[Federal Register: January 26, 2004 (Volume 69, Number 16)]
[Notices]
[Page 3544-3552]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ja04-21]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-886]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Polyethylene Retail
Carrier Bags from the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: We preliminarily determine that polyethylene retail carrier
bags from the People's Republic of China are being, or are likely to
be, sold in the United States at less than fair value, as provided in
section 733 of the Tariff Act of 1930, as amended. Interested parties
are invited to comment on this preliminary determination. We will make
our final determination not later than 135 days after the date of
publication of this preliminary determination. The estimated margins of
sales at less than fair value are shown in the ``Suspension of
Liquidation'' section of this notice.
EFFECTIVE DATE: January 26, 2004.
FOR FURTHER INFORMATION CONTACT: Hermes Pinilla (Nantong), Edythe
Artman (Senetex), Kristin Case (United Wah), Jeff Frank (Ming Pak),
Janis Kalnins (Zhongshan), Jennifer Moats (Hang Lung), Thomas Schauer
(Rally Plastics), or Dmitry Vladimirov (Glopack), Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.
20230; telephone: (202) 482-4733.
SUPPLEMENTARY INFORMATION:
Preliminary Determination
The Department of Commerce (the Department) has conducted this
antidumping investigation in accordance with section 733 of the Tariff
Act of 1930, as amended (the Act). We preliminarily determine that
polyethylene retail carrier bags (PRCBs) from the People's Republic of
China (PRC) are being, or are likely to be, sold in the United States
at less than fair value (LTFV), as provided in section 733 of the Act.
The estimated margins of sales at LTFV are shown in the
[[Page 3545]]
``Suspension of Liquidation'' section of this notice.
Case History
We initiated this investigation on July 10, 2003. See Initiation of
Antidumping Duty Investigations: Polyethylene Retail Carrier Bags from
The People's Republic of China, Malaysia, and Thailand, 68 FR 42002
(July 16, 2003) (Initiation Notice). Since the initiation of this
investigation the following events have occurred.
On July 14, 2003, we issued a letter to interested parties in this
investigation providing an opportunity to comment on the
characteristics that we should use in identifying the different models
that the respondents sold in the United States. The petitioners and
respondents in the concurrent Thailand investigation submitted comments
on July 28, 2003. No other party submitted comments. After reviewing
the parties' comments, we adopted the characteristics discussed in the
``Fair Value Comparisons'' section below in order to determine unique
models of the subject merchandise.
On July 14, 2003, we sent a partial Section A questionnaire to all
of the producers/exporters named in the petition and to the exporters
who comprise the top 80 percent of exporters in terms of quantity
imported (in thousands of units) of the subject merchandise according
to data from U.S. Customs and Border Protection (CBP). We requested
information on the quantity and value of merchandise sold by these
exporters in order to identify potential respondents in the
investigation. We received responses from 39 firms which reported
exports of subject merchandise during the period of investigation
(POI). In addition, a number of firms indicated that they did not
export subject merchandise to the United States during the POI. We did
not receive responses from a number of firms in the PRC although the
record indicates that these companies received our July 14, 2003,
questionnaire. On August 1, 2003, we sent a letter to these firms to
reiterate our request for a response to the July 14, 2003,
questionnaire. We received no responses from these firms.
On August 4, 2003, the U.S. International Trade Commission (ITC)
issued its affirmative preliminary determination that there is a
reasonable indication that an industry in the United States is
materially injured by reason of imports of the subject merchandise from
the PRC, Malaysia, and Thailand. See Polyethylene Retail Carrier Bags
From China, Malaysia, and Thailand, 68 FR 47609 (August 11, 2003).
On August 14, 2003, the Department selected the following nine
mandatory respondents: Hang Lung Plastic Manufactory Limited (Hang
Lung); Dongguan Huang Jiang United Wah Plastic Bag Factory (United
Wah); Nantong Huasheng Plastic Products Company, Limited (Nantong);
Rally Plastics Company, Limited (Rally Plastics); Senetex Trading
Limited (Senetex); Shanghai Glopack Packing Company Limited and Sea
Lake Polyethylene Enterprise Limited (collectively Glopack); Tai Chiuan
Plastic Products Company, Limited (Tai Chiuan); Xiamen Ming Pak
Plastics Company, Limited (Ming Pak); Zhongshan Dongfeng Hung Wai
Plastic Bag Manufactory (Zhongshan). See Memorandum from Laurie
Parkhill to Jeff May regarding selection of respondents dated August
14, 2003.
