Chlorinated Isocyanurates from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 39053-39058 [E7-13801]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 136 (Tuesday, July 17, 2007)]
[Notices]
[Pages 39053-39058]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-13801]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-898


Chlorinated Isocyanurates from the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting 
an administrative review of the antidumping duty order on chlorinated 
isocyanurates (``chlorinated isos'') from the People's Republic of 
China (``PRC'') covering the period December 16, 2004, through May 31, 
2006. We have preliminarily determined that sales have been made below 
normal value (``NV'') by Hebei Jiheng Chemical Company Ltd. (``Jiheng 
Chemical''). If these preliminary results are adopted in our final 
results of this review, we will instruct U.S. Customs and Border 
Protection (``CBP'') to assess antidumping duties on all appropriate 
entries of subject merchandise during the period of review (``POR'').
    Interested parties are invited to comment on these preliminary 
results. We intend to issue the final results no later than 120 days 
from the date of publication of this notice, pursuant to section 
751(a)(3)(A) of the Tariff Act of 1930, as amended (``the Act'').

EFFECTIVE DATE: July 17, 2007.

FOR FURTHER INFORMATION CONTACT: Katharine Huang or Charles Riggle, 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-
1271 or (202) 482-0650, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On June 24, 2005, the Department published the antidumping duty 
order on chlorinated isos from the PRC.\1\ On June 2, 2006, the 
Department published a notice of opportunity to request an 
administrative review of this order.\2\ On June 30, 2006, in accordance 
with 19 CFR 351. 213(b)(1), the following requests were made: Clearon 
Corporation (``Clearon'') and Occidental Chemical Corporation 
(``OxyChem''), petitioners in the underlying investigation, and BioLab, 
Inc. (``BioLab''), a domestic producer of the like product, requested 
that the Department conduct an administrative review of Jiheng 
Chemical's sales and entries during the POR; On the same date, in 
accordance with 19 CFR 351.213(b)(2), Jiheng Chemical, a foreign 
producer/exporter of subject merchandise, requested that the Department 
review its sales of subject merchandise.
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    \1\ See Notice of Antidumping Duty Order: Chlorinated 
Isocyanurates From the People's Republic of China, 70 FR 36561 (June 
24, 2005).
    \2\ See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative 
Review, 71 FR 32032 (June 2, 2006).
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    On July 27, 2006, the Department initiated this administrative 
review with respect to Jiheng Chemical.\3\ The Department issued an 
antidumping duty questionnaire to Jiheng Chemical on August 15, 2006.
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    \3\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 71 FR 
42626 (July 17, 2006).
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    On August 16, 2006, the Department requested that the Office of 
Policy provide a list of surrogate countries for this review.\4\ On 
August 23, 2006, the Office of Policy issued its list of surrogate 
countries.\5\
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    \4\ See Memorandum to Ron Lorentzen, Director, Office of Policy, 
from Wendy Frankel, Director, AD/CVD Operations, Office 8, 
``Surrogate-Country Selection: 2004-2006 Administrative Review of 
the Antidumping Duty Order on Chlorinated Isocyanurates from the 
People's Republic of China'' (August 16, 2006).
    \5\ See the Memorandum from Ron Lorentzen, Director, Office of 
Policy, to Wendy Frankel, Director, AD/CVD Operations, Office 8, 
``Administrative Review of Chlorinated Isocyanurates from the 
People's Republic of China: Request for a List of Surrogate 
Countries'' (August 23, 2006) (``Surrogate Country Memorandum'').
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    On August 24, 2006, the Department requested that interested 
parties submit surrogate value information. On September 12, 2006, the 
Department requested that interested parties provide surrogate country 
selection comments. On September 15, 2006, Clearon and OxyChem 
(``Petitioners'') and BioLab requested an extension of time for all 
interested parties to submit surrogate value information, provide 
surrogate country selection comments, and submit factual information. 
On September 19, 2006, the Department granted the Petitioners' and 
BioLab's extension requests. On October 25, 2006, BioLab requested a 
further extension of time to submit surrogate value information and 
provide surrogate country selection comments. On October 31, 2006, the 
Department granted the requested extension to all parties.
    On November 17, 2006, Petitioners, BioLab and Jiheng Chemical 
provided comments on publicly available information to value the 
factors of production (``FOP'') and the selection of a surrogate 
country. All interested parties recommended India as the surrogate 
country. On November 27, 2006, Jiheng Chemical submitted rebuttal 
comments on Petitioners' November 17, 2006 surrogate value submission. 
On November 27, 2006, Petitioners and BioLab requested an extension of 
time for all parties to submit rebuttal information concerning 
surrogate values. On November 28, 2006, the Department granted 
Petitioners' and BioLab's extension requests. On November 30, 2006, 
BioLab requested an extension of time for all parties to submit factual 
information. On December 4, 2006, the Department granted BioLab's 
extension request. On December 6, 2006, Petitioners and BioLab 
submitted rebuttal comments on Jiheng Chemical's November 17, 2006 
surrogate value submission. On December 15, 2006, Jiheng Chemical 
submitted rebuttal information on Petitioners' and BioLab's December 6, 
2006 submissions.
    On December 15, 2006, Petitioners and BioLab submitted factual 
information on surrogate value selection. On December 26, 2006, 
Petitioners submitted comments on Jiheng Chemical's December 15, 2006 
rebuttal information. On January 5, 2007, Jiheng Chemical submitted 
rebuttal information on Petitioners' December 26, 2006 comments. On 
January 16, 2007, Petitioners submitted rebuttal information on Jiheng 
Chemical's January 5, 2007 comments.
    On October 11, 2006, Jiheng Chemical submitted its sections A, C, 
and D questionnaire responses (``AQR, CQR and DQR'', respectively). On 
November 6, 2006, the Department issued a section A supplemental 
questionnaire to Jiheng Chemical. On November 17, 2006, BioLab 
submitted comments on Jiheng Chemical's AQR, CQR and DQR. Petitioners 
submitted comments on Jiheng Chemical's AQR, CQR and DQR on November 
20, 2006. On November 28, 2006, Jiheng Chemical submitted rebuttal 
comments on Petitioners' November 20, 2006, and BioLab's November 17, 
2006, comments on its AQR, CQR and DQR. On December 5, 2006, Jiheng 
Chemical submitted its section A supplemental questionnaire response 
(``1\st\ SQR''). On January 19, 2007, BioLab submitted comments on 
Jiheng Chemical's 1\st\ SQR.

