Notice of Preliminary Determination of Sales at Less Than Fair Value: Sodium Nitrite from the Federal Republic of Germany, 21909-21912 [E8-8836]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 79 (Wednesday, April 23, 2008)]
[Notices]
[Pages 21909-21912]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-8836]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-428-841


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Sodium Nitrite from the Federal Republic of Germany

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce
SUMMARY: The U.S. Department of Commerce (the Department) preliminarily 
determines that sodium nitrite from the Federal Republic of Germany 
(Germany) is being, or is likely to be, sold in the United States at 
less than fair value (LTFV), as provided in section 733(b) of the 
Tariff Act of 1930, as amended (the Act). The estimated margins of 
sales at LTFV are listed in the ``Preliminary Determination'' section 
of this notice. Interested parties are invited to comment on this 
preliminary determination. We will make our final determination not 
later than 75 days after the date of the preliminary determination.

EFFECTIVE DATE: April 23, 2008.

FOR FURTHER INFORMATION CONTACT: Brian C. Smith or Gemal Brangman, AD/
CVD Operations, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482 
1766 or (202) 482 3773, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 28, 2007, the Department initiated the antidumping duty 
investigation of sodium nitrite from Germany. See Sodium Nitrite from 
the Federal Republic of Germany and the People's Republic of China: 
Initiation of Antidumping Duty Investigations, 72 FR 68563 (December 5, 
2007) (Initiation Notice). The petitioner in this investigation is 
General Chemical LLC.
    The Department set aside a period of time for parties to raise 
issues regarding product coverage and encouraged all parties to submit 
comments within 20 calendar days of publication of the Initiation 
Notice. See Initiation Notice, 72 FR at 68564. No parties submitted 
comments on the scope.
    The Department also set aside a period of time for parties to raise 
issues regarding product characteristics and encouraged all parties to 
submit comments within 20 calendar days of publication of the 
Initiation Notice. See Initiation Notice, 72 FR at 68564. Interested 
parties submitted comments on this issue.
    On December 21, 2007, we selected BASF AG (BASF), the largest 
producer/exporter of sodium nitrite from Germany during the period of 
investigation (POI), as the mandatory respondent in this proceeding. 
See Memorandum to James Maeder, Director Office 2, from the Team, 
regarding ``Antidumping Duty Investigation of Sodium Nitrite from the 
Federal Republic of Germany - Selection of Respondents for Individual 
Review,'' dated December 21, 2007.
    On January 3, 2008, the United States International Trade 
Commission (ITC) preliminarily determined that there is a reasonable 
indication that imports of sodium nitrite from Germany and the People's 
Republic of China are materially injuring the U.S. industry and the ITC 
notified the Department of its findings. See Sodium Nitrite From China 
and Germany, Case Numbers: 701-TA-453 (Preliminary) and 731-TA-1136-
1137 (Preliminary), 72 FR 2278 (January 14, 2008).
    We subsequently issued the antidumping questionnaire to BASF on 
January 14, 2008. On January 28, 2008, BASF informed the Department 
that it would not respond to the Department's antidumping duty 
questionnaire.

Period of Investigation

    The POI is October 1, 2006, through September 30, 2007.

Scope of the Investigation

    The merchandise covered by this investigation is sodium nitrite in 
any form, at any purity level. In addition, the sodium nitrite covered 
by this investigation may or may not contain an anti-caking agent. 
Examples of names commonly used to reference sodium nitrite are nitrous 
acid, sodium salt, anti-rust, diazotizing salts, erinitrit, and 
filmerine. The chemical composition of sodium nitrite is NaNO2 and it 
is generally classified under subheading 2834.10.1000 of the Harmonized 
Tariff Schedule of the United States (HTSUS). The American Chemical 
Society Chemical Abstract Service (CAS) has assigned the name ``sodium 
nitrite'' to sodium nitrite. The CAS registry number is 7632-00-0.
    While the HTSUS subheading, CAS registry number, and CAS name are 
provided for convenience and customs purposes, the written description 
of the scope of this investigation is dispositive.