On August 14, 2003, the Department issued its full antidumping
questionnaire to the mandatory respondents. All of the companies
responded to the questionnaire except Tai Chiuan. In addition, we
received section A responses from the following companies: Beijing
Lianbin Plastics and Printing Company Limited (Beijing Lianbin);
Dongguan Zhongqiao Combine Plastic Bag Factory (Dongguan Zhongqiao);
Good-in Holdings Limited (Good-in Holdings); Guangdong Esquel Packaging
Company, Limited (Guangdong Esquel); Nan Sing Plastics, Limited (Nan
Sing); Ningbo Fanrong Plastic Products Company Limited (Ningbo
Fanrong); Ningbo Huansen Plasthetics Company, Limited (Ningbo Huansen);
Rain Continent Shanghai Company Limited (Rain Continent); Shanghai
Dazhi Enterprise Development Company, Limited (Shanghai Dazhi);
Shanghai Fangsheng Coloured Packaging Company Limited (Shanghai
Fangsheng); Shanghai Jingtai Packaging Material Company, Limited
(Shanghai Jingtai); Shanghai Light Industrial Products Import and
Export Corporation (Shanghai Light Industrial); Shanghai Minmetals
Development Limited (Shanghai Minmetals); Shanghai New Ai Lian Import
and Export Company Limited (Shanghai New Ai Lian); Shanghai Overseas
International Trading Company, Limited (Shanghai Overseas); Shanghai
Yafu Plastics Industries Company Limited (Shanghai Yafu); Weihai
Weiquan Plastic and Rubber Products Company, Limited (Weihai Weiquan);
Xiamen Xingyatai Industry Company, Limited (Xiamen Xingyatai); Xinhui
Henglong.
We issued supplemental questionnaires to the mandatory respondents
which submitted full questionnaire responses. We received responses to
all of the supplemental questionnaires except from Senetex. On December
3, 2003, Senetex submitted a letter in which it stated that it no
longer wished to participate in the investigation.
On October 6, 2003, we requested publicly available information for
valuing the factors of production and comments on surrogate-country
selection. On November 20, 2003, we received comments from the
petitioners on surrogate-country selection. On the same day, we
received information for factor valuations from the petitioners and the
mandatory respondents.
On October 16, 2003, the petitioners requested that the Department
postpone its preliminary determination by 50 days. In accordance with
section 733(c)(1)(A) of the Act, we postponed our preliminary
determination by 50 days. See Notice of Postponement of Preliminary
Determinations in Antidumping Duty Investigations: Polyethylene Retail
Carrier Bags From the People's Republic of China, Malaysia, and
Thailand, 68 FR 61656 (October 29, 2003).
Postponement of Final Determination and Extension of Provisional
Measures
Section 735(a)(2)(A) of the Act provides that a final determination
may be postponed until no later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
exports of the subject merchandise. In accordance with 19 CFR
351.210(e)(2), the Department requires that exporters requesting
postponement of the final determination must also request an extension
of the provisional measures in section 733(d) of the Act from a four-
month period until not more than six months.
We received requests to postpone the final determination from
United Wah, Hang Lung, Rally Plastics, Glopack, and Ming Pak. In their
requests, these respondents consented to the extension of provisional
measures to no longer than six months. This preliminary determination
is affirmative, the requests for postponement have been made by
exporters that account for a significant proportion of exports of the
subject merchandise, and there is no compelling reason to deny the
respondents' requests. Therefore, we have extended the deadline for
issuance of the final determination until 135 days after the date of
publication of this
[[Page 3546]]
preliminary determination in the Federal Register and have extended
provisional measures to no longer than six months.
Period of Investigation
The POI corresponds to the two most recent fiscal quarters prior to
the filing of the petition, i.e., October 1, 2002, through March 31,
2003.
Scope Comments
In accordance with the preamble to our regulations (see Antidumping
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19,
1997)), we set aside a period of time for parties to raise issues
regarding product coverage and encouraged all parties to submit
comments within 20 calendar days of publication of the Initiation
Notice. Interested parties submitted such comments by August 5, 2003.
Pursuant to the Department's solicitation of scope comments in the
Initiation Notice, Regal Import Packaging, an importer of PRCBs,
requested on August 4, 2003, that bags that are ``four dimensional,''
bags with handles made of a material that differs from the bag itself,
and custom-printed bags where the bag order is of 50,000 bags or less
be excluded from the scope of the investigation. The importer asserted
that these types of bags were not manufactured in the United States and
therefore should be excluded from the scope of the investigation. On
August 12, 2003, the petitioners commented that the bags in question
were manufactured in the United States and requested that the
investigation not exclude these types of bags. We have not adopted the
changes in the scope of the investigation requested by Regal Import
Packaging because we find the petitioners have placed sufficient
evidence on the record to show that the bags in question are
manufactured in the United States and fall within the scope of the
petition.
Scope of Investigation
The merchandise subject to this investigation is PRCBs which may be
referred to as t-shirt sacks, merchandise bags, grocery bags, or
checkout bags. The subject merchandise is defined as non-sealable sacks
and bags with handles (including drawstrings), without zippers or
integral extruded closures, with or without gussets, with or without
printing, of polyethylene film having a thickness no greater than .035
inch (0.889 mm) and no less than .00035 inch (0.00889 mm), and with no
length or width shorter than 6 inches (15.24 cm) or longer than 40
inches (101.6 cm). The depth of the bag may be shorter than 6 inches
but not longer than 40 inches (101.6 cm).
PRCBs are typically provided without any consumer packaging and
free of charge by retail establishments (e.g., grocery, drug,
convenience, department, specialty retail, discount stores, and
restaurants) to their customers to package and carry their purchased
products. The scope of the investigation excludes (1) polyethylene bags
that are not printed with logos or store names and that are closeable
with drawstrings made of polyethylene film and (2) polyethylene bags
that are packed in consumer packaging with printing that refers to
specific end-uses other than packaging and carrying merchandise from
retail establishments (e.g., garbage bags, lawn bags, trash-can
liners).
