Citric Acid and Certain Citrate Salts From Canada: Preliminary Results of Antidumping Duty Administrative Review, 6061-6064 [2012-2802]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 77, Number 25 (Tuesday, February 7, 2012)]
[Notices]
[Pages 6061-6064]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-2802]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-853]


Citric Acid and Certain Citrate Salts From Canada: Preliminary 
Results of Antidumping Duty Administrative Review

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

SUMMARY: In response to a timely request by one manufacturer/exporter, 
Jungbunzlauer Canada Inc. (JBL Canada), the Department of Commerce (the 
Department) is conducting the second administrative review of the 
antidumping duty order on citric acid and certain citrate salts (citric 
acid) from Canada with respect to JBL Canada. The review covers the 
period May 1, 2010, through April 30, 2011. We preliminarily determine 
that JBL Canada made sales below normal value (NV).
    If the preliminary results are adopted in the final results of the 
administrative review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess antidumping duties on all appropriate 
entries. Interested parties are invited to comment on the preliminary 
results.

FOR FURTHER INFORMATION CONTACT: Rebecca Trainor or Kate Johnson, AD/
CVD Operations, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone (202) 482-4007 
or (202) 482-4929, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    In response to a timely request by JBL Canada, on June 28, 2011, 
the Department published in the Federal Register a notice of initiation 
of an administrative review of the antidumping duty order on citric 
acid from Canada with respect to JBL Canada covering the period May 1, 
2010, through April 30, 2011. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 76 FR 37781 (June 28, 2011) (Initiation Notice).
    On June 29, 2011, we issued the antidumping duty questionnaire to 
JBL Canada. In August 2011, we received responses to sections A (i.e., 
the section covering general information about the company), B (i.e., 
the section covering comparison-market sales), and C (i.e., the section 
covering U.S. sales).\1\ On September 22, 2011, we issued to JBL Canada 
a supplemental questionnaire with respect to sections A, B, and C of 
the original questionnaire and we received a response on October 6, 
2011.
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    \1\ No responses to sections D or E of the questionnaire (i.e., 
cost of production information and further manufacturing 
information, respectively).
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Scope of the Order

    The scope of this order includes all grades and granulation sizes 
of citric acid, sodium citrate, and potassium citrate in their 
unblended forms, whether dry or in solution, and regardless of 
packaging type. The scope also includes blends of citric acid, sodium 
citrate, and potassium citrate; as well as blends with other 
ingredients, such as sugar, where the unblended form(s) of citric acid, 
sodium citrate, and potassium citrate constitute 40 percent or more, by 
weight, of the blend. The scope of this order also includes all forms 
of crude calcium citrate, including dicalcium citrate monohydrate, and 
tricalcium citrate tetrahydrate, which are intermediate products in the 
production of citric acid, sodium citrate, and potassium citrate. The 
scope of this order does not include calcium citrate that satisfies the 
standards set forth in the United States Pharmacopeia and has been 
mixed with a functional excipient, such as dextrose or starch, where 
the excipient constitutes at least 2 percent, by weight, of the 
product. The scope of this order includes the hydrous and anhydrous 
forms of citric acid, the dihydrate and anhydrous forms of sodium 
citrate, otherwise known as citric acid sodium salt, and the 
monohydrate and monopotassium forms of potassium citrate. Sodium 
citrate also includes both trisodium citrate and monosodium citrate, 
which are also known as citric acid trisodium salt and citric acid 
monosodium salt, respectively. Citric acid and sodium citrate are 
classifiable under 2918.14.0000 and 2918.15.1000 of the Harmonized 
Tariff Schedule of the United States (HTSUS), respectively. Potassium 
citrate and crude calcium citrate are classifiable under 2918.15.5000 
and 3824.90.9290 of the HTSUS, respectively. Blends that include citric 
acid, sodium citrate, and potassium citrate are classifiable under 
3824.90.9290 of the HTSUS. Although the HTSUS subheadings are provided 
for convenience and customs purposes, the written description of the 
merchandise is dispositive.

Period of Review

    The period of review (POR) is May 1, 2010, through April 30, 2011.

