Certain Cased Pencils from the People's Republic of China; Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review, 673-681 [E9-00062]
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Federal Register / Vol. 74, No. 4 / Wednesday, January 7, 2009 / Notices
DEPARTMENT OF COMMERCE
Foreign–Trade Zones Board
[Docket 53–2008]
Foreign–Trade Zone 242 – Boundary
County, Idaho, Application for
Subzone, Hoku Materials, Inc.,
Cancellation of Public Hearing
The public hearing scheduled for
January 8, 2009, on the application for
subzone status at the Hoku Materials,
Inc. (Hoku), facility in Pocatello, Idaho
(73 FR 59597, 10/9/08) has been
cancelled. The party which had
requested the hearing, Globe
Metallurgical Inc. (Globe), submitted a
letter to the Foreign–Trade Zones Board
on January 2, 2009, withdrawing its
request as a result of Hoku’s December
31, 2008, amendment of its application
in which Hoku indicated that it would
not admit silicon metal subject to
antidumping or countervailing duty
orders into the proposed subzone
facility and would accept an FTZ Board
Order condition restricting such
admission. Additional information is
available on the FTZ Board web page
via www.trade.gov/ftz.
As indicated previously, the comment
period for this case is open through
January 23, 2009. Rebuttal comments
may be submitted during the subsequent
15–day period, until February 9, 2009.
For further information, contact Diane
Finver at DianelFinver@ita.doc.gov or
(202) 482–1367.
Dated: January 5, 2009.
Andrew McGilvray,
Executive Secretary.
[FR Doc. E9–123 Filed 1–5–09; 4:15 pm]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
[A–570–827]
Certain Cased Pencils from the
People’s Republic of China;
Preliminary Results and Partial
Rescission of Antidumping Duty
Administrative Review
AGENCY: Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(‘‘the Department’’) has preliminarily
determined that the respondents in this
review, covering the period December 1,
2006, through November 30, 2007, have
made sales of subject merchandise at
less than normal value. If these
preliminary results are adopted in the
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final results of this review, we will
instruct U.S. Customs and Border
Protection (‘‘CBP’’) to assess
antidumping duties on all appropriate
entries. The Department invites
interested parties to comment on these
preliminary results.
EFFECTIVE DATE: January 7, 2009.
FOR FURTHER INFORMATION CONTACT:
Alexander Montoro or David Layton,
AD/CVD Operations, Office 1, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW, Washington, DC 20230;
telephone (202) 482–0238 and (202)
482–0371, respectively.
SUPPLEMENTARY INFORMATION:
Background
On December 28, 1994, the
Department published an antidumping
duty order on certain cased pencils from
the People’s Republic of China (‘‘PRC’’).
See Antidumping Duty Order: Certain
Cased Pencils from the People’s
Republic of China, 59 FR 66909
(December 28, 1994).
On December 3, 2007, the Department
published a notice of ‘‘Opportunity to
Request Administrative Review’’ of the
antidumping duty order on certain
cased pencils from the PRC covering the
period of review (‘‘POR’’) December 1,
2006, through November 30, 2007. See
Antidumping or Countervailing Duty
Order, Finding, or Suspended
Investigation; Opportunity to Request
Administrative Review, 72 FR 67889
(December 3, 2007). On December 26,
2007, in accordance with 19 CFR
351.213(b), Shandong Rongxin Import
and Export Co., Ltd. (‘‘Rongxin’’), a PRC
exporter/producer, requested a review
of itself. On December 31, 2007, the
following exporters/producers requested
reviews of themselves in accordance
with 19 CFR 351.213(b): China First
Pencil Co., Ltd. (‘‘China First’’),
Shanghai Three Star Stationery Industry
Corp. (‘‘Three Star’’), and Oriental
International Holding Shanghai Foreign
Trade Co., Ltd. (‘‘SFTC’’). On December
31, 2007, the petitioners 1 requested a
review of the following companies:
China First (including subsidiaries
Shanghai First Writing Instrument Co.,
Ltd. (‘‘Shanghai First’’), Shanghai Great
Wall Pencil Co., Ltd. (‘‘Great Wall’’),
and China First Pencil Fang Zheng Co.,
Ltd. (‘‘Fang Zheng’’), Three Star,
Guangdong Provincial Stationery &
Sporting Goods Import & Export
Corporation (‘‘Guangdong’’), Rongxin,
Tianjin Custom Wood Processing Co.,
1 The petitioners include Sanford L.P., Musgrave
Pencil Company, RoseMoon Inc., and General
Pencil Company.
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Ltd. (‘‘Tianjin’’), Beijing Dixon
Stationery Company Ltd. (‘‘Dixon’’), and
Anhui Import & Export Co., Ltd.
(‘‘Anhui’’).
On January 28, 2008, the Department
published a notice of initiation for this
administrative review covering the
companies listed in the requests
received from interested parties. See
Initiation of Antidumping and
Countervailing Duty Administrative
Reviews and Request for Revocation in
Part, 73 FR 4829 (January 28, 2008). On
May 6, 2008, the petitioners requested
that the Department conduct
verification of the information the
Department will rely upon in the final
results of this review. On August 25,
2008, we extended the time limit for the
preliminary results in this review until
December 30, 2008. See Certain Cased
Pencils from the People’s Republic of
China: Extension of Time Limit for the
Preliminary Results of the Antidumping
Duty Administrative Review, 73 FR
49993 (August 25, 2008).
Respondent Selection
Section 777A(c)(1) of the Tariff Act of
the 1930, as amended (‘‘the Act’’),
directs the Department to calculate
individual dumping margins for each
known producer or exporter of the
subject merchandise. Because it was not
practicable for the Department to
individually examine all of the
companies covered by the review, the
Department limited its examination to a
reasonable number of producers/
exporters, accounting for the greatest
possible export volume, pursuant to
section 777A(c)(2)(B) of the Act.
Therefore, the Department selected
China First, Three Star, and Rongxin as
the mandatory respondents in this
review. See Memorandum from
Alexander Montoro, International Trade
Compliance Analyst, to Susan H.
Kuhbach, Director of AD/CVD
Operations Office 1, entitled ‘‘Selection
of Respondents for the Antidumping
Duty Review of Certain Cased Pencils
from the People’s Republic of China,’’
June 17, 2008.
Partial Rescission
On July 3, 2008, Dixon requested that
the Department rescind the
administrative review with respect to
Dixon and certified that it had no
exports, sales or entries of subject
merchandise to the United States during
the POR. We reviewed CBP import data
and found no evidence that Dixon had
any shipments of subject merchandise
during the POR. See Memorandum from
Alexander Montoro to the File, entitled
‘‘Intent to Rescind in Part the
Antidumping Duty Administrative
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Review on Certain Cased Pencils from
the People’s Republic of China’’, August
7, 2008, (‘‘Intent to Rescind Memo’’). In
addition, on July 17, 2008, we made a
‘‘No Shipments Inquiry’’ to CBP to
confirm that there were no exports of
subject merchandise by Dixon during
the POR. We asked CBP to notify us
within ten days if CBP ‘‘has contrary
information and is suspending
liquidation’’ of subject merchandise
exported by Dixon. CBP did not reply
with contrary information. The
Department provided interested parties
in this review until August 14, 2008, to
submit comments on the Intent to
Rescind Memo. No interested party
submitted any comments. Accordingly,
we are preliminarily rescinding this
review with respect to Dixon.
Non–Market Economy 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 Act, any determination that a foreign
country is an NME country shall remain
in effect until revoked by the
administering authority. See, e.g., 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 calculated
normal value (‘‘NV’’) in accordance with
section 773(c) of the Act, which applies
to NME countries.
Surrogate Country and Surrogate
Values
Section 773(c)(1) of the Act directs the
Department to base NV on the NME
producer’s factors of production
(‘‘FOPs’’), valued in a surrogate market
economy country or countries
considered to be appropriate by the
Department if NV cannot be determined
pursuant to section 773(a) of the Act. In
accordance with section 773(c)(4) of the
Act, the Department valued the FOPs, to
the extent possible, using the costs of
the FOPs in one or more market–
economy countries that are at a level of
economic development comparable to
that of the PRC and are significant
producers of comparable merchandise.
The Department determined that India,
Indonesia, the Philippines, Colombia
and Thailand are countries comparable
to the PRC in terms of economic
development. See Memorandum from
Carole Showers, Acting Director, Office
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of Policy, to Susan H. Kuhbach,
Director, Office 1, July 9, 2008.
On November 14, 2008, the
Department solicited comments on
surrogate country selection from
interested parties. The Department
received comments from the petitioners
on November 26, 2008. On November
26, 2008, the Department also received
surrogate–value information from the
petitioner, China First, and Three Star.
On December 5, 2008, and December 8,
2008, the Department received rebuttal
factual information and comments on
factor valuation from the petitioners and
China First and Three Star (‘‘China
First–Three Star’’), respectively. For a
detailed discussion of the Department’s
selection of surrogate values and
financial ratios, see ‘‘Factor Valuations’’
section below. See also Memorandum
from the Team to the File, entitled
‘‘2006–2007 Antidumping Duty
Administrative Review of Certain Cased
Pencils from the People’s Republic of
China: Factor Valuation for the
Preliminary Results’’, December 30,
2008, (‘‘Factor Valuation
Memorandum’’), which is on file in the
Central Records Unit (‘‘CRU’’) in Room
1117 of the main Department of
Commerce building.
We determined that India is
comparable to the PRC in terms of per
capita gross national product and the
national distribution of labor.
Furthermore, India is a significant
producer of comparable merchandise.
See Memorandum from Alexander
Montoro to the File entitled, ‘‘2006–
2007 Antidumping Duty Administrative
Review on Certain Cased Pencils from
the People’s Republic of China:
Selection of a Surrogate Country,’’
December 30, 2008.
Moreover, it is the Department’s
practice to select an appropriate
surrogate country based on the
availability and reliability of data from
these countries. See Department Policy
Bulletin No. 04.1: Non–Market Economy
Surrogate Country Selection Process,
dated March 1, 2004. The Department
finds India to be a reliable source for
surrogate values because India is at a
comparable level of economic
development pursuant to section
773(c)(4) of the Act, is a significant
producer of comparable merchandise,
and has publicly available and reliable
data. Furthermore, the Department notes
that India has been the primary
surrogate country in past segments, and
the only surrogate value data submitted
on the record are from Indian sources.
Given the above facts, the Department
has selected India as the primary
surrogate country for this review.
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Scope of the Order
Imports covered by the order are
shipments of certain cased pencils of
any shape or dimension (except as
described below) which are writing and/
or drawing instruments that feature
cores of graphite or other materials,
encased in wood and/or man–made
materials, whether or not decorated and
whether or not tipped (e.g., with erasers,
etc.) in any fashion, and either
sharpened or unsharpened. The pencils
subject to the order are currently
classifiable under subheading
9609.10.00 of the Harmonized Tariff
Schedule of the United States
(‘‘HTSUS’’). Specifically excluded from
the scope of the order are mechanical
pencils, cosmetic pencils, pens, non–
cased crayons (wax), pastels, charcoals,
chalks, and pencils produced under
U.S. patent number 6,217,242, from
paper infused with scents by the means
covered in the above–referenced patent,
thereby having odors distinct from those
that may emanate from pencils lacking
the scent infusion. Also excluded from
the scope of the order are pencils with
all of the following physical
characteristics: (1) length: 13.5 or more
inches; (2) sheath diameter: not less
than one-and-one quarter inches at any
point (before sharpening); and (3) core
length: not more than 15 percent of the
length of the pencil.
In addition, pencils with all of the
following physical characteristics are
excluded from the scope of the order:
novelty jumbo pencils that are octagonal
in shape, approximately ten inches long,
one inch in diameter before sharpening,
and three-and-one eighth inches in
circumference, composed of turned
wood encasing one-and-one half inches
of sharpened lead on one end and a
rubber eraser on the other end.
Although the HTSUS subheading is
provided for convenience and customs
purposes, the written description of the
scope of the order is dispositive.
Affiliation – China First and Three Star
To the extent that section 771(33) of
the Act does not conflict with the
Department’s application of separate
rates and enforcement of the NME
provision, section 773(c) of the Act, the
Department will determine that
exporters and/or producers are affiliated
if the facts of the case support such a
finding.2 For the reasons discussed
2 See, e.g., Certain Preserved Mushrooms From
the People’s Republic of China; Preliminary Results
of Antidumping Duty Administrative Review, 71 FR
64930, 64934 (November 6, 2006) (unchanged in the
final results, 72 FR 44827 (August 9, 2007)), and
Certain Preserved Mushrooms From the People’s
Republic of China: Preliminary Results and Partial
Rescission of Fifth Antidumping Duty
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below, we find that this condition has
not prevented us from examining in this
administrative review whether China
First and its subsidiary producers3 are
affiliated with Three Star.
In prior administrative reviews
involving China First and Three Star,
the Department found China First to be
affiliated with Three Star as a result of
Shanghai Light Industry, Ltd.’s (‘‘SLI’’)
direct oversight and control over both
China First and Three Star.4
In this review, as in past
administrative reviews, China First and
Three Star claim that they are not
affiliated and should not be collapsed.
