Notice of Preliminary Determination of Sales at Less Than Fair Value: Glycine From India, 62827-62834 [E7-21873]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 215 (Wednesday, November 7, 2007)]
[Notices]
[Pages 62827-62834]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-21873]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-845]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Glycine From India

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

DATES: Effective Dates: November 7, 2007.
SUMMARY: We preliminarily determine that imports of glycine from India 
are being, or are likely to be, sold in the United States at less than 
fair value, as provided in section 733(b) of the Tariff Act of 1930, as 
amended (the Act). Interested parties are invited to comment on this 
preliminary determination. We will make our final determination within 
75 days after the date of this preliminary determination.

FOR FURTHER INFORMATION CONTACT: George Callen or Kristin Case, AD/CVD 
Operations, Office 5, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0180 and (202) 482-3174, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On April 26, 2007, the Department of Commerce (the Department) 
published in the Federal Register the initiation of an antidumping 
investigation on glycine from India. See Glycine from India, Japan, and 
the Republic of Korea: Initiation of Antidumping Duty Investigations, 
72 FR 20816 (April 26, 2007) (Initiation Notice). The Department set 
aside a period for all interested parties to raise issues regarding 
product coverage. See Initiation Notice, 72 FR at 20817. We did not 
receive comments regarding product coverage from any interested party.
    On May 17, 2007, we issued the quantity-and-value (Q&V) 
questionnaire to all companies identified in the petition. In addition, 
we issued the Q&V questionnaire to companies in India for which we 
obtained public information indicating that the companies produced and/
or exported glycine or pharmaceuticals. See the June 22, 2007, 
Memorandum to the File entitled ``Issuance of Quantity and Value 
Questionnaires to Potential Indian Respondents.'' We received responses 
from seven companies. Based on an analysis of U.S. Customs and Border 
Protection (CBP) import statistics of Indian glycine under the 
Harmonized Tariff Schedule of the United States (HTSUS) number 
2922.49.4020,

[[Page 62828]]

Advanced Exports/Aico Laboratories (AICO), Nutracare International/
Salvi Chemical Industries (Salvi), and Paras Intermediates (Paras) 
account for more than 75 percent of imports. AICO and Paras responded 
to our Q&V questionnaire; Salvi did not respond. We selected AICO and 
Paras as mandatory respondents.
    On May 25, 2007, the International Trade Commission (ITC) published 
its affirmative preliminary determination that there is a reasonable 
indication that an industry in the United States is materially injured 
by reason of imports of glycine from India. See Glycine from India, 
Japan, and Korea, 72 FR 29352 (May 25, 2007).

Period of Investigation

    The period of investigation is January 1, 2006, through December 
31, 2006.

Scope of Investigation

    The merchandise covered by this investigation is glycine, which in 
its solid, i.e., crystallized, form is a free-flowing crystalline 
material. Glycine is used as a sweetener/taste enhancer, buffering 
agent, reabsorbable amino acid, chemical intermediate, metal complexing 
agent, dietary supplement, and is used in certain pharmaceuticals. The 
scope of this investigation covers glycine in any form and purity 
level. Although glycine blended with other materials is not covered by 
the scope of this investigation, glycine to which relatively small 
quantities of other materials have been added is covered by the scope. 
Glycine's chemical composition is 
C2H5NO2 and is normally classified 
under subheading 2922.49.4020 of the HTSUS.
    The scope of this investigation also covers precursors of dried 
crystalline glycine, including, but not limited to, glycine slurry, 
i.e., glycine in a non-crystallized form, and sodium glycinate. Glycine 
slurry is classified under the same HTSUS subheading as crystallized 
glycine (2922.49.4020) and sodium glycinate is classified under 
subheading HTSUS 2922.49.8000.
    While HTSUS subheadings are provided for convenience and CBP 
purposes, our written description of the scope of this investigation is 
dispositive.

Issuance of Questionnaire

    On June 26, 2007, we issued sections A, B, C, D, and E \1\ of the 
antidumping questionnaire to AICO and Paras. Although we received 
timely responses from Paras, we did not receive timely responses from 
AICO, as described in detail below, despite granting several extensions 
of the applicable deadlines.
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    \1\ Section A of the antidumping duty questionnaire requests 
general information concerning a company's corporate structure and 
business practices, the merchandise under investigation, and the 
manner in which it sells that merchandise in all of its markets. 
Section B requests a complete listing of all of the company's home-
market sales of the foreign like product or, if the home market is 
not viable, of sales of the foreign like product in the most 
appropriate third-country market. Section C requests a complete 
listing of the company's U.S. sales of subject merchandise. Section 
D requests information about the cost of production of the foreign 
like product and the constructed value of the merchandise under 
investigation. Section E requests information on further-
manufacturing activities.
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Use of Facts Otherwise Available

    For the reasons discussed below, we determine that the use of facts 
otherwise available with an adverse inference is appropriate for the 
preliminary determination with respect to Salvi and AICO.

