Glycine from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Rescission, in Part, 18457-18461 [E7-6953]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 70 (Thursday, April 12, 2007)]
[Notices]
[Pages 18457-18461]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-6953]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-836]


Glycine from the People's Republic of China: Preliminary Results 
of Antidumping Duty Administrative Review and Preliminary Rescission, 
in Part

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from Geo Speciality Chemicals, Inc. 
(``GSC''), a domestic glycine producer, the Department of Commerce 
(``the Department'') is conducting an administrative review of the 
antidumping duty order on glycine from the People's Republic of China 
(``PRC''). This review covers Nantong Dongchang Chemical Industry 
Corporation (``Nantong Dongchang'') and Baoding Mantong Fine Chemistry 
Co., Ltd. (``Baoding Mantong''). The period of review (``POR'') is 
March 1, 2005, through February 28, 2006. We preliminarily find that 
sales have been made below normal value (``NV'') by Nantong Dongchang, 
and that Baoding Mantong did not make sales of subject merchandise 
during the POR. We are preliminary rescinding this review with respect 
to Baoding Mantong. The preliminary results are listed below in the 
section titled ``Preliminary Results of Review.'' If these preliminary 
results are adopted in our final results, we will instruct U.S. Customs 
and Border Protection (``CBP'') to assess the ad valorem margins 
against the entered value of each entry of the subject merchandise 
during the POR.

EFFECTIVE DATE: April 12, 2007.

FOR FURTHER INFORMATION CONTACT: Matthew Renkey or Alex Villanueva, 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-
2312, or (202) 482-3208, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On March 29, 1995, the Department published in the Federal Register 
an antidumping duty order on glycine from the PRC. See Antidumping Duty 
Order: Glycine from the People's Republic of China, 60 FR 16116 (March 
29, 1995). On March 1, 2004, the Department published a Notice of 
Opportunity to Request an Administrative Review of Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation, 69 FR 
9584 (March 1, 2004). On March 29, 2006, GEO Speciality Chemicals, 
Inc., requested that the Department conduct an administrative review of 
Baoding Mantong's sales of subject merchandise to the United States 
during the POR, in accordance with section 351.213(b) of the 
Department's regulations. On March 31, 2006, GEO Speciality Chemicals, 
Inc., requested that the Department conduct an administrative review of 
Nantong Dongchang's sales of subject merchandise to the United States 
during the POR, in accordance with section 351.213(b) of the 
Department's regulations. On April 28, 2006, the Department initiated 
the antidumping duty administrative review with respect to Nantong 
Donchang and Baoding Mantong. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 71 FR 25145 (April 28, 
2006).

[[Page 18458]]

Questionnaires

    On May 5, 2006, the Department issued standard non-market economy 
(``NME'') antidumping duty questionnaires to Baoding Mantong and 
Nantong Dongchang. On May 11, 2006, Baoding Mantong reported that it 
had no shipments of subject merchandise during the POR. Between June 5, 
2006, and January 3, 2007, Nantong Dongchang submitted responses to the 
Department's original and supplemental Section A, C and D 
questionnaires.

Surrogate Country and Factors

    On October 17, 2006, we invited interested parties to comment on 
the Department's surrogate country selection and/or significant 
production in the other potential surrogate countries and to submit 
publicly available information to value the factors of production 
(``FOPs''). On November 7, 2006, GSC submitted comments regarding 
surrogate country selection. On January 8, 2007, both GSC and Nantong 
Dongchang submitted information for the Department to consider in 
valuing the FOPs. On March 5, 2007, along with its comments regarding 
the upcoming preliminary results, GSC re-submitted the surrogate value 
data it had originally filed on January 8, 2007. All surrogate value 
data submitted by both parties were from Indian sources.