These respondents contend that SLI’s
transfer of its oversight responsibilities
for China First and Three Star to the
Huangpu District State Assets
Administration Office (‘‘HSAAO’’) on
October 11, 2005, and September 8,
2005, respectively, is additional
evidence of their non–affiliation.5
Based on our analysis, we
preliminarily find that China First and
its pencil–producing subsidiaries are
affiliated with Three Star, pursuant to
section 771(33)(F) of the Act, because of
the common control exercised by
HSAAO. See Memorandum From Team
to Susan H. Kuhbach, Director, Office 1,
entitled ‘‘Certain Cased Pencils from the
People’s Republic of China: Whether to
Continue To Collapse China First and
its Pencil–Producing Subsidiaries with
Three Star,’’ December 30, 2008
(‘‘Affiliation/Collapsing Memo’’). The
basis of our finding is that the facts have
not changed from previous reviews in
which we found these parties to be
affiliated.
In the four most recent administrative
reviews of Pencils from China, the
Department found China First and
Three Star to be affiliated, in large part
based on: (1) a 1997 public filing by
China First that indicated that China
First’s shareholders voted to merge with
Three Star; and (2) common oversight of
the two firms by SLI, a government–
owned assets management entity.
Throughout the four reviews, both
companies consistently asserted that the
Administrative Review, 70 FR 10965, 10969 (March
7, 2005) (‘‘Mushrooms Fifth Review Prelim’’)
(unchanged in the final results, 70 FR 54361
(September 14, 2005)).
3 China First’s pencil-producing subsidiaries
include the following companies: Shanghai First,
Great Wall, and Fang Zheng.
4 See, e.g., Certain Cased Pencils from the
People’s Republic of China; Final Results and
Partial Rescission of Antidumping Duty
Administrative Review,71 FR 38366 (July 6, 2006)
and accompanying Issues and Decision
Memorandum at Comment 7.
5 See page 2 of Three Star’s section A response,
and pages A-4 and A-5 of China First’s section A
response, August 1, 2008.
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1997 merger was not implemented and
that the two companies, are in, fact
unaffiliated competitors. However,
neither China First nor Three Star was
able to document that the 1997
shareholder decision to merge was
reversed.
In this review, China First and Three
Star continue to claim that the merger
was never completed, but have yet to
provide documents specifically
supporting this claim. The only change
is the transfer of SLI’s administrative
oversight of China First and Three Star
to HSAAO. China First and Three Star
describe the oversight duties and asset
management of HSAAO to be essentially
the same as those of SLI. Therefore, we
preliminarily determine that common
control of China First and Three Star
continues and that they are affiliated
under section 771(33)(F) of the Act.
The Department intends to obtain
additional information on the
relationship of these companies for
consideration in the final results.
Collapsing – China First and Three Star
Pursuant to 19 CFR 351.401(f), the
Department will collapse producers and
treat them as a single entity where (1)
those producers are affiliated, (2) the
producers have production facilities for
producing similar or identical products
that would not require substantial
retooling of either facility in order to
restructure manufacturing priorities,
and (3) there is a significant potential
for manipulation of price or production.
We also note that the rationale for
collapsing, to prevent manipulation of
price and/or production (see 19 CFR
351.401(f)), applies to both producers
and exporters, if the facts indicate that
producers of like merchandise are
affiliated as a result of their mutual
relationship with an exporter.
To the extent that this provision does
not conflict with the Department’s
application of separate rates and
enforcement of the NME provision,
section 773(c) of the Act, the
Department will collapse two or more
affiliated entities in a case involving an
NME country if the facts of the case
warrant such treatment. Furthermore,
we note that the factors listed in 19 CFR
351.401(f)(2) are not exhaustive in the
context of an NME investigation or
administrative review, other factors
unique to the relationship of business
entities within the NME may lead the
Department to determine that collapsing
is either warranted or unwarranted,
depending on the facts of the case. See
Hontex Enterprises, Inc. v. United
States, 248 F. Supp. 2d 1323, 1342 (Ct.
Int’l. Trade 2003) (noting that the
application of collapsing in the NME
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context may differ from the standard
factors listed in the regulation).
In summary, if there is evidence of
significant potential for manipulation or
control between or among producers
which produce similar and/or identical
merchandise, but may not all produce
their product for sale to the United
States, the Department may find such
evidence sufficient to apply the
collapsing criteria in an NME context in
order to determine whether all or some
of those affiliated producers should be
treated as one entity. See, e.g.,
Mushrooms Fifth Review Prelim, 70 FR
at 10971 (unchanged in final results, 70
FR 54361 (September 14, 2005)); and
Certain Preserved Mushrooms From the
People’s Republic of China: Final
Results of Sixth Antidumping Duty New
Shipper Review and Final Results and
Partial Rescission of the Fourth
Antidumping Duty Administrative
Review, 69 FR 54635, 54637 (September
9, 2004), and accompanying Issues and
Decision Memorandum at Comment 1.
As noted above in the ‘‘Affiliation –
China First and Three Star’’ section of
this notice, we find a sufficient basis to
conclude that China First and its
pencil–producing subsidiaries and
Three Star are affiliated through the
common control by HSAAO, pursuant
to section 771(33)(F) of the Act. All of
China First’s three pencil–producing
subsidiaries and Three Star produced
cased pencils during the POR, which
would be subject to the antidumping
duty order if this merchandise entered
the United States (see FOP data
submitted by China First and Three Star
in their section D responses, August 18,
2008). Therefore, we find that the first
and second collapsing criteria are met
because in addition to being affiliated,
these producers have production
facilities for producing similar or
identical products, such that no
retooling at any of the three facilities is
required in order to restructure
manufacturing priorities.
Finally, we find that the third
collapsing criterion is met in this case
because, a significant potential for
manipulation of price or production
exists among China First and Three Star.
In determining whether a significant
potential for manipulation exists, the
regulations provide that the Department
may consider various factors, including
(1) the level of common ownership, (2)
the extent to which managerial
employees or board members of one
firm sit on the board of directors of an
affiliated firm, and (3) whether the
operations of the affiliated firms are
intertwined. See Gray Portland Cement
and Clinker From Mexico: Final Results
of Antidumping Duty Administrative
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Review, 63 FR 12764, 12774 (March 16,
1998) and Notice of Final Determination
of Sales at Less Than Fair Value:
Collated Roofing Nails From Taiwan, 62
FR 51427, 51436 (October 1, 1997). See
Affiliation/Collapsing Memo for further
discussion. In this case, there is a
significant potential for manipulation of
price or production because China First
and Three Star have common ownership
as demonstrated by the fact that HSAAO
has administrative oversight over both
of them.
For the reasons explained more fully
in the Affiliation/Collapsing Memo and
pursuant to 19 CFR 351.401(f), we have
preliminarily collapsed China First and
its pencil–producing subsidiaries with
Three Star.
Separate Rates Determination
A designation as an NME remains in
effect until it is revoked by the
Department. See section 771(18)(c) of
the Act. Accordingly, the Department
begins with a rebuttable presumption
that all companies within the country
are subject to government control and,
thus, should be assessed a single
antidumping duty deposit rate (i.e., a
country–wide rate). See Notice of Final
Determination of Sales at Less Than
Fair Value, and Affirmative Critical
Circumstances, In Part: Certain Lined
Paper Products From the People’s
Republic of China, 71 FR 53079
(September 8, 2006); Final
Determination of Sales at Less Than
Fair Value and Final Partial Affirmative
Determination of Critical
Circumstances: Diamond Sawblades
and Parts Thereof from the People’s
Republic of China, 71 FR 29303 (May
22, 2006).
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. 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 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 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’’).
Regarding the mandatory
respondents, China First and Three Star
are a joint stock limited company and a
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company ‘‘owned by all of the people,’’
respectively.6 A portion of China First’s
shares are held in trust in part by
HSAAO, which is also owned by ‘‘all of
the people.’’7 HSAAO, as trustee, has
oversight over Three Star’s assets. As
discussed above in the ‘‘Collapsing–
China First and Three Star’’ section of
this notice, we are preliminarily treating
China First and Three Star as a
collapsed entity. Consequently, we are
considering whether the collapsed
entity as a whole is entitled to a separate
rate. This decision is specific to the facts
presented in this review and is based on
several considerations, including the
structure of the collapsed entity, the
level of control between/among
affiliates, and the level of participation
by each affiliate in the proceeding.
Given the unique relationships which
arise in NMEs between individual
companies and the government, a
separate rate will be granted to the
collapsed entity only if the facts, taken
as a whole, support such a finding.
The other mandatory respondent,
Rongxin, is a limited liability company.
Five respondents subject to this
review were not selected as mandatory
respondents.8 We issued separate rate
applications and certifications to all five
of these companies. One of these
respondents, Dixon, requested
rescission on the basis that it had no
shipments in the POR, as discussed
above. SFTC filed its separate rate
certification on July 24, 2008. The
remaining three non–mandatory
respondents did not submit either a
separate rates certification or
application. One of these three
companies, Tianjin, qualified for a
separate rate in an earlier administrative
review. See Certain Cased Pencils from
the People’s Republic of China; Final
Results and Partial Rescission of
Antidumping Duty Administrative
Review, 68 FR 43082, 43084 (July 21,
2003). However, because Tianjin did not
submit a separate rate certification in
the instant review, it will now be treated
as part of the PRC–wide entity.
Consequently, Anhui, Guangdong, and
Tianjin have not satisfied the criteria for
separate rates for the POR and are
considered as being part of the PRC–
wide entity.
Our analysis of whether the export
activities of Rongxin, the China First/
Three Star collapsed entity, and SFTC
are independent from government
control follows.
6 See page A-2 of China First’s August 1, 2008,
Section A Response and page 2 of Three Star’s
August 1, 2008 Section A Response.
7 See page A-5 of China First’s August 1, 2008,
Section A Response.
8 Dixon, SFTC, Anhui, Guangdong, and Tianjin.
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Absence of De Jure Control
The Department considers the
following criteria in determining
whether an individual company may be
granted a separate rate: (1) an absence of
restrictive stipulations associated with
the individual exporter’s business and
export licenses; (2) any legislative
enactments decentralizing control of
companies; and (3) any other formal
measures by the government
decentralizing control of companies. See
Sparklers, 56 FR at 20589.
The China First Three Star collapsed
entity and Rongxin have placed on the
administrative record the following
documents to demonstrate absence of de
jure control: the 1994 ‘‘Foreign Trade
Law of the People’s Republic of China;’’
the ‘‘Company Law of the PRC,’’
effective as of July 1, 1994; and ‘‘The
Enterprise Legal Person Registration
Administrative Regulations,’’
promulgated on June 13, 1988. In other
cases involving products from the PRC,
these and other respondents have
submitted the following additional
documents to demonstrate absence of de
jure control, and the Department has
placed these additional documents on
the record of this segment, as well: the
‘‘Law of the People’s Republic of China
on Industrial Enterprises Owned by the
Whole People,’’ adopted on April 13,
1988; and the 1992 ‘‘Regulations for
Transformation of Operational
Mechanisms of State–Owned Industrial
Enterprises.’’ See December 30, 2008,
memorandum to the file which places
the above–referenced laws on the record
of this segment.
In its separate rates certification,
SFTC certified that during the POR: (1)
as with the segment of the proceeding
in which the firm was previously
granted a separate rate (‘‘previous
Granting Period’’), there were no
government laws or regulations that
controlled the firm’s export activities;
(2) the ownership under which the firm
registered itself with the official
government business license issuing
authority remains the same as for the
previous Granting Period; (3) the firm
had a valid PRC Export Certificate of
Approval, now referred to and labeled
as a Registration Form for Foreign Trade
Operator; (4) as in the previous Granting
Period, in order to conduct export
activities, the firm was not required by
any level of government law or
regulation to possess additional
certificates or other documents related
to the legal status and/or operation of its
business beyond those discussed above;
and (5) PRC government laws and
legislative enactments applicable to
SFTC remained the same as in the
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previous Granting Period. SFTC
attached copies of its business license
and foreign trade operator registration
form to its separate certification to
document the absence of government de
jure control.
As in prior cases, we have analyzed
these laws and have found them to
sufficiently establish an absence of de
jure control of joint ventures and
companies owned by ‘‘all of the people’’
absent proof on the record to the
contrary. See, e.g., Notice of Final
Determination of Sales at Less Than
Fair Value: Furfuryl Alcohol From the
People’s Republic of China, 60 FR 22544
(May 8, 1995) (‘‘Furfuryl Alcohol’’). We
have no information in this proceeding
that would cause us to reconsider this
determination. Thus, we find that the
evidence on the record supports a
preliminary finding of absence of de
jure government control for SFTC,
China First–Three Star (‘‘the China
First–Three Star collapsed entity’’), and
Rongxin based on: (1) an absence of
restrictive stipulations associated with
the exporter’s business license; (2) the
legal authority on the record
decentralizing control over the
respondent, as demonstrated by the PRC
laws placed on the record of this review;
and (3) other formal measures by the
government decentralizing control of
companies.