[[Page 39054]]

    On March 6, 2007, the Department issued a second supplemental 
questionnaire to Jiheng Chemical. On April 5, 2007, Jiheng Chemical 
submitted its second supplemental questionnaire response (``2\nd\ 
SQR''). On April 20, 2007, the Department issued a supplemental 
questionnaire requesting that Jiheng Chemical provide more information 
on the desiccant it uses. On April 24 and 25, 2007, respectively, 
Petitioners and BioLab submitted comments on Jiheng Chemical's 2\nd\ 
SQR, and requested that the Department conduct verification of Jiheng 
Chemical.
    On April 30, 2007, Jiheng Chemical submitted its supplemental 
questionnaire response on desiccant. Jiheng Chemical submitted rebuttal 
comments on May 1, 2007, addressing Petitioners' April 24, 2007 and 
BioLab's April 25, 2007 comments on its 2\nd\ SQR. On May 8, 2007, the 
Department issued a third supplemental questionnaire, and on May 17, 
2007, the Department issued a fourth supplemental questionnaire. On May 
21, 2007, Jiheng Chemical submitted its response to the Department's 
third supplemental questionnaire (``3\rd\ SQR''), and on June 7, 2007, 
Jiheng Chemical submitted its response to the Department's fourth 
supplemental questionnaire (``4\th\ SQR'').
    On March 5, 2007, the Department published a notice in the Federal 
Register extending the time limit for the preliminary results of review 
until May 1, 2007.\6\ On May 2, 2007, the Department published a notice 
in the Federal Register further extending the time limit for the 
preliminary results of review until July 2, 2007.\7\
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    \6\ See Chlorinated Isocyanurates from the People's Republic of 
China: Extension of Time limit for Preliminary Results of 
Antidumping Duty Administration Review, 72 FR 9729 (March 5, 2007).
    \7\ See Chlorinated Isocyanurates from the People's Republic of 
China: Extension of Time limit for Preliminary Results of 
Antidumping Duty Administration Review, 72 FR 24272 (May 2, 2007).
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Scope of the Order