Use of Facts Otherwise Available

    For the reasons discussed below, we determine that the use of 
adverse facts available (AFA) is appropriate for the preliminary 
determination with respect to the sole respondent in this 
investigation, BASF.
    As noted in the ``Supplementary Information'' section above, BASF 
informed the Department that it would not respond to the Department's 
antidumping duty questionnaire. See BASF's January 28, 2008, letter to 
the Department. Section 776(a)(2) of the Act provides that, (1) if an 
interested party withholds information requested by the administering 
authority, (2) fails to provide such information by the deadlines for 
submission of the information and in the form or manner requested, 
subject to subsections (c)(1) and (e) of section 782, (3) significantly 
impedes a proceeding under this title, or (4) provides such information 
but the information cannot be verified as provided in 782(i), 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

[[Page 21910]]

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.
    In this case, BASF failed to respond to the Department's 
antidumping duty questionnaire and, as such, it withheld information 
that we requested for purposes of determining its antidumping duty 
margin, thereby significantly impeding this proceeding. Because this 
company did not provide any information, sections 782(d) and 782(e) of 
the Act are not applicable. Thus, in reaching our preliminary 
determination for BASF, pursuant to sections 776(a)(2)(A) and (C) of 
the Act, we have based its dumping margin on facts otherwise available.

Application of Adverse Inferences for Facts Available

    According to section 776(b) of the Act, if the Department finds 
that an interested party fails to cooperate by not acting to the best 
of its ability to comply with requests for information, the Department 
may use an inference that is adverse to the interests of that party in 
selecting from the facts otherwise available. See, e.g., Notice of 
Final Results of Antidumping Duty Administrative Review: Stainless 
Steel Bar from India, 70 FR 54023, 54025-26 (September 13, 2005); and 
Notice of Final Determination of Sales at Less Than Fair Value and 
Final Negative Critical Circumstances: Carbon and Certain Alloy Steel 
Wire Rod from Brazil, 67 FR 55792, 55794-96 (August 30, 2002). It is 
the Department's practice to apply adverse inferences to ensure that 
the party does not obtain a more favorable result by failing to 
cooperate than if it had cooperated fully. See the Statement of 
Administrative Action accompanying the Uruguay Round Agreements Act, 
H.R. Doc. No. 103-316, vol. 1 (1994) at 870 (SAA), reprinted in 1994 
U.S.C.C.A.N. 4040, 4198-4199. Furthermore, ``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; Final Rule, 62 FR 27296, 27340 (May 19, 1997); 
see also Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382-83 
(Fed. Cir. 2003) (Nippon); and Certain Polyester Staple Fiber from 
Korea: Final Results of the 2005-2006 Antidumping Duty Administrative 
Review, 72 FR 69663, 69664 (December 10, 2007).
    BASF's failure to respond to the Department's questionnaire 
constitutes a failure on its part to cooperate to the best of its 
ability to comply with a request for information by the Department 
within the meaning of section 776(b) of the Act. Based on the above, 
the Department has preliminarily determined that BASF failed to 
cooperate to the best of its 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, 42986 (July 12, 2000) (the Department applied total AFA where 
the respondent failed to respond to the antidumping questionnaire).

Selection and Corroboration of Information Used as Facts Available

    Where the Department applies AFA 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 SAA at 870 and 19 CFR 351.308(c). It is the 
Department's practice to use the highest rate from the petition in an 
investigation when a respondent fails to act to the best of its ability 
to provide the necessary information and there are no other 
respondents. See, e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value and Postponement of Final Determination: Purified 
Carboxymethylcellulose From Finland, 69 FR 77216, 77218 (December 27, 
2004) (unchanged in Notice of Final Determination of Sales at Less Than 
Fair Value: Purified Carboxymethylcellulose From Finland, 70 FR 28279 
(May 17, 2005)). Therefore, because an adverse inference is warranted 
in this case, we have assigned to BASF the highest margin alleged in 
the petition, as referenced in the Initiation Notice, of 237.00 
percent. (See Initiation Notice, 72 FR at 68567; and November 28, 2007, 
Initiation Checklist at page 9.)
    When using facts otherwise available, section 776(c) of the Act 
provides that, when the Department relies on secondary information 
(such as 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. To ``corroborate'' means that the Department 
will satisfy itself that the secondary information to be used has 
probative value. See SAA at 870. To corroborate secondary information, 
the Department will examine, to the extent practicable, the reliability 
and relevance of the information used. See 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, 11843 
(March 13, 1997)). 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); see also SAA at 870.
    To the extent appropriate information was available, we reviewed 
the adequacy and accuracy of the information in the petition during our 
pre-initiation analysis. See Initiation Checklist at page 9. We also 
examined evidence supporting the calculations in the petition to 
determine the probative value of the margins alleged in the petition 
for use as AFA in this preliminary determination. During our pre-
initiation analysis, we examined the key elements of the export-price 
(EP) and normal-value (NV) calculations used in the petition to derive 
margins. See Initiation Checklist at pages 5-9. During our pre-
initiation analysis, we also examined information from various 
independent sources provided either in the petition or in supplements 
to the petition that corroborates key elements of the EP and