A. Use of Facts Available

    Section 776(a)(2) of the Act provides that, if an interested party 
withholds information requested by the administering authority, fails 
to provide such information by the deadlines for submission of the 
information and in the form or manner requested, subject to sections 
782(c)(1) and (e) of the Act, significantly impedes a proceeding under 
this title, or provides such information but the information cannot be 
verified as provided in section 782(i) of the Act, the administering 
authority shall use, subject to section 782(d) of the Act, facts 
otherwise available in reaching the applicable determination. Section 
782(d) of the Act provides that, if the administering authority 
determines that a response to a request for information does not comply 
with the request, the administering authority shall promptly inform the 
responding party and provide an opportunity to remedy the deficient 
submission. Section 782(e) of the Act states further that the 
Department shall not decline to consider submitted information if all 
of the following requirements are met: (1) The information is submitted 
by the established deadline; (2) the information can be verified; (3) 
the information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and 
(5) the information can be used without undue difficulties.
    Salvi--Salvi did not respond to our Q&V questionnaire and, 
therefore, did not provide any information necessary to calculate an 
antidumping margin for the preliminary determination. On June 1, 2007, 
we sent Salvi a follow-up letter informing it that failure to respond 
might result in the application of facts available, including an 
adverse inference, in accordance with section 776 of the Act and 
pursuant to 19 CFR 351.308. Salvi still did not respond to our Q&V 
questionnaire and, thus, withheld requested information and 
significantly impeded this proceeding. Pursuant to section 776(a) of 
the Act, in reaching our preliminary determination, we have used total 
facts available for Salvi because it did not provide the data we needed 
to decide whether it should be selected as a mandatory respondent.
    AICO--In this case, AICO did not provide pertinent information we 
requested that is necessary to calculate an antidumping margin for the 
preliminary determination. The following is a summary of our attempts 
to receive a complete response from AICO. On April 19, 2007, we 
initiated the less-than-fair value (LTFV) investigation of glycine from 
India. In that initiation, we also initiated an investigation of sales 
at prices below the cost of production in the comparison market. The 
statutory date of the preliminary determination at this time was 
September 6, 2007. On June 26, 2007, we issued our standard 
questionnaire. The section A response was due on July 16, 2007, 21 days 
from the issuance of the questionnaire, and the section B, C, and D 
responses were due on August 2, 2007, 39 days from the issuance of the 
questionnaire.
    On July 10, 2007, AICO requested an extension of 45-60 days to 
submit its section A response. We granted AICO an additional 14 days, 
and the revised due date for its section A response was July 30, 2007. 
Four days after the extended deadline for its section A response and 
one day after the due date for AICO's sections B, C, and D responses, 
on August 3, 2007, we received from AICO an incomplete, two-page 
section A response and a request for a ``4-5 week'' extension of the 
deadline to submit section B, C, and D responses. We granted AICO a 
two-week extension until August 16, 2007, for its sections B, C, and D 
responses and also requested that it file a complete section A response 
at the same time it submitted its section B, C, and D responses.
    On August 16, 2007, we received AICO's revised section A response 
and a request from AICO for a one-month extension for the submission of 
its section B, C, and D responses. We gave AICO a two-week extension 
for its section B, C, and D responses until August 30, 2007. On 
September 5, 2007, six days after the deadline, we received AICO's 
section B and C responses and a request for a two-week extension for

[[Page 62829]]

its submission of its section D response, i.e., until September 15, 
2007.
    On September 14, 2007, we informed AICO that, despite the fact that 
we had given it several extensions and a total of 66 days to respond to 
our original questionnaire, we had received AICO's section B and C 
responses six days after the due date. We also informed it that we had 
received its request for an additional extension of time to respond to 
section D of our questionnaire six days after the already-extended due 
date for the section D response. We declined to give AICO any further 
extensions and returned its sections B and C responses as untimely.
    AICO did not file its sections B and C responses in a timely matter 
despite having been granted multiple extensions of time. Therefore, 
AICO failed to provide information requested by the established 
deadlines. See section 776(a)(2)(B) of the Act. Also, AICO did not 
respond at all to section D of our questionnaire, thereby withholding, 
among other things, cost-of-production information that is necessary 
for reaching the applicable determination. See section 776(a)(2)(A) of 
the Act. In granting extensions, we informed AICO repeatedly that, if 
we did not receive submissions by the stated deadline, we may reject 
the submission and use facts available in the preliminary 
determination.
    By not providing its submissions by the applicable deadlines, AICO 
did not provide information we need to calculate an antidumping margin 
for the preliminary determination. Thus, in reaching our preliminary 
determination, pursuant to sections 776(a)(2)(A) and (B) of the Act, we 
have based the dumping margin on facts otherwise available for AICO.