    The products covered by this order are chlorinated isocyanurates, 
as described below:
    Chlorinated isocyanurates are derivatives of cyanuric acid, 
described as chlorinated s-triazine triones. There are three primary 
chemical compositions of chlorinated isocyanurates: (1) 
trichloroisocyanuric acid (Cl3(NCO)3), (2) sodium 
dichloroisocyanurate (dihydrate) 
(NaCl2(NCO)32H2O), and (3) 
sodium dichloroisocyanurate (anhydrous) 
(NaCl2(NCO)3). Chlorinated isocyanurates are 
available in powder, granular, and tableted forms. This order covers 
all chlorinated isocyanurates.
    Chlorinated isocyanurates are currently classifiable under 
subheadings 2933.69.6015, 2933.69.6021, 2933.69.6050, 3808.40.50, 
3808.50.40 and 3808.94.50.00 of the Harmonized Tariff Schedule of the 
United States (``HTSUS''). The tariff classification 2933.69.6015 
covers sodium dichloroisocyanurates (anhydrous and dihydrate forms) and 
trichloroisocyanuric acid. The tariff classifications 2933.69.6021 and 
2933.69.6050 represent basket categories that include chlorinated 
isocyanurates and other compounds including an unfused triazine ring. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the scope of this order is 
dispositive.

Non-Market Economy Country Status

    Jiheng Chemical did not contest the Department's treatment of the 
PRC as a non-market economy (``NME''), and the Department has treated 
the PRC as an NME country in all past antidumping duty investigations 
and administrative reviews and continues to do so in this case.\8\ No 
interested party in this case has argued that we should do otherwise. 
Designation as an NME country remains in effect until it is revoked by 
the Department. See Section 771(18)(C)(i) of the Act.
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    \8\ See, e.g., Certain Cased Pencils from the Peoples Republic 
of China: Final Results of Antidumping Duty Administrative Review, 
72 FR 27074 (May 14, 2007); and Carbazole Violet Pigment 23 from the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 72 FR 26589 (May 10, 2007).
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Surrogate Country

    Section 773(c)(1) of the Act directs the Department to base NV 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 FOPs, the 
Department shall use, to the extent possible, the prices or costs of 
the 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 the Surrogate Value Memorandum.\9\
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    \9\ See Memorandum from Katharine Huang, International Trade 
Compliance Analyst, through Charles Riggle, Program Manager, to 
Wendy Frankel, Director, AD/CVD Operations, Office 8, ``Preliminary 
Results of the 2004-2006 Administrative Review of Chlorinated 
Isocyanurates from the People's Republic of China: Surrogate Value 
Memorandum'' (July 2, 2007) (``Surrogate Value Memorandum'').
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    The Department has previously determined that India, Indonesia, Sri 
Lanka, the Philippines, and Egypt are countries comparable to the PRC 
in terms of economic development. See Surrogate Country Memorandum. 
Customarily, we select an appropriate surrogate country from the 
Surrogate Country Memorandum based on the availability and reliability 
of data from the countries that are significant producers of comparable 
merchandise. In this case, we have found that India is a significant 
producer of comparable merchandise.\10\
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    \10\ See Memorandum from Katharine Huang, International Trade 
Compliance Analyst, through Charles Riggle, Program Manager, to 
Wendy Frankel, Director, AD/CVD Operations, Office 8, ``Antidumping 
Administrative Review of Chlorinated Isocyanurates: Selection of a 
Surrogate Country,'' (July 2, 2007) (``Surrogate Country Selection 
Memorandum'').
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    The Department used India as the primary surrogate country and 
accordingly, has calculated NV using Indian prices to value the PRC 
producers' FOPs, when available and appropriate. See Surrogate Country 
Selection Memorandum and Surrogate Value Memorandum. We have obtained 
and relied upon publicly available information wherever possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping administrative review, interested parties may submit 
publicly available information to value factors of production within 20 
days after the date of publication of the preliminary results of 
review.