Duty Absorption

    On July 28, 2011, the petitioners \2\ requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
Section 751(a)(4) of the Tariff Act of 1930, as amended (the Act), 
provides for the Department, if requested, to determine during an 
administrative review initiated two or four years after the publication 
of the order, whether antidumping duties have been absorbed by a 
foreign producer or exporter, if the subject merchandise is sold in the 
United States through an affiliated importer. This review was initiated 
two years after the publication of the order. See Initiation Notice; 
Citric Acid and Certain Citrate Salts from Canada and the People's 
Republic of China: Antidumping Duty Orders, 74 FR 25703 (May 29, 2009) 
(Citric Acid Duty Orders).
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    \2\ Archer Daniels Midland Company, Incorporated, and Tate & 
Lyle Americas LLC.
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    In determining whether the antidumping duties have been absorbed by 
JBL Canada, we presume the duties will be absorbed for constructed 
export price (CEP) sales that have been made at less than NV. This 
presumption can be rebutted with evidence (e.g., an agreement between 
the affiliated importer and unaffiliated purchaser) that the 
unaffiliated purchaser will pay the full duty ultimately assessed on 
the subject merchandise. See, e.g., Certain Stainless Steel Butt-Weld 
Pipe Fittings from Taiwan: Preliminary Results of Antidumping Duty 
Administrative Review and Notice of Intent to Rescind in Part, 70 FR 
39735, 39737 (July 11, 2005), unchanged in Notice of Final Results and 
Final Rescission in Part of Antidumping Duty Administrative Review: 
Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan, 70 FR 
73727 (December 13, 2005). On August 9, 2011, we requested proof that 
JBL Canada's unaffiliated purchasers would ultimately pay the 
antidumping duties to be assessed on entries during the POR. On 
September 20, 2011, JBL

[[Page 6062]]

Canada responded to our request for information and stated that the 
sales documentation provided in its questionnaire response shows that 
antidumping duties are not being absorbed by JBL Canada through its 
affiliated U.S. importer. Based on our review of the documentation 
contained in JBL Canada's questionnaire response (see Exhibit A-12 of 
the August 4, 2011, questionnaire response), we preliminarily determine 
that antidumping duties were not absorbed during the POR. See, e.g., 
Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam: 
Preliminary Results, Partial Rescission, and Request for Revocation, in 
Part, of the Fourth Administrative Review, 75 FR 12206, 12207-12208 
(March 15, 2010), unchanged in Certain Frozen Warmwater Shrimp from the 
Socialist Republic of Vietnam: Final Results and Partial Rescission of 
Antidumping Duty Administrative Review, 75 FR 47771 (August 9, 2010). 
Because much of the information contained in JBL Canada's September 20, 
2011, duty absorption response is business proprietary, additional 
analysis of this issue is contained in the memorandum entitled 
``Preliminary Results Margin Calculation for Jungbunzlauer Canada 
Inc.,'' dated contemporaneously with this notice.

Comparisons to Normal Value

    To determine whether JBL Canada's sales of citric acid from Canada 
to the United States were made at less than NV, we compared the CEP to 
the NV, as described in the ``Constructed Export Price'' and ``Normal 
Value'' sections of this notice.
    Pursuant to section 777A(d)(2) of the Act, for JBL Canada we 
compared the CEPs of individual U.S. transactions to the weighted-
average NV of the foreign like product where there were sales made in 
the ordinary course of trade. See discussion below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by JBL Canada covered by the description in the 
``Scope of the Order'' section, above, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
Pursuant to 19 CFR 351.414(e)(2), we compared JBL Canada's U.S. sales 
of citric acid to its sales of citric acid made in the home market. 
Where there were no contemporaneous sales within the definition of 19 
CFR 351.414(e)(2)(i), pursuant to 19 CFR 351.414(e)(2)(ii) and (iii), 
we compared sales within the contemporaneous window period, which 
extends from three months prior to the month of the U.S. sale until two 
months after the sale.
    In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by JBL Canada in the 
following order: type, form, grade, and particle size.