[[Page 21911]]

NV calculations used in the petition to derive estimated margins. See 
id. Specifically, the petitioners calculated three constructed export 
prices (CEPs) using POI price quotes for sodium nitrite produced by 
BASF in Germany and sold (or offered for sale) by BASF's affiliate in 
the United States. See Initiation Checklist at page 5. These price 
quotes identify the price that the first U.S. customer unaffiliated 
with BASF paid for the subject merchandise. See id. The petitioners 
also calculated an export price (EP) using the average unit values 
(AUVs) of sodium nitrite from Germany imported into the United States 
during the POI, classified under HTSUS 2834.10.1000, as reported in the 
Bureau of the Census IM145 import statistics. See Volume 2 of the 
November 8, 2007, petition at Exhibit II-6 (the petition). We compared 
the U.S. price quotes to the AUVs for this period and confirmed that 
the U.S. price quotes were consistent with the AUVs. See Initiation 
Checklist at Attachment V, Volume 2 of the petition at Exhibit II-6, 
and the November 20, 2007, supplement to the petition at Exhibit 5. The 
petitioners adjusted CEPs, where applicable, for discounts, foreign 
inland freight, ocean freight, marine insurance, U.S. inland freight 
and transloading fees, U.S. customs and port fees, warehousing 
expenses, and CEP profit. See Initiation Checklist at page 5. For EP 
based on customs value, the petitioner made an adjustment only for 
foreign inland freight, as the AUV is based on an FOB foreign port 
price. See Initiation Checklist at pages 5-6. Based on our review of 
the information contained in the petition, we recalculated CEP to 
correct certain errors in the petitioner's calculation. See id. Based 
on an examination of the aforementioned information, we considered the 
petitioner's calculation of net U.S. prices to be corroborated. 
Further, we obtained no other information that would make us question 
the reliability of the pricing information provided in the petition.
    With respect to NV, the petitioner stated that neither home-market 
prices nor third-country prices of German-produced sodium nitrite were 
reasonably available. According to the petitioner, it was unsuccessful 
in obtaining such pricing information, despite its best efforts. 
Therefore, the petitioner based NV on constructed value (CV). See 
Initiation Checklist at pages 7-8.
    Pursuant to section 773(e) of the Act, CV consists of the cost of 
manufacture (COM); selling, general and administrative (SG&A) expenses; 
packing expenses; and profit. In calculating COM and packing, the 
petitioner based the quantity of each of the inputs used to manufacture 
and pack sodium nitrite in Germany on its own production experience 
during the POI. The petitioner then multiplied the usage quantities by 
the value of the inputs used to manufacture and pack sodium nitrite in 
Germany based on publicly available data (e.g., ammonia, caustic soda), 
data obtained from market research (e.g., silicon dioxide), or its own 
costs (e.g., packing materials). See Initiation Checklist at pages 7-8.
    The petitioner determined labor costs using the labor inputs 
derived from its own experience which it valued using an industrial 
German wage rate obtained from the International Labour Organization's 
``Laborsta'' database at https://laborsta.ilo.org. The petitioner 
determined energy costs (i.e., electricity, natural gas, steam, cooling 
water, and city water) using German price data obtained from market 
research. To calculate factory overhead, the petitioner relied on its 
own experience (for factory overhead exclusive of depreciation) and on 
BASF's parent company's consolidated financial data (for depreciation). 
To calculate SG&A expenses and profit, the petitioner relied on BASF's 
parent company's consolidated financial data, for the fiscal year 
ending December 31, 2006, the period most contemporaneous with the POI 
for which the petitioner was able to obtain such information. See 
Initiation Checklist at page 8.
    Based on our examination of the aforementioned information, we 
consider the petitioner's calculation of CV to be corroborated. Because 
the petitioner demonstrated, and we confirmed, the validity of the 
input-usage quantities it used in its CV build-up, used public sources 
of information that we confirmed were accurate to value inputs of 
production, and used financial documents of the type accepted by the 
Department in prior cases that we consider to be accurate (e.g., a 
financial statement) to compute factory overhead, SG&A, financial 
expense, and profit, we consider the petitioner's calculation of NV 
corroborated. Further, we consider the petitioner's calculation of NV 
corroborated because several parts of that calculation relied on 
publicly available information which does 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 publicly available 
information, we preliminarily determine that the margins in the 
petition are reliable for 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 AFA 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 the margins in the petition reflected the 
commercial practices of the sodium nitrite industry during the POI. 
Further, no information has been presented in the investigation that 
calls into question the relevance of this information. As such, we 
preliminarily find 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 AFA rate for BASF 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 BASF, 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 BASF in this investigation, we have 
corroborated the AFA 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) (stating that, ``pursuant

