Refined Brown Aluminum Oxide from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 72767-72770 [E8-28458]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 231 (Monday, December 1, 2008)]
[Notices]
[Pages 72767-72770]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-28458]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-882


Refined Brown Aluminum Oxide from the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from an interested party, the 
Department of Commerce (the Department) is conducting the 2006-2007 
administrative review of the antidumping duty order on refined brown 
aluminum oxide (RBAO) from the People's Republic of China (PRC). The 
review covers one exporter, Qingdao Shunxingli Abrasives Co. Ltd. 
(Qingdao Shunxingli). The period of review (POR) is November 1, 2006, 
to October 31, 2007.
    We have preliminarily determined that sales have been made at 
prices below normal value by Qingdao Shunxingli. If these preliminary 
results are adopted in our final results of administrative review, we 
will instruct U.S. Customs and Border Protection (CBP) to assess 
antidumping duties on all appropriate entries.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments in this review are requested to 
submit with each argument (1) a statement of the issue and (2) a brief 
summary of the argument.

EFFECTIVE DATE: December 1, 2008.

FOR FURTHER INFORMATION CONTACT: David Goldberger or Kate Johnson, AD/
CVD Operations, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
4136 or (202) 482-4929, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 1, 2007, the Department published a notice of 
opportunity to request an administrative review of the antidumping duty 
order on, inter alia, RBAO from the PRC. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 72 FR 61859 (November 1, 
2007). In response, Fujimi Corporation (Fujimi), an importer of the 
subject merchandise, timely requested an administrative review of the 
antidumping duty order on RBAO from the PRC for entries of the subject 
merchandise during the POR from two PRC producers/exporters: Henan 
Yilong High and New Materials Co., Ltd. (Henan Yilong), and Qingdao 
Shunxingli.
    On December 27, 2007, the Department initiated a review on Henan 
Yilong and Qingdao Shunxingli. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 72 FR 73315 (December 27, 
2007).
    The Department issued antidumping duty questionnaires to Henan 
Yilong and Qingdao Shunxingli on January 7, 2008. We received responses 
to these questionnaires in March 2008. We issued a supplemental 
questionnaire to Henan Yilong in April 2008 and received a response 
later that month. We issued supplemental questionnaires to Qingdao 
Shunxingli in March, May, and July 2008. We received responses to these 
supplemental questionnaires in April, May, and July 2008, respectively.
    On May 23, 2008, Fujimi withdrew its request for review of Henan 
Yilong and requested that the Department rescind the review with 
respect to this company. In accordance with 19 CFR 351.213(d)(1), we 
granted Fujimi's request and rescinded this administrative review with 
respect to Henan Yilong. In addition, we extended the due date for 
completion of these preliminary results until not later than December 
1, 2008. See Refined Brown Aluminum Oxide from the People's Republic of 
China: Notice of Partial Rescission of Antidumping Duty Administrative 
Review and Extension of Time Limit for Preliminary Results, 73 FR 38173 
(July 3, 2008).

Scope of the Order

    The merchandise covered by this order is ground, pulverized or 
refined artificial corundum, also known as brown aluminum oxide or 
brown fused alumina, in grit size of 3/8 inch or less. Excluded from 
the scope of the order is crude artificial corundum in which particles 
with a diameter greater than 3/8 inch constitute at least 50 percent of 
the total weight of the entire batch. The scope includes brown 
artificial corundum in which particles with a diameter greater than 3/8 
inch constitute less than 50 percent of the total weight of the batch. 
The merchandise under investigation is currently classifiable under 
subheadings 2818.10.20.00 and 2818.10.20.90 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS subheading is 
provided for convenience and customs purposes, the written description 
of the merchandise covered by the order is dispositive.

NME Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market-economy (NME) country. In 
accordance with section 771(18)(C)(i) of the Tariff Act of 1930, as 
amended (the Act), any determination that a foreign country is an NME 
country shall remain in effect until revoked by the administering 
authority. See Brake Rotors From the People's Republic of China: 
Preliminary Results and Partial Rescission of the 2004/2005 
Administrative Review and Notice of of Intent to Rescind the 2004/2005 
New Shipper Review, 71 FR 26736, (May 8, 2006); unchanged in Brake 
Rotors From the People's Republic of China: Final Results and Partial 
Rescission of the 2004/2005 Administrative Review and Notice of 
Rescission of 2004/2005 New Shipper Review, 71 FR 66304 (November 14, 
2006). None of the parties to this proceeding has contested such 
treatment. Accordingly, we have calculated normal value in accordance 
with section 773(c) of the Act, which applies to NME countries.

