Preliminary Determination of Sales at Less Than Fair Value: Sodium Hexametaphosphate from the People's Republic of China, 52544-52551 [E7-18167]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 178 (Friday, September 14, 2007)]
[Notices]
[Pages 52544-52551]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-18167]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-908


Preliminary Determination of Sales at Less Than Fair Value: 
Sodium Hexametaphosphate from the People's Republic of China

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

EFFECTIVE DATE: September 14, 2007.
SUMMARY: We preliminarily determine that sodium hexametaphosphate 
(``SHMP'') from the People's Republic of China (``PRC'') is being, or 
is likely to be, sold in the United States at less than fair value 
(``LTFV''), as provided in section 733 of the Tariff Act of 1930, as 
amended (``the Act''). The estimated margins of sales at less than fair 
value (``LTFV'') are shown in the ``Preliminary Determination'' section 
of this notice.

FOR FURTHER INFORMATION CONTACT: Erin Begnal or Kristina Horgan, 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-
1442 or (202) 482-8173, respectively.

SUPPLEMENTARY INFORMATION:

Initiation

    On February 8, 2007, the Department of Commerce (``Department'') 
received a petition on imports of SHMP from the PRC filed in proper 
form by ICL Performance Products, LP and Innophos, Inc. 
(``Petitioners'') on behalf of the domestic industry producing SHMP. 
This investigation was initiated on February 28, 2007. See Initiation 
of Antidumping Duty Investigation: Sodium Hexametaphosphate From the 
People's Republic of China, 72 FR 9926 (March 6, 2007) (``Initiation 
Notice''); see also Notice of Correction of Initiation of Antidumping 
Duty Investigation: Sodium Hexametaphosphate from the People's Republic 
of China, 72 FR 11325 (March 13, 2007). Additionally, in the Initiation 
Notice, the Department notified parties of the application process by 
which exporters and producers may obtain separate-rate status in non-
market economy (``NME'') investigations. The process requires exporters 
and producers to submit a separate-rate status application. See Policy 
Bulletin 05.1: Separate-Rates Practice and Application of Combination 
Rates in Antidumping Investigations involving Non-Market Economy 
Countries, (April 5, 2005), (``Policy Bulletin 05.1'') available at 
https://ia.ita.doc.gov. However, the standard for eligibility for a 
separate rate (which is whether a firm can demonstrate an absence of 
both de jure and de facto governmental control over its export 
activities) has not changed.
    On April 3, 2007, the United States International Trade Commission 
(``ITC'') issued its affirmative preliminary determination that there 
is a reasonable indication that an industry in the United States is 
materially injured or threatened with material injury by reason of 
imports from the PRC of SHMP. The ITC's determination was published in 
the Federal Register on April 9, 2007. See Investigation No. 731-TA-
1110 (Preliminary), Sodium Hexametaphosphate (SHMP) From China, 72 FR 
17581 (April 9, 2007).

Scope Comments

    The Department also set aside a 20-day period from the publication 
of the initiation for all interested parties to raise issues regarding 
product coverage. The Department did not receive any comments from 
interested parties regarding product coverage during the 20-day period 
and subsequently, did not change the scope in the Initiation Notice.

Scope of Investigation

    The merchandise subject to this investigation is sodium 
hexametaphosphate (``SHMP''). SHMP is a water-soluble polyphosphate 
glass that consists of a distribution of polyphosphate chain lengths. 
It is a collection of sodium polyphosphate polymers built on repeating 
NaPO3 units. SHMP has a P2O5 content from 60 to 71 percent. Alternate 
names for SHMP include the following: Calgon; Calgon S; Glassy Sodium 
Phosphate; Sodium Polyphosphate, Glassy; Metaphosphoric Acid; Sodium 
Salt; Sodium Acid Metaphosphate; Graham's Salt; Sodium Hex; 
Polyphosphoric Acid, Sodium Salt; Glass H; Hexaphos; Sodaphos; 
Vitrafos; and BAC-N-FOS. SHMP is typically sold as a white powder or 
granule (crushed) and may also be sold in the form of sheets (glass) or 
as a liquid solution. It is imported under heading 2835.39.5000, HTSUS. 
It may also be imported as a blend or mixture under heading 
3823.90.3900, HTSUS. The American Chemical Society, Chemical Abstract 
Service (``CAS'') has assigned the name ``Polyphosphoric Acid, Sodium 
Salt'' to SHMP. The CAS registry number is 68915-31-1. However, SHMP is 
commonly identified by CAS No. 10124-56-8 in the market. For purposes 
of the investigation, the narrative description is dispositive, not the 
tariff heading, CAS registry number or CAS name.
    The product covered by this investigation includes SHMP in all 
grades, whether food grade or technical grade. The product covered by 
this investigation includes SHMP without regard to chain length i.e., 
whether regular or long chain. The product covered by this 
investigation includes SHMP without regard to physical form, whether 
glass, sheet, crushed, granule, powder, fines, or other form.
    However, the product covered by this investigation does not include 
SHMP when imported in a blend with other materials in which the SHMP 
accounts for less than 50 percent by volume of the finished product.

