[Federal Register: May 13, 2008 (Volume 73, Number 93)]
[Notices]
[Page 27504-27513]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13my08-22]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-920]
Lightweight Thermal Paper From the People's Republic of China:
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
DATES: Effective Date: May 13, 2008.
SUMMARY: We preliminarily determine that lightweight thermal paper
(``LWTP'') from the People's Republic of China (``PRC'') is being, or
is likely to be, sold in the United States at less than fair value
(``LTFV''), as provided in section 733 of the Tariff Act of 1930, as
amended (``the Act''). The estimated margins of sales at LTFV are shown
in the ``Preliminary Determination'' section of this notice. Pursuant
to requests from interested parties, we are postponing the final
determination and extending the provisional measures from a four-month
period to not more than six months. Accordingly, we will make our final
determination not later than 135 days after publication of the
preliminary determination. See the ``Postponement of the Final
Determination'' section below.
FOR FURTHER INFORMATION CONTACT: Frances Veith or Marin Weaver, AD/CVD
Operations, Office 8, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4295 or (202) 482-2336, respectively.
SUPPLEMENTARY INFORMATION:
Initiation
On September 19, 2007, Appleton Papers, Inc. (``petitioner'' or
``Appleton''), filed an antidumping petition in proper form on behalf
of the domestic industry and workers producing LWTP, concerning imports
of LWTP from Germany, the Republic of Korea (``Korea''), and the PRC,
in addition to a countervailing duty petition on LWTP from the PRC. See
Antidumping Duty Petition on Lightweight Thermal Paper from Germany,
the Republic of Korea, and the People's Republic of China and
Countervailing Duty Petition on Lightweight Thermal Paper from the
People's Republic of China, dated September 19, 2007 (the
``Petition'').
On October 16, 2007, the Department of Commerce (``the
Department''), pursuant to section 732(c)(1)(B) of the Act, extended
the deadline for the initiation determination in order to determine the
adequacy of the petition.\1\
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\1\ See Notice of Extension of the Deadline for Determining the
Adequacy of the Antidumping Duty Petitions: Lightweight Thermal
Paper from Germany, the Republic of Korea, and the People's Republic
of China; and the Countervailing Duty Petition: Lightweight Thermal
Paper from the People's Republic of China, 72 FR 58639 (October 16,
2007).
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The Department initiated this investigation on October 29, 2007.\2\
In the Initiation Notice, the Department notified parties of the
application process by which exporters and producers may obtain
separate-rate status in non-market economy (``NME'') investigations.
The process requires exporters and producers to submit a separate-rate
status application (``SRA'').\3\ However, the standard for eligibility
for a separate rate (which is whether a firm can demonstrate an absence
of both de jure and de facto government control over its export
activities) has not changed. The SRA for this investigation was posted
on the Department's Web site http://ia.ita.doc.gov/ia-highlights-and-
news.html on November 5, 2007. The due date for filing an SRA was
December 28, 2007. No party filed an SRA in this investigation.
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\2\ See Notice of Initiation of Antidumping Duty Investigations:
Lightweight Thermal Paper from Germany, the Republic of Korea, and
the People's Republic of China, 72 FR 62430 (November 5, 2007)
(``Initiation Notice'').
\3\ See Policy Bulletin 05.1: Separate-Rates Practice and
Application of Combination Rates in Antidumping Investigations
involving Non-Market Economy Countries (April 5, 2005) (``Policy
Bulletin 05.1''), available at <http://ia.ita.doc.gov/policy/
bulletin05-1.pdf.
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On December 5, 2007, the International Trade Commission (``ITC'')
determined that there is a reasonable indication that an industry in
the United States is materially injured or threatened with material
injury by reason of imports of LWTP from the PRC.\4\
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\4\ See Investigation Nos. 701-TA-451 and 731-TA-1126-1128
(Preliminary): Certain Lightweight Thermal Paper from China,
Germany, and Korea, 72 FR 70343 (December 11, 2007).
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Period of Investigation
The period of investigation (``POI'') is January 1, 2007, through
June 30, 2007. This period corresponds to the two most recent fiscal
quarters prior to the month of the filing of the petition, which was
September 2007. See 19 CFR 351.204(b)(1).