Imports of the subject merchandise are classified under statistical
category 3923.21.0090 of the Harmonized Tariff Schedule of the United
States (HTSUS). This subheading also covers products that are outside
the scope of this investigation. Furthermore, although the HTSUS
subheading is provided for convenience and customs purposes, our
written description of the scope of this investigation is dispositive.
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate
individual dumping margins for each known exporter and producer of the
subject merchandise. Section 777A(c)(2) of the Act gives the Department
discretion, when faced with a large number of producers or exporters,
to limit its examination to a reasonable number of such companies if it
is not practicable to examine all companies.
On July 14, 2003, the Department sent a partial Section A
questionnaire to all producers/exporters of the subject merchandise
named in the petition and to the exporters who represent 80 percent of
exporters of subject merchandise in terms of quantity imported (in
thousands of units) into the United States according to data from CBP.
We also sent the partial questionnaire to the Chinese government and
asked for its assistance in delivering the questionnaire to all
producers and exporters of the subject merchandise. We received
responses from 39 firms that reported exports of subject merchandise
during the POI.
There is no data on the record that indicates conclusively the
number of producers or exporters from the PRC which exported the
subject merchandise to the United States during the POI. Having
received 39 responses from producers or exporters to our partial
Section A questionnaire, we determined that we had the resources to
examine a maximum of nine of the companies. We found it appropriate to
select the largest producers/exporters of the subject merchandise from
the 39 companies in order to cover the greatest possible export volume
of the merchandise. Thus, we selected Hang Lung, United Wah, Nantong,
Rally Plastics, Senetex, Glopack, Tai Chiuan, Ming Pak, and Zhongshan
as our mandatory respondents. See Memorandum from Laurie Parkhill to
Jeff May regarding selection of respondents, dated August 14, 2003.
Non-Market-Economy Country Status
The Department has treated the PRC as a non-market-economy (NME)
country in all past antidumping investigations (see, e.g., Final
Determination of Sales at Less Than Fair Value: Creatine Monohydrate
from the People's Republic of China, 64 FR 71104 (December 20, 1999),
and Final Determination of Sales at Less Than Fair Value: Certain
Preserved Mushrooms from the People's Republic of China, 63 FR 72255
(December 31, 1998)). A designation as an NME remains in effect until
it is revoked by the Department (see section 771(18)(C) of the Act).
No party in this investigation has requested a revocation of NME
status for the PRC. Therefore, we have preliminarily determined to
continue to treat the PRC as an NME. When we investigate imports from
an NME, section 773(c)(1) of the Act directs us to base the normal
value on the NME producer's factors of production, valued in a market
economy that is at a comparable level of economic development and that
is a significant producer of comparable merchandise. The sources used
to value individual factors are discussed in the ``Factor Valuations''
section below.
Separate Rates
In proceedings involving NME countries, 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. In this case, the mandatory respondents
Hang Lung, United Wah, Nantong, Rally Plastics, Senetex, Glopack, Ming
Pak, and Zhongshan have requested separate company-specific rates. In
addition, Beijing Lianbin, Dongguan Zhongqiao, Good-in Holdings,
Guangdong Esquel, Nan Sing, Ningbo Fanrong, Ningbo Huansen, Rain
Continent, Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai,
Shanghai Light Industrial,
[[Page 3547]]
Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai
Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong have
requested separate rates.
It is the Department's policy to treat Hong Kong companies as
market-economy companies. See Application of U.S. Antidumping and
Countervailing Duty Laws to Hong Kong, 62 FR 42965 (August 11, 1997).
Based on a review of the Section A responses, we have concluded that
Good-in Holdings, Hang Lung, United Wah, Nan Sing, Rally Plastics, and
Zhongshan are companies based in Hong Kong. Therefore, we determine
that no separate-rate analysis is required for these companies.
Shanghai Glopack Packing Limited (Shanghai Glopack), an exporter
with no PRC ownership, reported that it is affiliated with Sea Lake
Polyethylene Enterprise Limited (Sea Lake), a Hong Kong-based company
with no PRC ownership. Shanghai Glopack is controlled by the Law
family, the family that also owns Sea Lake. See Glopack's Section A
Response, dated September 11, 2003, at page 2. Because of these
circumstances, we determine that no separate-rate analysis is required
for Glopack.
In its Section A Response, dated September 11, 2003, on page A-4,
Senetex claimed that it was not a PRC entity. We asked for
documentation of company ownership in the November 20, 2003,
supplemental questionnaire that we issued to that company. Instead of
filing a response to the questionnaire, Senetex filed a letter on
December 3, 2003, in which it stated that it no longer wished to
participate in the investigation, including verification of the
company's responses. Because the record does not establish clearly that
Senetex is a non-PRC entity and because we are unable to verify
information on this matter, we do not find that Senetex is entitled to
a separate rate.
With respect to the companies based in China, in order to establish
whether a company operating in an NME country is sufficiently
independent to be eligible for a separate rate, it must establish an
absence of governmental control on both a de jure and a de facto basis.
In determining whether a company meets this requirement, the Department
analyzes each exporting entity 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), as amplified by
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). Under this test, the Department assigns separate rates in NME
cases only if an exporter can demonstrate the absence of both de jure
and de facto governmental control over its export activities. See
Silicon Carbide.