Constructed Export Price

    For all U.S. sales made by JBL Canada, we calculated CEP in 
accordance with section 772(b) of the Act because the subject 
merchandise was first sold (or agreed to be sold) in the United States 
before or after the date of importation by or for the account of the 
producer or exporter, or by a seller affiliated with the producer or 
exporter, to a purchaser not affiliated with the producer or exporter.
    We based CEP on packed prices to unaffiliated purchasers in the 
United States. Where appropriate, we adjusted the starting prices for 
billing adjustments and rebates, in accordance with 19 CFR 351.401(c). 
We made deductions for movement expenses, where appropriate, in 
accordance with section 772(c)(2)(A) of the Act; these included, where 
appropriate, foreign inland freight expenses, foreign inland insurance 
expenses, U.S. brokerage and handling expenses, U.S. inland freight 
expenses, U.S. warehousing expenses, and U.S. inland insurance 
expenses. In accordance with section 772(d)(1) of the Act and 19 CFR 
351.402(b), we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (e.g., imputed credit expenses), and indirect selling expenses 
(including inventory carrying costs).
    Pursuant to section 772(d)(3) of the Act, we further reduced the 
starting price by an amount for profit to arrive at CEP. In accordance 
with section 772(f) of the Act, we calculated the CEP profit rate using 
the expenses incurred by JBL Canada and its U.S. affiliate on their 
sales of the subject merchandise in the United States and the profit 
associated with those sales. See memorandum entitled ``Preliminary 
Results Margin Calculation for Jungbunzlauer Canada Inc.,'' dated 
contemporaneously with this notice.

Normal Value

A. Home Market Viability and Selection of Comparison Market

    To determine whether there was a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV, we compared 
the volume of home market sales of the foreign like product to the 
volume of U.S. sales of the subject merchandise, in accordance with 
section 773(a)(1)(C) of the Act. Based on this comparison, we 
determined that, pursuant to 19 CFR 351.404(b), JBL Canada had a viable 
home market during the POR. Consequently, pursuant to section 
773(a)(1)(B)(i) of the Act and 19 CFR 351.404(c)(i), we based NV on 
home market sales.

B. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales of foreign 
like products at the same level of trade (LOT) as the export price or 
CEP. Sales are made at different LOTs if they are made at different 
marketing stages (or their equivalent). See 19 CFR 351.412(c)(2). 
Substantial differences in selling activities are a necessary, but not 
sufficient, condition for determining that there is a difference in the 
stages of marketing. See id.; see also, Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate From South Africa, 62 FR 61731, 61732 (November 19, 1997) (Plate 
from South Africa). In order to determine whether the comparison-market 
sales were at different stages in the marketing process than the U.S. 
sales, we reviewed the distribution system in each market (i.e., the 
chain of distribution), including selling functions, class of customer 
(customer category), and the level of selling expenses for each type of 
sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for EP and comparison-market sales (i.e., where NV is based on either 
home market or third country prices),\3\ we consider the starting 
prices before any adjustments. For CEP sales, we consider only the 
selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F.3d 1301, 1314 (Fed. Cir. 
2001). When the Department is unable to match U.S. sales of the foreign 
like product in the comparison market at the same LOT as the EP or CEP, 
the Department may compare the U.S. sales to sales at a different LOT 
in the comparison market. In comparing EP or CEP sales at a different 
LOT in the comparison market, where available data make it practicable, 
we make an LOT adjustment under section

[[Page 6063]]