Quantity and Value

    On March 6, 2007, the Department requested quantity and value 
(``Q&V'') information from a total of 38 companies identified by 
Petitioners as potential producers or exporters of SHMP from the PRC. 
Also, on March 6, 2007, the Department sent a letter requesting Q&V 
information to the China Bureau of Fair Trade for Imports & Exports 
(``BOFT'') of the Ministry of Commerce (``MOFCOM'') requesting that 
BOFT transmit the letter to all companies who manufacture and export 
subject merchandise to the United States, or produce the subject 
merchandise for the companies who were engaged in exporting the subject 
merchandise to the United States during the POI. For a complete list of 
all parties from which the Department requested Q&V information, see 
Memorandum to James C. Doyle, Director, Office 9, AD/CVD Operations, 
through Christopher D. Riker, Program Manager, Office 9, AD/CVD 
Operations, from Erin Begnal, Senior International Trade Analyst,

[[Page 52545]]

Office 9, AD/CVD Operations, regarding ``Selection of Respondents for 
the Antidumping Investigation of Sodium Hexametaphosphate from the 
People's Republic of China'' (April 17, 2007) (``Respondent Selection 
Memorandum''). The Department received timely Q&V responses from five 
interested parties. The Department did not receive any type of 
communication from BOFT regarding its request for Q&V information. See 
id., at 1.
    On April 17, 2007, the Department selected Hubei Xingfa Chemicals 
Group (``Hubei Xingfa'') and Mianyang Aostar Phosphorous Chemical 
Industry Co., Ltd. (``Mianyang Aostar'') as mandatory respondents in 
this investigation. See id., at 3-4.

Surrogate Country

    On May 10, 2007, the Department determined that India, Indonesia, 
Sri Lanka, the Philippines, and Egypt are countries comparable to the 
PRC in terms of economic development. See Letter to All Interested 
Parties, from Christopher D. Riker, Program Manager, Office 9, AD/CVD 
Operations, regarding ``Antidumping Duty Investigation of Sodium 
Hexametaphosphate from the People's Republic of China (``PRC''),'' 
dated May 10, 2007, attaching Memorandum to Christopher D. Riker, 
Program Manager, Office 9, AD/CVD Operations, from Ron Lorentzen, 
Director, Office of Policy, regarding ``Investigation of Sodium 
Hexametaphosphate from the People's Republic of China (PRC): Request 
for List of Surrogate Countries,'' dated May 9, 2007.
    On May 10, 2007, the Department requested comments on surrogate 
country selection from the interested parties in this investigation. 
Petitioners submitted surrogate country comments on June 4, 2007. Hubei 
Xingfa submitted surrogate country comments on June 4, 2007. 
Petitioners submitted rebuttal surrogate country comments on June 14, 
2007. No other interested parties commented on the selection of a 
surrogate country. For a detailed discussion of the selection of the 
surrogate country, see ``Surrogate Country'' section below, and the 
Memorandum to the File, through James C. Doyle, Director, Office 9, AD/
CVD Operations, from Scot T. Fullerton, Program Manager, Office 9, AD/
CVD Operations, regarding ``Antidumping Duty Investigation of Sodium 
Hexametaphophate from the People's Republic of China: Selection of a 
Surrogate Country,'' dated September 6, 2007 (``Surrogate Country 
Memorandum'').

Separate Rates Applications

    Between April 3, 2007, and May 4, 2007, we received timely 
separate-rate applications from three non-mandatory respondent 
companies: Jiangyin Chengxing International Trading Co., Ltd. 
(``Chengxing''), Yibin Tianyuan Group Co., Ltd. (``Tianyuan''), and 
Sichuan Mianzhu Norwest Phosphate Chemical Company Limited 
(``Norwest'').

Questionnaires

    On March 30, 2007, the Department requested comments from all 
interested parties on product characteristics to be used in the 
designation of control numbers (``CONNUMs'') to be assigned to the 
subject merchandise. The Department received comments from Petitioners 
and Hubei Xingfa.
    On April 18, 2007, the Department issued its sections A, C, D, and 
E,\1\ questionnaire to Hubei Xingfa and Mianyang Aostar, which included 
product characteristics used in the designation of CONNUMs and assigned 
to the merchandise under consideration.
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    \1\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section C 
requests a complete listing of U.S. sales. Section D requests 
information on factors of production, and Section E requests 
information on further manufacturing.
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    On May 9, 2007, Hubei Xingfa submitted its response to section A of 
the Department's questionnaire, and on June 1, 2007, Hubei Xingfa 
submitted its response to sections C and D of the Department's 
questionnaire. On May 9, 2007, the Department placed on the record a 
letter submitted by Mianyang Aostar, indicating that it was withdrawing 
from the investigation. See Mianyang Aostar Withdrawal Memo.\2\ The 
Department issued supplemental questionnaires to Hubei Xingfa between 
June and August 2007, and received responses between June and August 
2007. On June 12, and June 20, 2007, Petitioners submitted comments on 
Hubei Xingfa's questionnaires responses.
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    \2\ On May 3, 2007, Mianyang Aostar submitted an improperly 
filed letter to the Department indicating it was withdrawing from 
the investigation. See Memorandum to the File, from Erin Begnal, 
Senior International Trade Analyst, Office 9, AD/CVD Operations, 
regarding ``Antidumping Duty Investigation of Sodium 
Hexametaphosphate (``SHMP'') from the People's Republic of China: 
Withdrawal of Mianyang Aostar Phosphorous Chemical Industry Co., 
Ltd.'' (May 9, 2007) (``Mianyang Aostar Withdrawal Memo'').
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    On July 20, 2007, the Department issued a supplemental 
questionnaire to separate rate respondent, Chengxing, which was 
submitted on July 30, 2007. In addition, on July 23, 2007, the 
Department issued a supplemental questionnaire to separate rate 
respondent, Tianyuan, which was submitted on August 6, 2007.