De Jure Control
In determining whether there is an absence of de jure government
control, the Department considers the following: (1) an absence of
restrictive stipulations associated with an individual exporter's
business and export licenses; (2) any legislative enactments
decentralizing control of companies; (3) any other formal measures by
the government decentralizing control of companies. See id. In this
case, the mandatory respondents Nantong and Ming Pak provided evidence
on the record that indicates that their export activities are not
controlled by the government. In addition, evidence on the record
indicates that the export activities of the following companies are
also not controlled by the government: Beijing Lianbin, Dongguan
Zhongqiao, Guangdong Esquel, Ningbo Fanrong, Ningbo Huansen, Rain
Continent, Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai,
Shanghai Light Industrial, Shanghai Minmetals, Shanghai New Ai Lian,
Shanghai Overseas, Shanghai Yafu, Weihai Weiquan, Xiamen Xingyatai, and
Xinhui Henglong (collectively the Section A respondents).
The respondents have placed a number of documents on the record to
demonstrate absence of de jure government control, including ``Foreign
Trade Law of the People's Republic of China'' (Foreign Trade Law),
``Company Law of the PRC'' (Company Law), the ``Administrative
Regulations of the People's Republic of China Governing the
Registration of Legal Corporations'' (Administrative Regulations), and
the ``Law of the People's Republic of China on Industrial Enterprises
Owned by the Whole People'' (Industrial Enterprise Law). These laws
indicate that the government lacks control over privately owned
companies, such as Nantong or Ming Pak, and that these enterprises
retain control over themselves.
The Department has analyzed these laws in prior cases and found
that they establish an absence of de jure control. See, e.g., Notice of
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Certain Partial-Extension Steel
Drawer Slides With Rollers From the People's Republic of China, 60 FR
29571 (June 5, 1995), and Final Determination of Sales at Less Than
Fair Value: Certain Preserved Mushrooms From the People's Republic of
China, 63 FR 72255 (December 31, 1998). We have no new information in
this proceeding which would cause us to reconsider this determination.
Accordingly, we preliminarily determine that there is an absence of
de jure government control over export pricing and marketing decisions
of the respondents identified in paragraph one of this section.
De Facto Control
The Department typically considers the following four factors in
evaluating whether each respondent is subject to de facto governmental
control of its export functions: (1) whether each exporter sets its own
export prices independently of the government and without the approval
of a government authority; (2) whether each exporter retains the
proceeds from its sales and makes independent decisions regarding the
disposition of profits or financing of losses; (3) whether each
exporter has the authority to negotiate and sign contracts and other
agreements; (4) whether each exporter has autonomy from the government
regarding the selection of management. See id.
With respect to the absence of de facto government control over the
export activities of the companies investigated and those which applied
for a separate rate, evidence on the record indicates that the
government has no involvement in the determination of export prices,
profit distribution, marketing strategy, and contract negotiations with
regard to Nantong, Ming Pak, or any of the Section A respondents. Our
analysis indicates that there is no government involvement in the daily
operations or the selection of management for these companies. In
addition, we found that these companies' pricing and export strategy
decisions are not subject to any governmental review or approval and
that there are no governmental policy directives that affect these
decisions.
Consequently, because evidence on the record indicates an absence
of government control, both in law and in fact, over the export
activities of all the companies named above, we preliminarily determine
that these companies have met the requirements for receiving a separate
rate for purposes of this investigation.
Margins for Cooperative Exporters Not Selected
Beijing Lianbin, Dongguan Zhongqiao, Good-in Holdings, Guangdong
Esquel, Nan Sing, Ningbo Fanrong, Ningbo Huansen, Rain Continent,
Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai, Shanghai Light
Industrial,
[[Page 3548]]
Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai
Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong have
requested separate company-specific rates. These parties responded to
Section A of the Department's antidumping questionnaire but were not
selected as respondents in this investigation. They provided
information to the Department, in a timely manner, for a separate-rate
analysis. Although we are unable to calculate a company-specific rate
for these companies due to administrative constraints (see Memorandum
from Laurie Parkhill to Jeff May regarding selection of respondents,
dated August 14, 2003), they cooperated in providing the information
that we requested. Thus, we have calculated a weighted-average margin
for these companies based on the rates we calculated for the selected
respondents (see Memorandum from Thomas Schauer to the File regarding
calculation of the adverse-facts-available and non-adverse-facts-
available margins dated January 16, 2004). See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Freshwater Crawfish
Tail Meat From the People's Republic of China, 62 FR 41347, 41350
(August 1, 1997). Companies receiving this ``all others'' rate of 12.71
percent are identified by name in the ``Suspension of Liquidation''
section of this notice.
The PRC-Wide Rate
All exporters were given the opportunity to respond to the
Department's questionnaire. As explained above, we received responses
to the full questionnaire from Hang Lung, United Wah, Nantong, Rally
Plastics, Senetex, Glopack, Ming Pak, and Zhongshan. We have received
responses to Section A of our questionnaire from Beijing Lianbin,
Dongguan Zhongqiao, Good-in Holdings, Guangdong Esquel, Nan Sing,
Ningbo Fanrong, Ningbo Huansen, Rain Continent, Shanghai Dazhi,
Shanghai Fangsheng, Shanghai Jingtai, Shanghai Light Industrial,
Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai
Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong. Tai
Chiuan, a mandatory respondent, did not respond to our full
questionnaire and withdrew itself from this investigation on September
8, 2003; its response to our July 14, 2003, questionnaire indicated it
exported the subject merchandise to the United States during the POI.