773(a)(7)(A) of the Act. Finally, for CEP sales only, if the NV LOT is 
at a more advanced stage of distribution than the LOT of the CEP and 
there is no basis for determining whether the difference in LOTs 
between NV and CEP affects price comparability (i.e., no LOT adjustment 
was practicable), the Department shall grant a CEP offset, as provided 
in section 773(a)(7)(B) of the Act. See Plate from South Africa, 62 FR 
at 61732-33.
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    \3\ Where NV is based on constructed value (CV), we determine 
the NV LOT based on the LOT of the sales from which we derive 
selling expenses, general and administrative expenses, and profit 
for CV, where possible.
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    In this administrative review, we obtained information from JBL 
Canada regarding the marketing stages involved in making its reported 
home market and U.S. sales, including a description of the selling 
activities performed by the respondent and its affiliates for each 
channel of distribution.
    During the POR, JBL Canada reported that it sold citric acid to 
end-users and distributors through two channels of distribution in both 
the U.S. and home markets. JBL Canada stated that its selling process 
was essentially the same for both channels of distribution. Because the 
details of JBL Canada's reported selling functions for each channel of 
distribution are business proprietary, our analysis of these selling 
functions for purposes of determining whether different LOTs exist is 
contained in a separate memorandum entitled ``Preliminary Level-of-
Trade Analysis,'' dated contemporaneously with this notice.
    Based on our analysis, we found that the selling functions JBL 
Canada performed for each of its channels of distribution in the U.S. 
market were essentially the same, with the exception of one selling 
function which we determined was not sufficient to warrant an LOT 
distinction between these channels. Therefore, we determined 
preliminarily that there is only one LOT (for CEP sales) in the U.S. 
market. Similarly, we found that the selling functions that JBL Canada 
(and its affiliates) performed for each of the channels of distribution 
in the home market were essentially the same, with the exception of 
certain selling activities which we determined were not sufficient to 
warrant an LOT distinction between these channels. Therefore, we 
preliminarily determined that there is only one LOT in the home market.
    In comparing the home market LOT to the CEP LOT, we found that the 
selling activities performed by JBL Canada (and its affiliates) for its 
CEP sales were significantly fewer than the selling activities that it 
performed for its home market sales, and that the home-market LOT was 
more remote from the factory than the CEP LOT. Accordingly, we 
considered the CEP LOT to be different from the home-market LOT and to 
be at a less advanced stage of distribution than the home-market LOT.
    Therefore, we could not match CEP sales to sales at the same LOT in 
the home market, nor could we determine an LOT adjustment based on JBL 
Canada's home market sales because there is only one LOT in the home 
market, and it is not possible to determine if there is a pattern of 
consistent price differences between the sales on which NV is based and 
the home market sales at the LOT of the export transaction. See section 
773(a)(7)(A) of the Act. Furthermore, we have no other information that 
provides an appropriate basis for determining an LOT adjustment. 
Consequently, because the available data do not form an appropriate 
basis for making an LOT adjustment but the home market LOT is at a more 
advanced stage of distribution than the CEP LOT, we find it is 
appropriate to make a CEP offset to NV in accordance with section 
773(a)(7)(B) of the Act. The CEP offset is calculated as the lesser of: 
(1) The indirect selling expenses incurred on the home market sales, or 
(2) the indirect selling expenses deducted from the starting price in 
calculating CEP.

Calculation of Normal Value Based on Comparison-Market Prices

    We based NV for JBL Canada on packed prices to unaffiliated 
customers in the home market. Where appropriate, we adjusted the 
starting prices for billing adjustments and rebates, in accordance with 
19 CFR 351.401(c). We made deductions, where appropriate, from the 
starting price for movement expenses, including inland freight and 
inland insurance, under section 773(a)(6)(B)(ii) of the Act.
    We made adjustments under section 773(a)(6)(C) of the Act for 
differences in circumstances-of-sale for imputed credit expenses, where 
appropriate. We also deducted home market packing costs and added U.S. 
packing costs, in accordance with sections 773(a)(6)(A) and (B) of the 
Act. Finally, as discussed in the ``Level of Trade'' section above, we 
made a CEP offset pursuant to section 773(a)(7)(B) of the Act and 19 
CFR 351.412(f). We calculated the CEP offset as the lesser of the 
indirect selling expenses incurred on the home-market sales or the 
indirect selling expenses deducted from the starting price in 
calculating CEP.

Currency Conversion

    It is our normal practice to make currency conversions into U.S. 
dollars, in accordance with section 773A(a) of the Act, based on 
exchange rates in effect on the dates of the U.S. sales, as certified 
by the Federal Reserve Bank.