Absence of De Facto Control
As stated in previous cases, there is
some evidence that certain enactments
of the PRC central government have not
been implemented uniformly among
different sectors and/or jurisdictions in
the PRC. See Silicon Carbide, 59 FR at
22587. Therefore, 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 government control which
would preclude the Department from
assigning separate rates.
The Department typically considers
the following 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 agency; (2) whether the
respondent has the authority to
negotiate and sign contracts and other
agreements; (3) whether the respondent
has autonomy from the government in
making decisions regarding the
selection of management; and (4)
whether the respondent retains the
proceeds of its export sales and makes
independent decisions regarding the
disposition of profits or financing of
losses. See Silicon Carbide, 59 FR at
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22586–87, and Furfuryl Alcohol, 60 FR
at 22545.
The affiliates in the China First–Three
Star collapsed entity (where applicable)
and Rongxin all have asserted the
following: (1) each establishes its own
export prices; (2) each negotiates
contracts without guidance from any
government entities or organizations; (3)
each makes its own personnel decisions;
and (4) each retains the proceeds of its
export sales, uses profits according to its
business needs, and has the authority to
sell its assets and to obtain loans.
Additionally, each respondent’s
questionnaire responses indicate that its
pricing during the POR was not
coordinated among exporters. As a
result, there is a sufficient basis to
preliminarily determine that each
respondent listed above (including the
China First–Three Star collapsed entity
as a whole) has demonstrated a de facto
absence of government control of its
export functions and is each entitled to
a separate rate. Consequently, we have
preliminarily determined that each of
these respondents has met the criteria
for the application of a separate rate.
Moreover, with respect to the affiliates
included in the China First–Three Star
collapsed entity, we have assigned to all
of them the same antidumping rate in
these preliminary results for the above–
mentioned reasons.
The Department also conducted a
separate rates analysis for SFTC. SFTC
certified the following: (1) there is no
government participation in setting
export prices; (2) the firm has
independent authority to negotiate and
sign export contracts; (3) the firm had
autonomy from all levels of government
in making decisions regarding the
selection of management; (4) SFTC did
not submit the names of its candidates
for managerial positions to any
governmental entity for approval; and
(5) there are no restrictions on the use
of export revenue. During our analysis
of the information on the record, we
found no information indicating the
existence of government control of
SFTC’s export activities. See SFTC’s
submission of July 24, 2008.
Consequently, we preliminarily
determine that SFTC has met the criteria
for the application of a separate rate.
Fair–Value Comparisons
To determine whether the
respondents’ sales of subject
merchandise were made at less than NV,
we compared the NV to individual
export price (‘‘EP’’) transactions in
accordance with section 777A(d)(2) of
the Act. See ‘‘Export Price’’ and
‘‘Normal Value’’ sections of this notice,
below.
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677
Export Price
In accordance with section 772(a) of
the Act, EP is ‘‘the price at which
merchandise is first sold (or agreed to be
sold) before the date importation by the
producer or exporter of the subject
merchandise outside of the United
States to an unaffiliated purchaser in the
United States to an unaffiliated
purchaser for exportation to the United
States,’’ as adjusted under section 772(c)
of the Act. In accordance with section
772(a) of the Act, we used EPs for sales
by the China First–Three Star collapsed
entity and Rongxin to the United States
because the subject merchandise was
sold directly to unaffiliated customers
in the United States (or to unaffiliated
resellers outside the United States with
knowledge that the merchandise was
destined for the United States) prior to
importation, and constructed export
price methodology was not otherwise
indicated. We based EP on free–onboard port or delivered prices to
unaffiliated purchasers in the United
States. In accordance with section 772
(c)(2)(A) of the Act, we made deductions
for movement expenses, where
appropriate. Movement expenses
included expenses for foreign inland
freight from plant to port of exportation,
foreign brokerage and handling where
applicable, international freight. Foreign
inland freight and foreign brokerage and
handling were provided by an NME
vendor and, thus, as explained in the
section below, we based the amounts of
the deductions for these movement
charges on values from a surrogate
country.
For international freight, we used the
reported expenses because the
respondents used market–economy
freight carriers and/or paid for those
expenses in a market–economy
currency. For certain sales, Rongxin
used a market–economy carrier, which
it paid in U.S. dollars. In China First–
Three Star’s case, it used an NME
carrier, but paid for the services in a
market–economy currency. All of the
respondents reported that they incurred
no marine insurance expenses on their
sales to the United States. For a detailed
description of all adjustments, see
Memorandum from Nancy Decker,
Program Manager, Office 1, to the File
entitled ‘‘Analysis for the Preliminary
Results of Antidumping Duty
Administrative Review of Certain Cased
Pencils from the People’s Republic of
China: China First Pencil Company,
Ltd., Shanghai Three Star Stationery
Industry Corp.’’ (‘‘China First–Three
Star Preliminary Calculation
Memorandum’’), December 30, 2008,
and ‘‘Analysis for the Preliminary
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Results of Antidumping Duty
Administrative Review of Certain Cased
Pencils from the People’s Republic of
China: Shandong Rongxin Import and
Export Co. Ltd.’’ (‘‘Rongxin Preliminary
Calculation Memorandum’’), December
30, 2008.
We valued brokerage and handling
using a simple average of the brokerage
and handling costs that were reported in
public submissions that were filed in
three antidumping duty cases.
Specifically, we averaged the public
brokerage and handling expenses
reported by: Agro Dutch Industries Ltd.
in the antidumping duty administrative
review of certain preserved mushrooms
from India; Kejirwal Paper Ltd. in the
less than fair value investigation of
certain lined paper products from India;
and Essar Steel in the antidumping duty
administrative review of hot–rolled
carbon steel flat products from India.
See Certain Preserved Mushrooms From
India: Final Results of Antidumping
Duty Administrative Review, 71 FR
10646 (March 2, 2006); see also Notice
of Preliminary Determination of Sales at
Less Than Fair Value, Postponement of
Final Determination, and Affirmative
Preliminary Determination of Critical
Circumstances in Part: Certain Lined
Paper Products From India, 71 FR 19706
(April 17, 2006) (unchanged in final
results, 71 FR 45012 (August 8, 2006)),
and Certain Hot–Rolled Carbon Steel
Flat Products From India: Preliminary
Results of Antidumping Duty
Administrative Review, 71 FR 2018,
2021 (January 12, 2006) (unchanged in
final results, 71 FR 40694 (July 18,
2006)). We identify the source used to
value foreign inland freight in the
‘‘Normal Value’’ section of this notice,
below. We adjusted these values, as
appropriate, to account for inflation or
deflation between the effective period
and the POR. We calculated the
inflation or deflation adjustments for
these values using the wholesale price
indices (‘‘WPI’’) for India as published
in the International Financial Statistics
(‘‘IFS’’) Online Service maintained by
the Statistics Department of the
International Monetary Fund at the
website https://www.imfstatistics.org.
Normal Value
Section 773(c)(1) of the Act provides
that the Department shall determine NV
using an factor of production (‘‘FOP’’)
methodology if the merchandise is
exported from an NME country and the
information does not permit the
calculation of NV using home–market
prices, third–country prices, or
constructed value under section 773(a)
of the Act.
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16:10 Jan 06, 2009
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The Department will base NV on
FOPs because the presence of
government controls on various aspects
of these NME economies renders price
comparisons and the calculation of
production costs invalid under our
normal methodologies. Therefore, we
calculated NV based on FOPs in
accordance with sections 773(c)(3) and
(4) of the Act and 19 CFR 351.408(c).
The FOPs include: (1) hours of labor
required; (2) quantities of raw materials
employed; (3) amounts of energy and
other utilities consumed; and (4)
representative capital costs. We used the
FOPs reported by respondents for
materials, energy, labor, and packing.
In accordance with 19 CFR
351.408(c)(1), when a producer sources
an input from a market–economy
(‘‘ME’’) country and pays for it in ME
currency, the Department will normally
value the factor using the actual price
paid to the market–economy supplier
for the input. See 19 CFR 351.408(c)(1).
Where a portion of the input is
purchased from a market–economy
supplier and the remainder from an
NME supplier, the Department will
normally use the price paid for the
input sourced from market–economy
suppliers to value all of the input,
provided the volume of the market–
economy input as a share of total
purchases from all sources is
‘‘meaningful.’’ See Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR
27296, 27366 (May 19, 1997);
Shakeproof v. United States, 268 F.3d
1376, 1382 (Fed. Cir. 2001); 19 CFR
351.408(c)(1); see also Antidumping
Methodologies: Market Economy Inputs,
Expected Non–Market Economy Wages,
Duty Drawback; and Request for
Comments, 71 FR 61716, 61716–61719
(October 19, 2006) regarding the
Department’s flexible 33 percent
threshold for market economy inputs. In
this administrative review, Three Star,
one of the companies in the collapsed
China First–Three Star entity, reports
purchasing four market economy inputs.
However, the volume of three of the four
market economy purchases did not
exceed the threshold percentage that the
Department normally considers
‘‘meaningful’’ when these purchases
were compared to the combined NME
purchases of the same inputs by the
collapsed Chin First–Three Star entity.
See China First–Three Star Preliminary
Calculation Memorandum.
With regard to both the Indian
import–based surrogate values and the
ME input values, we have disregarded
prices that we have reason to believe or
suspect may be subsidized. See Tapered
Roller Bearings and Parts Thereof,
Finished and Unfinished, From the
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Sfmt 4703
People’s Republic of China; Final
Results of 1999–2000 Administrative
Review, Partial Rescission of Review,
and Determination Not To Revoke Order
in Part, 66 FR 57420 (November 15,
2001), and accompanying Issues and
Decision Memorandum at Comment 1.
We have found that India, Indonesia,
South Korea, and Thailand maintain
broadly available, non–industry-specific
export subsidies, and it is reasonable to
infer that exports to all markets from
these countries may be subsidized. See
Certain Frozen Fish Fillets From the
Socialist Republic of Vietnam:
Preliminary Results and Preliminary
Partial Rescission of Antidumping Duty
Administrative Review, 70 FR 54007,
54011 (September 13, 2005) (unchanged
in final results, 71 FR 14170 (March 21,
2006)); and China Nat’l Machinery
Import & Export Corp. v. United States,
293 F. Supp. 2d 1334, 1336 (Ct. Int’l.
Trade 2003), aff’d 104 Fed. App 183
(Fed. Cir. 2004).
In avoiding the use of prices that may
be subsidized, the Department does not
conduct a formal investigation to ensure
that such prices are not subsidized. See
H.R. Rep. 100–576 at 590–91 (1988),
reprinted in 1988 U.S.C.C.A.N. 1547,
1623. Rather, the Department bases its
decision on information that is available
to it at the time it is making its
determination. Therefore, we have not
used prices from these countries either
in calculating the Indian import–based
surrogate values or in calculating ME
input values. See Factor Valuation
Memorandum.
Factor Valuations
In accordance with section 773(c)(3)
of the Act, we calculated NV based on
FOPs reported by the respondents for
the POR. We multiplied the reported
per–unit factor quantities by publicly
available Indian surrogate values. In
selecting the surrogate values, we
considered the quality, specificity, and
contemporaneousness of the data.
In accordance with section 773(c)(1)
of the Act, for purposes of calculating
NV, we attempted to value the FOPs
using surrogate values that were in
effect during the POR. If we were unable
to obtain surrogate values that were in
effect during the POR, we adjusted the
values, as appropriate, to account for
inflation or deflation between the
effective period and the POR. We
calculated the inflation or deflation
adjustments for all factor values, as
applicable, except labor, using the WPI
for the appropriate surrogate country as
published in the IFS.
As appropriate, we adjusted input
prices by including freight costs to make
them delivered prices. Specifically, we
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added to the Indian import surrogate
values a surrogate freight cost calculated
using the shorter of the reported
distance from the domestic supplier to
the factory or the distance from the
nearest port of export to the factory
where appropriate (i.e., where the sales
terms for the ME inputs were not
delivered to the factory). This
adjustment is in accordance with the
decision of the Court of Appeals for the
Federal Circuit in Sigma Corp. v. United
States, 117 F.3d 1401 (Fed. Cir. 1997).
We valued the FOPs as follows:
(1) Except where noted below, we
valued all reported material, energy,
and packing inputs using Indian
import data from the World Trade
Atlas (‘‘WTA’’) for December 2006
through November 2007.
(2) To value lindenwood pencil slats,
we used publicly available,
published U.S. prices for American
basswood lumber because price
information for Chinese
lindenwood and American
basswood is not available from any
of the potential surrogate
countries.9 The U.S. lumber prices
for basswood for the period
December 1, 2006, through
November 30, 2007.are published in
the Hardwood Market Report. We
intend to obtain additional
information on this issue after the
preliminary results. For further
discussion see Factor Valuation
Memorandum.
(3) The China First–Three Star
collapsed entity reported that some
of its purchases of specific inputs
were sourced from ME countries
and paid for in ME currencies.
Pursuant to 19 CFR 351.408(c)(1),
we used the actual price paid by the
China First–Three Star collapsed
entity for one of these inputs.