[[Page 72768]]

Separate Rates

    As explained above, a designation of a country as an NME remains in 
effect until it is revoked by the Department. See section 771(18)(C) of 
the Act. Accordingly, there is a rebuttable presumption that all 
companies within the PRC are subject to government control and, thus, 
should be assessed a single antidumping duty rate. It is the 
Department's standard policy to assign all exporters of the merchandise 
subject to review in NME countries a single rate unless an exporter can 
affirmatively demonstrate an absence of government control, both in law 
(de jure) and in fact (de facto), with respect to exports. See Policy 
Bulletin 05.1 entitled ``Separate Rate Practice and Application of 
Combination Rates in Antidumping Duty Investigations Involving Non-
Market Economy Countries,'' dated April 5, 2005. To establish whether a 
company is sufficiently independent to be entitled to a separate, 
company-specific rate, the Department analyzes each exporting entity in 
an NME country under the test established in the Final Determination of 
Sales at Less Than Fair Value: Sparklers from the People's Republic of 
China, 56 FR 20588 (May 6, 1991) (Sparklers), as amplified by the 
Notice of Final Determination of Sales at Less Than Fair Value: Silicon 
Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) 
(Silicon Carbide).
    The Department's separate-rate test determines whether the 
exporters are independent from government control and does not 
consider, in general, macroeconomic or border-type controls, e.g., 
export licenses, quotas, and minimum export prices, particularly if 
these controls are imposed to prevent dumping. The test focuses, 
rather, on controls over the investment, pricing, and output decision-
making process at the individual firm level. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate From Ukraine, 62 FR 61754, 61757 (November 19, 
1997).
     Qingdao Shunxingli provided complete separate-rate information in 
its responses to our original and supplemental questionnaires. Qingdao 
Shunxingli is a wholly Chinese-owned company. Therefore, the Department 
must analyze whether Qingdao Shunxingli can demonstrate the absence of 
both de jure and de facto governmental control over export activities.

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 at Comment 1. As discussed below, our analysis shows that the 
evidence on the record supports a preliminary finding of an absence of 
de jure government control for Qingdao Shunxingli based on each of 
these factors.
    The evidence provided by Qingdao Shunxingli supports a preliminary 
finding of de jure absence of governmental control based on the 
following facts: (1) an absence of restrictive stipulations associated 
with the individual exporter's business and export licenses; (2) there 
are applicable legislative enactments decentralizing control of the 
companies; and (3) there are formal measures by the government 
decentralizing control of companies. See, e.g., ``The Company Law of 
the People's Republic of China,'' submitted as Exhibit A-2 to Qingdao 
Shunxingli's March 5, 2008, response to Section A of the Department's 
questionnaire (QRA).

Absence of De Facto Control

    Typically, the Department considers four factors in evaluating 
whether a respondent is subject to de facto government control of its 
export functions: (1) whether the export prices are set by, or subject 
to, the approval of a government authority; (2) whether the respondent 
has authority to negotiate and sign contracts and other agreements; (3) 
whether the respondent has autonomy from the government in making 
decisions regarding the selection of its management; and (4) whether 
the respondent retains the proceeds of its export sales and makes 
independent decisions regarding disposition of profits or financing of 
losses. See Silicon Carbide 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.
    With respect to de facto control, Qingdao Shunxingli reported that: 
(1) it independently set prices for sales to the United States through 
negotiations with customers and these prices are not subject to review 
by any government organization; (2) it did not coordinate with other 
exporters or producers to set the price or to determine to which market 
it will sell subject merchandise; (3) the PRC Chamber of Commerce did 
not coordinate its export activities; (4) its staff has the authority 
to contractually bind it to sell subject merchandise; (5) its 
management is selected without any government control or review; (6) 
there is no restriction on its use of export revenues; (7) its 
management ultimately determines the disposition of respective profits, 
and Qingdao Shunxingli has not had a loss on its export sales in the 
last two years; and (8) none of its managers is a government official. 
See QRA at pages A-2 - A-11. Furthermore, our analysis of Qingdao 
Shunxingli's questionnaire responses reveals no other information 
indicating government control of its export activities. Therefore, 
based on the information on the record, we preliminarily determine that 
there is an absence of de facto government control with respect to 
Qingdao Shunxingli's exports.
    In summary, the evidence placed on the record of this review by 
Qingdao Shunxingli demonstrates an absence of de jure and de facto 
government control with respect to its exports of the merchandise under 
review, in accordance with the criteria identified in Sparklers and 
Silicon Carbide.