Surrogate Value Comments

    On June 20, 2007, Petitioners and Hubei Xingfa submitted comments 
on surrogate information with which to value the factors of production 
in this proceeding. On July 2, 2007, Petitioners also filed rebuttal 
comments on surrogate information with which to value the factors of 
production in this proceeding. On August 14, 2007, Petitioners and 
Hubei Xingfa submitted additional comments on surrogate information 
with which to value factors of production.

Postponement of Preliminary Determination

    On June 25, 2007, Petitioners requested that the Department 
postpone the preliminary determination pursuant to section 
733(c)(1)(B)(i) of the Act. We did so on July 2, 2007. See Notice of 
Postponement of Preliminary Determination of Antidumping Duty 
Investigation: Sodium Hexametaphosphate from the People's Republic of 
China, 72 FR 37728 (July 11, 2007).

Period of Investigation

    The period of investigation (``POI'') is July 1, 2006, through 
December 31, 2006. This period corresponds to the two most recent 
fiscal quarters prior to the month of the filing of the petition 
(February 8, 2007). See 19 CFR 351.204(b)(1).

Non-Market-Economy Country

    For purposes of initiation, Petitioners submitted LTFV analyses for 
the PRC as a non-market economy. See Initiation Notice, 72 FR at 9927. 
The Department considers the PRC to be a NME country. In accordance 
with section 771(18)(C)(i) of the Act, any determination that a foreign 
country is an NME country shall remain in effect until revoked by the 
administering authority. See Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, (``TRBs'') From the People's Republic of 
China: Preliminary Results 2001-2002 Administrative Review and Partial 
Rescission of Review, 68 FR 7500 (February 14, 2003), unchanged in 
Final Results of 2001-2002 Administrative Review: TRBs from the 
People's Republic of China, 68 FR 70488 (December 18, 2003). No party 
has challenged the designation of the PRC as an NME country in this 
investigation. Therefore, we have treated the PRC as

[[Page 52546]]

an NME country for purposes of this preliminary determination.

Surrogate Country

    When the Department is investigating imports from an NME, section 
773(c)(1) of the Act directs it to base normal value, in most 
circumstances, on the NME producer's factors of production valued in a 
surrogate market-economy country or countries considered to be 
appropriate by the Department. In accordance with section 773(c)(4) of 
the Act, in valuing the factors of production, the Department shall 
utilize, to the extent possible, the prices or costs of factors of 
production in one or more market-economy countries that are at a level 
of economic development comparable to that of the NME country and are 
significant producers of comparable merchandise. The sources of the 
surrogate values we have used in this investigation are discussed under 
the normal value section below.
    As detailed in the Surrogate Country Memorandum, the Department has 
preliminarily selected India as the surrogate country on the basis 
that: (1) It is a significant producer of comparable merchandise; (2) 
it is at a similar level of economic development pursuant to 773(c)(4) 
of the Act; and (3) we have reliable data from India that we can use to 
value the factors of production. Thus, we have calculated normal value 
using Indian prices when available and appropriate to value Hubei 
Xingfa's factors of production. See Memorandum to the File, through 
Scot T. Fullerton, Program Manager, Office 9, AD/CVD Operations, from 
Erin Begnal, Senior International Trade Analyst, Office 9, AD/CVD 
Operations, regarding ``Sodium Hexametaphophate from the People's 
Republic of China: Surrogate Values for the Preliminary Determination'' 
(September 6, 2007) (``Factor Value Memorandum'').
    In accordance with 19 CFR 351.301(c)(3)(i), for the final 
determination in an antidumping investigation, interested parties may 
submit publicly available information to value the factors of 
production within 40 days after the date of publication of the 
preliminary determination.

Affiliation

    Based on the evidence presented in Hubei Xingfa's questionnaire 
responses, we preliminarily find that Hubei Xingfa is affiliated with 
Baokang Chuyuan Chemical Industry Co., Ltd. (``Baokang Chuyuan''), 
which also produces subject merchandise, and certain suppliers of its 
material inputs, pursuant to sections 771(33)(E) and (G) of the Act. In 
addition, based on the evidence presented in Hubei Xingfa's 
questionnaire responses, we preliminarily find that Hubei Xingfa and 
Baokang Chuyuan should be collapsed for the purposes of this 
investigation. This finding is based on the determination that Hubei 
Xingfa and Baokang Chuyuan are affiliated, that Hubei Xingfa and 
Baokang Chuyuan are both producers of identical products and no 
retooling would be necessary in order to restructure manufacturing 
priorities, and there is significant potential for manipulation of 
price or production between the parties. See 19 C.F.R. Sec. 
351.401(f)(1) and (2). For further discussion, see Memorandum to James 
C. Doyle, Director, AD/CVD Operations, Office 9, through Scot T. 
Fullerton, Program Manager, AD/CVD Operations, Office 9, from Erin C. 
Begnal, Senior International Trade Analyst, AD/CVD Operations, Office 
9, regarding ``Antidumping Duty Investigation of Sodium 
Hexametaphosphate from the People's Republic of China: Affiliation and 
Collapsing of Hubei Xingfa Chemicals Group, Ltd.'' dated September 6, 
2007.

Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to investigation in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. 
Companies Hubei Xingfa and the separate rate applicants, Chengxing and 
Norwest, (hereinafter referred to as the Separate Rate Companies) have 
provided company-specific information to demonstrate that they operate 
independently of de jure and de facto government control, and therefore 
satisfy the standards for the assignment of a separate rate.
    We have considered whether each PRC company that submitted a 
complete application is eligible for a separate rate. The Department's 
separate-rate test is not concerned, in general, with macroeconomic/
border-type controls, e.g., export licenses, quotas, and minimum export 
prices, particularly if these controls are imposed to prevent dumping. 
See Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Preserved Mushrooms from the People's Republic of China, 63 FR 
72255, 72256 (December 31, 1998). The test focuses, rather, on controls 
over the investment, pricing, and output decision-making process at the 
individual firm level. See Certain Cut-to-Length Carbon Steel Plate 
from Ukraine: Final Determination of Sales at Less than Fair Value, 62 
FR 61754, 61758 (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).
    To establish whether a firm is sufficiently independent from 
government control of its export activities to be entitled to a 
separate rate, the Department analyzes each entity exporting the 
subject merchandise under a test arising from the Notice of Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588.
    (May 6, 1991) (``Sparklers''), as further developed in 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''). In accordance with the separate-rates criteria, 
the Department assigns separate rates in NME cases only if respondents 
can demonstrate the absence of both de jure and de facto governmental 
control over export activities.

1. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589.
    The evidence provided by Hubei Xingfa and the Separate Rate 
Companies supports a preliminary finding of de jure absence of 
governmental control based on the following: 1) An absence of 
restrictive stipulations associated with the individual exporter's 
business and export licenses; 2) the applicable legislative enactments 
decentralizing control of the companies; and 3) any other formal 
measures by the government decentralizing control of companies. See 
Memorandum to James C. Doyle, Director, AD/CVD Operations, Office 9, 
through Scot T. Fullerton, Program Manager, AD/CVD Operations, Office 
9, from Erin Begnal, Senior International Trade Analyst, AD/CVD 
Operations, Office 9, regarding

[[Page 52547]]

``Antidumping Duty Investigation of Sodium Hexametaphosphate from the 
People's Republic of China: Separate Rates Memorandum'' (September 6, 
2007) (``Separate Rates Memorandum'').

2. Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a governmental agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also 
Notice of Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 
22545 (May 8, 1995). The Department has determined that an analysis of 
de facto control is critical in determining whether respondents are, in 
fact, subject to a degree of governmental control which would preclude 
the Department from assigning separate rates.
    We determine that, for Hubei Xingfa and the Separate Rate 
Companies, the evidence on the record supports a preliminary finding of 
de facto absence of governmental control based on record statements and 
supporting documentation showing the following: 1) Each exporter sets 
its own export prices independent of the government and without the 
approval of a government authority; 2) each exporter retains the 
proceeds from its sales and makes independent decisions regarding 
disposition of profits or financing of losses; 3) each exporter has the 
authority to negotiate and sign contracts and other agreements; and 4) 
each exporter has autonomy from the government regarding the selection 
of management.
    With respect to Tianyuan, we determine that it failed to provide 
evidence regarding its corporate structure, specifically the nature of 
its parent company and whether or not its parent company was subject to 
control by the government. The separate rate application requires that 
the applicant provide specific documentation regarding its corporate 
history and corporate structure. Tianyuan did not provide complete 
information in its application nor in its supplemental response in 
regard to a specific question from the Department asking for this 
information. See Separate Rates Memo. Therefore, we determine that 
Tingyuan has failed to establish its eligibility for a separate rate 
and it is deemed to be part of the PRC-wide Entity.
    The evidence placed on the record of this investigation by Hubei 
Xingfa, Chengxing, and Norwest demonstrates an absence of de jure and 
de facto government control with respect to each of the exporter's 
exports of the merchandise under investigation, in accordance with the 
criteria identified in Sparklers and Silicon Carbide. As a result, for 
the purposes of this preliminary determination, we have granted a 
separate company-specific rate to Hubei Xingfa. Additionally, we have 
granted the Separate Rate Companies a weighted-average margin for the 
purposes of this preliminary determination. See Separate Rates 
Memorandum.