Separate Rates

    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 assigned a single 
antidumping duty deposit rate. It is the Department's policy to assign 
all exporters of subject merchandise subject to review in an NME 
country a single rate unless an exporter can demonstrate that it is 
sufficiently independent of government control to be entitled to a 
separate rate.\11\ We have considered

[[Page 39055]]

whether the reviewed company based in the PRC is eligible for a 
separate rate.
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    \11\ See, e.g., Certain Cased Pencils from the People's Republic 
of China; Preliminary Results of Antidumping Duty Administrative 
Review, 71 FR 70949, 71 FR 70952 (December 7, 2006) (unchanged in 
the final results); Carbazole Violet Pigment 23 From the People's 
Republic of China; Preliminary Results of Antidumping Duty 
Administrative Review and Rescission in Part, 71 FR 65073, 65074 
(November 7, 2006) (unchanged in the final results).
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    The Department's separate-rate test to determine whether the 
exporters are independent from government control does not consider, in 
general, macroeconomic/border-type controls, e.g., export licenses, 
quotas, and minimum export prices, particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level.\12\
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    \12\ See Certain Cut-to-Length Carbon Steel Plate from Ukraine: 
Final Determination of Sales at Less than Fair Value, 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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    To establish whether an exporter is sufficiently independent of 
government control to be entitled to a separate rate, the Department 
analyzes the exporter in light of select criteria, discussed below.\13\ 
Under this test, exporters in NME countries are entitled to separate, 
company-specific margins when they can demonstrate an absence of 
government control over exports, both in law (``de jure'') and in fact 
(``de facto'').
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    \13\ See Final Determination of Sales at Less Than Fair Value: 
Sparklers from the People's Republic of China, 56 FR 20585, 22587 
(May 6, 1991) (``Sparklers''); and 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).
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    Jiheng Chemical provided company-specific separate-rate 
information. Jiheng Chemical reported that it is owned by all the 
people of the PRC. See Jiheng Chemical's AQR at A-4. Therefore, a 
separate-rates analysis is necessary to determine whether its export 
activities are independent from government control.

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; or (3) any other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR 20588 at Comment 1.
    Jiheng Chemical has placed documents on the record to demonstrate 
the absence of de jure control, including its list of shareholders, 
business license, and the Company Law of the People's Republic of 
China, as revised October 27, 2005 (``Company Law''). Other than 
limiting Jiheng Chemical to activities referenced in the business 
license, we found no restrictive stipulations associated with the 
license. In addition, in previous cases, the Department has analyzed 
the Company Law and found that it establishes an absence of de jure 
control.\14\ We have no information in this segment of the proceeding 
that would cause us to reconsider this determination. Therefore, based 
on the foregoing, we have preliminarily found an absence of de jure 
control for Jiheng Chemical.
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    \14\ See, e.g., Certain Non-Frozen Apple Juice Concentrate from 
the People's Republic of China: Final Results, Partial Recision and 
Termination of a Partial Deferral of the 2002-2003 Administrative 
Review, 69 FR 65148, 65150 (November 10, 2004).
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B. Absence of De Facto Control

    As stated in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC.\15\ 
Therefore, the Department has preliminarily determined that an analysis 
of de facto control is critical in determining whether Jiheng Chemical 
is, in fact, subject to a degree of government control that would 
preclude the Department from assigning separate rates. The Department 
typically considers four factors in evaluating whether each respondent 
is subject to de facto government control of its export functions: (1) 
whether the exporter sets its own export prices independent of the 
government and without the approval of a government authority; (2) 
whether the 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 its 
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.\16\
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    \15\ See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Certain Preserved Mushrooms from the People's 
Republic of China, 63 FR 72255, 72257 (December 31, 1998).
    \16\ See, e.g., 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).
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    With regard to de facto control, Jiheng Chemical reported that: (1) 
it independently set prices to the United States through direct arm's-
length negotiations with its customers and these prices are not subject 
to review by any government organization; (2) Jiheng Chemical did not 
coordinate with other exporters or producers to set the price or to 
determine to which market the companies will sell subject merchandise; 
(3) Jiheng Chemical is a member of the China Chamber of Commerce of 
Metals Minerals & Chemicals Importers & Exporters, which is a non-
governmental association, and does not interfere with the export 
activities of Jiheng Chemical; (4) Jiheng Chemical's authorized sales 
representatives have the authority to contractually bind it to sell 
subject merchandise; (5) in accordance with the Article of Association, 
its board of directors designated the general manager; (6) there is no 
restriction on its use of export revenues; (7) its shareholders 
ultimately determine the disposition of respective profits, and Jiheng 
Chemical has not had a loss in the last two years. Our analysis of 
Jiheng Chemical's questionnaire responses reveals no other information 
indicating government control of its export activities. Therefore, 
based on the information on the record, we preliminarily determine that 
there is an absence of de facto government control with respect to 
Jiheng Chemical's export functions and that Jiheng Chemical has met the 
criteria for the application of a separate rate.