 Surrogate Country

    When the Department analyzes imports from an NME country, section 
773(c)(1) of the Act directs it to base normal value, in most 
circumstances, on the NME producer's factors of production (FOP), 
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 FOP, the Department shall use, to the extent 
possible, the prices or costs of FOP in one or more market-economy 
countries that are at a level of economic development comparable to 
that of the NME country and that are significant producers of 
comparable merchandise. On January 14, 2008, the Department's Office of 
Policy issued a memorandum identifying India, the Philippines, Colombia 
and Thailand as being at a level of economic development comparable to 
the PRC for the POR. See Memorandum entitled ``Administrative Review of 
the Antidumping Order on

[[Page 72769]]

Refined Brown Aluminum Oxide from the People's Republic of China (PRC): 
Request for a List of Surrogate Countries,'' dated January 14, 2008. 
After consideration of the relevant factors for surrogate country 
selection, the Department determined that India is the appropriate 
surrogate country for this review. See Memorandum entitled 
``Administrative Review of the Antidumping Duty Order on Refined Brown 
Aluminum Oxide from the People's Republic of China: Selection of a 
Surrogate Country,'' dated February 12, 2008. The sources of the 
surrogate factor values are discussed under the ``Normal Value'' 
section below and in the Memorandum entitled ``Preliminary Results 
Valuation Memorandum'' (Valuation Memo), dated contemporaneously with 
this notice.

U.S. Price

A. Export Price

    In accordance with section 772(a) of the Act, we based U.S. price 
on the export price (EP) for sales to the United States made by Qingdao 
Shunxingli because the first sale to an unaffiliated party was made 
before the date of importation and the use of constructed EP was not 
otherwise warranted. We calculated EP for Qingdao Shunxingli based on 
the prices to unaffiliated purchasers in the United States.
    In accordance with section 772(c) of the Act, we deducted from the 
price to unaffiliated purchasers, where appropriate, foreign inland 
freight, brokerage and handling, and international freight expenses.
    As foreign inland freight and brokerage and handling services were 
provided by NME service providers, we valued these services using 
surrogate values. See Valuation Memo. For those international freight 
services that were provided by a market-economy provider and for which 
Qingdao Shunxingli paid in a market-economy currency, we deducted the 
actual expenses incurred. For those international freight services that 
were provided by an NME provider, we valued them using the weighted-
average of the international freight expenses charged by market-economy 
providers, as described in the Valuation Memo.


Normal Value

A. Methodology

    Section 773(c)(1)(B) of the Act provides that the Department shall 
determine the normal value using a FOP methodology if the merchandise 
is exported from a NME country and the information does not permit the 
calculation of normal value using home-market prices, third-country 
prices, or constructed value under section 773(a) of the Act. The 
Department bases normal value on the FOP because the presence of 
government controls on various aspects of NME countries renders price 
comparisons and the calculation of production costs invalid under the 
Department's normal methodologies. See Tapered Roller Bearings and 
Parts Thereof, Finished or Unfinished, From the People's Republic of 
China: Preliminary Results of Antidumping Duty Administrative Review 
and Notice of Intent to Rescind in Part, 70 FR 39744 (July 11, 2005) 
(unchanged in Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China: Final Results of 2003-
2004 Administrative Review and Partial Rescission of Review, 71 FR 2517 
(January 17, 2006)).
    The FOP for RBAO include the following elements: (1) quantities of 
raw materials employed; (2) hours of labor required; (3) amounts of 
energy and other utilities consumed; (4) representative capital and 
selling costs; and (5) packing materials. We used the FOP reported by 
Qingdao Shunxingli for materials, labor, energy, and packing. Where 
appropriate, we adjusted the surrogate prices by including freight 
costs to make them delivered prices.

B. FOP Valuation

    In accordance with section 773(c) of the Act, we calculated normal 
value based on the FOP reported by Qingdao Shunxingli for the POR. To 
calculate normal value, we multiplied the reported per-unit factor-
consumption rates by publicly available surrogate values, in accordance 
with 19 CFR 351.408(c)(1). In selecting the surrogate values, we 
considered the quality, specificity, and contemporaneity of the data.
    Consistent with the Department's practice, we calculated price-
index adjustors to inflate or deflate, as appropriate, surrogate values 
that are not contemporaneous with the POR using the wholesale price 
index or equivalent for the subject country. See, e.g., Chlorinated 
Isocyanurates from the People's Republic of China: Preliminary Results 
of Antidumping Duty Administrative Review, 73 FR 24943 (May 6, 2008); 
unchanged in Chlorinated Isocyanurates from the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 73 FR 
52645 (September 10, 2008). The methodology which we applied in this 
review is detailed in the Valuation Memo.
    We were unable to identify an appropriate surrogate value from 
India for the crude brown aluminum oxide raw material input. Therefore, 
we used a weighted-average U.S. price, derived from the data reported 
in the Defense Logistics Agency FY2000 Annual Report. Our selection of 
this value is further discussed in the Valuation Memo. The sources and 
data we used to determine the surrogate values for the other FOP, as 
well as the surrogate financial ratios for factory overhead, selling, 
general and administrative expenses (SG&A), and profit, are discussed 
in detail in the Valuation Memo.