B. Application of Adverse Inferences for Facts Available

    In applying the facts otherwise available, section 776(b) of the 
Act provides that, if the administering authority finds that an 
interested party has failed to cooperate by not acting to the best of 
its ability to comply with a request for information from the 
administering authority, in reaching the applicable determination under 
this title, the administering authority may use an inference adverse to 
the interests of that party in selecting from among the facts otherwise 
available.
    Adverse inferences are appropriate ``to ensure that the party does 
not obtain a more favorable result by failing to cooperate than if it 
had cooperated fully.'' See Statement of Administrative Action 
accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, 
vol. 1 (1994) at 870 (SAA). Further, ``affirmative evidence of bad 
faith on the part of a respondent is not required before the Department 
may make an adverse inference.'' See Antidumping Duties; Countervailing 
Duties, 62 FR 27296, 27340 (May 19, 1997). Pursuant to section 782(d) 
of the Act, the Department provided Salvi and AICO with notice 
informing them of the consequences of their failure to respond 
adequately to the Department's request for information. Nevertheless, 
Salvi did not respond to the Q&V questionnaire and AICO did not respond 
adequately, completely, or in a timely manner to the standard 
questionnaire. This constitutes a failure on the part of Salvi and AICO 
to cooperate to the best of their ability to comply with requests for 
information by the Department within the meaning of section 776(b) of 
the Act. Because Salvi and AICO did not provide information we 
requested, section 782(e) of the Act is not applicable. Based on the 
above, the Department has preliminarily determined that Salvi and AICO 
failed to cooperate to the best of their ability and, therefore, in 
selecting from among the facts otherwise available, an adverse 
inference is warranted. See, e.g., Notice of Final Determination of 
Sales at Less than Fair Value: Circular Seamless Stainless Steel Hollow 
Products from Japan, 65 FR 42985 (July 12, 2000).

C. Selection and Corroboration of Information Used as Facts Available

    Where the Department applies adverse facts available because a 
respondent failed to cooperate by not acting to the best of its ability 
to comply with a request for information, section 776(b) of the Act 
authorizes the Department to rely on information derived from the 
petition, a final determination, a previous administrative review, or 
other information placed on the record. See also 19 CFR 351.308(c) and 
the SAA at 870. In this case, because we are unable to calculate a 
margin for Salvi and AICO and because an adverse inference is 
warranted, we have assigned to Salvi and AICO a margin of 121.62 
percent, the highest margin alleged in the petition. See Petition for 
the Imposition of Antidumping Duties on Imports of Glycine from India, 
Japan, and the Republic of Korea dated March 30, 2007 (Petition), and 
the supplements to the Petition filed on behalf of Geo Specialty 
Chemicals, Inc. (the petitioner), and dated April 3, 12, 13, 17, and 
18, 2007, as recalculated in the April 19, 2007, ``Office of AD/CVD 
Operations Initiation Checklist for the Antidumping Duty Petition on 
Glycine from the India ``(Initiation Checklist) on file in Import 
Administration's Central Records Unit, Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230.
    When using facts otherwise available, section 776(c) of the Act 
provides that, when the Department relies on secondary information 
(such as information contained in the petition) rather than on 
information obtained in the course of an investigation, it must 
corroborate, to the extent practicable, information from independent 
sources that are reasonably available at its disposal.
    The SAA clarifies that ``corroborate'' means the Department will 
satisfy itself that the secondary information to be used has probative 
value. See SAA at 870. As stated in Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, from Japan, and Tapered Roller 
Bearings, Four Inches or Less in Outside Diameter, and Components 
Thereof, from Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996) (unchanged in Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, 
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, 
and Components Thereof, From Japan; Final Results of Antidumping Duty 
Administrative Reviews and Termination in Part, 62 FR 11825 (March 13, 
1997)), to corroborate secondary information, the Department will 
examine, to the extent practicable, the reliability and relevance of 
the information used. The Department's regulations state that 
independent sources used to corroborate such evidence may include, for 
example, published price lists, official import statistics and customs 
data, and information obtained from interested parties during the 
particular investigation. See 19 CFR 351.308(d) and the SAA at 870.
    For the purposes of this investigation, to the extent appropriate 
information was available, we reviewed the adequacy and accuracy of the 
information in the Petition during our pre-initiation analysis and for 
purposes of this preliminary determination. See Initiation Checklist. 
We examined evidence supporting the calculations in the Petition to 
determine the probative value of the margins alleged in the Petition 
for use as adverse facts available for purposes of this preliminary 
determination. During our pre-initiation analysis, we examined the key 
elements of the export-price and

[[Page 62830]]