Another mandatory respondent, Senetex, responded to our full
questionnaire but then refused to file a response to a supplemental
questionnaire and withdrew its participation in the investigation.
Thus, we preliminarily determine that these two PRC exporters of PRCBs
failed to respond to our requests for information. Moreover, we assume
that the firms which received our July 14, 2003, questionnaire but did
not respond to it (see the ``Case History'' section above) also
exported the subject merchandise to the United States during the POI.
In addition, we obtained data from CBP that indicated that a number of
these companies may have exported the subject merchandise to the United
States during the POI. Consequently, we are applying a single
antidumping rate the PRC-wide rate to all other exporters in the PRC
based on our presumption that those respondents which failed to
demonstrate entitlement to a separate rate constitute a single
enterprise under common control by the Chinese government. See, e.g.,
Final Determination of Sales at Less Than Fair Value: Synthetic Indigo
from the People's Republic of China, 65 FR 25706, 25707 (May 3, 2000).
The PRC-wide rate applies to all entries of subject merchandise except
for entries from companies which we have preliminarily determined to
have met the requirements for receiving a separate rate for purposes of
this investigation.
Use of Facts Otherwise Available
Section 776(a)(2) of the Act provides that, if an interested party
withholds information that has been requested by the Department, fails
to provide such information in a timely manner or in the form or manner
requested, significantly impedes a proceeding under the antidumping
statute, or provides such information but the information cannot be
verified, the Department shall, subject to sections 782(d) and (e) of
the Act, use facts otherwise available in reaching the applicable
determination.
Section 776(a)(2)(B) of the Act requires the Department to use
facts available when a party does not provide the Department with
information by the established deadline or in the form and manner
requested by the Department. In addition, section 776(b) of the Act
provides that, if the Department finds that an interested party ``has
failed to cooperate by not acting to the best of its ability to comply
with a request for information,'' the Department may use information
that is adverse to the interests of that party as facts otherwise
available.
As explained above, the exporters comprising the single PRC-wide
entity failed to respond to the Department's requests for information.
Pursuant to section 776(a) of the Act, in reaching our preliminary
determination, we have used total facts available for the PRC-wide rate
because we did not receive the data needed to calculate a margin for
that entity. Also, because the exporters comprising the PRC-wide entity
failed to respond to our requests for information, we have found that
the PRC-wide entity failed to cooperate to the best of its ability.
Therefore, pursuant to section 776(b) of the Act, we have used an
adverse inference in selecting from the facts available for the margin
for that entity. As adverse facts available, we have recalculated the
four margins that the petitioners alleged in their June 20, 2003,
petition using the surrogate values that we selected for the
preliminary determination and selecting the highest of the four
margins, since the margins derived from the information in the petition
exceed those we calculated for the respondent companies. For details on
this calculation, see the Memorandum from Thomas Schauer to the File
regarding calculation of the adverse-facts-available and non-adverse-
facts-available margins dated January 16, 2004.
In addition, we have determined that the use of a partial adverse
inference is warranted for certain U.S. sales reported by Zhongshan. On
January 12, 2004, four days before the due date of our preliminary
determination, Zhongshan submitted information in which it disclosed
that an affiliation relationship existed between it and a Hong Kong
reseller. Because the timing of Zhongshan's submission precluded us
from analyzing this affiliation completely or from requesting
additional information pertaining to the matter for purposes of this
preliminary determination, we found that Zhongshan had failed to
cooperate to the best of its ability in responding to our requests for
information. Accordingly, we have applied the adverse-facts-available
rate, as described above, to all of Zhongshan's sales of subject
merchandise through this Hong Kong reseller in our calculations for
this preliminary determination. The Department will evaluate whether
the submitted information should be used for purposes of the final
determination. For a detailed discussion of this matter, see the
calculation memorandum with respect to Zhongshan dated January 16,
2004.
We have preliminarily determined to use facts otherwise available
for all sales reported by Nantong. In our original and supplemental
questionnaires, we requested that Nantong report its factors-of-
production information on a product-specific basis. On January 12,
2004, Nantong clarified that its usual
[[Page 3549]]
business practices did not permit it to allocate its use of inputs on
this basis and that, therefore, it could only provide factor
information on a more generalized basis. We have concluded that we are
unable to calculate a margin because, as provided, the factor
information is distortive of the amount of raw material inputs used in
the production of the various reported products. Thus, pursuant to
section 776(a) of the Act, we have determined to use total facts
available for Nantong's sales. We have found that an adverse inference
is not warranted in the selection of the facts available since Nantong
provided timely responses to all of our requests for information and,
without evidence to the contrary, acted to the best of its ability to
provide the requested factors-of-production information. Therefore,
pending our findings at verification, we have concluded that an adverse
inference, pursuant to section 776(b) of the Act, is not warranted.
Consequently, we have applied the ``all others'' rate to Nantong's
sales as the facts otherwise available. For a more detailed discussion
of this matter, see the calculation memorandum with respect to Nantong
dated January 16, 2004.