Preliminary Results of the Review

    As a result of our review, we preliminarily determine that the 
following percentage weighted-average dumping margin exists for the 
period November 1, 2006, through October 31, 2007:

------------------------------------------------------------------------
                Manufacturer/Exporter                   Percent Margin
------------------------------------------------------------------------
Qingdao Shunxingli Abrasives Co. Ltd................               54.62
------------------------------------------------------------------------

Comments

    We will disclose the calculations used in our analysis to parties 
in this review within five days of the date of publication of this 
notice in accordance with 19 CFR 351.224(b). Interested parties may 
submit publicly available information to value factors no later than 20 
days after the date of publication of these preliminary results of 
review. See 19 CFR 351.301(c)(3)(ii). Any interested party may request 
a hearing within 30 days of the date of publication of this notice. See 
19 CFR 351.310(c). Interested parties who wish to request a hearing or 
to participate in a hearing if a hearing is requested must submit a 
written request to the Assistant Secretary for Import Administration 
within 30 days after the date of publication of this notice. See 19 CFR 
351.310(c). Requests should contain the following: (1) the party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of issues to be discussed. Issues raised in the hearing 
will be limited to those raised in the case and rebuttal briefs. See 19 
CFR 351.310(c). Case briefs from interested parties may be submitted 
not later than 30 days after the date of publication of this notice of 
preliminary results of review. See 19 CFR 351.309(c)(1)(ii). Rebuttal 
briefs from interested parties, limited to the issues raised in the 
case briefs, may be

[[Page 72770]]

submitted not later than five days after the time limit for filing the 
case briefs. See 19 CFR 351.309(d)(1). If requested, any hearing will 
be held two days after the scheduled date for submission of rebuttal 
briefs. See 19 CFR 351.310(d). Parties who submit case briefs or 
rebuttal briefs in this proceeding are encouraged to submit with each 
argument a statement of the issue, a summary of the arguments not 
exceeding five pages, and a table of statutes, regulations, and cases 
cited. See 19 CFR 351.309(c)(2).
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
such written briefs or at the hearing, if held, not later than 120 days 
after the date of publication of this notice. See section 751(a)(3)(A) 
of the Act.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department intends to issue 
assessment instructions to CBP 15 days after the date of publication of 
the final results of review.
    Pursuant to 19 CFR 351.212(b)(1), we will calculate importer-
specific ad valorem duty assessment rates based on the ratio of the 
total amount of the dumping margins calculated for the examined sales 
to the total entered value of those same sales. We will instruct CBP to 
assess antidumping duties on all appropriate entries covered by this 
review if any importer-specific assessment rate calculated in the final 
results of this review is above de minimis. The final results of this 
review shall be the basis for the assessment of antidumping duties on 
entries of merchandise covered by the final results of this review and 
for future deposits of estimated duties, where applicable.

Cash-Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the notice of final results of the administrative review 
for all shipments of RBAO from the PRC entered, or withdrawn from 
warehouse, for consumption on or after the date of publication, as 
provided by section 751(a)(2)(C) of the Act: (1) for subject 
merchandise exported by Qingdao Shunxingli, the cash-deposit rate will 
be that established in the final results of review; (2) for previously 
reviewed or investigated companies not listed above that have separate 
rates, the cash-deposit rate will continue to be the company-specific 
rate published for the most recent period; (3) for all other PRC 
exporters of subject merchandise, which have not been found to be 
entitled to a separate rate, the cash-deposit rate will be PRC-wide 
rate of 135.18 percent; and (4) for all non-PRC exporters of subject 
merchandise, the cash-deposit rate will be the rate applicable to the 
PRC exporter that supplied that exporter. These deposit requirements, 
when imposed, shall remain in effect until further notice.

Notification to Importers

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

    Dated: November 21, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-28458 Filed 11-28-08; 8:45 am]
BILLING CODE 3510-DS-S