normal-value calculations used in the Petition to derive margins. Also, 
during our pre-initiation analysis, we examined information from 
various independent sources provided either in the Petition or, based 
on our requests, in supplements to the Petition, that corroborates key 
elements of the export-price and normal-value calculations used in the 
Petition to derive estimated margins.
    The petitioner calculated export prices using lost sales reports 
from sales staff. See the Petition at 27-29. The Petitioner adjusted 
U.S. prices for foreign inland freight, international freight, U.S. 
inland freight, distributor mark-up, and credit charges using publicly 
available data. See Petition at Exhibits 1-4 and 6. The petitioner 
arrived at adjusted, per pound, U.S. dollar figures per pound for 
technical grade glycine, food grade glycine, and pharmaceutical grade 
glycine, the same unit and currency on which normal value was 
calculated. See Volume I of the Petition at pages 27-29, Volume II of 
the Petition at DOC Exhibits 1-7, the April 12, 2007, supplement to the 
Petition, at Exhibit A, and the April 13, 2007, supplement to the 
Petition, at Exhibit L.
    Based on our review of the information contained in the Petition, 
we recalculated net export prices (based on price quotes) by excluding 
an adjustment to export price for U.S. credit expenses. Because the 
petitioner did not provide supporting documentation for its home-market 
interest rate, we did not make an adjustment to normal value for home-
market credit expenses. We also recalculated the net export prices 
based on price quotes by revising the reported value associated with a 
distributor's mark-up. See Volume II of the Petition, at Exhibits DOC-
1, DOC-27 through DOC-29, and the April 13, 2007, supplement to the 
Petition, at Exhibits L, M, and N. In addition, we recalculated the 
distributor's mark-up value using a reseller's average mark-up 
percentage based on the industry practice of glycine sales in the 
United States. See Initiation Checklist, Attachment VI. Based on our 
examination of the aforementioned information, we consider the 
petitioner's calculation of net U.S. prices corroborated.
    With respect to normal value, the petitioner stated that, because 
it does not sell glycine in the Indian market, it does not have 
specific knowledge of how glycine is sold, marketed, or packaged in the 
Indian market. Therefore, the petitioner determined the price of 
glycine sold in the Indian market and the cost of production (COP) 
based on market research of Indian manufactures of glycine. The 
petitioner was able to determine domestic Indian prices based on price 
quotes, obtained by a market researcher, from two Indian manufacturers 
of glycine. See the Memorandum to the File entitled ``Telephone Call to 
Market Research Firm Regarding the Antidumping Petition on Glycine from 
India,'' dated April 19, 2007. These price quotations identified 
specific terms of sale and payment terms. See Volume II of the 
Petition, at Exhibits DOC-17, DOC-18, DOC-22, and DOC-23. These per 
pound price quotes were for technical grade glycine, USP grade glycine 
(food grade), and pharmaceutical grade glycine.
    Based on our review of the information contained in the Petition, 
we recalculated normal value for Indian glycine (when based on price 
quotations) by excluding the adjustment for home-market and U.S. credit 
expenses. See Initiation Checklist.
    Based on the petitioner's initial cost model, all of the domestic 
Indian prices of glycine were found to be above cost, and, therefore, 
there was no allegation of sales at prices below COP. See, e.g., Volume 
I of the Petition, at page 33, Volume II of the Petition, at Exhibits 
DOC-17--DOC-20, and the April 13, 2007, supplement to the Petition, at 
pages 2-3 and Exhibits B, F, and I, and the discussion of export price 
above. In its April 13, 2007, supplement to the Petition, in response 
to questions by the Department regarding cost methodology, however, the 
petitioner revised its cost-calculation methodology and calculated 
Indian COP based on publicly available cost information. Based on the 
new cost methodology, the petitioner re-calculated the cost of USP 
grade glycine and this resulted in the Indian market prices of USP 
grade glycine being significantly below the COP for that specific 
product. The petitioner alleged that these sales in the Indian market 
did not form an adequate basis for comparison to the U.S. prices and 
that normal value in those instances should be based on the constructed 
value of the merchandise. See the April 13, 2007, supplement to the 
Petition, at 5 and Exhibit I, and Volume II of the Petition, at 
Exhibits DOC-17 and DOC-18.
    Further, because this methodology provided information 
demonstrating reasonable grounds to believe or suspect that sales of 
glycine in India were made at prices below the fully absorbed COP 
within the meaning of section 773(b) of the Act, the petitioner 
requested that the Department conduct a cost investigation for 
respondents in India. See the April 13, 2007, supplement to the 
Petition, at 5, Exhibit I, and Volume II of the Petition at Exhibits 
DOC-17 and DOC-18.
    Further, section 773(b)(1) of the Act requires that the Department 
have ``reasonable grounds to believe or suspect'' that below-cost sales 
have occurred before initiating such an investigation. Reasonable 
grounds exist when an interested party provides specific factual 
information on costs and prices, observed or constructed, indicating 
that sales in the foreign market in question are at below-cost prices. 
See section 773(b)(2)(A) of the Act.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (COM), selling, general, and administrative (SG&A) 
expenses, and packing expenses. To calculate the COM, the petitioner 
multiplied the usage quantity of each input needed to produce one 
metric ton (MT) of glycine by the value of that input. The petitioner 
obtained all of the quantity and value data it used to calculate the 
COM from public sources. The petitioner obtained the input-usage 
factors from the public record of the 1997-1998 administrative review 
of glycine from the People's Republic of China (PRC). See Initiation 
Notice, 72 FR 20819. The petitioner asserted that the producer in the 
PRC 1997-1998 review produced glycine by the same production method 
that producers in India use. The petitioner obtained the values for the 
inputs from various public sources. The petitioner calculated factory 
overhead, SG&A, and the financial-expense ratios based on the Indian 
surrogate ratios that the Department used in the preliminary results of 
the 2005-2006 administrative review of the antidumping duty order on 
glycine from the PRC. Where the Department used constructed value to 
determine normal value in that review, the petitioner added an amount 
for profit from the same financial statements the Department used.
    We adjusted petitioner's calculation of SG&A expenses to apply the 
SG&A rate to COM inclusive of factory overhead. We did not include a 
separate financial-expense amount as the petitioner did because the 
SG&A ratio already included financial expense. See the Initiation 
Checklist for a full description of the petitioner's methodology and 
the adjustments the Department made to the petitioner's calculations.
    Because it alleged sales below cost, pursuant to sections 
773(a)(4), (b) and (e) of the Act, the petitioner also based normal 
value for Indian sales of a certain grade glycine on constructed