Section 776(c) of the Act provides that, where the Department
selects from among the facts otherwise available and relies on
``secondary information,'' such as the petition, the Department shall,
to the extent practicable, corroborate that information from
independent sources reasonably at the Department's disposal. The
Statement of Administrative Action accompanying the URAA, H.R. Doc. No.
103-316 (1994) (SAA), states that ``corroborate'' means to determine
that the information used has probative value. See SAA at 870.
The petitioners' methodology for calculating the export price and
normal value in the petition is discussed in the initiation notice. See
Initiation Notice, 68 FR at 42003. To corroborate the recalculated
margin of 80.52 percent, we compared that margin to the margins we
found for one of the respondents.
As discussed in the Memorandum to the File regarding the
corroboration of facts available, dated January 16, 2004, we found that
the margin of 80.52 percent has probative value. Accordingly, we find
that the highest margin, based on petition information and adjusted as
described above, of 80.52 percent is corroborated within the meaning of
section 776(c) of the Act.
Accordingly, for the preliminary determination, the PRC-wide rate
is 80.52 percent. Because this is a preliminary margin, the Department
will consider all margins on the record at the time of the final
determination for the purpose of determining the most appropriate final
PRC-wide margin.
Surrogate Country
When the Department is investigating imports from an NME country,
section 773(c)(1) of the Act directs that normal value, in most
circumstances, be based on the NME producer's factors of production,
valued in a surrogate market-economy country or countries selected in
accordance with section 773(c)(4) of the Act. In accordance with that
provision, the Department shall utilize, to the extent possible, the
prices or costs of factors of production in one or more market-economy
countries that are at a level of economic development comparable to the
NME country and are significant producers of comparable merchandise.
The sources of the surrogate factor values are discussed in the
``Normal Value'' section below.
The Department has determined that India, Pakistan, Indonesia, Sri
Lanka, and the Philippines are countries comparable to the PRC in terms
of economic development. See Memorandum from Ron Lorentzen to Laurie
Parkhill regarding surrogate-country selection dated August 25, 2003.
Customarily, we select an appropriate surrogate based on the
availability and reliability of data from these countries. In this
case, we have found that India is a significant producer of comparable
merchandise and that we have reliable data from India that we can use
to value the factors of production. Furthermore, every party that
submitted factor-valuation data provided data from India and no party
argued that we should use another country as the surrogate country.
We have selected India as the surrogate country and, accordingly,
we have calculated normal value using Indian prices when available and
appropriate to value the factors of production of the PRCBs producers.
We have obtained and relied upon publicly available information
wherever possible. See the Memorandum from Jeff Frank to the File
regarding surrogate-country selection and factor valuations dated
January 16, 2004 (Factor Valuation Memorandum).
In accordance with section 351.301(c)(3)(i) of the Department's
regulations, for the final determination in an antidumping
investigation, interested parties may submit publicly available
information to value factors of production within 40 days of the date
of publication of this preliminary determination.
Fair Value Comparisons
To determine whether sales of PRCBs to the United States were made
at less than fair value, we compared export price or constructed export
price to normal value, as described in the ``U.S. Price'' and ``Normal
Value'' sections of this notice below. In accordance with section
777A(d)(1)(A)(i) of the Act, we calculated weighted-average export
prices and constructed export prices.
In making the product comparisons, we determined what products
constituted a unique model based on the following physical
characteristics reported by the respondents: 1) quality, 2) bag type,
3) length, 4) width, 5) gusset, 6) thickness, 7) percent of high-
density polyethylene resin, 8) percent of low-density polyethylene
resin, 9) percent of low-linear-density polyethylene resin, 10) percent
of color concentrate, 11) percent of ink coverage, 12) number of ink
colors, 13) number of sides printed.
U.S. Price
In accordance with section 772(a) of the Act, we used export price
for Hang Lung, Rally Plastics, Ming Pak, and Zhongshan because the
subject merchandise was sold directly to unaffiliated customers in the
United States prior to importation and because constructed export price
was not otherwise indicated. In accordance with section 772(b) of the
Act, we used constructed export price for United Wah and Glopack
because the subject merchandise was sold in the United States after the
date of importation by a U.S. seller affiliated with the producer. In
accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI-
wide weighted-average export prices and constructed export prices to
the normal values.
We calculated export price and constructed export price based on
the packed F.O.B., C.I.F., or delivered price to unaffiliated
purchasers in, or for exportation to, the United States. We made
deductions, as appropriate, for discounts and rebates. We also made
deductions for any movement expenses in accordance with section
772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act and the SAA at 823-
824, we calculated the constructed export price by deducting selling
expenses associated with economic activities occurring in the United
States, which includes commissions, direct selling expenses, and
indirect selling expenses. For United Wah, we also deducted the cost of
further manufacturing in accordance with section 772(d)(2) of the
[[Page 3550]]
Act. Finally, we made an adjustment for profit allocated to these
expenses in accordance with section 772(d)(3) of the Act.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine the normal value using a factors-of-production methodology if
(1) the merchandise is exported from an NME country and (2) the
information does not permit the calculation of normal value using home-
market prices, third-country prices, or constructed value under section
773(a) of the Act.