Scope of the Order

    The product covered by the order is glycine, which is a free-
flowing crystalline material, like salt or sugar. Glycine is produced 
at varying levels of purity and is used as a sweetener/taste enhancer, 
a buffering agent, reabsorbable amino acid, chemical intermediate, and 
a metal complexing agent. This review covers glycine of all purity 
levels. Glycine is currently classified under subheading 2922.49.4020 
of the Harmonized Tariff Schedule of the United States (HTSUS). 
Although the HTSUS subheading is provided for convenience and Customs 
purposes, the written description of the merchandise under the order is 
dispositive.

Separate Rate

    A designation of a country as an NME remains in effect until it is 
revoked by the Department. See section 771(18)(C) of the Tariff Act of 
1930, as amended (``the Act''). Accordingly, there is a rebuttable 
presumption that all companies within the PRC are subject to government 
control and, thus, should be assessed a single antidumping duty rate. 
It is the Department's standard policy to assign all exporters of the 
merchandise subject to review in NME countries a single rate unless an 
exporter can affirmatively demonstrate an absence of government 
control, both in law (de jure) and in fact (de facto), with respect to 
exports. To establish whether a company is sufficiently independent to 
be entitled to a separate, company-specific rate, the Department 
analyzes each exporting entity in an NME country under the test 
established in the Final Determination of Sales at Less than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991), as amplified by the 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'').

A. 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) any other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589. In a prior new shipper review for this case, 
the Department granted a separate rate to Nantong Dongchang. See 
Glycine from the People's Republic of China: Final Results of New 
Shipper Administrative Review, 66 FR 8383 (January 31, 2001). However, 
it is the Department's policy to evaluate requests for a separate rate 
individually, regardless of whether the respondent received a separate 
rate in the past. See Manganese Metal From the People's Republic of 
China: Final Results and Partial Rescission of Antidumping Duty 
Administrative Review, 63 FR 12440 (March 13, 1998).
    In this review, Nantong Dongchang submitted a complete response to 
the separate rates section of the Department's NME questionnaire. The 
evidence submitted by this company includes government laws and 
regulations on corporate ownership, business licenses, and narrative 
information regarding the companies' operations and selection of 
management. The evidence provided by this company supports a finding of 
a de jure absence of governmental control over their export activities 
based on: (1) an absence of restrictive stipulations associated with 
the exporter's business license; and (2) the legal authority on the 
record decentralizing control over the respondents, as demonstrated by 
the PRC laws placed on the record of this review. No party submitted 
information to the contrary. Accordingly, we preliminarily find an 
absence of de jure control.

B. Absence of De Facto Control

    The absence of de facto governmental control over exports is based 
on whether the respondent: (1) sets its own export prices independent 
of the government and other exporters; (2) retains the proceeds from 
its export sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) has the authority to 
negotiate and sign contracts and other agreements; and (4) has autonomy 
from the government regarding the selection of management. See Silicon 
Carbide, 59 FR at 22587; Sparklers, 56 FR at 20589; 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).
    In its questionnaire responses, Nantong Dongchang submitted 
evidence indicating an absence of de facto governmental control over 
its export activities. Specifically, this evidence indicates that: (1) 
Nantong Dongchang sets its own export prices independent of the 
government and without the approval of a government authority; (2) 
Nantong Dongchang retains the proceeds from its sales and makes 
independent decisions regarding the disposition of profits or financing 
of losses; (3) Nantong Dongchang has a general manager, branch manager 
or division manager with the authority to negotiate and bind the 
company in an agreement; (4) the general manager is selected by the 
board of directors or company employees, and the general manager 
appoints the deputy managers and the manager of each department; and 
(5) there is no restriction on the company's use of export revenues. 
Therefore, the Department preliminarily finds that Nantong Dongchang 
has established prima facie that it qualifies for a separate rate under 
the criteria established by Silicon Carbide and Sparklers.

