27, 2005, Sea Lake and 
Glopack withdrew their requests for an administrative review. On 
February 23, 2006, Ampac withdrew its request for an administrative 
review.
    On September 13, 2006, the Department published the Preliminary 
Results in the Federal Register.\4\ On October 20, 2006, High Den 
submitted its third supplemental questionnaire response (``3\rd\ 
SQR''). The Polyethylene Retail Carrier Bags Committee (``the PRCB 
Committee''), Crown, High Den, and Nozawa each submitted case briefs on 
October 26, 2006, and rebuttal briefs on November 6, 2006.
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    \4\ See Polyethylene Retail Carrier Bags from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, 71 FR 54021 (September 13, 2006).
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    On January 10, 2007, the Department determined that it was not 
practicable to complete the final results of the administrative review 
of PRCBs from the PRC within the 120-day period due to complex issues 
the parties have raised regarding the selection of appropriate 
financial statements for the calculation of surrogate financial ratios. 
Therefore, in accordance with section 751(a)(3)(A) of the Trade and 
Tariff Act of 1930 as amended (``the Act''), the Department extended 
the time period for completion of the final results until February 12, 
2007.\5\
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    \5\ See Polyethylene Retail Carrier Bags from the People's 
Republic of China: Notice of Extension of Time Limit for the Final 
Results of the Antidumping Duty Administrative Review, 72 FR 1216 
(January 10, 2007).
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    On February 2, 2007, the Department published the revised 
``Expected NME Wages'' applicable to 2004 on its website. See https://
ia.ita.doc.gov/wages/. On February 2, 2007, the Department 
informed all interested parties of the revised NME wage rate applicable 
to this review and gave the parties the opportunity to comment on this 
issue prior to the final results.\6\ In order to give parties an 
opportunity to comment on the Department's revised calculations of 
expected non-market economy wages, the Department extended the deadline 
to complete the final results to February 26, 2007.\7\ We extended the 
deadline to complete the final results due to complex issues related to 
the calculation of surrogate financial ratios to March 12, 2007.\8\
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    \6\ See Memorandum from Matthew Quigley, International Trade 
Compliance Analyst, Through Charles Riggle, Program Manager, AD/CVD 
Operations, Office 8, To The File, ``Polyethylene Retail Carrier 
Bags from the People's Republic of China: Request for Comments on 
Revised Expected Non-Market Economy Wages'' (February 2, 2007).
    \7\ See Polyethylene Retail Carrier Bags from the People's 
Republic of China: Notice of Extension of Time Limit for the Final 
Results of the Antidumping Duty Administrative Review, 72 FR 7417 
(February 15, 2007).
    \8\ See Polyethylene Retail Carrier Bags from the People's 
Republic of China: Notice of Extension of Time Limit for the Final 
Results of the Antidumping Duty Administrative Review, 72 FR 9731 
(March 5, 2007).
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    No party provided comments on this issue. Thus, we calculated the 
surrogate value for labor using the Department's revised expected NME 
wage rate of $0.83 for the PRC.
    We have conducted this administrative review in accordance with 
section 751 of the Act and 19 CFR 351.213.

Scope of the Order

    The merchandise subject to this antidumping duty order is PRCBs 
which may be referred to as t-shirt sacks, merchandise bags, grocery 
bags, or checkout bags. The subject merchandise is defined as non-
sealable sacks and bags with handles (including drawstrings), without 
zippers or integral extruded closures, with or without gussets, with or 
without printing, of polyethylene film having a thickness no greater 
than 0.035 inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm), 
and with no length or width shorter than 6 inches (15.24 cm) or longer 
than 40 inches (101.6 cm). The depth of the bag may be shorter than 6 
inches but not longer than 40 inches (101.6 cm).
    PRCBs are typically provided without any consumer packaging and 
free of charge by retail establishments, e.g., grocery, drug, 
convenience, department, specialty retail, discount stores, and 
restaurants, to their customers to package and carry their purchased 
products. The scope of the investigation excludes (1) polyethylene bags 
that are not printed with logos or store names and that are closeable 
with drawstrings made of polyethylene film and (2) polyethylene bags 
that are packed in consumer packaging with printing that refers to 
specific end-uses other than packaging and carrying merchandise