[[Page 62831]]

value. The petitioner calculated constructed value using the same COM, 
SG&A, and financial-expense figures it used to compute the COP. 
Consistent with section 773(e)(2) of the Act, the petitioner included 
an amount for profit in constructed value. See the April 13, 2007, 
supplement to the Petition, pages 1-5, Exhibit I.
    The petitioner obtained the values for the inputs from various 
public sources. Specifically, the petitioner valued raw materials using 
import statistics in the World Trade Atlas for the year 2006, exclusive 
of imports from non-market and heavily subsidized economies, which is 
the latest Indian import data available. See Initiation Checklist at 9. 
The petitioner valued labor costs using the average per-hour wages for 
India for 2004 using the International Labour Organization's Yearbook 
of Labour Statistics and per-capita gross national income obtained from 
the World Bank. The petitioner did not adjust the labor data for wage 
inflation. See Initiation Checklist at 10. The petitioner valued 
electricity and water consumption using data from page 43 of the Key 
World Energy Statistics 2003, published by the International Energy 
Agency, which were attached to the 2005-2006 Preliminary Results of 
Antidumping Duty Administrative Review and Preliminary Rescission of 
Glycine from the People's Republic of China, Surrogate Value Memo, at 
Exhibit 6, dated April 2, 2007. The petitioner did not adjust the 
electricity data for inflation. See Initiation Checklist at 10.
    Because the petitioner demonstrated, and we confirmed, the validity 
of the input-usage quantities it used in its COP/constructed-value 
build-up, used public sources of information, such as official import 
statistics, that we confirmed were accurate to value inputs of 
production, and used documents that were used in the Department's prior 
decisions and that we consider to be accurate to compute factory 
overhead, SG&A, financial expense, and profit, we consider the 
petitioner's calculation of normal value corroborated. Further, we 
consider the petitioner's calculation of normal value corroborated 
because the bulk of the calculations relied on publicly available 
information or import statistics which do not require further 
corroboration. Therefore, because we confirmed the accuracy and 
validity of the information underlying the derivation of margins in the 
Petition by examining source documents as well as publically available 
information, we preliminarily determine that the margins in the 
Petition are reliable for the purposes of this investigation.
    In making a determination as to the relevance aspect of 
corroboration, the Department will consider information reasonably at 
its disposal as to whether there are circumstances that would render a 
margin not relevant. Where circumstances indicate that the selected 
margin is not appropriate as adverse facts available, the Department 
will disregard the margin and determine an appropriate margin. For 
example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping 
Duty Administrative Review, 61 FR 6812 (February 22, 1996), the 
Department disregarded the highest margin as ``best information 
available'' (the predecessor to ``facts available'') because the margin 
was based on another company's uncharacteristic business expense that 
resulted in an unusually high dumping margin.
    In Am. Silicon Techs. v. United States, 273 F. Supp. 2d 1342, 1346 
(CIT 2003), the court found that the adverse facts-available rate bore 
a ``rational relationship'' to the respondent's ``commercial 
practices'' and was, therefore, relevant. In the pre-initiation stage 
of this investigation, we confirmed that the calculation of margins in 
the Petition reflects commercial practices of the particular industry 
during the period of investigation. Further, no information has been 
presented in the investigation that calls into question the relevance 
of this information. As such, we preliminarily determine that the 
highest margin in the Petition, which we determined during our pre-
initiation analysis was based on adequate and accurate information and 
which we have corroborated for purposes of this preliminary 
determination, is relevant as the adverse facts-available rate for 
Salvi and AICO in this investigation.
    Similar to our position in Polyethylene Retail Carrier Bags from 
Thailand: Preliminary Results of Antidumping Duty Administrative 
Review, 71 FR 53405 (September 11, 2006) (unchanged in Polyethylene 
Retail Carrier Bags from Thailand: Final Results of Antidumping Duty 
Administrative Review, 72 FR 1982 (January 17, 2007)), because this is 
the first proceeding involving Salvi and AICO, there are no probative 
alternatives. Accordingly, by using information that was corroborated 
in the pre-initiation stage of this investigation and preliminarily 
determined to be relevant to Salvi and AICO in this investigation, we 
have corroborated the adverse facts-available rate ``to the extent 
practicable.'' See section 776(c) of the Act, 19 CFR 351.308(d), and 
NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 1336 (CIT 2004), which 
states, ``pursuant to the `to the extent practicable' language * * * 
the corroboration requirement itself is not mandatory when not 
feasible.'' Therefore, we find that the estimated margin of 121.62 
percent in the Initiation Notice has probative value. Consequently, in 
selecting a rate to apply as adverse facts available, with respect to 
Salvi and AICO, we have applied the margin rate of 121.62 percent, the 
highest estimated dumping margin set forth in the notice of initiation. 
See Initiation Notice, 72 FR 20820.