Preliminary Partial Rescission of Review

    In accordance with 19 CFR 351.213(d)(3), we are preliminarily 
rescinding this administrative review with respect to Baoding Mantong. 
As noted above, Baoding Mantong reported that it made no shipments of 
subject merchandise to the United States during the POR. Our 
examination of shipment data from CBP for Baoding Mantong confirmed 
that there were no entries of glycine during the POR. Consequently,

[[Page 18459]]

because there is no evidence on the record to indicate that Baoding 
Mantong had sales of subject merchandise during the POR, we are 
preliminarily rescinding the review for Baoding Mantong.

NME Country Status

    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 Brake Rotors From the People's Republic of 
China: Final Results and Partial Rescission of the 2004/2005 
Administrative Review and Notice of Rescission of 2004/2005 New Shipper 
Review, 71 FR 66304 (November 14, 2006). None of the parties to this 
proceeding have contested such treatment. Accordingly, we calculated NV 
in accordance with section 773(c) of the Act, which applies to NME 
countries.

Normal Value Comparisons

    To determine whether Nantong Dongchang's sale of the subject 
merchandise to the United States was made at a price below NV, we 
compared its United States price to a normal value, as described in the 
``United States Price'' and ``Normal Value'' section of this notice.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV, in most 
circumstances, on the NME producer's FOPs, 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 FOPs 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 sources of the surrogate factor values are discussed 
under the ``Normal Value'' section below and in Memorandum to the File 
through Alex Villanueva, Program Manager, Office 9 from Matthew Renkey, 
Senior Analyst, Office 9: Antidumping Duty Administrative Reviews of 
Glycine from the People's Republic of China: Surrogate Values for the 
Preliminary Results, April 2, 2007 (``Surrogate Values Memo'').
    India is among the countries comparable to the PRC in terms of 
overall economic development, as noted in the Department's October 17, 
2006, letter to interested parties requesting surrogate country and 
surrogate value comments. In its November 7, 2006, letter commenting on 
surrogate country selection, GSC suggested that India be the primary 
surrogate country because it is a significant producer of glycine 
(whereas the other countries are not), and also because of the 
availability of surrogate value data from Indian sources. In addition, 
based on publicly available information placed on the record (i.e., 
export data), India is a significant producer of the subject 
merchandise. See Memorandum to the File, through James C. Doyle, Office 
Director, Office 9, Import Administration, from Matthew Renkey, Senior 
Analyst, Subject: Antidumping Duty Administrative Review of Glycine 
from the People's Republic of China: Selection of a Surrogate Country, 
(April 2, 2007) (``Surrogate Country Memo''). Furthermore, we note that 
India has been the primary surrogate country in past segments of this 
case, and both GSC and Nantong Dongchang submitted surrogate values 
based on Indian data that are contemporaneous to the POR, which gives 
further credence to the use of India as a surrogate country.

U.S. Price

A. Export Price

    In accordance with section 772(a) of the Act, we calculated the 
export price (``EP'') for certain sales to the United States for 
Nantong Dongchang because the first sale to an unaffiliated party was 
made before the date of importation and the use of constructed EP 
(``CEP'') was not otherwise warranted. We calculated EP based on the 
price to unaffiliated purchasers in the United States. In accordance 
with section 772(c) of the Act, as appropriate, we deducted from the 
starting price to unaffiliated purchasers foreign inland freight, 
brokerage and handling, international freight, and marine insurance. 
Each of these services was either provided by an NME vendor or paid for 
using an NME currency. Thus, we based the deduction of these movement 
charges on surrogate values. Additionally, for international freight 
provided by a market economy provider and paid in U.S. dollars 
(``USD''), we used the actual cost per kilogram of the freight. See 
Surrogate Values Memo for details regarding the surrogate values for 
movement expenses.