[[Page 12763]]

from retail establishments, e.g., garbage bags, lawn bags, trash-can 
liners.
    Imports of the subject merchandise are currently classifiable under 
statistical category 3923.21.0085 of the Harmonized Tariff Schedule of 
the United States (HTSUS).\9\ This subheading may also cover products 
that are outside the scope of this investigation. Furthermore, although 
the HTSUS subheading is provided for convenience and customs purposes, 
our written description of the scope of this order is dispositive.
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    \9\ Until July 1, 2005, these products were classifiable under 
HTSUS 3923.21.0090 (Sacks and bags of polymers of ethylene, other). 
See Harmonized Tariff Schedule of the United States (2005)- 
Supplement 1 Annotated for Statistical Reporting Purposes Change 
Record - 17th Edition - Supplement 1, available at https://
hotdocs.usitc.gov/docs/tata/hts/bychapter/0510/0510chgs.pdf.
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Analysis of Comments Received

    All issues raised in the post-preliminary comments by parties in 
this review are addressed in the memorandum from Stephen J. Claeys, 
Deputy Assistant Secretary for Import Administration, to David M. 
Spooner, Assistant Secretary for Import Administration, ``Issues and 
Decision Memorandum for the 2004-2005 Administrative Review of 
Polyethylene Retail Carrier Bags from the People's Republic of China,'' 
(March 12, 2007) (``Issues and Decision Memorandum''), which is hereby 
adopted by this notice. A list of the issues that parties raised and to 
which we responded in the Issues and Decision Memorandum is attached to 
this notice as an appendix. The Issues and Decision Memorandum is a 
public document and is on file in the Central Records Unit (``CRU'') in 
room B-099 in the main Department building, and is also accessible on 
the Web at https://ia.ita.doc.gov/frn. The paper copy and electronic 
version of the memorandum are identical in content.

Changes Since the Preliminary Results

    Based on our analysis of comments received, we have made changes in 
the margin calculations for Crown, High Den, and Nozawa . See Issues 
and Decision Memorandum, at Comments 1-16.

Surrogate Financial Ratios

 We excluded Arvind Chemi Synthetics Pvt., Ltd. (``Arvind'') 
and Jain Raffia Industries, Ltd. (``Jain Raffia'') from the companies 
used to calculate the surrogate financial ratios because they did not 
produce merchandise that was identical or comparable to the subject 
merchandise. See Comment 1 of the memorandum from Stephen J. Claeys, 
Deputy Assistant Secretary for Import Administration, to David M. 
Spooner, Assistant Secretary for Import Administration, ``Issues and 
Decision Memorandum for the 2004-2005 Administrative Review of 
Polyethylene Retail Carrier Bags from the People's Republic of China,'' 
(February 12, 2007) (``Issues and Decision Memorandum'').
 Of the seven surrogate financial statements provided by the 
PRCB Committee in its October 3, 2006 surrogate value submission, we 
based our determination of the surrogate financial ratios on: A.P. 
Polyplast Private Limited (``A.P. Polyplast''), Kuloday Technopack Pvt. 
Ltd. (``Kuloday''), Sangeeta Poly Pack Limited (``Sangeeta''), Smitabh 
Intercon Ltd. (``Smitabh''), Synthetic and Tims Polymers Pvt. Ltd 
(``Tims''). See Comment 2 of the Issues and Decision Memorandum.
 We made the following changes to the calculations of the 
surrogate financial ratios provided in the PRCB Committee's case brief:
    a. We did not allocate ``salary and wages'' between labor and SG&A 
based upon industry-wide information published by the Indian 
government. Rather, we classified ``salary and wages'' in a manner 
consistent with each of the surrogate company's audited financial 
statements.. See Comment 3a of the Issues and Decision Memorandum.
    b. We classified ``salaries'' as SG&A and ``wages'' as direct labor 
for A.P. Polyplast. See Comment 3b of the Issues and Decision 
Memorandum.
    c. We have classified ``consumable stores'' for A.P. Polyplast and 
Sangeeta as an overhead expense. See Comment 3c of the Issues and 
Decision Memorandum.
    d. We have offset SG&A by the amount of short-term interest 
reported on Sangeeta's, Smitabh's and Tims' financial statements. See 
Comment 3g of the Issues and Decision Memorandum.
    e. We decreased material cost by the amount of the increase of 
stock-in-process for Sangeeta, Smitabh and Tims. See Comment 3i of the 
Issues and Decision Memorandum.
    f. We did not adjust the audited financial statements for 
unacknowledged accruals for leave encashment and employee gratuity for 
A.P. Polyplast, Kuloday, Sangeeta, Smitabh, Synthetic and Tims. See 
Comment 3j of the Issues and Decision Memorandum.
    g. We offset SG&A by foreign exchange gains and losses for Kuloday, 
Smitabh and Tims. See Comment 3k of the Issues and Decision Memorandum.
    h. We did not adjust the audited financial statements for subsidies 
for Tims. See Comment 3l of the Issues and Decision Memorandum.