Date of Sale

    Section 351.401(i) of the Department's regulations states that:
    in identifying the date of sale of the subject merchandise or 
foreign like product, the Secretary normally will use the date of 
invoice, as recorded in the exporter or producer's records kept in the 
normal course of business. However, the Secretary may use a date other 
than the date of invoice if the Secretary is satisfied that a different 
date better reflects the date on which the exporter or producer 
establishes the material terms of sale.
Jiheng Chemical reported the shipment date as the date of sale because 
it claims that, for its U.S. sales of subject merchandise made during 
the POR, the material terms of sale were established on the shipment 
date and its shipment date was on or before the invoice date. We have 
preliminarily determined that the shipment date is the most appropriate 
date to use as Jiheng Chemical's date of sale in accordance with our 
long-standing practice of determining as the date of sale the date on 
which the final terms of sale are established.\17\
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    \17\ Notice of Final Determination of Sales at Less Than Fair 
Value and Negative Final Determination of Critical Circumstances: 
Certain Frozen and Canned Warmwater Shrimp from Thailand, 69 FR 
76918 (December 23, 2004), and accompanying Issues and Decision 
Memorandum at Comment 10; and Notice of Final Determination of Sales 
at Less Than Fair Value: Structural Steel Beams from Germany, 67 FR 
35497 (May 20, 2002), and accompanying Issues and Decision 
Memorandum at Comment 2.

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[[Page 39056]]

Normal Value Comparisons

    To determine whether sales of chlorinated isos to the United States 
by Jiheng Chemical were made at less than NV, we compared export price 
(``EP'') to NV, as described in the ``Export Price,'' and ``Normal 
Value'' sections of this notice, pursuant to section 771(35) of the 
Act.