Factors of production 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
reported factors of production for materials, energy, labor, and
packing. We valued all input factors not obtained from market economies
using publicly available published information as discussed in the
``Surrogate Country'' and ``Factor Valuations'' sections of this
notice.
In accordance with 19 CFR 351.408(c)(1), where a producer sources
an input from a market economy and pays for it in market-economy
currency, the Department employs the actual price paid for the input to
calculate the factors-based normal value. See also Lasko Metal Products
v. United States, 43 F.3d 1442, 1445-1446 (Fed. Cir. 1994). A number of
respondents reported that some of their inputs were purchased from
market economies and paid for in market-economy currency. See the
``Factor Valuations'' section below.
Factor Valuations
In accordance with section 773(c) of the Act, we calculated normal
value based on factors of production reported by respondents for the
POI. To calculate normal value, we multiplied the reported per-unit
factor quantities by publicly available Indian surrogate values (except
as described below). In selecting the surrogate values, we considered
the quality, specificity, and contemporaneity of the data. As
appropriate, we adjusted input prices by including freight costs to
make them delivered prices. For a detailed description of all surrogate
values used for respondents, see the Factor Valuation Memorandum. For a
detailed description of all actual values used for market-economy
inputs, see the company-specific calculation memoranda dated January
16, 2004.
Because we used Indian import values to value inputs purchased
domestically by the Chinese producers, we added surrogate freight costs
to the calculated surrogate values. We calculated the freight costs by
selecting the shorter of the reported distances from a domestic
supplier to the factory or the distance from the nearest seaport to the
factory in accordance with the decision by the Court of Appeals for the
Federal Circuit in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed.
Cir. 1997). Because some of the values were not contemporaneous with
the POI, we adjusted those values for inflation using wholesale price
indices published in the International Monetary Fund's International
Financial Statistics.
Except as described below, we valued raw material inputs using the
weighted-average unit import values derived from Indian import data
available from the World Trade Atlas (Internet Version, maintained by
Global Trade Information Services, Incorporated) (Indian Import
Statistics) for the period October 2002 through March 2003.
As explained above, a number of respondents purchased certain raw
material inputs from market-economy suppliers and paid for them in
market-economy currencies. The respondents provided evidence that
indicated they paid for their market-economy purchases of inputs in a
market-economy currency. Therefore, in accordance with 19 CFR
351.408(c)(1), the Department has determined to use the market-economy
prices as reported by the respondents in order to value these inputs in
instances where the inputs were obtained from both market-economy and
NME suppliers because the market-economy inputs represent a significant
quantity of the inputs and they were paid for in a market-economy
currency.
Furthermore, with regard to both the Indian import-based surrogate
values and the market-economy input values, we have disregarded prices
that we have reason to believe or suspect may be subsidized. We have
reason to believe or suspect that prices of inputs from India,
Indonesia, South Korea, and Thailand may have been subsidized. We have
found in other proceedings that these countries maintain broadly
available, non-industry-specific export subsidies and, therefore, it is
reasonable to infer that all exports to all markets from these
countries are subsidized. See Certain Helical Spring Lock Washers from
the People's Republic of China; Final Results of Administrative Review,
61 FR 66255 (December 17, 1996), at Comment 1. We are also directed by
the legislative history not to conduct a formal investigation to ensure
that such prices are not subsidized. See H.R. Rep. 100-576 at 590
(1988). Rather, the Department was instructed by Congress to base 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 market-economy input values. In instances
where a market-economy input was obtained solely from suppliers located
in these countries, we used Indian import-based surrogate values to
value the input.
Rally Plastics, Hang Lung, and Ming Pak reported the use of
recycled resin scrap in the production of its subject merchandise.
Because the scrap represented the re-use of purchased raw materials, we
only valued the labor and electricity used to recycle the scrap when
valuing this input.
Zhongshan reported amounts of resin scrap produced as a result of
the production of subject merchandise. We valued the scrap by using
Indian Import Statistics for imports of polyethylene scrap and thereby
granted a by-product offset for the scrap. We intend to examine the
issue of this offset more closely at verification.
To value electricity, we used data from the International Energy
Agency's Key World Energy Statistics (2003 edition). Submitted by the
petitioners in Exhibit 5 of their November 20, 2003, submission, this
information is contemporaneous with the POI.
The respondents also reported packing inputs. We used Indian Import
Statistics data from the period October 2002 through March 2003 to
value these inputs except where respondents obtained the inputs from
market-economy suppliers and paid for them in a market-economy
currency.
We used Indian transport information in order to value the
transportation of raw materials. To calculate domestic inland freight
for trucking services, we selected the week of January 1, 2003, the
week in the middle of the POI, and obtained freight values from the
website http://www.infreight.com. We converted the Indian Rupee value into
U.S. dollars. To calculate domestic inland freight for rail services,
we relied upon a rate used in the Final Results of Antidumping
Administrative Review of Bulk Aspirin from the People's Republic of
China, 68 FR 48337 (August 13, 2003). We adjusted the rate for
inflation and converted the Rupee value to U.S. dollars. Some inputs
were transported by market-economy transportation firms and paid for in
a market-economy currency. Where this was the case, we added the actual
market-economy
[[Page 3551]]
transportation expense to the valuation of the factor of production.