B. Constructed Export Price

    Also for Nantong Dongchang, we based U.S. price for certain sales 
on CEP in accordance with section 772(b) of the Act, because sales were 
made by Nantong Donchang's U.S. affiliate, Wavort, Inc. (``Wavort'') to 
unaffiliated purchasers. For such sales to certain U.S. customers, we 
based CEP on prices to the first unaffiliated purchaser in the United 
States. Where appropriate, we made deductions from the starting price 
(gross unit price) for foreign movement expenses, international 
movement expenses, U.S. movement expenses, and appropriate selling 
adjustments, in accordance with section 772(c)(2)(A) of the Act. Due to 
the proprietary nature of the facts regarding the CEP treatment for 
certain sales, for further details, see Memorandum to the File, through 
Alex Villanueva, Program Manager, Office 9, from Matthew Renkey, Senior 
Analyst, Office 9; Administrative Review of Gylcine from the People's 
Republic of China: Analysis for the Preliminary Results of Nantong 
Dongchang Chemical Industry Corp. (``Nantong Dongchang'') , dated April 
2, 2007 (``Prelim Analysis Memo'').
    In accordance with section 772(d)(1) of the Act and 19 CFR 
351.402(b), we also deducted those selling expenses associated with 
economic activities occurring in the United States. We deducted, where 
appropriate, commissions, credit expenses, and indirect selling 
expenses. Where foreign movement expenses, international movement 
expenses, or U.S. movement expenses were provided by NME service 
providers or paid for in an NME currency, we valued these services 
using surrogate values (see Surrogate Values Memo for further 
discussion). For those expenses that were provided by a market economy 
provider and paid for in market economy currency, we used the reported 
expense. Due to the proprietary nature of certain adjustments to U.S. 
price, for a detailed description of all adjustments made to U.S. price 
for Nantong Dongchang, see Prelim Analysis Memo.

Normal Value

1. Methodology

    Section 773(c)(1)(B) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if the 
merchandise is exported from an NME and 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. The Department 
bases NV on the FOPs because the presence of

[[Page 18460]]

government controls on various aspects of NMEs renders price 
comparisons and the calculation of production costs invalid under the 
Department's normal methodologies.

2. Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by respondent for the POR. To 
calculate NV, we multiplied the reported per-unit factor-consumption 
rates by publicly available Indian surrogate values. In selecting the 
surrogate values, we considered the quality, specificity, and 
contemporaneity of the data. As appropriate, we adjusted input prices 
by including freight costs to make them delivered prices. Specifically, 
we added to Indian import surrogate values a surrogate freight cost 
using the shorter of the reported distance from the domestic supplier 
to the factory of production or the distance from the nearest seaport 
to the factory of production where appropriate. This adjustment is in 
accordance with the Court of Appeals for the Federal Circuit's decision 
in Sigma Corp. v. United States, 117 F. 3d 1401, 1407-1408 (Fed. Cir. 
1997). Where we did not use Indian import data, we calculated freight 
based on the reported distance from the supplier to the factory.
    With regard to surrogate values, we have disregarded prices that we 
have reason to believe or suspect may be subsidized. We have reason to 
believe or suspect that prices of inputs from Indonesia, South Korea 
and Thailand may have been subsidized. We have found in other 
proceedings that these countries maintain broadly available, non-
industry-specific export subsidies and, therefore, it is reasonable to 
infer that all exports to all markets from these countries may be 
subsidized See Notice of Final Determination of Sales at Less Than Fair 
Value and Negative Final Determination of Critical Circumstances: 
Certain Color Television Receivers From the People's Republic of China, 
69 FR 20594 (April 16, 2004) (``CTVs from the PRC'') and accompanying 
issues and decision memorandum at Comment 7; see also Certain Cut-to-
Length Carbon Steel Plate from Romania: Notice of Final Results and 
Final Partial Rescission of Antidumping Duty Administrative Review, 70 
FR 12651 (March 15, 2005) and accompanying Issues and Decision 
Memorandum at Comment 4. The legislative history provides that in 
making its determination as to whether input values may be subsidized, 
the Department is not required to conduct a formal investigation; 
rather, Congress directed the Department to base its decision on 
information that is available to it at the time it makes its 
determination. See H.R. Rep. 100-576 at 590 (1988). Therefore, based on 
the information currently available, we have not used prices from these 
countries in calculating the surrogate values based on Indian import 
data. See Memorandum from Office of Policy to DAS and Office Directors: 
NME investigations: procedures for disregarding subsidized factor input 
prices, (February 2002), which has been placed on the record of this 
review. We have also disregarded Indian import data from countries that 
the Department has previously determined to be NME countries, as well 
as imports from unspecified countries. See CTVs from the PRC. For a 
comprehensive list of the sources and data used to determine the 
surrogate vales for the FOPs, by-products, and the surrogate financial 
ratios for factory overhead, selling, general and administrative 
expenses, and profit, see Surrogate Values Memo.
    It is the Department's practice to calculate price index adjustors 
to inflate or deflate, as appropriate, surrogate values that are not 
contemporaneous with the POR using the wholesale price index for the 
subject country. See Certain Preserved Mushrooms from the People's 
Republic of China: Final Results of the Antidumping Duty New Shipper 
Review, 71 FR 66910 (November 17, 2006). Therefore, where publicly 
available information contemporaneous with the POR with which to 
calculate surrogate values could not be obtained, surrogate values were 
adjusted using the Wholesale Price Index (``WPI'') for India, as 
published in the International Financial Statistics (``IFS'') of the 
International Monetary Fund (``IMF'').
    Surrogate values denominated in foreign currencies were converted 
to USD using the applicable average exchange rate based on exchange 
rate data from the Department's website.