The PRC-Wide Entity

    The Department has data that indicates there were more exporters of 
SHMP from the PRC than those indicated in the response to our request 
for Q&V information during the POI. See Respondent Selection 
Memorandum. We issued our request for Q&V information to 38 potential 
Chinese exporters of the subject merchandise, in addition to the Bureau 
of Foreign Trade/Ministry of Commerce of the PRC (``BOFT/MOFCOM'').\3\ 
See id.,at 1-2. While information on the record of this investigation 
indicates that there are numerous producers/exporters of SHMP in the 
PRC, we received only five timely-filed Q&V responses. Further, based 
on our knowledge of the volume of imports of subject merchandise from 
the PRC, the companies which responded to the Q&V questionnaire do not 
account for all imports into the United States. Although all exporters 
were given an opportunity to provide Q&V information, not all exporters 
provided a response to the Department's Q&V letter. Further, the 
Government of the PRC did not respond to the Department's 
questionnaire. Therefore, the Department determines preliminarily that 
there were PRC exporters of the subject merchandise during the POI from 
PRC producers/exporters that did not respond to the Department's 
request for information. We have treated these PRC producers/exporters 
as part of the PRC-wide entity because they did not qualify for a 
separate rate.
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    \3\ For a list of companies to which the Department sent its 
request for Q&V information, see Respondent Selection Memorandum at 
1-2.
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    Section 776(a)(2) of the Act provides that, if an interested party 
(A) Withholds information that has been requested by the Department, 
(B) fails to provide such information in a timely manner or in the form 
or manner requested, subject to subsections 782(c)(1) and (e) of the 
Act, (C) significantly impedes a proceeding under the antidumping 
statute, or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    Information on the record of this investigation indicates that the 
PRC-wide entity was non-responsive. Certain companies did not respond 
to our request for Q&V information and did not respond to the 
Department's questionnaire (including the mandatory respondent, 
Mianyang Aostar). As a result, pursuant to section 776(a)(2)(A) of the 
Act, we find that the use of facts available is appropriate to 
determine the PRC-wide rate. See Preliminary Determination of Sales at 
Less Than Fair Value, Affirmative Preliminary Determination of Critical 
Circumstances and Postponement of Final Determination: Certain Frozen 
Fish Fillets from the Socialist Republic of Vietnam, 68 FR 4986 
(January 31, 2003), unchanged in Final Determination of Sales at Less 
Than Fair Value and Affirmative Critical Circumstances: Certain Frozen 
Fish Fillets from the Socialist Republic of Vietnam, 68 FR 37116 (June 
23, 2003).
    Section 776(b) of the Act provides that, in selecting from among 
the facts otherwise available, the Department may employ an adverse 
inference if an interested party fails to cooperate by not acting to 
the best of its ability to comply with requests for information. See 
Statement of Administrative Action, accompanying the Uruguay Round 
Agreements Act (``URAA''), H.R. Rep. No. 103-316, 870 (1994) (``SAA''); 
see also Final Determination of Sales at Less Than Fair Value: Certain 
Cold-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian 
Federation, 65 FR 5510, 5518 (February 4, 2000). We find that, because 
the PRC-wide entity did not respond to our request for information, it 
has failed to cooperate to the best of its ability. Therefore, the 
Department preliminarily finds that, in selecting from among the facts 
available, an adverse inference is appropriate.
    When employing an adverse inference, the statute indicates that the 
Department may rely upon information

[[Page 52548]]

derived from the petition, the final determination from the LTFV 
investigation, a previous administrative review, or any other 
information placed on the record. In selecting a rate for adverse facts 
available (``AFA''), the Department selects a rate that is sufficiently 
adverse to ensure that the uncooperative party does not obtain a more 
favorable result by failing to cooperate than if it had fully 
cooperated. See SAA at 870. It is the Department's practice to select, 
as AFA, the higher of the (a) Highest margin alleged in the petition, 
or (b) the highest calculated rate of any respondent in the 
investigation. See Final Determination of Sales at Less Than Fair 
Value: Certain Cold-Rolled Carbon Quality Steel Products from the 
People's Republic of China, 65 FR 34660 (May 21, 2000) and accompanying 
Issues and Decision Memorandum, at ``Facts Available.'' In the instant 
investigation, as AFA, we have assigned to the PRC-wide entity the 
calculated margin for Hubei Xingfa, the highest rate calculated of any 
respondent in the investigation. Section 776(c) of the Act requires 
that, when the Department relies on secondary information rather than 
on information obtained in the course of an investigation as facts 
available, it must, to the extent practicable, corroborate that 
information from independent sources reasonably at its disposal.\4\ As 
we did not rely upon secondary information, no corroboration was 
required under section 776(c) of the Act.
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    \4\ Secondary information is described in the SAA as 
``information derived from the petition that gave rise to the 
investigation or review, the final determination concerning subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See SAA at 870.
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Margin for the Separate Rate Companies

    The Department received timely and complete separate rates 
applications from the Separate Rates Companies, who are all exporters 
of SHMP from the PRC, which were not selected as mandatory respondents 
in this investigation. Through the evidence in their applications, 
these companies have demonstrated their eligibility for a separate 
rate, as discussed above in the ``Separate Rates'' section and in the 
Separate Rates Memorandum. Consistent with the Department's practice, 
as the separate rate, we have established a weighted-average margin for 
the Separate Rates Companies based on the rate we calculated for Hubei 
Xingfa, which was not zero, de minimis, or based entirely on AFA. 
Companies receiving this rate are identified by name in the 
``Suspension of Liquidation'' section of this notice.

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. See 19 CFR 351.401(i); see also Allied Tube 
and Conduit Corp. v. United States, 132 F. Supp. 2d 1087, 1090-1093 
(CIT 2001) (``Allied Tube''). The date of sale is generally the date on 
which the parties agree upon all substantive terms of the sale. This 
normally includes the price, quantity, delivery terms and payment 
terms. In order to simplify the determination of date of sale for both 
the respondent and the Department, in accordance with 19 CFR 
351.401(i), the date of sale will normally be the date of the invoice, 
as recorded in the exporter's or producer's records kept in the 
ordinary course of business, unless satisfactory evidence is presented 
that the exporter or producer establishes the material terms of sale on 
some other date. In other words, the date of the invoice is the 
presumptive date of sale, although this presumption may be overcome. 
For instance, in Final Determination of Sales at Less Than Fair Value: 
Polyvinyl Alcohol from Taiwan, 61 FR 14067 (March 29, 1996), the 
Department used the date of the purchase order as the date of sale 
because the terms of sale were established at that point.
    After examining the questionnaire responses and the sales 
documentation that Hubei Xingfa placed on the record, we preliminarily 
determine that invoice date is the most appropriate date of sale for 
Hubei Xingfa because the terms of sales are set at the invoice date.