Export Price

    Petitioners and BioLab requested that the Department determine that 
Jiheng Chemical is affiliated with one of its U.S. customers and, 
accordingly, base U.S. price on constructed-export-price (``CEP'') 
rather than EP. Our analysis of Jiheng Chemical's questionnaire 
responses reveals no information to support a finding that Jiheng 
Chemical is affiliated with its U.S. customer.\18\ Because Jiheng 
Chemical sold the subject merchandise to unaffiliated purchasers in the 
United States prior to importation into the United States and the use 
of the CEP methodology is not otherwise indicated, we have used EP in 
accordance with section 772(a) of the Act.
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    \18\ See the Memorandum from Katharine Huang, International 
Trade Compliance Analyst, through Charles Riggle, Program Manager, 
to Wendy Frankel, Director, AD/CVD Operations, Office 8, 
``Preliminary Results of the 2004-2006 Administrative Review of 
Chlorinated Isocyanurates from the People's Republic of China: 
Memorandum on Affiliation Issue between Jiheng Chemical and its US 
Customer'' (July 2, 2007).
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    We calculated EP based on the delivered price to unaffiliated 
purchasers for Jiheng Chemical. From this price, we deducted amounts 
for foreign inland freight, brokerage and handling and marine 
insurance, where applicable, pursuant to section 772(c)(2)(A) of the 
Act.\19\
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    \19\ See Memorandum to the File from Katharine Huang, 
International Trade Compliance Analyst, through Charles Riggle, 
Program Manager, AD/CVD Operations, Office 8, ``Analysis for the 
Preliminary Results of the 2004-2006 Administrative Review of 
Chlorinated Isocyanurates from the People's Republic of China: Hebei 
Jiheng Chemical Company Ltd. (July 2, 2007).
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    The Department used two sources to calculate a surrogate value for 
domestic brokerage expenses. The Department averaged the December 2003-
November 2004 data contained in Essar Steel's February 28, 2005 public 
version response submitted in the antidumping duty administrative 
review of hot-rolled carbon steel flat products from India.\20\ These 
data were averaged with the February 2004-January 2005 data contained 
in Agro Dutch Industries Limited's (``Agro Dutch'') May 24, 2005, 
public version response submitted in the administrative review of the 
antidumping duty order on certain preserved mushrooms from India.\21\ 
The brokerage-expense data reported by Essar Steel and Agro Dutch in 
the public versions of their respective responses are ranged data. The 
Department first derived an average per-unit amount from each data 
source. We then separately adjusted each average rate for inflation. 
Finally, we averaged the two per-unit amounts to derive an overall 
average rate for the POR. See Surrogate Value Memorandum at 9 and 
Attachment XXII.
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    \20\ See Certain Hot-Rolled Carbon Steel Flat Products From 
India: Notice of Preliminary Results of Antidumping Duty 
Administrative Review, 71 FR 2018 (January 12, 2006).
    \21\ See Certain Preserved Mushrooms From India: Final Results 
of Antidumping Duty Administrative Review, 70 FR 37757 (June 30, 
2005); and Notice of Preliminary Determination of Sales at Less Than 
Fair Value, Affirmative Critical Circumstances, In Part, and 
Postponement of Final Determination: Certain Lined Paper Products 
from the People's Republic of China, 71 FR 19695, 19704 (April 17, 
2006) (which utilized these same data and was unchanged for the 
final determination).
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    To value truck freight, we used the freight rates published by 
Indian Freight Exchange, available at https://www.infreight.com. The 
truck freight rates are contemporaneous with the POR; therefore, we 
made no adjustments for inflation.
    Jiheng Chemical reported that its U.S. customer(s) provided it with 
certain raw materials and packing materials free of charge. For Jiheng 
Chemical's products that contained inputs provided free of charge by 
its customer,\22\ consistent with the Department's practice, we added 
to the U.S. price paid by the Jiheng Chemical's customer the built-up 
cost (i.e., the surrogate value for these raw materials and packing 
materials multiplied by the reported FOPs for these items).\23\
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    \22\ Jiheng Chemical stated that its customer sourced materials 
from both market-economy and non-market-economy suppliers. Jiheng 
Chemical further stated that it does not know the names of the 
market-economy suppliers. See Jiheng Chemical's October 11, 2006 
section D response at D-6 - D-7.
    \23\ See e.g., Notice of Final Determination of sales at Less 
Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products from the People's Republic of China, 71 
FR 53079 (September 8, 2006), and the accompanying Issues and 
Decision Memorandum at Comment 17.
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Normal Value

    Section 773(c)(1) of the Act provides that, in the case of an NME, 
the Department shall determine NV using an FOP 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 will base NV on FOP because the presence of 
government controls on various aspects of these economies renders price 
comparisons and the calculation of production costs invalid under our 
normal methodologies. Therefore, we calculated NV based on FOP in 
accordance with sections 773(c)(3) and (4) of the Act and 19 CFR 
351.408(c). The FOPs include: (1) hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We used the 
FOPs reported by respondents for materials, energy, labor, by-products, 
and packing.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to value the FOPs, but when 
a producer sources an input from a market-economy country and pays for 
it in market-economy currency, the Department may value the factor 
using the actual price paid for the input.\24\ Jiheng Chemical reported 
that it did not purchase any inputs from market economy suppliers for 
the production of the subject merchandise. See Jiheng Chemical's DQR at 
D-8.
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    \24\ See 19 CFR 351.408(c)(1); see also, Lasko Metal Products v. 
United States, 43 F.3d 1442, 1445-1446 (Fed. Cir. 1994) (affirming 
the Department's use of market-based prices to value certain FOPs).
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    With regard to both the Indian import-based surrogate values and 
the market-economy input 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 India, 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.\25\ We are also guided by the statute's legislative history 
that explains that it is not