Expected NME Wage Rate

 We calculated the surrogate value for labor using the 
Department's revised expected NME wage rate of $0.83 for the PRC.

Nozawa

 We applied adverse fact available (``AFA'') to those sales of 
Nozawa where the corresponding control number (``CONNUM'') in the U.S. 
sales database was not based on the product's physical characteristics 
(e.g., those sales lacking factors of production data) rather than to 
all sales whose corresponding CONNUMs matched to more than one set of 
physical characteristics. See Comment 4b of the Issues and Decision 
Memorandum.
 We made no inland freight adjustment to Nozawa's market-
economy (``ME'') material input purchases which Nozawa reported as 
delivered prices. See Comment 7 of the Issues and Decision Memorandum.
 We adjusted U.S. prices for further manufacturing costs on a 
transaction-specific basis rather than a CONNUM-specific basis, thereby 
limiting the adjustment only to sales of product further manufactured 
in the United States. See Comment 8 of the Issues and Decision 
Memorandum.
 We treated Nozawa's export price (``EP'') sales as though the 
entered values were unknown and calculated a per unit assessment for 
Nozawa's EP sales rather than an ad valorem assessment rate. We based 
these changes on Nozawa's December 23, 2005, original section C 
questionnaire response which, in response to field 47.0, states that 
the entered values of Nozawa's EP sales are unknown.

Crown

 We corrected the ministerial error in the SAS program 
representing the value of market-economy freight for four transactions. 
See Comment 9 of the Issues and Decision Memorandum.
 We valued paper cardboard using the value of HTS number 
4819.10.10. See Comment 12 of the Issues and Decision Memorandum.

High Den

 We recalculated High Den's antidumping duty without regard for 
international freight. See Comment 14 of the Issues and Decision 
Memorandum.

[[Page 12764]]

 We deducted from the starting price handling charges that were 
recorded on the commercial invoices of the U.S. sales, but were not 
reported in the section C databases. See Comment 14 of the Issues and 
Decision Memorandum.
 We recalculated the value of High Den's market-economy 
purchases of polyethylene resins, correcting the ministerial errors 
contained in the Excel chart. See Comment 15 of the Issues and Decision 
Memorandum.

Final Results of Review

    We determine that the following dumping margins exist for the 
period January 26, 2004, through July 31, 2005:

------------------------------------------------------------------------
                                                       Weighted-Average
                Exporter/Manufacturer                  Margin Percentage
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Crown...............................................                7.68
High Den............................................               14.01
Nozawa..............................................                7.36
The PRC-Wide Entity.................................               77.57
------------------------------------------------------------------------

Assessment Rates

    The Department intends to issue assessment instructions to U.S. 
Customs and Border Protection 15 days after the date of publication of 
these final results of administrative review.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
publication of this notice of final results of administrative review 
for all shipments of PRCBs from the PRC entered, or withdrawn from 
warehouse, for consumption on or after the date of publication, as 
provided by Section 751(a)(1) of the Act: (1) As the final weight-
averaged margins for Crown, High Den, and Nozawa are not less than 0.5 
percent and, therefore, not de minimis, cash deposits of estimated 
antidumping duties will be required; (2) for previously reviewed or 
investigated companies not listed above that have a separate rate, the 
cash deposit rate will continue to be the company-specific rate 
published for the most recent period; (3) the cash deposit rate for all 
other PRC exporters will be 77.57 percent, the current PRC-wide rate; 
and (4) the cash deposit rate for all non-PRC exporters will be the 
rate applicable to the PRC exporter that supplied that exporter. These 
cash deposit requirements shall remain in effect until further notice.