Fair-Value Comparision

    Paras was the sole selected respondent which provided timely 
responses to all sections of our questionnaire and supplemental 
questionnaires. We have calculated a margin for Paras using the 
information and methodology we describe below.

Comparison-Market Sales

    In order to determine whether there was a sufficient volume of 
sales of glycine in the comparison market to serve as a viable basis 
for calculating the normal value, we compared the volume of Paras's 
home-market sales of the foreign like product to its volume of the U.S. 
sales of the subject merchandise in accordance with section 773(a)(1) 
of the Act. Paras's quantity of sales in the home market was greater 
than five percent of its sales to the U.S. market. Based on this 
comparison of the aggregate quantities of the sales in comparison 
market (India) and the United States and absent any information that a 
particular market situation in the exporting country did not permit a 
proper comparison, we determined that the quantity of the foreign like 
product sold by the respondent in the exporting country was sufficient 
to permit a proper comparison with the sales of the subject merchandise 
to the United States, pursuant to section 773(a)(1) of the Act. Thus, 
we determined that Paras's home market was viable during the period of 
investigation. Therefore, in accordance with section 773(a)(1)(B)(i) of 
the Act, we based normal value for the respondent on the prices at 
which the foreign like product was first sold for consumption in the 
exporting country in the usual commercial quantities and in the 
ordinary course of trade and, to the extent practicable, at the same 
level of trade as the U.S. sales.

Export Price

    We calculated export price in accordance with section 772(a) of the 
Act because Paras sold the merchandise

[[Page 62832]]

to unaffiliated purchasers in the United States prior to importation. 
We based export price on the packed, delivered, duty-unpaid price to 
the unaffiliated purchasers in the United States. We made deductions 
from the starting price for movement expenses in accordance with 
section 772(c)(2)(A) of the Act. We added duty drawback to the gross 
unit price. See section 772(c)(1)(B) of the Act.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products covered by the scope of the order which were produced and sold 
by Paras in the home market during the period of investigation to be 
foreign like products for the purpose of determining appropriate 
product comparisons to glycine sold in the United States. We compared 
U.S. sales to sales made in the comparison market during the period of 
investigation.
    We found there were sales of identical merchandise in the 
comparison market made in the ordinary course of trade to compare to 
Paras's U.S. sales. In making product comparisons, we defined identical 
foreign like products based on the physical characteristics reported by 
Paras in the following order of importance: type, grade, specification, 
and nominal grade. For more information, see ``Analysis Memorandum of 
Paras Intermediates, Pvt. Ltd., for the Preliminary Determination of 
the Less-Than-Fair-Value Investigation on Glycine from India'' dated 
October 26, 2007 (Prelim Memo).

Cost of Production

    Based on allegations contained in the petition and in accordance 
with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to 
believe or suspect that glycine sales were made in India at prices 
below the COP. See Initiation Notice, 72 FR at 20818. As a result, the 
Department has conducted an investigation to determine whether Paras 
made home-market sales at prices below its COP during the period of 
investigation within the meaning of section 773(b) of the Act. For 
Paras, we conducted the COP analysis as described below. We were unable 
to conduct a cost investigation of Salve and AICO because of their 
failure to respond to our questionnaire in a timely manner.
    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of the costs of materials and labor employed in 
producing the foreign like product, the SG&A expenses, and all costs 
and expenses incidental to packing the merchandise. In our COP 
analysis, we used the home-market sales and COP information Paras 
provided in its questionnaire responses, including its home-market and 
COP databases. The Department issued a detailed supplemental section D 
questionnaire on October 9, 2007, to Paras to address various questions 
and fundamental issues, including transactions with affiliated parties 
and further processing of imported materials, after reviewing the 
original section D response dated August 27, 2007. The due date for the 
response to the supplemental questionnaire is October 30, 2007, which 
is later than the statutory deadline for this preliminary 
determination. Upon receipt of a response from Paras, we will analyze 
these issues, provide a memorandum discussing the results of our 
analysis to the respondents and the petitioner, and allow the parties 
to comment prior to the final determination.
    After calculating the COP and in accordance with section 773(b)(1) 
of the Act, we tested home-market sales of the foreign like product to 
determine whether they were made at prices below the COP within an 
extended period of time in substantial quantities and whether such 
prices permitted the recovery of all costs within a reasonable period 
of time. The home-market prices were exclusive of any applicable 
movement charges, billing adjustments, discounts, and indirect selling 
expenses. Pursuant to section 773(b)(2)(C) of the Act, where less than 
20 percent of Paras's sales of a given product were at prices less than 
the COP, we did not disregard any below-cost sales of that product 
because the below-cost sales were not made in substantial quantities 
within an extended period of time. Where 20 percent or more of Paras's 
sales of a given product were at prices less than the COP, we 
disregarded the below-cost sales of that product because we determined 
that the below-cost sales were made in substantial quantities within an 
extended period of time, pursuant to sections 773(b)(2)(B) and (C) of 
the Act and because, based on comparisons of prices to weighted-average 
COPs for the period of investigation, we determined that these below-
cost sales were made at prices which would not permit recovery of all 
costs within a reasonable period of time in accordance with section 
773(b)(2)(D) of the Act. See Prelim Memo. Consequently, we disregarded 
Paras's below-cost sales of products where 20 percent or more of the 
product were at prices less than the COP and used the remaining sales 
as the basis for determining normal value, in accordance with section 
773(b)(1) of the Act.