[[Page 39057]]

necessary to conduct a formal investigation to ensure that such prices 
are not subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, the 
Department was instructed by Congress to base its decision on 
information that is available to it at the time it is making its 
determination. Therefore, we have not used prices from these countries 
in calculating the Indian import-based surrogate values.
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    \25\ See Certain Frozen Fish Fillets from the Socialist Republic 
of Vietnam: Notice of Preliminary Results and Preliminary Partial 
Rescission of Antidumping Duty Administrative Review, 70 FR 54007, 
54011 (September 13, 2005) (unchanged in the final results); 
Automotive Replacement Glass Windshields From the People's Republic 
of China: Final Results of Administrative Review, 69 FR 61790 
(October 21, 2004) and accompanying Issues and Decision Memorandum 
at Comment 5; and China National Machinery Import & Export 
Corporation v. United States, 293 F. Supp. 2d 1334 (CIT 2003), as 
affirmed by the Federal Circuit, 104 Fed. Appx. 183 (Fed. Cir. 
2004).
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Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on the FOPs reported by Jiheng Chemical for the POR. To calculate 
NV, we multiplied the reported per-unit factor quantities by publicly 
available Indian surrogate values (except as noted below). In selecting 
the surrogate values, we considered the quality, specificity, and 
contemporaneity of the data. As appropriate, we adjusted input prices 
by including freight costs to render 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 or the distance from the nearest 
seaport to the factory. This adjustment is in accordance with the 
decision of the Federal Circuit in Sigma Corp. v. United States, 117 F. 
3d 1401, 1408 (Fed. Cir. 1997). For a detailed description of all 
surrogate values used for Jiheng Chemical, see the Surrogate Value 
Memorandum.
    Except as noted below, we valued raw material inputs using the 
weighted-average unit import values derived from the Monthly Statistics 
of the Foreign Trade of India, as published by the Directorate General 
of Commercial Intelligence and Statistics of the Ministry of Commerce 
and Industry, Government of India in the World Trade Atlas, available 
at https://www.gtis.com/wta.htm (``WTA''). Where we could not obtain 
publicly available information contemporaneous with the POR with which 
to value FOPs, we adjusted the SVs using, where appropriate, the Indian 
Wholesale Price Index (``WPI'') as published in the International 
Financial Statistics of the International Monetary Fund. See Surrogate 
Value Memorandum at 2 and Attachments II and III. We further adjusted 
these prices to account for freight costs incurred between the supplier 
and respondent. We used the freight rates published by Indian Freight 
Exchange available at https://www.infreight.com, to value truck freight. 
See the Surrogate Value Memorandum at 9 and Attachment XX. The truck 
and rail freight rates are contemporaneous with the POR. Therefore, we 
made no adjustments for inflation. For a complete description of the 
factor values we used, see the Surrogate Value Memorandum.
    We valued hydrochloric acid, barium chloride and sulfuric acid 
using Chemical Weekly because we did not have reliable Indian import 
statistics in the WTA for these factors. We adjusted these values for 
taxes and to account for freight costs incurred between the supplier 
and Jiheng Chemical.
    Jiheng Chemical reported that its U.S. customer(s) provided certain 
raw materials and packing materials free of charge. For Jiheng 
Chemical's products that included raw materials and packing materials 
provided free of charge by its customer, consistent with the 
Department's practice, we used the built-up cost (i.e., the surrogate 
value for these raw materials and packing materials multiplied by the 
reported FOPs for these items) in the NV calculation.\26\ Where 
applicable, we also adjusted these values to account for freight costs 
incurred between the port of exit and Jiheng Chemical's plants. See 
Surrogate Value Memorandum at 9, and Jiheng Chemical Preliminary 
Analysis Memorandum.
---------------------------------------------------------------------------

    \26\ See e.g., Notice of Final Determination of Sales at Less 
Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products from the People's Republic of China, 71 
FR 53079 (September 8, 2006), and the accompanying Issues and 
Decision Memorandum at Comment 17.
---------------------------------------------------------------------------