Where applicable, we also adjusted
these values to account for freight
costs incurred between the supplier
and respondent. See Factor
Valuation Memorandum, Analysis
for the Preliminary Results of the
Antidupming Duty Administrative
Review of Certain Cased Pencils
from the People’s Republic of
9 In the antidumping investigation of certain
cased pencils from the PRC, the Department found
Chinese lindenwood and American basswood to be
virtually indistinguishable and thus used U.S.
prices for American basswood to value Chinese
lindenwood. See Notice of Final Determination of
Sales at Less Than Fair Value: Certain Cased
Pencils From the People’s Republic of China, 59 FR
55625, 55632 (November 8, 1994). This
methodology was upheld by the Court of
International Trade. See Writing Instrument Mfrs.
Ass’n Pencil Section, et. al. v. United States, 984 F.
Supp. 629, 639 (Ct. Int’l. Trade 1997), aff’d 178 F.3d
1311 (Fed. Cir. 1998).
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Jkt 217001
China: China First Pencil Company,
Ltd. (‘‘China First’’) and Shanghai
Three Star Stationery Industry
Corp. (‘‘Three Star’’), December 30,
2008, and Analysis for the
Preliminary Results of the
Antidupming Duty Administrative
Review of Certain Cased Pencils
from the People’s Republic of
China: Shandong Rongxin Import &
Export Co. (‘‘Rongxin’’)., December
30, 2008. As noted above, we found
that the ME purchases of the other
three inputs reported by the China
First–Three Star collapsed entity
did not account for a high enough
percentage of the collapsed entity’s
total purchases of those inputs to be
meaningful.
(4) We valued electricity using price
data for small, medium, and large
industries, as published by the
Central Electricity Authority of the
Government of India in its
publication titled ‘‘Electricity Tariff
& Duty and Average Rates of
Electricity Supply in India,’’ dated
July 2006. These electricity rates
represent actual country–wide,
publicly–available information on
tax–exclusive electricity rates
charged to industries in India. Since
the rates are not contemporaneous
with the POI, we inflated the values
using the WPI. See Factor Valuation
Memorandum.
(5) We valued steam using the data as
calculated by the Department in the
Certain New Pneumatic Off–TheRoad Tires from the People’s
Republic of China: Final
Affirmative Determination of Sales
at Less Than Fair Value and Partial
Affirmative Determination of
Critical Circumstances,73 FR 40485
(July 15, 2008) and accompanying
Issues and Decision Memorandum
at Comment 11. We adjusted this
value, as appropriate, to account for
inflation between the effective
period and the POR.
(6) Section 351.408(c)(3) of the
Department’s regulations requires
the use of a regression–based wage
rate. Therefore, we valued labor
using the regression–based wage
rate for China published on IA’s
website. The source of the wage rate
data on the Import Administration’s
website is the International Labour
Organization (‘‘ILO’’), Geneva,
Labour Statistics Database Chapter
5B: Wages in Manufacturing. See
Expected Wages of Selected NME
Countries (revised November 2008)
(available at https://ia.ita.doc.gov/
wages/). Since this
regression–based wage rate does not
separate the labor rates into
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679
different skill levels or types of
labor, we have applied the same
wage rate to all skill levels and
types of labor.
(7) We derived ratios for factory
overhead, depreciation, and selling,
general and administrative
expenses, interest expenses, and
profit for the finished product using
the 2006–2007 (‘‘FY 06–07 FS’’)
financial statement of Triveni
Pencils Ltd. (‘‘Triveni’’), an Indian
producer of pencils, in accordance
with the Department’s practice with
respect to selecting financial
statements for use in NME cases
(see, e.g., Notice of Final
Determination of Sales at Less Than
Fair Value: Chlorinated
Isocyanurates From the People’s
Republic of China, 70 FR 24502
(May 10, 2005), and accompanying
Issues and Decision Memorandum
at Comment 2). The Department
prefers to derive financial ratios
using data from those surrogate
producers whose financial data will
not be distorted or otherwise
unreliable.
In prior reviews of this product, the
Department derived the surrogate
financial ratios from the financial
statement of Camlin Ltd.
(‘‘Camlin’’), an Indian producer of
pencils and other products. See,
e.g., Certain Cased Pencils From the
People’s Republic of China;
Preliminary Results of Antidumping
Duty Administrative Review, 71 FR
70949 (December 7, 2006) (‘‘Prelim
PRC Pencils 2004–2005 AR’’)
(unchanged in the final results, 72
FR 27074 (May 14, 2007)).
However, we have used Triveni’s
FY 06–07 FS for purposes of the
preliminary results of this review
because Triveni pencils, whereas
Camlin produces pencils and an
array of other art supplies. Because
of this, Triveni is a better match
with our Chinese respondents who
also primarily produce pencil
producers. Consequently, we find
Triveni’s FY 06–07 report to be
more reliable and less distortive
than Camlin’s financial data. In
addition, India is our primary
surrogate country and Triveni is an
Indian producer of the subject
merchandise. Therefore, for both
the China First–Three Star
collapsed entity and Rongxin, we
have applied the ratios taken from
Triveni’s FY 06–07 FS statement to
the respondents’ calculated costs
for materials, labor, and energy.
(8) We valued inland truck freight
expenses using a per–unit average
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rate calculated from data on the
following website: https://
www.infobanc.com/logistics/
logtruck.htm. The logistics section
of this website contains inland
freight truck rates between many
large Indian cities. For certain
Rongxin sales where inland freight
was provided by ‘‘ferry,’’ we were
unable to find sufficiently recent
barge rates and, therefore, we
substituted inland truck rates. See
Factor Valuation Memorandum.
Since the truck rate value is not
contemporaneous with the POI, we
deflated the rate using WPI. For
Rongxin we used 2006–2007 data
from the website
www.Indianrailways.gov to derive,
where appropriate, input–specific
train rates on a rupees per kilogram
per kilometer basis(≥Rs/kg/km’’).
Rongxin also reported
transportation by cart for one input
which we disregarded because the
distance involved was insignificant.
See China First–Three Star
Preliminary Calculation
Memorandum. For further
discussion of the surrogate values
we used for these preliminary
results of review, see the Factor
Valuation Memorandum, which is
on file in the Central Records Unit
(‘‘CRU’’) in Room 1117 of the main
Department of Commerce building.
Currency Conversion
We made currency conversions into
U.S. dollars, in accordance with section
773A(a) of the Act, based on the
exchange rates in effect on the dates of
the U.S. sales, as certified by the Federal
Reserve Bank.
Preliminary Results of Review
We preliminarily determine that the
following margins exist for the period
December 1, 2006, through November
30, 2007:
Margin
(percent)
Manufacturer/exporter
China First Pencil Company, Ltd.
(which includes its affiliates
China First Pencil Fang Zheng
Co., Shanghai First Writing Instrument Co., Ltd., and
Shanghai Great Wall Pencil
Co., Ltd.), and Shanghai
Three Star Stationery Industry
Corp.10 ....................................
Shandong Rongxin Import & Export Co., Ltd. ...........................
Orient International Holding
Shanghai Foreign Trade Co.,
Ltd. ..........................................
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33.26
8.53
20.90
Jkt 217001
19 CFR 351.301(c)(1). See Glycine from
the People’s Republic of China: Final
Results of Antidumping Duty
PRC–wide Entity11 .....................
114.90 Administrative Review and Final
10 For this review, we consider China First
Rescission, in Part, 72 FR 58809
Pencil Company, Ltd., China First Pencil Fang (October 17, 2007) and accompanying
Zheng Co., Shanghai First Writing Instrument Issues and Decision Memorandum at
Co., Ltd., Shanghai Great Wall Pencil Co., Comment 2.
Ltd., and Shanghai Three Star Stationery InAn interested party may request a
dustry Corp. to constitute a single entity as
stated on page A-1 of China First’s August 1, hearing within 30 days of publication of
2008, Section A Response.
the preliminary results. See 19 CFR
11 The PRC-wide entity includes Anhui Import Export Co., Ltd., Guangdong Provincial 351.310(c). Interested parties may
Stationeryand Sporting Goods Import Export submit written comments (case briefs)
Corporation, and Tianjin Custom Wood Proc- within seven days of issuance of the
essing Co., Ltd.
verification report and rebuttal
comments (rebuttal briefs), which must
As stated above in the ‘‘Separate–
be limited to issues raised in the case
Rates Determination’’ section of this
notice, SFTC qualifies for a separate rate briefs, within five days after the time
in this review. Moreover as stated above limit for filing case briefs. See 19 CFR
351.309(c)(1)(ii) and 19 CFR 351.309(d).
in the ‘‘Respondent Selection’’ section
of this notice, we limited this review by Parties who submit arguments are
requested to submit with the argument:
selecting the largest exporters and did
(1) a statement of the issue; (2) a brief
not select SFTC as a mandatory
summary of the argument; and (3) a
respondent. Therefore, SFTC is being
table of authorities. Further, the
assigned a dumping margin based on
Department requests that parties
the calculated margins of mandatory
submitting written comments provide
respondents which are not de minimis
the Department with a diskette
or based on adverse facts available, in
containing the public version of those
accordance with Department practice.
comments. We will issue a
Accordingly, we have assigned SFTC
memorandum identifying the date of a
the simple–average of the dumping
hearing, if one is requested.
margins assigned to the China First–
The Department will issue the final
Three Star collapsed entity and
results of this administrative review,
Rongxin.
including the results of our analysis of
The Department will disclose
the issues raised by the parties in their
calculations performed for these
preliminary results to the parties within comments, within 120 days of
publication of the preliminary results,
five days of the date of publication of
pursuant to section 751(a)(3)(A) of the
this notice in accordance with 19 CFR
Act.
351.224(b).
In accordance with 19 CFR
Assessment Rates
351.301(c)(3)(ii), for the final results of
Upon completion of this
this administrative review, interested
administration review, the Department
parties may submit publicly available
will determine, and CBP shall assess,
information to value FOPs within 20
antidumping duties on all appropriate
days after the date of publication of
entries. The Department intends to issue
these preliminary results. Interested
assessment instructions to CBP 15 days
parties must provide the Department
after the date of publication of the final
with supporting documentation for the
results of review. Pursuant to 19 CFR
publicly available information to value
351.212(b)(1), we will calculate
each FOP. Additionally, in accordance
importer- or customer–specific ad
with 19 CFR 351.301(c)(1), for the final
valorem duty assessment rates based on
results of this administrative review,
the ratio of the total amount of the
interested parties may submit factual
dumping margins calculated for the
information to rebut, clarify, or correct
examined sales to the total entered
factual information submitted by an
value of those same sales. To determine
interested party less than ten days
whether the duty assessment rates are
before, on, or after, the applicable
de minimis (i.e., less than 0.50 percent),
deadline for submission of such factual
in accordance with the requirement set
information. However, the Department
forth in 19 CFR 351.106(c)(2), we will
notes that 19 CFR 351.301(c)(1) permits
calculate customer–specific ad valorem
new information only insofar as it
ratios based on export prices.
rebuts, clarifies, or corrects information
recently placed on the record. The
We will instruct CBP to assess
Department generally cannot accept the antidumping duties on all appropriate
submission of additional, previously
entries covered by this review if any
absent–from-the–record alternative
importer- or customer–specific
surrogate value information pursuant to assessment rate calculated in the final
PO 00000
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Margin
(percent)
E:\FR\FM\07JAN1.SGM
07JAN1
Federal Register / Vol. 74, No. 4 / Wednesday, January 7, 2009 / Notices
results of this review is above de
minimis.
For entries of the subject merchandise
during the POR from companies not
subject to this review, we will instruct
CBP to liquidate them at the cash
deposit rate in effect at the time of entry.
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.
For the China First–Three Star
collapsed entity and Rongxin, we have
calculated customer–specific
antidumping duty assessment amounts
for subject merchandise based on the
ratio of the total amount of antidumping
duties calculated for the examined sales
to the total quantity of sales examined.
We calculated these assessment
amounts because there is no information
on the record which identifies entered
values or the importers of record for the
U.S. sales of the China First–Three Star
collapsed entity and Rongxin.
As noted above, SFTC, the company
that met the separate rate application
status, will be assigned the simple–
average dumping margin based on the
calculated margins of mandatory
respondents which are not de minimis
or based on adverse facts available, in
accordance with Department practice.
We will instruct CBP to assess
antidumping duties on this company’s
entries equal to the margin this
company receives in the final results,
regardless of the importer or customer.
The other three companies, Anhui,
Guangdong and Tianjin, did not provide
separate rate information. Therefore, the
Department finds that they are not
entitled to a separate rate. As a result,
these three companies will be
considered part of the PRC–wide entity,
subject to the PRC–wide rate.
For Dixon, for which this review is
preliminarily rescinded, antidumping
duties shall be assessed at rates equal to
the cash–deposit of estimated.
antidumping duties required at the time
of entry, or withdrawal form warehouse,
for consumption, in accordance with 19
CFR 351.212(c)(2).