Fair Value Comparisons

    To determine whether sales of SHMP to the United States by Hubei 
Xingfa were made at less than fair value, we compared the export price 
(``EP'') to normal value (``NV''), as described in the ``U.S. Price,'' 
and ``Normal Value'' sections of this notice. We compared NV to 
weighted-average EPs in accordance with section 777A(d)(1) of the Act.

U.S. Price-Export Price

    For Hubei Xingfa, we based U.S. price on EP in accordance with 
section 772(a) of the Act, because the first sale to an unaffiliated 
purchaser was made prior to importation, and CEP was not otherwise 
warranted by the facts on the record. We calculated EP based on the 
packed price from the exporter to the first unaffiliated customer in 
the United States. Where applicable, we deducted foreign movement 
expenses, foreign brokerage and handling expenses, and international 
freight expenses from the starting price (gross unit price), in 
accordance with section 772(c) of the Act.
    Where foreign movement or international ocean freight was provided 
by PRC service providers or paid for in Renminbi (``RMB''), we valued 
these services using surrogate values (see ``Factors of Production'' 
section below for further discussion).
    For a complete discussion of the calculations of the U.S. price for 
Hubei Xingfa, see Memorandum to the File, through Scot T. Fullerton, 
Program Manager, AD/CVD Operations, Office 9, from Erin Begnal, Senior 
International Trade Analyst, AD/CVD Operations, Office 9, regarding 
``Program Analysis for the Preliminary Determination of Antidumping 
Duty Investigation of Sodium Hexametaphosphate from the People's 
Republic of China: Hubei Xingfa,'' dated September 6, 2007 (``Hubei 
Xingfa Analysis Memorandum'').

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production (``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 bases NV on the FOP because the presence of government 
controls on various aspects of non-market economies renders price 
comparisons and the calculation of production costs invalid under the 
Department's normal methodologies.

Factor Valuation Methodology

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOP data reported by Hubei Xingfa for the POI.\5\ To calculate 
NV, we multiplied

[[Page 52549]]

the reported per-unit factor-consumption rates by publicly available 
surrogate values (except as discussed below).
---------------------------------------------------------------------------

    \1\ The Department did not value the factors of production for 
the production of phosphate rock, silica quartzite, or crude coal, 
consistent with the Department's practice in Notice of Final 
Antidumping Duty Determination of Sales at Less Than Fair Value and 
Affirmative Critical Circumstances: Certain Frozen Fish Fillets from 
the Socialist Republic of Vietnam, 68 FR 37116 (June 23, 2003) and 
accompanying Issues and Decision Memorandum at Comment 3.
---------------------------------------------------------------------------