Notification of Interested Parties

    This notice also serves as a final reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of the antidumping duties occurred and the subsequent 
assessment of double antidumping duties. This notice also serves as a 
reminder to parties subject to administrative protective orders 
(``APOs'') of their responsibility concerning the return or destruction 
of proprietary information disclosed under APO in accordance with 19 
CFR 351.305, which continues to govern business proprietary information 
in this segment of the proceeding. Timely written notification of the 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and terms of an APO is a violation that is subject to 
sanction.
    We are issuing and publishing this determination and notice in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: March 12, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.

Appendix

List of Comments and Issues in the Decision Memorandum

Issues with Respect to Surrogate Financial Ratios
Comment 1: Exclude Arvind and Jain Raffia from the Calculation of the 
Surrogate Financial Ratios
Comment 2: Determine the Surrogate Financial Ratios Based on the Seven 
Financial Statements Provided by the PRCB Committee
Comment 3: Methodological and Clerical Errors in the Surrogate 
Financial Ratio Calculations Either Used by the Department or Proposed 
by the PRCB Committee
Comment 3a. Allocate ``Salary and Wages'' Between Direct Labor and 
Selling, General and Administrative (``SG&A'') Expenses Based upon 
Industry-Wide Information Published by the Indian Government
Comment 3b. Classify ``Salaries'' as SG&A and ``Wages'' as a Part of 
Direct Labor
Comment 3c. Reclassify Consumable Stores as Manufacturing Overhead 
(``MOH'') Rather than Direct Materials
Comment 3d. Offset the Value of Raw Material by Sales of Scrap
Comment 3e. Reclassify Depreciation as Factory Overhead
Comment 3f. Offset Direct Labor Expenses With Job Work Revenue
Comment 3g. Offset SG&A Expenses by Short-Term Interest Income
Comment 3h. Reclassify Coolie and Cartage from MOH to Labor Expense
Comment 3i. Reduce Material Costs by the Increase in Stock of Finished 
Goods and Scrap
Comment 3j. Adjust Audited Financial Statements for Leave Encashment 
and Employee Gratuity Accruals
Comment 3k. Offset Financial Expenses by Foreign Exchange Gains
Comment 3l. Adjust Energy, Overhead, SG&A and Profit by the Amount of 
Subsidy Receivable
Comments with Respect to Nozawa:
Comment 4a: Partial Adverse Facts Available (``AFA'') for Nozawa
Comment 4b: Should AFA Be Limited Only to Control Numbers (``CONNUMs'') 
Not Defined by Their Physical Characteristics or to All CONNUMs with 
More than One Set of Physical Characteristics?
Comment 5: Appropriate AFA Rate for Nozawa
Comment 6: Surrogate Value for Colored Ink
Comment 7: Nozawa's Further Manufacturing
Comment 8: Freight on Nozawa's Market-Economy (``ME'') Purchases
Comments with Respect to Crown:
Comment 9: International Freight
Comment 10: Negative Sales Values in the Denominator Used to Calculate 
Importer-Specific Assessment Rates
Comment 11: Valuation of Cardboard Paper Inserts
Comment 12: Valuation of Corrugated Cardboard Carton
Comments with Respect to High Den:
Comment 13: New Factual Information Submitted by High-Den
Comment 14: International Freight Expenses for Transaction Number 2
Comment 15: Calculation of Weighted-Average Value of High Den's ME 
Purchases of Polyethylene Resins
Comment 16: Valuation of High Den's Scrap Resin
[FR Doc. E7-4946 Filed 3-16-07; 8:45 am]
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