Cash Deposit Requirements
The following cash–deposit
requirements will apply to all
shipments of certain cased pencils from
the PRC entered, or withdrawn from
warehouse, for consumption on or after
the publication date of the final results
of this administrative review, as
provided by section 751(a)(1) of the Act:
(1) the cash deposit rates for the
reviewed companies named above will
be the rates for those firms established
VerDate Nov<24>2008
16:10 Jan 06, 2009
Jkt 217001
in the final results of this administrative
review; (2) for any previously reviewed
or investigated PRC or non–PRC
exporter, not covered in this review,
with a separate rate, the cash deposit
rate will be the company–specific rate
established in the most recent segment
of this proceeding; (3) for all other PRC
exporters, the cash deposit rate will be
the PRC–wide rate established in the
final results of this review; and (4) the
cash–deposit rate for any non–PRC
exporter of subject merchandise from
the PRC 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 Interested Parties
This notice 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.
We are issuing and publishing the
preliminary results determination in
accordance with sections 751(a)(1) and
777(i)(1) of the Act.
Dated: December 30, 2008.
David M. Spooner,
Assistant Secretary for Import
Administration.
[FR Doc. E9–00062 Filed 1–6–09; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
[A–489–805]
Notice of Initiation of Antidumping
Duty Changed Circumstances Review:
Certain Pasta From Turkey
AGENCY: Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from
Marsan Gida Sanayi ve Ticaret A.S.
(Marsan), a producer of pasta, pursuant
to section 751(b)(1) of the Tariff Act of
1930, as amended (the Act), and 19 CFR
351.216 and 351.221(c)(3), the
Department is initiating a changed
circumstances review of the
antidumping duty order on certain pasta
(pasta) from Turkey. This review is
being conducted to determine whether
Marsan is the successor-in-interest to
PO 00000
Frm 00011
Fmt 4703
Sfmt 4703
681
Gidasa Sabanci Gida Sanayi ve Ticaret
A.S. (Gidasa) for purposes of
determining antidumping duty liability.
DATES: Effective Date: January 7, 2009.
FOR FURTHER INFORMATION CONTACT:
Christopher Hargett, Office of AD/CVD
Operations, Office 3, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th and Constitution
Avenue, NW., Washington, DC 20230;
telephone: (202) 482–4161.
Background
On July 24, 1996, the Department
published in the Federal Register the
antidumping duty order on pasta from
Turkey. See Notice of Antidumping
Duty Order and Amended Final
Determination of Sales at Less Than
Fair Value: Certain Pasta From Turkey,
61 FR 38545 (July 24, 1996) (Pasta from
Turkey Order). On December 3, 2008,
Marsan filed a request for an expedited
changed circumstances review to
determine whether it is the successorin-interest to Gidasa, in accordance with
section 751(b) of the Act and 19 CFR
351.216. Marsan submitted certain
information in support of its claim that
it is the successor-in-interest to Gidasa
and, therefore, is entitled to Guidasa’s
current antidumping duty cash deposit
rate of 0.29 percent.1
Scope of the Order
Imports covered by this review are
shipments of certain non-egg dry pasta
in packages of five pounds (2.27
kilograms) or less, whether or not
enriched or fortified or containing milk
or other optional ingredients such as
chopped vegetables, vegetable purees,
milk, gluten, diastases, vitamins,
coloring and flavorings, and up to two
percent egg white. The pasta covered by
this scope is typically sold in the retail
market, in fiberboard or cardboard
cartons, or polyethylene or
polypropylene bags of varying
dimensions.
Excluded from the scope of this
review are refrigerated, frozen, or
canned pastas, as well as all forms of
egg pasta, with the exception of non-egg
dry pasta containing up to two percent
egg white.
The merchandise subject to review is
currently classifiable under item
1902.19.20 of the Harmonized Tariff
Schedule of the United States (HTSUS).
Although the HTSUS subheading is
1 See Notice of Final Results of Antidumping Duty
Administrative Review: Certain Pasta from Turkey,
64 FR 69493 (December 13, 1999); see also Notice
of Final Results of Changed Circumstances
Antidumping and Countervailing Duty
Administrative Reviews: Certain Pasta From
Turkey, 68 FR 41554 (July 14, 2003).
E:\FR\FM\07JAN1.SGM
07JAN1
]]>Agencies
[Federal Register Volume 74, Number 4 (Wednesday, January 7, 2009)]
[Notices]
[Pages 673-681]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-00062]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-827]
Certain Cased Pencils from the People's Republic of China;
Preliminary Results and Partial Rescission of Antidumping Duty
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') has
preliminarily determined that the respondents in this review, covering
the period December 1, 2006, through November 30, 2007, have made sales
of subject merchandise at less than normal value. If these preliminary
results are adopted in the final results of this review, we will
instruct U.S. Customs and Border Protection (``CBP'') to assess
antidumping duties on all appropriate entries. The Department invites
interested parties to comment on these preliminary results.
EFFECTIVE DATE: January 7, 2009.
FOR FURTHER INFORMATION CONTACT: Alexander Montoro or David Layton, AD/
CVD Operations, Office 1, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-0238
and (202) 482-0371, respectively.
SUPPLEMENTARY INFORMATION:
Background
On December 28, 1994, the Department published an antidumping duty
order on certain cased pencils from the People's Republic of China
(``PRC''). See Antidumping Duty Order: Certain Cased Pencils from the
People's Republic of China, 59 FR 66909 (December 28, 1994).
On December 3, 2007, the Department published a notice of
``Opportunity to Request Administrative Review'' of the antidumping
duty order on certain cased pencils from the PRC covering the period of
review (``POR'') December 1, 2006, through November 30, 2007. See
Antidumping or Countervailing Duty Order, Finding, or Suspended
Investigation; Opportunity to Request Administrative Review, 72 FR
67889 (December 3, 2007). On December 26, 2007, in accordance with 19
CFR 351.213(b), Shandong Rongxin Import and Export Co., Ltd.
(``Rongxin''), a PRC exporter/producer, requested a review of itself.
On December 31, 2007, the following exporters/producers requested
reviews of themselves in accordance with 19 CFR 351.213(b): China First
Pencil Co., Ltd. (``China First''), Shanghai Three Star Stationery
Industry Corp. (``Three Star''), and Oriental International Holding
Shanghai Foreign Trade Co., Ltd. (``SFTC''). On December 31, 2007, the
petitioners \1\ requested a review of the following companies: China
First (including subsidiaries Shanghai First Writing Instrument Co.,
Ltd. (``Shanghai First''), Shanghai Great Wall Pencil Co., Ltd.
(``Great Wall''), and China First Pencil Fang Zheng Co., Ltd. (``Fang
Zheng''), Three Star, Guangdong Provincial Stationery & Sporting Goods
Import & Export Corporation (``Guangdong''), Rongxin, Tianjin Custom
Wood Processing Co., Ltd. (``Tianjin''), Beijing Dixon Stationery
Company Ltd. (``Dixon''), and Anhui Import & Export Co., Ltd.
(``Anhui'').
---------------------------------------------------------------------------
\1\ The petitioners include Sanford L.P., Musgrave Pencil
Company, RoseMoon Inc., and General Pencil Company.
---------------------------------------------------------------------------
On January 28, 2008, the Department published a notice of
initiation for this administrative review covering the companies listed
in the requests received from interested parties. See Initiation of
Antidumping and Countervailing Duty Administrative Reviews and Request
for Revocation in Part, 73 FR 4829 (January 28, 2008). On May 6, 2008,
the petitioners requested that the Department conduct verification of
the information the Department will rely upon in the final results of
this review. On August 25, 2008, we extended the time limit for the
preliminary results in this review until December 30, 2008. See Certain
Cased Pencils from the People's Republic of China: Extension of Time
Limit for the Preliminary Results of the Antidumping Duty
Administrative Review, 73 FR 49993 (August 25, 2008).
Respondent Selection
Section 777A(c)(1) of the Tariff Act of the 1930, as amended (``the
Act''), directs the Department to calculate individual dumping margins
for each known producer or exporter of the subject merchandise. Because
it was not practicable for the Department to individually examine all
of the companies covered by the review, the Department limited its
examination to a reasonable number of producers/exporters, accounting
for the greatest possible export volume, pursuant to section
777A(c)(2)(B) of the Act. Therefore, the Department selected China
First, Three Star, and Rongxin as the mandatory respondents in this
review. See Memorandum from Alexander Montoro, International Trade
Compliance Analyst, to Susan H. Kuhbach, Director of AD/CVD Operations
Office 1, entitled ``Selection of Respondents for the Antidumping Duty
Review of Certain Cased Pencils from the People's Republic of China,''
June 17, 2008.
Partial Rescission
On July 3, 2008, Dixon requested that the Department rescind the
administrative review with respect to Dixon and certified that it had
no exports, sales or entries of subject merchandise to the United
States during the POR. We reviewed CBP import data and found no
evidence that Dixon had any shipments of subject merchandise during the
POR. See Memorandum from Alexander Montoro to the File, entitled
``Intent to Rescind in Part the Antidumping Duty Administrative
[[Page 674]]
Review on Certain Cased Pencils from the People's Republic of China'',
August 7, 2008, (``Intent to Rescind Memo''). In addition, on July 17,
2008, we made a ``No Shipments Inquiry'' to CBP to confirm that there
were no exports of subject merchandise by Dixon during the POR. We
asked CBP to notify us within ten days if CBP ``has contrary
information and is suspending liquidation'' of subject merchandise
exported by Dixon. CBP did not reply with contrary information. The
Department provided interested parties in this review until August 14,
2008, to submit comments on the Intent to Rescind Memo. No interested
party submitted any comments. Accordingly, we are preliminarily
rescinding this review with respect to Dixon.
Non-Market Economy 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 Act, any determination
that a foreign country is an NME country shall remain in effect until
revoked by the administering authority. See, e.g., 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 calculated normal value (``NV'') in accordance with section 773(c)
of the Act, which applies to NME countries.
Surrogate Country and Surrogate Values
Section 773(c)(1) of the Act directs the Department to base NV on
the NME producer's factors of production (``FOPs''), valued in a
surrogate market economy country or countries considered to be
appropriate by the Department if NV cannot be determined pursuant to
section 773(a) of the Act. In accordance with section 773(c)(4) of the
Act, the Department valued the FOPs, to the extent possible, using the
costs of the FOPs in one or more market-economy countries that are at a
level of economic development comparable to that of the PRC and are
significant producers of comparable merchandise. The Department
determined that India, Indonesia, the Philippines, Colombia and
Thailand are countries comparable to the PRC in terms of economic
development. See Memorandum from Carole Showers, Acting Director,
Office of Policy, to Susan H. Kuhbach, Director, Office 1, July 9,
2008.
On November 14, 2008, the Department solicited comments on
surrogate country selection from interested parties. The Department
received comments from the petitioners on November 26, 2008. On
November 26, 2008, the Department also received surrogate-value
information from the petitioner, China First, and Three Star. On
December 5, 2008, and December 8, 2008, the Department received
rebuttal factual information and comments on factor valuation from the
petitioners and China First and Three Star (``China First-Three
Star''), respectively. For a detailed discussion of the Department's
selection of surrogate values and financial ratios, see ``Factor
Valuations'' section below. See also Memorandum from the Team to the
File, entitled ``2006-2007 Antidumping Duty Administrative Review of
Certain Cased Pencils from the People's Republic of China: Factor
Valuation for the Preliminary Results'', December 30, 2008, (``Factor
Valuation Memorandum''), which is on file in the Central Records Unit
(``CRU'') in Room 1117 of the main Department of Commerce building.
We determined that India is comparable to the PRC in terms of per
capita gross national product and the national distribution of labor.
Furthermore, India is a significant producer of comparable merchandise.
See Memorandum from Alexander Montoro to the File entitled, ``2006-2007
Antidumping Duty Administrative Review on Certain Cased Pencils from
the People's Republic of China: Selection of a Surrogate Country,''
December 30, 2008.
Moreover, it is the Department's practice to select an appropriate
surrogate country based on the availability and reliability of data
from these countries. See Department Policy Bulletin No. 04.1: Non-
Market Economy Surrogate Country Selection Process, dated March 1,
2004. The Department finds India to be a reliable source for surrogate
values because India is at a comparable level of economic development
pursuant to section 773(c)(4) of the Act, is a significant producer of
comparable merchandise, and has publicly available and reliable data.
Furthermore, the Department notes that India has been the primary
surrogate country in past segments, and the only surrogate value data
submitted on the record are from Indian sources. Given the above facts,
the Department has selected India as the primary surrogate country for
this review.
Scope of the Order
Imports covered by the order are shipments of certain cased pencils
of any shape or dimension (except as described below) which are writing
and/or drawing instruments that feature cores of graphite or other
materials, encased in wood and/or man-made materials, whether or not
decorated and whether or not tipped (e.g., with erasers, etc.) in any
fashion, and either sharpened or unsharpened. The pencils subject to
the order are currently classifiable under subheading 9609.10.00 of the
Harmonized Tariff Schedule of the United States (``HTSUS'').