    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 or the distance from the nearest 
seaport to the factory, 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). A detailed description of all surrogate values used for 
respondents can be found in the Memorandum to the File, Through Scot T. 
Fullerton, Program Manager, AD/CVD Operations, Office 9, From Erin 
Begnal, Senior International Trade Analyst, AD/CVD Operations, Office 
9, regarding, ``Antidumping Duty Investigation of Sodium 
Hexametaphosphate from the People's Republic of China: Selection of 
Factor Values,'' dated September 6, 2007 (``Factor Value Memorandum'') 
and Memorandum to the File, Through Scot T. Fullerton, Program Manager, 
AD/CVD Operations, Office 9, From Erin Begnal, Senior International 
Trade Analyst, AD/CVD Operations, Office 9, regarding, ``Antidumping 
Duty Investigation of Sodium Hexametaphosphate from the People's 
Republic of China: Analysis Memorandum for Hubei Xingfa Chemicals Group 
Co., Ltd.,'' dated September 6, 2007 (``Hubei Xingfa Analysis 
Memorandum''). Additionally, for detailed descriptions of all actual 
values used for market-economy inputs, where applicable, see Hubei 
Xingfa Analysis Memorandum.
    For this preliminary determination, in accordance with the 
Department's practice, we used data from the Indian Import Statistics 
in order to calculate surrogate values for Hubei Xingfa's material 
inputs. In selecting the best available information for valuing FOP in 
accordance with section 773(c)(1) of the Act, the Department's practice 
is to select, to the extent practicable, surrogate values which are 
non-export average values, most contemporaneous with the POI, product-
specific, and tax-exclusive. See, e.g., Notice of Preliminary 
Determination of Sales at Less Than Fair Value, Negative Preliminary 
Determination of Critical Circumstances and Postponement of Final 
Determination: Certain Frozen and Canned Warmwater Shrimp From the 
Socialist Republic of Vietnam, 69 FR 42672, 42682 (July 16, 2004), 
results unchanged in Final Determination of Sales at Less Than Fair 
Value: Certain Frozen and Canned Warmwater Shrimp from the Socialist 
Republic of Vietnam, 69 FR 71005 (December 8, 2004). The record shows 
that the Indian import statistics represent import data that is 
contemporaneous with the POI, product-specific, and tax-exclusive. 
Where we could not obtain publicly available information 
contemporaneous to the POI with which to value factors, we adjusted the 
surrogate values, where appropriate, using the Indian Wholesale Price 
Index (``WPI'') as published in the International Financial Statistics 
of the International Monetary Fund.
    Furthermore, with regard to the Indian import-based surrogate 
values, we have disregarded import 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, e.g., Amended 
Final Determination of Sales at Less than Fair Value: Automotive 
Replacement Glass Windshields from the People's Republic of China, 67 
FR 11670 (March 15, 2002) and accompanying Issues and Decision 
Memorandum at Comment 4; see also 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) and 
accompanying Issues and Decision Memorandum at Comment 7 (``CTVs from 
the PRC''). We are also directed by the legislative history not to 
conduct a formal investigation to ensure that such prices are not 
subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, Congress 
directed the Department to base its decision on information that is 
available to it at the time it makes its determination. Therefore, we 
have not used prices from these countries either in calculating the 
Indian import-based surrogate values or in calculating market-economy 
input values. In instances where a market-economy input was obtained 
solely from suppliers located in these countries, we used Indian 
import-based surrogate values to value the input. See Final 
Determination of Sales at Less Than Fair Value: Certain Automotive 
Replacement Glass Windshields From The People's Republic of China, 67 
FR 6482 (February 12, 2002), and accompanying Issues and Decision 
Memorandum at Comment 1.
    For Hubei Xingfa, certain inputs into the production of the 
merchandise under investigation were purchased from market economy 
suppliers and paid for in market economy currencies. We valued Hubei 
Xingfa's inputs using the market economy prices paid for the inputs 
where the total volume of the input purchased from all market economy 
sources during the POI exceeded 33 percent of the total volume of the 
input purchased from all sources during that period. Alternatively, 
when the volume of Hubei Xingfa's purchases of an input from market 
economy suppliers during the POI was below 33 percent of the company's 
total volume of purchases of the input during the POI, we weight-
averaged the weighted-average market economy purchase price with an 
appropriate surrogate value according to their respective shares of the 
total volume of purchases, as appropriate.
    The Department used the Indian Import Statistics to value the raw 
material and packing material inputs that Hubei Xingfa used to produce 
the subject merchandise during the POI, except where listed below. To 
value electricity the Department used rates from Key World Energy 
Statistics 2003, published by the International Energy Agency. Because 
these data were not contemporaneous to the POI, we adjusted for 
inflation using WPI. See Factor Value Memorandum.
    Consistent with 19 CFR 351.408(c)(3), we valued direct, indirect, 
and packing labor, using the most recently calculated regression-based 
wage rate, which relies on 2004 data. This wage rate can currently be 
found on the Departmen's website on Import Administration's home page, 
Import Library, Expected Wages of Selected NME Countries, revised in 
January 2007, 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 2002, ILO (Geneva: 2002), Chapter 5B: 
Wages in Manufacturing. Because this regression-based wage rate does 
not separate the labor rates into different skill levels or types of 
labor, we have applied the same wage rate to all skill levels and types 
of labor reported by GE and Chenming. See Factor Value Memorandum.
    Because water is essential to the production process of the subject 
merchandise, the Department considers water to be a direct material 
input, and

[[Page 52550]]

not overhead. Hubei Xingfa stated in its questionnaire responses that 
it used water in the production of SHMP, but since it took the water 
from the river free of charge, it did not record its consumption of 
water. Therefore, we are using the water consumption rate from the 
petition for the production of SHMP only, and valued water with a 
surrogate value according to our practice. See Final Determination of 
Sales at Less Than Fair Value and Critical Circumstances: Certain 
Malleable Iron Pipe Fittings From the People's Republic of China, 68 FR 
61395 (October 28, 2003) and, accompanying Issue and Decision 
Memorandum at Comment 11. Although Hubei Xingfa has reported that it 
obtains water free of charge from the river, we find that whether the 
producer pays for water is irrelevant in determining whether it should 
be considered a direct material input. See, e.g., Fresh Garlic From the 
People's Republic of China: Final Results of Antidumping Duty New 
Shipper Review, 69 FR58392 (September 30, 2004) and accompanying Issues 
and Decision memorandum at Comment 1.
    Further, there is no evidence on the record that the Indian 
producer of comparable merchandise from which we are obtaining an 
overhead financial ratio accounts for water as an overhead expense. The 
Department valued water using data from the Maharashtra Industrial 
Development Corporation (www.midcindia.org) since it includes a wide 
range of industrial water tariffs. This source provides 386 industrial 
water rates within the Maharashtra province from June 2003: 193 of the 
water rates were for the ``inside industrial areas'' usage category and 
193 of the water rates were for the ``outside industrial areas'' usage 
category. Because the value was not contemporaneous with the POI, we 
adjusted the rate for inflation. See Factor Value Memorandum. After the 
preliminary determination, we will allow Hubei Xingfa an opportunity to 
report water consumption, but may have to resort to using an inference 
that is adverse to Hubei Xingfa if we are unable to obtain the 
information.
    We used Indian transport information to value the freight-in cost 
of the raw materials. The Department determined the best available 
information for valuing truck freight to be from www.infreight.com. 
This source provides daily rates from six major points of origin to 
five destinations in India during the POI. The Department obtained a 
price quote on the first day of each month of the POI from each point 
of origin to each destination and averaged the data accordingly. See 
Factor Value Memorandum. Consistent with the calculation of inland 
truck freight, the Department used the same freight distances used in 
the calculation of inland truck freight, as reported by 
www.infreight.com to derive a value in Rupees per kilogram per 
kilometer. To value PRC inland freight by barge we used Indian Inland 
Waterways rates from July, 1997, as used in the 2000-2001 antidumping 
duty administrative review of helical spring lock washers from the PRC. 
See Certain Helical Spring Lock Washers From the People's Republic of 
China; Final Results of Antidumping Duty Administrative Review, 67 FR 
8520 (February 25, 2002) and accompanying Issues and Decision 
memorandum at Comment 5. After inflating the value, the rate we derived 
from this source is in rupees per kilogram. See Factor Value 
Memorandum.
    To value brokerage and handling (``B&H''), the Department used a 
simple average of the publicly summarized version of the average value 
for B&H expenses reported in the U.S. sales listings in: (1) Essar 
Steel Ltd.'s February 28, 2005, submission in the antidumping duty 
review of Certain Hot-Rolled Carbon Steel Flat Products from India (See 
Certain Hot-Rolled Carbon Steel Flat Products From India: Preliminary 
Results of Antidumping Duty Administrative Review 71 FR 2018, 2022 
(January 12, 2006)); (2) Agro Dutch Industries Ltd.'s March 2, 2006, 
submission in the antidumping duty review of Certain Preserved 
Mushrooms From India (See Certain Preserved Mushrooms From India: Final 
Results of Antidumping Duty Administrative Review, 72 FR 5268 (February 
5, 2007)); and, (3) Kejirwal Paper Ltd.'s January 9, 2006, submission 
in the antidumping duty investigation of Lined Paper from India (See 
Notice of Final Determination of Sales at Less Than Fair Value, and 
Negative Determination of Critical Circumstances: Certain Lined Paper 
Products from India, 71 FR 45012 (August 8, 2006)). The Department 
first derived an average per-unit amount from each source, and then 
adjusted each average rate for inflation. Finally, the Department 
averaged the three per-unit amounts to derive an overall average rate 
for the POI. See Factor Value Memorandum.
    Hubei Xingfa reported that it sourced ocean freight from market-
economy countries and paid for it in U.S. dollars. For ocean freight, 
we are using Hubei Xingfa's reported market-economy ocean freight 
expenses. The Department valued marine insurance, where necessary, 
based on a publicly available price quote from a marine insurance 
provider at https://www.rjgconsultants.com/insurance.html, as used in 
the 2004-2005 administrative review of brake rotors from the PRC. 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 FR66304 (November 14, 
2006). The rates quoted are based on 110% of US $100.00 value on all 
destinations from China. After inflating the value, the rate we derived 
is in rupees per kilogram.