Preliminary Results of the Review

    The Department has determined that the following preliminary 
dumping margins exist for the period March 1, 2005, through February 
28, 2006:

                          Glycine from the PRC
------------------------------------------------------------------------
                                                            Weighted-
                 Manufacturer/Exporter                    Average Margin
                                                            (Percent)
------------------------------------------------------------------------
Nantong Dongchang Chemical Industry Corp...............          75.82
------------------------------------------------------------------------

    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).
    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)(1)(ii). Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than five days after the 
time limit for filing the case briefs. See 19 CFR 351.309(d).
    Any interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). 
Requests should contain the following information: (1) the party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. Oral presentations will 
be limited to issues raised in the briefs. If we receive a request for 
a hearing, we intend to hold the hearing seven days after the deadline 
for submission of the rebuttal briefs at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.
    The Department intends to issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such comments, 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. 
The Department intends to issue assessment instructions to CBP 15 days 
after the date of publication of the final results of review. If these 
preliminary results are adopted in our final results of review, the 
Department shall determine, and CBP shall assess, antidumping duties on 
all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), we will 
calculate importer-specific (or customer) ad valorem duty assessment 
rates based on the ratio of the total amount of the dumping margins 
calculated for the examined sales to the total entered value of those 
same sales. We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis.

[[Page 18461]]

Cash Deposit Requirements

    Further, the following cash deposit requirements will be effective 
upon publication of the final results of the administrative review for 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results, as provided by section 751(a)(2)(C) of the Act: (1) for 
subject merchandise exported by Nantong Dongchang, the cash-deposit 
rate will be that established in the final results of review; (2) for 
previously reviewed or investigated companies not listed above that 
have separate rates, the cash-deposit rate will continue to be the 
company-specific rate published for the most recent period; (3) for all 
other PRC exporters of subject merchandise, which have not been found 
to be entitled to a separate rate, the cash-deposit rate will be PRC-
wide rate of 155.89 percent; (4) for all non-PRC exporters of subject 
merchandise, the cash-deposit rate will be the rate applicable to the 
PRC exporter that supplied that exporter. These deposit requirements, 
when imposed, shall remain in effect until publication of the final 
results of the next administrative review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and this notice are in accordance with 
sections 751(a)(1) and 777(i) of the Act, 19 CFR 351.213, and 19 CFR 
351.221(b)(4).

    Dated: April 2, 2007.
Steven J. Claeys,
Deputy Assistant Secretary for Import Administration.
[FR Doc. E7-6953 Filed 4-11-07; 8:45 am]
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