    To value electricity, we used the 2000 electricity price data from 
International Energy Agency, Energy Prices and Taxes - Quarterly 
Statistics (First Quarter 2003), adjusted for inflation. See Surrogate 
Value Memorandum at 7 and Attachment XVI.
    To value water, we used the revised Maharashtra Industrial 
Development Corporation (``MIDC'') water rates for June 1, 2003 for the 
Mumbai region, available at https://www.midcindia.com/water-supply, 
adjusted for inflation. See Surrogate Value Memorandum at 4 - 5 and 
Attachment XI.
    For direct labor, indirect labor and packing labor, consistent with 
19 CFR 351.408(c)(3), we used the PRC regression-based wage rate as 
reported on Import Administration's web site.\27\ Because this 
regression-based wage rate does not separate the labor rates into 
different skill levels or types of labor, we have applied the same wage 
rate to all skill levels and types of labor reported by each 
respondent. See Surrogate Value Memorandum at 8.
---------------------------------------------------------------------------

    \27\ See Expected Wages of Selected NME Countries (revised 
November 2005) (available at https://ia.ita.doc.gov/wages). The 
source of these wage rate data on the Import Administration's web 
site is the Yearbook of Labour Statistics 2003, ILO, (Geneva: 2003), 
Chapter 5B: Wages in Manufacturing. The years of the reported wage 
rates range from 1998 to 2003.
---------------------------------------------------------------------------

    For factory overhead, selling, general, and administrative expenses 
(``SG&A''), and profit values, we used information from Kanoria 
Chemicals and Industries Limited, and DCM Sriram Consolidated Ltd. for 
the year ending March 31, 2006. From this information, we were able to 
determine factory overhead as a percentage of the total raw materials, 
labor and energy (``ML&E'') costs; SG&A as a percentage of ML&E plus 
overhead (i.e., cost of manufacture); and the profit rate as a 
percentage of the cost of manufacture plus SG&A. See Surrogate Value 
Memorandum at 8-9 and Attachment XIX for a full discussion of the 
calculation of these ratios.
    For packing materials, we used the per-kilogram values obtained 
from the WTA and made adjustments to account for freight costs incurred 
between the PRC supplier and Jiheng Chemical's plant. See Surrogate 
Value Memorandum at Attachment VI.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, based on the exchange rates in effect on 
the dates of the U.S. sales, as certified by the Federal Reserve Bank.

Preliminary Results of Review

    We preliminarily determine that the following weighted-average 
dumping margin exists:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/Exporter                      (Percent)
------------------------------------------------------------------------
Jiheng Chemical.............................................        6.75
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See 19 CFR 351.224(b). Interested parties are invited to 
comment on the preliminary results and may submit case briefs and/or 
written comments within 30 days of the date of publication of this 
notice. See 19 CFR 351.309(c)(ii). Any interested party may request a 
hearing within 30 days of publication of this notice. See 19 CFR 
351.310(c). Any hearing, if requested, will be held 42 days after the 
date of publication of this notice. See 19 CFR 351.310(d). Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 35 days after the 
date of publication. See 19 CFR 351.309(d). The Department requests 
that parties

[[Page 39058]]

submitting written comments also provide the Department with an 
additional copy of those comments on diskette. The Department will 
issue the final results of this administrative review, which will 
include the results of its analysis of issues raised in any 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 appropriate assessment instructions 
directly to CBP 15 days after the date of publication of the final 
results of this administrative review. If these preliminary results are 
adopted in our final results of review, we will direct CBP to assess 
the resulting per-unit value or ad valorum rate against the entered 
customs value for the subject merchandise on each importer's/customer's 
entries during the POR.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(2)(C) of the Act: (1) for Jiheng 
Chemical, which has a separate rate, the cash deposit rate will be the 
company-specific rate established in the final results of review 
(except, if the rate is zero or de minimis, no cash deposit will be 
required); (2) for previously investigated or reviewed PRC and non-PRC 
exporters not listed above that have separate rates, the cash deposit 
rate will continue to be the exporter-specific rate published for the 
most recent period; (3) for all PRC exporters of subject merchandise 
that have not been found to be entitled to a separate rate, the cash 
deposit rate will be the PRC-wide rate of 285.63 percent; and (4) for 
all non-PRC exporters of subject merchandise which have not received 
their own rate, the cash deposit rate will be the rate applicable to 
the PRC exporters that supplied that non-PRC exporter. These deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Notification to Importers

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

    Dated: July 2, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-13801 Filed 7-16-07; 8:45 am]
BILLING CODE 3510-DS-S