Specifically excluded from the scope of the order are mechanical
pencils, cosmetic pencils, pens, non-cased crayons (wax), pastels,
charcoals, chalks, and pencils produced under U.S. patent number
6,217,242, from paper infused with scents by the means covered in the
above-referenced patent, thereby having odors distinct from those that
may emanate from pencils lacking the scent infusion. Also excluded from
the scope of the order are pencils with all of the following physical
characteristics: (1) length: 13.5 or more inches; (2) sheath diameter:
not less than one-and-one quarter inches at any point (before
sharpening); and (3) core length: not more than 15 percent of the
length of the pencil.
In addition, pencils with all of the following physical
characteristics are excluded from the scope of the order: novelty jumbo
pencils that are octagonal in shape, approximately ten inches long, one
inch in diameter before sharpening, and three-and-one eighth inches in
circumference, composed of turned wood encasing one-and-one half inches
of sharpened lead on one end and a rubber eraser on the other end.
Although the HTSUS subheading is provided for convenience and
customs purposes, the written description of the scope of the order is
dispositive.
Affiliation - China First and Three Star
To the extent that section 771(33) of the Act does not conflict
with the Department's application of separate rates and enforcement of
the NME provision, section 773(c) of the Act, the Department will
determine that exporters and/or producers are affiliated if the facts
of the case support such a finding.\2\ For the reasons discussed
[[Page 675]]
below, we find that this condition has not prevented us from examining
in this administrative review whether China First and its subsidiary
producers\3\ are affiliated with Three Star.
---------------------------------------------------------------------------
\2\ See, e.g., Certain Preserved Mushrooms From the People's
Republic of China; Preliminary Results of Antidumping Duty
Administrative Review, 71 FR 64930, 64934 (November 6, 2006)
(unchanged in the final results, 72 FR 44827 (August 9, 2007)), and
Certain Preserved Mushrooms From the People's Republic of China:
Preliminary Results and Partial Rescission of Fifth Antidumping Duty
Administrative Review, 70 FR 10965, 10969 (March 7, 2005)
(``Mushrooms Fifth Review Prelim'') (unchanged in the final results,
70 FR 54361 (September 14, 2005)).
\3\ China First's pencil-producing subsidiaries include the
following companies: Shanghai First, Great Wall, and Fang Zheng.
---------------------------------------------------------------------------
In prior administrative reviews involving China First and Three
Star, the Department found China First to be affiliated with Three Star
as a result of Shanghai Light Industry, Ltd.'s (``SLI'') direct
oversight and control over both China First and Three Star.\4\
---------------------------------------------------------------------------
\4\ See, e.g., Certain Cased Pencils from the People's Republic
of China; Final Results and Partial Rescission of Antidumping Duty
Administrative Review,71 FR 38366 (July 6, 2006) and accompanying
Issues and Decision Memorandum at Comment 7.
---------------------------------------------------------------------------
In this review, as in past administrative reviews, China First and
Three Star claim that they are not affiliated and should not be
collapsed. These respondents contend that SLI's transfer of its
oversight responsibilities for China First and Three Star to the
Huangpu District State Assets Administration Office (``HSAAO'') on
October 11, 2005, and September 8, 2005, respectively, is additional
evidence of their non-affiliation.\5\
---------------------------------------------------------------------------
\5\ See page 2 of Three Star's section A response, and pages A-4
and A-5 of China First's section A response, August 1, 2008.
---------------------------------------------------------------------------
Based on our analysis, we preliminarily find that China First and
its pencil-producing subsidiaries are affiliated with Three Star,
pursuant to section 771(33)(F) of the Act, because of the common
control exercised by HSAAO. See Memorandum From Team to Susan H.
Kuhbach, Director, Office 1, entitled ``Certain Cased Pencils from the
People's Republic of China: Whether to Continue To Collapse China First
and its Pencil-Producing Subsidiaries with Three Star,'' December 30,
2008 (``Affiliation/Collapsing Memo''). The basis of our finding is
that the facts have not changed from previous reviews in which we found
these parties to be affiliated.
In the four most recent administrative reviews of Pencils from
China, the Department found China First and Three Star to be
affiliated, in large part based on: (1) a 1997 public filing by China
First that indicated that China First's shareholders voted to merge
with Three Star; and (2) common oversight of the two firms by SLI, a
government-owned assets management entity. Throughout the four reviews,
both companies consistently asserted that the 1997 merger was not
implemented and that the two companies, are in, fact unaffiliated
competitors. However, neither China First nor Three Star was able to
document that the 1997 shareholder decision to merge was reversed.
In this review, China First and Three Star continue to claim that
the merger was never completed, but have yet to provide documents
specifically supporting this claim. The only change is the transfer of
SLI's administrative oversight of China First and Three Star to HSAAO.
China First and Three Star describe the oversight duties and asset
management of HSAAO to be essentially the same as those of SLI.
Therefore, we preliminarily determine that common control of China
First and Three Star continues and that they are affiliated under
section 771(33)(F) of the Act.
The Department intends to obtain additional information on the
relationship of these companies for consideration in the final results.
Collapsing - China First and Three Star
Pursuant to 19 CFR 351.401(f), the Department will collapse
producers and treat them as a single entity where (1) those producers
are affiliated, (2) the producers have production facilities for
producing similar or identical products that would not require
substantial retooling of either facility in order to restructure
manufacturing priorities, and (3) there is a significant potential for
manipulation of price or production. We also note that the rationale
for collapsing, to prevent manipulation of price and/or production (see
19 CFR 351.401(f)), applies to both producers and exporters, if the
facts indicate that producers of like merchandise are affiliated as a
result of their mutual relationship with an exporter.
To the extent that this provision does not conflict with the
Department's application of separate rates and enforcement of the NME
provision, section 773(c) of the Act, the Department will collapse two
or more affiliated entities in a case involving an NME country if the
facts of the case warrant such treatment. Furthermore, we note that the
factors listed in 19 CFR 351.401(f)(2) are not exhaustive in the
context of an NME investigation or administrative review, other factors
unique to the relationship of business entities within the NME may lead
the Department to determine that collapsing is either warranted or
unwarranted, depending on the facts of the case. See Hontex
Enterprises, Inc. v. United States, 248 F. Supp. 2d 1323, 1342 (Ct.
Int'l. Trade 2003) (noting that the application of collapsing in the
NME context may differ from the standard factors listed in the
regulation).
In summary, if there is evidence of significant potential for
manipulation or control between or among producers which produce
similar and/or identical merchandise, but may not all produce their
product for sale to the United States, the Department may find such
evidence sufficient to apply the collapsing criteria in an NME context
in order to determine whether all or some of those affiliated producers
should be treated as one entity. See, e.g., Mushrooms Fifth Review
Prelim, 70 FR at 10971 (unchanged in final results, 70 FR 54361
(September 14, 2005)); and Certain Preserved Mushrooms From the
People's Republic of China: Final Results of Sixth Antidumping Duty New
Shipper Review and Final Results and Partial Rescission of the Fourth
Antidumping Duty Administrative Review, 69 FR 54635, 54637 (September
9, 2004), and accompanying Issues and Decision Memorandum at Comment 1.
As noted above in the ``Affiliation - China First and Three Star''
section of this notice, we find a sufficient basis to conclude that
China First and its pencil-producing subsidiaries and Three Star are
affiliated through the common control by HSAAO, pursuant to section
771(33)(F) of the Act. All of China First's three pencil-producing
subsidiaries and Three Star produced cased pencils during the POR,
which would be subject to the antidumping duty order if this
merchandise entered the United States (see FOP data submitted by China
First and Three Star in their section D responses, August 18, 2008).
Therefore, we find that the first and second collapsing criteria are
met because in addition to being affiliated, these producers have
production facilities for producing similar or identical products, such
that no retooling at any of the three facilities is required in order
to restructure manufacturing priorities.
Finally, we find that the third collapsing criterion is met in this
case because, a significant potential for manipulation of price or
production exists among China First and Three Star. In determining
whether a significant potential for manipulation exists, the
regulations provide that the Department may consider various factors,
including (1) the level of common ownership, (2) the extent to which
managerial employees or board members of one firm sit on the board of
directors of an affiliated firm, and (3) whether the operations of the
affiliated firms are intertwined. See Gray Portland Cement and Clinker
From Mexico: Final Results of Antidumping Duty Administrative
[[Page 676]]
Review, 63 FR 12764, 12774 (March 16, 1998) and Notice of Final
Determination of Sales at Less Than Fair Value: Collated Roofing Nails
From Taiwan, 62 FR 51427, 51436 (October 1, 1997). See Affiliation/
Collapsing Memo for further discussion. In this case, there is a
significant potential for manipulation of price or production because
China First and Three Star have common ownership as demonstrated by the
fact that HSAAO has administrative oversight over both of them.
For the reasons explained more fully in the Affiliation/Collapsing
Memo and pursuant to 19 CFR 351.401(f), we have preliminarily collapsed
China First and its pencil-producing subsidiaries with Three Star.
Separate Rates Determination
A designation as an NME remains in effect until it is revoked by
the Department. See section 771(18)(c) of the Act. Accordingly, the
Department begins with a rebuttable presumption that all companies
within the country are subject to government control and, thus, should
be assessed a single antidumping duty deposit rate (i.e., a country-
wide rate). See Notice of Final Determination of Sales at Less Than
Fair Value, and Affirmative Critical Circumstances, In Part: Certain
Lined Paper Products From the People's Republic of China, 71 FR 53079
(September 8, 2006); Final Determination of Sales at Less Than Fair
Value and Final Partial Affirmative Determination of Critical
Circumstances: Diamond Sawblades and Parts Thereof from the People's
Republic of China, 71 FR 29303 (May 22, 2006).
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. 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 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 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'').
Regarding the mandatory respondents, China First and Three Star are
a joint stock limited company and a company ``owned by all of the
people,'' respectively.\6\ A portion of China First's shares are held
in trust in part by HSAAO, which is also owned by ``all of the
people.''\7\ HSAAO, as trustee, has oversight over Three Star's assets.
As discussed above in the ``Collapsing-China First and Three Star''
section of this notice, we are preliminarily treating China First and
Three Star as a collapsed entity. Consequently, we are considering
whether the collapsed entity as a whole is entitled to a separate rate.
This decision is specific to the facts presented in this review and is
based on several considerations, including the structure of the
collapsed entity, the level of control between/among affiliates, and
the level of participation by each affiliate in the proceeding. Given
the unique relationships which arise in NMEs between individual
companies and the government, a separate rate will be granted to the
collapsed entity only if the facts, taken as a whole, support such a
finding.
---------------------------------------------------------------------------
\6\ See page A-2 of China First's August 1, 2008, Section A
Response and page 2 of Three Star's August 1, 2008 Section A
Response.
\7\ See page A-5 of China First's August 1, 2008, Section A
Response.
---------------------------------------------------------------------------
The other mandatory respondent, Rongxin, is a limited liability
company.
Five respondents subject to this review were not selected as
mandatory respondents.\8\ We issued separate rate applications and
certifications to all five of these companies. One of these
respondents, Dixon, requested rescission on the basis that it had no
shipments in the POR, as discussed above. SFTC filed its separate rate
certification on July 24, 2008. The remaining three non-mandatory
respondents did not submit either a separate rates certification or
application. One of these three companies, Tianjin, qualified for a
separate rate in an earlier administrative review. See Certain Cased
Pencils from the People's Republic of China; Final Results and Partial
Rescission of Antidumping Duty Administrative Review, 68 FR 43082,
43084 (July 21, 2003). However, because Tianjin did not submit a
separate rate certification in the instant review, it will now be
treated as part of the PRC-wide entity. Consequently, Anhui, Guangdong,
and Tianjin have not satisfied the criteria for separate rates for the
POR and are considered as being part of the PRC-wide entity.
---------------------------------------------------------------------------
\8\ Dixon, SFTC, Anhui, Guangdong, and Tianjin.
---------------------------------------------------------------------------
Our analysis of whether the export activities of Rongxin, the China
First/Three Star collapsed entity, and SFTC are independent from
government control follows.
Absence of De Jure Control
The Department considers the following criteria in determining
whether an individual company may be granted a separate rate: (1) an
absence of restrictive stipulations associated with the individual
exporter's business and export licenses; (2) any legislative enactments
decentralizing control of companies; and (3) any other formal measures
by the government decentralizing control of companies. See Sparklers,
56 FR at 20589.
The China First Three Star collapsed entity and Rongxin have placed
on the administrative record the following documents to demonstrate
absence of de jure control: the 1994 ``Foreign Trade Law of the
People's Republic of China;'' the ``Company Law of the PRC,'' effective
as of July 1, 1994; and ``The Enterprise Legal Person Registration
Administrative Regulations,'' promulgated on June 13, 1988. In other
cases involving products from the PRC, these and other respondents have
submitted the following additional documents to demonstrate absence of
de jure control, and the Department has placed these additional
documents on the record of this segment, as well: the ``Law of the
People's Republic of China on Industrial Enterprises Owned by the Whole
People,'' adopted on April 13, 1988; and the 1992 ``Regulations for
Transformation of Operational Mechanisms of State-Owned Industrial
Enterprises.'' See December 30, 2008, memorandum to the file which
places the above-referenced laws on the record of this segment.