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.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
all information relied upon in making our final determination.

Combination Rates

    In the Initiation Notice, the Department stated that it would 
calculate combination rates for certain respondents that are eligible 
for a separate rate in this investigation. See Initiation Notice 72 FR 
9926 at 9929. This practice is described in Policy Bulletin 05.1, 
available at https://ia.ita.doc.gov/.

Preliminary Determination

    The weighted-average dumping margins are as follows:

                  Sodium Hexametaphosphate from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
                Manufacturer/Exporter                  Margin (Percent)
------------------------------------------------------------------------
Hubei Xingfa Chemicals Group Co., Ltd...............              183.15
Jiangyin Chengxing International Trading Co., Ltd...              183.15
Sichuan Mianzhu Norwest Phosphate Chemical Company                183.15
 Limited............................................
PRC-Wide Rate (including Yibin Tianyuan Group Co.,                183.15
 Ltd. and Mianyang Aostar Phosphorous Chemical
 Industry Co., Ltd. )...............................
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations performed within five days of the 
date

[[Page 52551]]

of publication of this notice to parties in this proceeding in 
accordance with 19 CFR 351.224(b).

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we will instruct U.S. 
Customs and Border Protection (``CBP'') to suspend liquidation of all 
entries of SHMP from the PRC as described in the ``Scope of 
Investigation'' section, entered, or withdrawn from warehouse, for 
consumption from Hubei Xingfa, the Separate Rate Companies and the PRC-
wide entity on or after the date of publication of this notice in the 
Federal Register. We will instruct CBP to require a cash deposit or the 
posting of a bond equal to the weighted-average amount by which the 
normal value exceeds U.S. price, as indicated above.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary affirmative determination of sales at less than 
fair value. Section 735(b)(2) of the Act requires the ITC to make its 
final determination as to whether the domestic industry in the United 
States is materially injured, or threatened with material injury, by 
reason of imports of SHMP, or sales (or the likelihood of sales) for 
importation, of the subject merchandise within 45 days of our final 
determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date of the final verification report is issued in this 
proceeding and rebuttal briefs limited to issues raised in case briefs 
no later than five days after the deadline date for case briefs. A list 
of authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. This summary should be limited 
to five pages total, including footnotes.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. If a request 
for a hearing is made, we intend to hold the hearing three days after 
the deadline of submission of rebuttal briefs at the U.S. Department of 
Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230, 
at a time and location to be determined. Parties should confirm by 
telephone the date, time, and location of the hearing two days before 
the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days after the date of publication of this notice. See 
19 CFR 351.310(c). Requests should contain the party's name, address, 
and telephone number, the number of participants, and a list of the 
issues to be discussed. At the hearing, each party may make an 
affirmative presentation only on issues raised in that party's case 
brief and may make rebuttal presentations only on arguments included in 
that party's rebuttal brief.
    We will make our final determination no later than 75 days after 
the date of publication of this preliminary determination, pursuant to 
section 735(a) of the Act. This determination is issued and published 
in accordance with sections 733(f) and 777(i)(1) of the Act.

    Dated: September 6, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-18167 Filed 9-13-07; 8:45 am]
BILLING CODE 3510-DS-S