Normal Value

    We based normal value for Paras on the prices of the foreign like 
products sold to its comparison-market customers. When applicable, we 
made adjustments for differences in packing and for movement expenses 
in accordance with sections 773(a)(6)(A) and (B) of the Act. In 
addition, we made adjustments for differences in circumstances of sale 
in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410. For comparisons to export price, we made circumstance-of-sale 
adjustments by deducting home-market direct selling expenses incurred 
on home-market sales from, and adding U.S. direct selling expenses to, 
normal value.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determined normal value based on sales in the 
home market at the same level of trade as the export-price sales. 
Pursuant to 19 CFR 351.412(c)(1), the normal-value level of trade is 
based on the starting price of the sales in the home market or, when 
normal value is based on constructed value, the starting price of the 
sales from which we derive SG&A expenses and profit. For export-price 
sales, the U.S. level of trade is based on the starting price of the 
sales to the U.S. market.
    To determine whether normal-value sales are at a different level of 
trade than the export-price sales, the Department examines stages in 
the marketing process and selling functions along the chain of 
distribution between the producer and the customer. If the comparison-
market sales are at a different level of trade than the export-price 
sales and the difference affects price comparability, as manifested by 
a pattern of consistent price differences between comparison-market 
sales at the normal-value level of trade and comparison-market sales at 
the level of trade of the export transaction, the Department makes a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act. See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732 
(November 19, 1997).
    In determining whether Paras made sales at different levels of 
trade, we obtained information from Paras regarding the marketing 
stages for the reported U.S. and home-market sales,

[[Page 62833]]

including a description of the selling activities it performed for each 
channel of distribution. Generally, if the reported levels of trade are 
the same, the selling functions and activities of the seller at each 
level of distribution should be similar. Conversely, if a party reports 
that levels of trade are different for different groups of sales, the 
selling functions and activities of the seller for each distribution 
group should be dissimilar.

Export-Price Sales

Sales Process and Marketing Support

    Paras reported export-price sales to the United States through two 
channels of distribution, end-users and traders. We examined the chain 
of distribution and the selling activities associated with sales 
reported by Paras to these two channels of distribution in the United 
States. Based on Paras's response, we determined that it provided 
relatively equal levels of support for most sales-process and 
marketing-support functions. These functions include, among other 
functions, sales forecasting, advertising, and sales promotion. It 
provided less training for end-users than it did for traders and 
slightly less inventory maintenance for end-users.
    Paras did not report any billing adjustments, early-payment 
discounts, quantity discounts, or rebates for its sales to the United 
States. Based on the limited information we received from Paras, we 
determine that the degree of sales process and marketing support 
provided is medium.

Freight and Delivery

    Paras provided less freight and delivery for end-users. For 
traders, Paras may ship, at the trader's request, the order directly to 
the trader's customers. We determine that the degree of freight and 
delivery services provided is higher for traders than for end-users.

Warehousing

    Paras reported that none of the subject merchandise sold in United 
States during the period of investigation was shipped to a warehouse or 
other intermediate location to either channel of distribution.
    We found that both distribution channels for sales to the U.S. 
market were similar with respect to sales process and marketing support 
but different with respect to freight services. Consequently we find 
that these channels constituted two distinct levels of trade.

Home-Market Sales

Sales Process and Marketing Support

    Paras reported home-market sales during the period of investigation 
through two channels of distribution, end-users and traders. We 
examined the chain of distribution and the selling activities 
associated with sales reported by Paras to these two channels of 
distribution in the home market. Based on Paras's response, we 
determine that it provided relatively equal levels of support for most 
sales-process and marketing-support functions. These functions include, 
among other functions, sales forecasting, advertising, and sales 
promotion. It provided less training for end-users than it did for 
traders, however, as well as less technical assistance and market 
research for end-users than traders. With respect to inventory 
maintenance, Paras provided slightly less inventory maintenance for 
end-users.
    Based on the limited information we received from Paras, we 
determine that the degree of sales process and marketing support 
provided is medium although it is slightly higher for traders.

Freight and Delivery

    Paras provided less freight and delivery for end-users. For 
traders, Paras may ship, at the trader's request, the order directly to 
the trader's customers. We determine that the degree of freight and 
delivery services provided is higher for traders than for end-users.

Warehousing

    Paras reported that none of the subject merchandise sold in the 
home market during the period of investigation was shipped to a 
warehouse or other intermediate location.
    We found that both distribution channels in the home market were 
similar with respect to sales process and warehousing services but 
different with respect to freight services. Therefore, we find that 
these two channels constitute two distinct levels of trade.
    Paras reported export-price sales through two channels of 
distribution. To the extent practicable, we compare normal value at the 
same level of trade as the U.S. price. The export-price level of trade 
for end-users is similar to the home-market level of trade for end-
users with respect to sales process, freight services, and warehousing 
services. The export-price level of trade for traders differed from 
end-users with respect to freight and delivery and warehousing but was 
similar to the level of trade for home-market traders. We were able to 
match all export-price sales to identical sales in the home-market but 
not always at the same level of trade. For those comparison-market 
sales for which we matched export-price sales at a different level of 
trade, we found that there was a pattern of price difference and we 
made a level-of-trade adjustment.