In its separate rates certification, SFTC certified that during the
POR: (1) as with the segment of the proceeding in which the firm was
previously granted a separate rate (``previous Granting Period''),
there were no government laws or regulations that controlled the firm's
export activities; (2) the ownership under which the firm registered
itself with the official government business license issuing authority
remains the same as for the previous Granting Period; (3) the firm had
a valid PRC Export Certificate of Approval, now referred to and labeled
as a Registration Form for Foreign Trade Operator; (4) as in the
previous Granting Period, in order to conduct export activities, the
firm was not required by any level of government law or regulation to
possess additional certificates or other documents related to the legal
status and/or operation of its business beyond those discussed above;
and (5) PRC government laws and legislative enactments applicable to
SFTC remained the same as in the
[[Page 677]]
previous Granting Period. SFTC attached copies of its business license
and foreign trade operator registration form to its separate
certification to document the absence of government de jure control.
As in prior cases, we have analyzed these laws and have found them
to sufficiently establish an absence of de jure control of joint
ventures and companies owned by ``all of the people'' absent proof on
the record to the contrary. See, e.g., Notice of Final Determination of
Sales at Less Than Fair Value: Furfuryl Alcohol From the People's
Republic of China, 60 FR 22544 (May 8, 1995) (``Furfuryl Alcohol''). We
have no information in this proceeding that would cause us to
reconsider this determination. Thus, we find that the evidence on the
record supports a preliminary finding of absence of de jure government
control for SFTC, China First-Three Star (``the China First-Three Star
collapsed entity''), and Rongxin based on: (1) an absence of
restrictive stipulations associated with the exporter's business
license; (2) the legal authority on the record decentralizing control
over the respondent, as demonstrated by the PRC laws placed on the
record of this review; and (3) other formal measures by the government
decentralizing control of companies.
Absence of De Facto Control
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Silicon Carbide, 59 FR at 22587. Therefore, 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
government control which would preclude the Department from assigning
separate rates.
The Department typically considers the following 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 agency; (2) whether the
respondent has the authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding the disposition of profits or
financing of losses. See Silicon Carbide, 59 FR at 22586-87, and
Furfuryl Alcohol, 60 FR at 22545.
The affiliates in the China First-Three Star collapsed entity
(where applicable) and Rongxin all have asserted the following: (1)
each establishes its own export prices; (2) each negotiates contracts
without guidance from any government entities or organizations; (3)
each makes its own personnel decisions; and (4) each retains the
proceeds of its export sales, uses profits according to its business
needs, and has the authority to sell its assets and to obtain loans.
Additionally, each respondent's questionnaire responses indicate that
its pricing during the POR was not coordinated among exporters. As a
result, there is a sufficient basis to preliminarily determine that
each respondent listed above (including the China First-Three Star
collapsed entity as a whole) has demonstrated a de facto absence of
government control of its export functions and is each entitled to a
separate rate. Consequently, we have preliminarily determined that each
of these respondents has met the criteria for the application of a
separate rate. Moreover, with respect to the affiliates included in the
China First-Three Star collapsed entity, we have assigned to all of
them the same antidumping rate in these preliminary results for the
above-mentioned reasons.
The Department also conducted a separate rates analysis for SFTC.
SFTC certified the following: (1) there is no government participation
in setting export prices; (2) the firm has independent authority to
negotiate and sign export contracts; (3) the firm had autonomy from all
levels of government in making decisions regarding the selection of
management; (4) SFTC did not submit the names of its candidates for
managerial positions to any governmental entity for approval; and (5)
there are no restrictions on the use of export revenue. During our
analysis of the information on the record, we found no information
indicating the existence of government control of SFTC's export
activities. See SFTC's submission of July 24, 2008. Consequently, we
preliminarily determine that SFTC has met the criteria for the
application of a separate rate.
Fair-Value Comparisons
To determine whether the respondents' sales of subject merchandise
were made at less than NV, we compared the NV to individual export
price (``EP'') transactions in accordance with section 777A(d)(2) of
the Act. See ``Export Price'' and ``Normal Value'' sections of this
notice, below.
Export Price
In accordance with section 772(a) of the Act, EP is ``the price at
which merchandise is first sold (or agreed to be sold) before the date
importation by the producer or exporter of the subject merchandise
outside of the United States to an unaffiliated purchaser in the United
States to an unaffiliated purchaser for exportation to the United
States,'' as adjusted under section 772(c) of the Act. In accordance
with section 772(a) of the Act, we used EPs for sales by the China
First-Three Star collapsed entity and Rongxin to the United States
because the subject merchandise was sold directly to unaffiliated
customers in the United States (or to unaffiliated resellers outside
the United States with knowledge that the merchandise was destined for
the United States) prior to importation, and constructed export price
methodology was not otherwise indicated. We based EP on free-on-board
port or delivered prices to unaffiliated purchasers in the United
States. In accordance with section 772 (c)(2)(A) of the Act, we made
deductions for movement expenses, where appropriate. Movement expenses
included expenses for foreign inland freight from plant to port of
exportation, foreign brokerage and handling where applicable,
international freight. Foreign inland freight and foreign brokerage and
handling were provided by an NME vendor and, thus, as explained in the
section below, we based the amounts of the deductions for these
movement charges on values from a surrogate country.
For international freight, we used the reported expenses because
the respondents used market-economy freight carriers and/or paid for
those expenses in a market-economy currency. For certain sales, Rongxin
used a market-economy carrier, which it paid in U.S. dollars. In China
First-Three Star's case, it used an NME carrier, but paid for the
services in a market-economy currency. All of the respondents reported
that they incurred no marine insurance expenses on their sales to the
United States. For a detailed description of all adjustments, see
Memorandum from Nancy Decker, Program Manager, Office 1, to the File
entitled ``Analysis for the Preliminary Results of Antidumping Duty
Administrative Review of Certain Cased Pencils from the People's
Republic of China: China First Pencil Company, Ltd., Shanghai Three
Star Stationery Industry Corp.'' (``China First-Three Star Preliminary
Calculation Memorandum''), December 30, 2008, and ``Analysis for the
Preliminary
[[Page 678]]
Results of Antidumping Duty Administrative Review of Certain Cased
Pencils from the People's Republic of China: Shandong Rongxin Import
and Export Co. Ltd.'' (``Rongxin Preliminary Calculation Memorandum''),
December 30, 2008.
We valued brokerage and handling using a simple average of the
brokerage and handling costs that were reported in public submissions
that were filed in three antidumping duty cases. Specifically, we
averaged the public brokerage and handling expenses reported by: Agro
Dutch Industries Ltd. in the antidumping duty administrative review of
certain preserved mushrooms from India; Kejirwal Paper Ltd. in the less
than fair value investigation of certain lined paper products from
India; and Essar Steel in the antidumping duty administrative review of
hot-rolled carbon steel flat products from India. See Certain Preserved
Mushrooms From India: Final Results of Antidumping Duty Administrative
Review, 71 FR 10646 (March 2, 2006); see also Notice of Preliminary
Determination of Sales at Less Than Fair Value, Postponement of Final
Determination, and Affirmative Preliminary Determination of Critical
Circumstances in Part: Certain Lined Paper Products From India, 71 FR
19706 (April 17, 2006) (unchanged in final results, 71 FR 45012 (August
8, 2006)), and Certain Hot-Rolled Carbon Steel Flat Products From
India: Preliminary Results of Antidumping Duty Administrative Review,
71 FR 2018, 2021 (January 12, 2006) (unchanged in final results, 71 FR
40694 (July 18, 2006)). We identify the source used to value foreign
inland freight in the ``Normal Value'' section of this notice, below.
We adjusted these values, as appropriate, to account for inflation or
deflation between the effective period and the POR. We calculated the
inflation or deflation adjustments for these values using the wholesale
price indices (``WPI'') for India as published in the International
Financial Statistics (``IFS'') Online Service maintained by the
Statistics Department of the International Monetary Fund at the website
https://www.imfstatistics.org.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine NV using an factor of production (``FOP'') methodology if the
merchandise is exported from an NME country and the information does
not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act.
The Department will base NV on FOPs because the presence of
government controls on various aspects of these NME economies renders
price comparisons and the calculation of production costs invalid under
our normal methodologies. Therefore, we calculated NV based on FOPs in
accordance with sections 773(c)(3) and (4) of the Act and 19 CFR
351.408(c). The FOPs include: (1) hours of labor required; (2)
quantities of raw materials employed; (3) amounts of energy and other
utilities consumed; and (4) representative capital costs. We used the
FOPs reported by respondents for materials, energy, labor, and packing.
In accordance with 19 CFR 351.408(c)(1), when a producer sources an
input from a market-economy (``ME'') country and pays for it in ME
currency, the Department will normally value the factor using the
actual price paid to the market-economy supplier for the input. See 19
CFR 351.408(c)(1). Where a portion of the input is purchased from a
market-economy supplier and the remainder from an NME supplier, the
Department will normally use the price paid for the input sourced from
market-economy suppliers to value all of the input, provided the volume
of the market-economy input as a share of total purchases from all
sources is ``meaningful.'' See Antidumping Duties; Countervailing
Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997); Shakeproof v.
United States, 268 F.3d 1376, 1382 (Fed. Cir. 2001); 19 CFR
351.408(c)(1); see also Antidumping Methodologies: Market Economy
Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request
for Comments, 71 FR 61716, 61716-61719 (October 19, 2006) regarding the
Department's flexible 33 percent threshold for market economy inputs.
In this administrative review, Three Star, one of the companies in the
collapsed China First-Three Star entity, reports purchasing four market
economy inputs. However, the volume of three of the four market economy
purchases did not exceed the threshold percentage that the Department
normally considers ``meaningful'' when these purchases were compared to
the combined NME purchases of the same inputs by the collapsed Chin
First-Three Star entity. See China First-Three Star Preliminary
Calculation Memorandum.
With regard to both the Indian import-based surrogate values and
the ME input values, we have disregarded prices that we have reason to
believe or suspect may be subsidized. See Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, From the People's Republic of
China; Final Results of 1999-2000 Administrative Review, Partial
Rescission of Review, and Determination Not To Revoke Order in Part, 66
FR 57420 (November 15, 2001), and accompanying Issues and Decision
Memorandum at Comment 1. We have found that India, Indonesia, South
Korea, and Thailand maintain broadly available, non-industry-specific
export subsidies, and it is reasonable to infer that exports to all
markets from these countries may be subsidized. See Certain Frozen Fish
Fillets From the Socialist Republic of Vietnam: Preliminary Results and
Preliminary Partial Rescission of Antidumping Duty Administrative
Review, 70 FR 54007, 54011 (September 13, 2005) (unchanged in final
results, 71 FR 14170 (March 21, 2006)); and China Nat'l Machinery
Import & Export Corp. v. United States, 293 F. Supp. 2d 1334, 1336 (Ct.
Int'l. Trade 2003), aff'd 104 Fed. App 183 (Fed. Cir. 2004).
In avoiding the use of prices that may be subsidized, the
Department does not conduct a formal investigation to ensure that such
prices are not subsidized. See H.R. Rep. 100-576 at 590-91 (1988),
reprinted in 1988 U.S.C.C.A.N. 1547, 1623. Rather, the Department bases
its decision on information that is available to it at the time it is
making its determination. Therefore, we have not used prices from these
countries either in calculating the Indian import-based surrogate
values or in calculating ME input values. See Factor Valuation
Memorandum.
Factor Valuations
In accordance with section 773(c)(3) of the Act, we calculated NV
based on FOPs reported by the respondents for the POR. We multiplied
the reported per-unit factor quantities by publicly available Indian
surrogate values. In selecting the surrogate values, we considered the
quality, specificity, and contemporaneousness of the data.
In accordance with section 773(c)(1) of the Act, for purposes of
calculating NV, we attempted to value the FOPs using surrogate values
that were in effect during the POR. If we were unable to obtain
surrogate values that were in effect during the POR, we adjusted the
values, as appropriate, to account for inflation or deflation between
the effective period and the POR. We calculated the inflation or
deflation adjustments for all factor values, as applicable, except
labor, using the WPI for the appropriate surrogate country as published
in the IFS.
As appropriate, we adjusted input prices by including freight costs
to make them delivered prices. Specifically, we
[[Page 679]]
added to the Indian import surrogate values a surrogate freight cost
calculated using the shorter of the reported distance from the domestic
supplier to the factory or the distance from the nearest port of export
to the factory where appropriate (i.e., where the sales terms for the
ME inputs were not delivered to the factory). This adjustment is in
accordance with the decision of the Court of Appeals for the Federal
Circuit in Sigma Corp. v. United States, 117 F.3d 1401 (Fed. Cir.
1997). We valued the FOPs as follows:
(1) Except where noted below, we valued all reported material,
energy, and packing inputs using Indian import data from the World
Trade Atlas (``WTA'') for December 2006 through November 2007.
(2) To value lindenwood pencil slats, we used publicly available,
published U.S. prices for American basswood lumber because price
information for Chinese lindenwood and American basswood is not
available from any of the potential surrogate countries.\9\ The U.S.
lumber prices for basswood for the period December 1, 2006, through
November 30, 2007.are published in the Hardwood Market Report. We
intend to obtain additional information on this issue after the
preliminary results. For further discussion see Factor Valuation
Memorandum.