For NME-supplied marine insurance, we relied upon a rate calculated
in the LTFV investigation of certain color television receivers from
the PRC. See the Calculations Performed for Xiamen Overseas Chinese
Electronic Company, Limited, Memorandum, dated November 21, 2003, at
Attachment IX. Because the rate we used is contemporaneous with the POI
and in U.S. dollars, we did not need to adjust it for our calculations.
As is customary in the marine insurance industry, we applied the rate
to 110 percent of the value of the cargo.
To value factory overhead expenses, selling, general, and
administrative expenses (SG&A), and profit we calculated a rate based
on financial statements from an Indian producer of comparable
merchandise, Smitabh Intercon Ltd. For a detailed discussion of the
surrogate values for overhead, SG&A, and profit, see the Factor
Valuation Memorandum.
For labor, consistent with 19 CFR 351.408(c)(3), we used the PRC
regression-based wage rate at Import Administration's website, http://ia.ita.doc.gov/wages/corrected00wages/corrected00wages.htm.
The source
of the wage-rate data on the Import Administration's website is the
International Labour Organization's Yearbook of Labour Statistics 2001.
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.
Verification
As provided in section 782(i) of the Act, we will verify the
information upon which we will rely in making our final determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing CBP
to suspend liquidation of all imports of subject merchandise from the
PRC that are entered, or withdrawn from warehouse, for consumption on
or after the date of publication of this notice in the Federal
Register. We will instruct CBP to require a cash deposit or the posting
of a bond equal to the weighted-average amount by which the normal
value exceeds the export price or the constructed export price, as
indicated in the chart below except for Hang Lung. Because the
estimated weighted-average amount for Hang Lung is de minimis, we are
not directing CBP to suspend liquidation of entries of its merchandise.
In this instance, the Department shall not require a deposit or posting
of bond. These suspension-of-liquidation instructions will remain in
effect until further notice. The weighted-average dumping margins are
as follows:
----------------------------------------------------------------------------------------------------------------
Exporter or Producer Weighted-average percent margin
----------------------------------------------------------------------------------------------------------------
Hang Lung............................................. 0.12
United Wah............................................ 16.55
Nantong............................................... 12.71
Rally Plastics........................................ 9.01
Glopack............................................... 4.45
Ming Pak.............................................. 32.19
Zhongshan............................................. 57.09
Beijing Lianbin....................................... 12.71
Dongguan Zhongqiao.................................... 12.71
Good-in Holdings...................................... 12.71
Guangdong Esquel...................................... 12.71
Nan Sing.............................................. 12.71
Ningbo Fanrong........................................ 12.71
Ningbo Huansen........................................ 12.71
Rain Continent........................................ 12.71
Shanghai Dazhi........................................ 12.71
Shanghai Fangsheng.................................... 12.71
Shanghai Jingtai...................................... 12.71
Shanghai Light Industrial............................. 12.71
Shanghai Minmetals.................................... 12.71
Shanghai New Ai Lian.................................. 12.71
Shanghai Overseas..................................... 12.71
Shanghai Yafu......................................... 12.71
Weihai Weiquan........................................ 12.71
Xiamen Xingyatai...................................... 12.71
Xinhui Henglong....................................... 12.71
PRC-wide Rate......................................... 80.52
----------------------------------------------------------------------------------------------------------------
The PRC-wide rate applies to all entries of the subject merchandise
produced in the PRC except for entries from exporters or producers that
are identified individually above.
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination of sales at LTFV. Section 735(b)(2) requires
that the ITC make a final determination before the later of 120 days
after the date of the Department's preliminary determination or 45 days
after the Department's final determination whether the domestic
industry in the United States is materially injured, or threatened with
material injury, by reason of imports, or sales (or the likelihood of
sales) for importation, of the subject merchandise. Because we have
postponed the deadline for our final determination to 135 days from the
date of publication of this preliminary determination, the ITC will
make its final determination within 45 days of our final determination.
Public Comment
Case briefs or other written comments may be submitted to the
Assistant Secretary for Import Administration no later than seven days
after the date of the final verification report issued in this
proceeding and rebuttal briefs, limited to issues raised in case
briefs, no later than five days after the deadline date for case
briefs. A list of authorities
[[Page 3552]]
used and an executive summary of issues should accompany any briefs
submitted to the Department. This summary should be limited to five
pages total, including footnotes. In accordance with section 774 of the
Act, we will hold a public hearing, if requested, to afford interested
parties an opportunity to comment on arguments raised in case or
rebuttal briefs. Tentatively, any hearing will be held three days after
the deadline for submission of the rebuttal briefs at the U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230, at a time and location to be determined. Parties
should confirm by telephone the date, time, and location of the hearing
two days before the scheduled date. 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,
U.S. Department of Commerce, Room 1870, within 30 days of the date of
publication of this notice. See 19 CFR 351.310(c). Requests should
contain (1) the party's name, address, and telephone number, (2) the
number of participants, and (3) a list of the issues to be discussed.
At the hearing, each party may make an affirmative presentation only on
issues raised in that party's case brief and may make rebuttal
presentations only on arguments included in that party's rebuttal
brief. See 19 CFR 351.310(c).
We will make our final determination no later than 135 days after
the date of publication of the preliminary determination.
This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: January 16, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-1574 Filed 1-23-04; 8:45 am]