All-Others Rate

    Section 735(c)(5)(B) of the Act provides that, where the estimated 
weighted-averaged dumping margins established for all exporters and 
producers individually investigated are zero or de minimis or are 
determined entirely under section 776 of the Act, the Department may 
use any reasonable method to establish the estimated all-others rate 
for exporters and producers not individually investigated. In this 
case, the only individually investigated companies have margins which 
are zero or determined entirely under section 776. Under these 
circumstances, we have assigned, as the all-others rate, the simple 
average of the margins in the Petition. See Notice of Final 
Determinations of Sales at Less Than Fair Value: Certain Cold-Rolled 
Flat-Rolled Carbon-Quality Steel Products From Argentina, Japan and 
Thailand, 65 FR 5520, 5527-28 (February 4, 2000); see also Notice of 
Final Determination of Sales at Less Than Fair Value: Stainless Steel 
Plate in Coil from Canada, 64 FR 15457 (March 31, 1999). Consistent 
with our practice, we calculated a simple average of the rates in the 
Petition, as recalculated in the Initiation Checklist at Attachment VI 
and ranged in the Initiation Notice, and assigned this rate to all 
other manufacturers/exporters. See Initiation Notice, 72 FR at 20820. 
For details of these calculations, see the memorandum from George 
Callen to the File entitled ``Antidumping Duty Investigation on Glycine 
from India--Analysis Memo for All-Others Rate,'' dated October 26, 
2007.

Currency Conversion

    Pursuant to section 773A(a) of the Act, we converted amounts 
expressed in foreign currencies into U.S. dollar amounts based on the 
exchange rates in effect on the date of the U.S. sale, as reported by 
the Federal Reserve Bank.

Preliminary Determination

    We preliminarily determine that the following weighted-average 
dumping margins exist for the period January 1, 2006, through December 
31, 2006:

[[Page 62834]]



------------------------------------------------------------------------
                                                       Weighted-average
               Manufacturer/Exporter                   margin (percent)
------------------------------------------------------------------------
Paras Intermediates Ltd............................                 0.00
Nutracare International/Salvi Chemical Industries..               121.62
Advanced Exports/Aico Laboratories.................               121.62
All Others.........................................                45.82
------------------------------------------------------------------------

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we will instruct CBP 
to suspend liquidation of all entries of glycine from India that are 
entered, or withdrawn from warehouse, for consumption 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 margin, as indicated in the chart above, as 
follows: (1) The rates for the mandatory respondents except Paras (see 
below) will be the rates we have determined in this preliminary 
determination; (2) if the exporter is not a firm identified in this 
investigation but the producer is, the rate will be the rate 
established for the producer of the subject merchandise; (3) the rate 
for all other producers or exporters will be 45.82 percent. These 
suspension-of-liquidation instructions will remain in effect until 
further notice.
    In accordance with 19 CFR 351.204(e)(2), because the weighted-
average margin for Paras is zero, we will not instruct CBP to suspend 
liquidation of merchandise produced and exported by Paras.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary determination of sales at less than fair value. 
If our final antidumping determination is affirmative, the ITC will 
determine whether the imports covered by that determination are 
materially injuring, or threatening material injury to, the U.S. 
industry. The deadline for the ITC's determination would be the later 
of 120 days after the date of this preliminary determination or 45 days 
after the date of our final determination.

Public Comment

    Interested parties are invited to comment on the preliminary 
determination. Interested parties may submit case briefs to the 
Department no later than seven days after the date of the issuance of 
the final verification report in this proceeding. Rebuttal briefs, the 
content of which is limited to the issues raised in the case briefs, 
must be filed within five days from the deadline for the submission of 
case briefs. Executive summaries should be limited to five pages total, 
including footnotes. Further, we request that parties submitting briefs 
and rebuttal briefs provide us with a copy of the public version of 
such briefs on diskette. Section 774 of the Act provides that the 
Department will hold a hearing to afford interested parties an 
opportunity to comment on arguments raised in case or rebuttal briefs, 
provided that such a hearing is requested by an interested party. If a 
request for a hearing is made in this investigation, the hearing 
normally will be held two days after the deadline for submission of the 
rebuttal briefs at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230. Parties should confirm 
by telephone the time, date, and place of the hearing 48 hours before 
the scheduled time. Interested parties who wish to request a hearing, 
or to participate if one is requested, must submit a written request 
within 30 days of the publication of this notice. Requests should 
specify the number of participants and provide a list of the issues to 
be discussed. Oral presentations will be limited to issues raised in 
the briefs. We will make our final determination within 75 days after 
the date of this preliminary determination.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: October 26, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
 [FR Doc. E7-21873 Filed 11-6-07; 8:45 am]
BILLING CODE 3510-DS-P