---------------------------------------------------------------------------
\9\ In the antidumping investigation of certain cased pencils
from the PRC, the Department found Chinese lindenwood and American
basswood to be virtually indistinguishable and thus used U.S. prices
for American basswood to value Chinese lindenwood. See Notice of
Final Determination of Sales at Less Than Fair Value: Certain Cased
Pencils From the People's Republic of China, 59 FR 55625, 55632
(November 8, 1994). This methodology was upheld by the Court of
International Trade. See Writing Instrument Mfrs. Ass'n Pencil
Section, et. al. v. United States, 984 F. Supp. 629, 639 (Ct. Int'l.
Trade 1997), aff'd 178 F.3d 1311 (Fed. Cir. 1998).
---------------------------------------------------------------------------
(3) The China First-Three Star collapsed entity reported that some
of its purchases of specific inputs were sourced from ME countries and
paid for in ME currencies. Pursuant to 19 CFR 351.408(c)(1), we used
the actual price paid by the China First-Three Star collapsed entity
for one of these inputs. Where applicable, we also adjusted these
values to account for freight costs incurred between the supplier and
respondent. See Factor Valuation Memorandum, Analysis for the
Preliminary Results of the Antidupming Duty Administrative Review of
Certain Cased Pencils from the People's Republic of China: China First
Pencil Company, Ltd. (``China First'') and Shanghai Three Star
Stationery Industry Corp. (``Three Star''), December 30, 2008, and
Analysis for the Preliminary Results of the Antidupming Duty
Administrative Review of Certain Cased Pencils from the People's
Republic of China: Shandong Rongxin Import & Export Co. (``Rongxin'').,
December 30, 2008. As noted above, we found that the ME purchases of
the other three inputs reported by the China First-Three Star collapsed
entity did not account for a high enough percentage of the collapsed
entity's total purchases of those inputs to be meaningful.
(4) We valued electricity using price data for small, medium, and
large industries, as published by the Central Electricity Authority of
the Government of India in its publication titled ``Electricity Tariff
& Duty and Average Rates of Electricity Supply in India,'' dated July
2006. These electricity rates represent actual country-wide, publicly-
available information on tax-exclusive electricity rates charged to
industries in India. Since the rates are not contemporaneous with the
POI, we inflated the values using the WPI. See Factor Valuation
Memorandum.
(5) We valued steam using the data as calculated by the Department
in the Certain New Pneumatic Off-The-Road Tires from the People's
Republic of China: Final Affirmative Determination of Sales at Less
Than Fair Value and Partial Affirmative Determination of Critical
Circumstances,73 FR 40485 (July 15, 2008) and accompanying Issues and
Decision Memorandum at Comment 11. We adjusted this value, as
appropriate, to account for inflation between the effective period and
the POR.
(6) Section 351.408(c)(3) of the Department's regulations requires
the use of a regression-based wage rate. Therefore, we valued labor
using the regression-based wage rate for China published on IA's
website. The source of the wage rate data on the Import
Administration's website is the International Labour Organization
(``ILO''), Geneva, Labour Statistics Database Chapter 5B: Wages in
Manufacturing. See Expected Wages of Selected NME Countries (revised
November 2008) (available at https://ia.ita.doc.gov/wages/).
Since this regression-based wage rate does not separate the labor rates
into different skill levels or types of labor, we have applied the same
wage rate to all skill levels and types of labor.
(7) We derived ratios for factory overhead, depreciation, and
selling, general and administrative expenses, interest expenses, and
profit for the finished product using the 2006-2007 (``FY 06-07 FS'')
financial statement of Triveni Pencils Ltd. (``Triveni''), an Indian
producer of pencils, in accordance with the Department's practice with
respect to selecting financial statements for use in NME cases (see,
e.g., Notice of Final Determination of Sales at Less Than Fair Value:
Chlorinated Isocyanurates From the People's Republic of China, 70 FR
24502 (May 10, 2005), and accompanying Issues and Decision Memorandum
at Comment 2). The Department prefers to derive financial ratios using
data from those surrogate producers whose financial data will not be
distorted or otherwise unreliable.
In prior reviews of this product, the Department derived the
surrogate financial ratios from the financial statement of Camlin Ltd.
(``Camlin''), an Indian producer of pencils and other products. See,
e.g., Certain Cased Pencils From the People's Republic of China;
Preliminary Results of Antidumping Duty Administrative Review, 71 FR
70949 (December 7, 2006) (``Prelim PRC Pencils 2004-2005 AR'')
(unchanged in the final results, 72 FR 27074 (May 14, 2007)). However,
we have used Triveni's FY 06-07 FS for purposes of the preliminary
results of this review because Triveni pencils, whereas Camlin produces
pencils and an array of other art supplies. Because of this, Triveni is
a better match with our Chinese respondents who also primarily produce
pencil producers. Consequently, we find Triveni's FY 06-07 report to be
more reliable and less distortive than Camlin's financial data. In
addition, India is our primary surrogate country and Triveni is an
Indian producer of the subject merchandise. Therefore, for both the
China First-Three Star collapsed entity and Rongxin, we have applied
the ratios taken from Triveni's FY 06-07 FS statement to the
respondents' calculated costs for materials, labor, and energy.
(8) We valued inland truck freight expenses using a per-unit
average
[[Page 680]]
rate calculated from data on the following website: https://
www.infobanc.com/logistics/logtruck.htm. The logistics section of this
website contains inland freight truck rates between many large Indian
cities. For certain Rongxin sales where inland freight was provided by
``ferry,'' we were unable to find sufficiently recent barge rates and,
therefore, we substituted inland truck rates. See Factor Valuation
Memorandum. Since the truck rate value is not contemporaneous with the
POI, we deflated the rate using WPI. For Rongxin we used 2006-2007 data
from the website www.Indianrailways.gov to derive, where appropriate,
input-specific train rates on a rupees per kilogram per kilometer
basis(Rs/kg/km''). Rongxin also reported transportation by
cart for one input which we disregarded because the distance involved
was insignificant. See China First-Three Star Preliminary Calculation
Memorandum. For further discussion of the surrogate values we used for
these preliminary results of review, see the Factor Valuation
Memorandum, which is on file in the Central Records Unit (``CRU'') in
Room 1117 of the main Department of Commerce building.
Currency Conversion
We made currency conversions into U.S. dollars, in accordance with
section 773A(a) of the Act, based on the exchange rates in effect on
the dates of the U.S. sales, as certified by the Federal Reserve Bank.
Preliminary Results of Review
We preliminarily determine that the following margins exist for the
period December 1, 2006, through November 30, 2007:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
China First Pencil Company, Ltd. (which includes its 33.26
affiliates China First Pencil Fang Zheng Co., Shanghai
First Writing Instrument Co., Ltd., and Shanghai Great Wall
Pencil Co., Ltd.), and Shanghai Three Star Stationery
Industry Corp.\10\.........................................
Shandong Rongxin Import & Export Co., Ltd................... 8.53
Orient International Holding Shanghai Foreign Trade Co., 20.90
Ltd........................................................
PRC-wide Entity\11\......................................... 114.90
------------------------------------------------------------------------
\10\ For this review, we consider China First Pencil Company, Ltd.,
China First Pencil Fang Zheng Co., Shanghai First Writing Instrument
Co., Ltd., Shanghai Great Wall Pencil Co., Ltd., and Shanghai Three
Star Stationery Industry Corp. to constitute a single entity as stated
on page A-1 of China First's August 1, 2008, Section A Response.
\11\ The PRC-wide entity includes Anhui Import Export Co., Ltd.,
Guangdong Provincial Stationeryand Sporting Goods Import Export
Corporation, and Tianjin Custom Wood Processing Co., Ltd.
As stated above in the ``Separate-Rates Determination'' section of
this notice, SFTC qualifies for a separate rate in this review.
Moreover as stated above in the ``Respondent Selection'' section of
this notice, we limited this review by selecting the largest exporters
and did not select SFTC as a mandatory respondent. Therefore, SFTC is
being assigned a dumping margin based on the calculated margins of
mandatory respondents which are not de minimis or based on adverse
facts available, in accordance with Department practice. Accordingly,
we have assigned SFTC the simple-average of the dumping margins
assigned to the China First-Three Star collapsed entity and Rongxin.
The Department will disclose calculations performed for these
preliminary results to the parties within five days of the date of
publication of this notice in accordance with 19 CFR 351.224(b).
In accordance with 19 CFR 351.301(c)(3)(ii), for the final results
of this administrative review, interested parties may submit publicly
available information to value FOPs within 20 days after the date of
publication of these preliminary results. Interested parties must
provide the Department with supporting documentation for the publicly
available information to value each FOP. Additionally, in accordance
with 19 CFR 351.301(c)(1), for the final results of this administrative
review, interested parties may submit factual information to rebut,
clarify, or correct factual information submitted by an interested
party less than ten days before, on, or after, the applicable deadline
for submission of such factual information. However, the Department
notes that 19 CFR 351.301(c)(1) permits new information only insofar as
it rebuts, clarifies, or corrects information recently placed on the
record. The Department generally cannot accept the submission of
additional, previously absent-from-the-record alternative surrogate
value information pursuant to 19 CFR 351.301(c)(1). See Glycine from
the People's Republic of China: Final Results of Antidumping Duty
Administrative Review and Final Rescission, in Part, 72 FR 58809
(October 17, 2007) and accompanying Issues and Decision Memorandum at
Comment 2.
An interested party may request a hearing within 30 days of
publication of the preliminary results. See 19 CFR 351.310(c).
Interested parties may submit written comments (case briefs) within
seven days of issuance of the verification report and rebuttal comments
(rebuttal briefs), which must be limited to issues raised in the case
briefs, within five days after the time limit for filing case briefs.
See 19 CFR 351.309(c)(1)(ii) and 19 CFR 351.309(d). Parties who submit
arguments are requested to submit with the argument: (1) a statement of
the issue; (2) a brief summary of the argument; and (3) a table of
authorities. Further, the Department requests that parties submitting
written comments provide the Department with a diskette containing the
public version of those comments. We will issue a memorandum
identifying the date of a hearing, if one is requested.
The Department will issue the final results of this administrative
review, including the results of our analysis of the issues raised by
the parties in their comments, within 120 days of publication of the
preliminary results, pursuant to section 751(a)(3)(A) of the Act.
Assessment Rates
Upon completion of this administration review, the Department will
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- or
customer-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. To determine
whether the duty assessment rates are de minimis (i.e., less than 0.50
percent), in accordance with the requirement set forth in 19 CFR
351.106(c)(2), we will calculate customer-specific ad valorem ratios
based on export prices.
We will instruct CBP to assess antidumping duties on all
appropriate entries covered by this review if any importer- or
customer-specific assessment rate calculated in the final
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results of this review is above de minimis.
For entries of the subject merchandise during the POR from
companies not subject to this review, we will instruct CBP to liquidate
them at the cash deposit rate in effect at the time of entry. 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.
For the China First-Three Star collapsed entity and Rongxin, we
have calculated customer-specific antidumping duty assessment amounts
for subject merchandise based on the ratio of the total amount of
antidumping duties calculated for the examined sales to the total
quantity of sales examined. We calculated these assessment amounts
because there is no information on the record which identifies entered
values or the importers of record for the U.S. sales of the China
First-Three Star collapsed entity and Rongxin.
As noted above, SFTC, the company that met the separate rate
application status, will be assigned the simple-average dumping margin
based on the calculated margins of mandatory respondents which are not
de minimis or based on adverse facts available, in accordance with
Department practice. We will instruct CBP to assess antidumping duties
on this company's entries equal to the margin this company receives in
the final results, regardless of the importer or customer.
The other three companies, Anhui, Guangdong and Tianjin, did not
provide separate rate information. Therefore, the Department finds that
they are not entitled to a separate rate. As a result, these three
companies will be considered part of the PRC-wide entity, subject to
the PRC-wide rate.
For Dixon, for which this review is preliminarily rescinded,
antidumping duties shall be assessed at rates equal to the cash-deposit
of estimated. antidumping duties required at the time of entry, or
withdrawal form warehouse, for consumption, in accordance with 19 CFR
351.212(c)(2).
Cash Deposit Requirements
The following cash-deposit requirements will apply to all shipments
of certain cased pencils from the PRC entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided by section
751(a)(1) of the Act: (1) the cash deposit rates for the reviewed
companies named above will be the rates for those firms established in
the final results of this administrative review; (2) for any previously
reviewed or investigated PRC or non-PRC exporter, not covered in this
review, with a separate rate, the cash deposit rate will be the
company-specific rate established in the most recent segment of this
proceeding; (3) for all other PRC exporters, the cash deposit rate will
be the PRC-wide rate established in the final results of this review;
and (4) the cash-deposit rate for any non-PRC exporter of subject
merchandise from the PRC 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 Interested Parties
This notice 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.
We are issuing and publishing the preliminary results determination
in accordance with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: December 30, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E9-00062 Filed 1-6-09; 8:45 am]
BILLING CODE 3510-DS-S