Preliminary Results of the Review

    We preliminarily determine that a weighted-average dumping margin 
exists for JBL Canada for the period May 1, 2010, through April 30, 
2011, as follows:

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/exporter                        margin
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Jungbunzlauer Canada Inc.....................................      2.34
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Disclosure and Public Hearing

    The Department will disclose to parties the calculations performed 
in connection with these preliminary results within five days of the 
date of publication of this notice. See 19 CFR 351.224(b). Pursuant to 
19 CFR 351.309, interested parties may submit case briefs not later 
than 30 days after the date of publication of this notice. Rebuttal 
briefs, limited to issues raised in the case briefs, may be filed not 
later than five days after the date for filing case briefs. Parties who 
submit case briefs or rebuttal briefs in this proceeding are encouraged 
to submit with each argument: (1) A statement of the issue; (2) a brief 
summary of the argument; and (3) a table of authorities.
    Interested parties who wish to request a hearing or to participate 
if one is requested must submit a written request to the Assistant 
Secretary for Import Administration within 30 days of the date of 
publication of this notice. Requests should contain: (1) The party's 
name, address and telephone number; (2) the number of participants; and 
(3) a list of issues to be discussed. See 19 CFR 351.310(c). Issues 
raised in the hearing will be limited to those raised in the respective 
case briefs.
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of the administrative review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries, in accordance with 19 CFR 351.212. The Department intends to 
issue appropriate appraisement instructions for the company subject to 
this review directly to CBP 15 days after the date of publication of 
the final results of this review.
    For those sales where JBL Canada reported the entered value of its 
U.S.

[[Page 6064]]

sales, we calculated importer-specific ad valorem duty assessment rates 
based on the ratio of the total amount of antidumping duties calculated 
for the examined sales to the total entered value of the examined sales 
to that importer. For those sales where the respondent did not report 
the entered value of its U.S. sales, we calculated importer-specific or 
customer-specific per-unit duty assessment rates by aggregating the 
total amount of antidumping duties calculated for the examined sales 
and dividing this amount by the total quantity of those sales. To 
determine whether the duty assessment rates are de minimis, in 
accordance with the requirement set forth in 19 CFR 351.106(c)(2), we 
calculated importer-specific ad valorem ratios based on the estimated 
entered value.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis (i.e., at or above 0.50 percent). Pursuant to 19 CFR 
351.106(c)(2), we will instruct CBP to liquidate without regard to 
antidumping duties any entries for which the assessment rate is de 
minimis (i.e., less than 0.50 percent). 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.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment 
Policy Notice). This clarification will apply to entries of subject 
merchandise during the POR produced by the company included in these 
final results of review for which the reviewed company did not know 
that the merchandise it sold to the intermediary (e.g., a reseller, 
trading company, or exporter) was destined for the United States. In 
such instances, we will instruct CBP to liquidate unreviewed entries at 
the all-others rate effective during the POR if there is no rate for 
the intermediary involved in the transaction. See Assessment Policy 
Notice for a full discussion of this clarification.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise 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)(2)(C) of the Act: (1) The cash deposit rate for the company 
listed above will be that established in the final results of this 
review, except if the rate is less than 0.50 percent and, therefore, de 
minimis within the meaning of 19 CFR 351.106(c)(1), in which case the 
cash deposit rate will be zero; (2) for previously reviewed or 
investigated companies not participating in this review, the cash 
deposit rate will continue to be the company-specific rate published 
for the most recent period; (3) if the exporter is not a firm covered 
in this review, a previous review, or the original less-than-fair-value 
(LTFV) investigation, but the manufacturer is, the cash deposit rate 
will be the rate established for the most recent period for the 
manufacturer of the merchandise; and 4) the cash deposit rate for all 
other manufacturers or exporters will continue to be 23.21 percent, the 
all-others rate made effective by the LTFV investigation. See Citric 
Acid Duty Orders. These deposit requirements shall remain in effect 
until further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.

    Dated: January 31, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2012-2802 Filed 2-6-12; 8:45 am]
BILLING CODE 3510-DS-P