[[Page 21912]]

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 237.00 percent in the Initiation 
Notice has probative value. Consequently, in selecting a rate to apply 
as AFA with respect to BASF, we have applied the margin rate of 237.00 
percent, the highest estimated dumping margin set forth in the 
Initiation Notice.

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 Tariff Act, the Department 
may use any reasonable method to establish the estimated all-others 
rate for exporters and producers not individually investigated. Our 
recent practice under these circumstances has been to assign as the 
all-others rate the simple average of the margins in the petition. See, 
e.g., Notice of Final Determination of Sales at Less Than Fair Value 
and Affirmative Final Determination of Critical Circumstances: Glycine 
from Japan, 72 FR 67271, 67272 (November 28, 2007). See also Notice of 
Final Determination of Sales at Less Than Fair Value: Polyethylene 
Retail Carrier Bags From Malaysia, 69 FR 34128, 34129 (June 18, 2004). 
Consistent with our practice, we used the rates in the petition that 
were considered in the Department's initiation to calculate a simple 
average to be assigned as the all-others rate. That simple average, 
150.82 percent, is derived from the following petition rates: 237.00 
percent, 151.98 percent, 148.73 percent, and 65.58 percent. See 
Initiation Checklist at page 9.

Preliminary Determination

    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                Manufacturer/exporter                  Margin (percent)
------------------------------------------------------------------------
BASF AG.............................................              237.00
All Others..........................................              150.82
------------------------------------------------------------------------

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
U.S. Customs and Border Protection (CBP) to suspend liquidation of all 
entries of sodium nitrite from Germany, 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 
dumping margin, as indicated in the chart above, as follows: (1) the 
rate for the firm listed above will be the rate 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 237.00 percent. 
These suspension-of-liquidation instructions will remain in effect 
until further notice.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of the Department's preliminary affirmative determination. If the 
Department's final determination is affirmative, the ITC will determine 
before the later of 120 days after the date of this preliminary 
determination or 45 days after our final determination whether imports 
of sodium nitrite from Germany are materially injuring, or threaten 
material injury to, the U.S. industry.

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

Public Comment

    Interested parties are invited to comment on the preliminary 
determination. Interested parties may submit case briefs to the 
Department no later than 30 days after the date of publication of the 
preliminary determination. See 19 CFR 351.309(c)(1)(i). 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 date for 
the submission of case briefs. See 19 CFR 351.309(d)(1) and (2). A list 
of authorities used, a table of contents, and an executive summary of 
issues should accompany any briefs submitted to the Department. 
Executive summaries should be limited to five pages total, including 
footnotes. Further, we request that parties submitting briefs and 
rebuttal briefs provide the Department with a copy of the public 
version of such briefs on diskette.
    In accordance with section 774 of the Act, the Department will hold 
a public hearing, if requested, 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 will 
tentatively be held two days after the rebuttal brief deadline date at 
the U.S. Department of Commerce, 14th Street and Constitution Avenue, 
NW, Washington, DC 20230, at a time and in a room to be determined. 
Parties should confirm by telephone, the date, time, and location of 
the hearing 48 hours before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
in a hearing 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 of the publication of this notice. 
Requests should contain: (1) the party's name, address, and telephone 
number; (2) the number of participants; and (3) a list of the issues to 
be discussed. At the hearing, oral presentations will be limited to 
issues raised in the briefs.
    We will not be conducting verification in this case because BASF 
failed to respond to the Department's questionnaire, as discussed above 
in the ``Use of Facts Otherwise Available'' section of this notice. 
Therefore, the deadline for submission of factual information in 19 CFR 
351.301(b)(1) is not applicable. Thus, the deadline for submission of 
factual information in this investigation will be seven days after the 
date of publication of this notice.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: April 16, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-8836 Filed 4-22-08; 8:45 am]
BILLING CODE 3510-DS-S