Postponement of Preliminary Determination
On February 6, 2008, petitioner made a timely request pursuant to
section 733(c)(1)(A) of the Act and 19 CFR 351.205(b)(2) and (e) for a
50-day postponement of the preliminary determination. On February 25,
2008, the Department published a postponement of the preliminary
antidumping duty determination on LWTP from the PRC.\5\
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\5\ See Lightweight Thermal Paper From Germany and the People's
Republic of China: Postponement of Preliminary Determinations of
Antidumping Duty Investigations, 73 FR 9997 (February 25, 2008).
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Postponement of Final Determination
On April 14, 2008, and May 2, 2008, Hanhong International Limited,
Shanghai Hanhong Paper Co., Ltd., and Hong Kong Hanhong Ltd.
(collectively (``Hanhong'')) and Guangdong Guanhao High-Tech Co., Ltd.
(``Guanhao''), respectively, made a timely request pursuant to section
735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii) that the
Department extend the final determination by the full amount of time
allowed by law. On May 6, 2008, Hanhong and Guanhao supplemented their
requests to extend the final determination to include requests to
extend provisional measures pursuant to section 735(a)(2)(A) of the Act
and 19 CFR 351.210(e)(2).
Scope of the Investigation
The merchandise covered by this investigation includes certain
lightweight thermal paper, which is thermal paper with a basis weight
of 70 grams per square meter (g/m2) (with a tolerance of
4.0 g/m\2\) or less;
[[Page 27505]]
irrespective of dimensions; \6\ with or without a base coat \7\ on one
or both sides; with thermal active coating(s) \8\ on one or both sides
that is a mixture of the dye and the developer that react and form an
image when heat is applied; with or without a top coat; \9\ and without
an adhesive backing. Certain lightweight thermal paper is typically
(but not exclusively) used in point-of-sale applications such as ATM
receipts, credit card receipts, gas pump receipts, and retail store
receipts. The merchandise subject to this investigation may be
classified in the Harmonized Tariff Schedule of the United States
(``HTSUS'') under subheadings 4811.90.8040, 4811.90.9090, 3703.10.60,
4811.59.20, 4820.10.20, and 4823.40.00.\10\ Although HTSUS subheadings
are provided for convenience and customs purposes, the written
description of the scope of this investigation is dispositive.
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\6\ LWTP is typically produced in jumbo rolls that are slit to
the specifications of the converting equipment and then converted
into finished slit rolls. Both jumbo and converted rolls (as well as
LWTP in any other form, presentation, or dimension) are covered by
the scope of these investigations.
\7\ A base coat, when applied, is typically made of clay and/or
latex and like materials and is intended to cover the rough surface
of the paper substrate and to provide insulating value.
\8\ A thermal active coating is typically made of sensitizer,
dye, and co-reactant.
\9\ A top coat, when applied, is typically made of polyvinyl
acetone, polyvinyl alcohol, and/or like materials and is intended to
provide environmental protection, an improved surface for press
printing, and/or wear protection for the thermal print head.
\10\ HTSUS subheading 4811.90.8000 was a classification used for
LWTP until January 1, 2007. Effective that date, subheading
4811.90.8000 was replaced with 4811.90.8020 (for gift wrap, a
nonsubject product) and 4811.90.8040 (for ``other'' including LWTP).
HTSUS subheading 4811.90.9000 was a classification for LWTP until
July 1, 2005. Effective that date, subheading 4811.90.9000 was
replaced with 4811.90.9010 (for tissue paper, a nonsubject product)
and 4811.90.9090 (for ``other,'' including LWTP). Petitioner
indicated that, from time to time, LWTP also may have been entered
under HTSUS subheading 3703.90, HTSUS heading 4805, and perhaps
other subheadings of the HTSUS, including HTSUS subheadings:
3703.10.60, 4811.59.20, 4820.10.20, and 4823.40.00.
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Scope Comments
We set aside a period for interested parties to raise issues
regarding product coverage. See Antidumping Duties; Countervailing
Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997). The Department
encouraged all interested parties to submit such comments within 20
calendar days of signature of the Initiation Notice, 72 FR at 62431. We
only received comments on the scope from petitioner. See petitioner's
letter to the Department regarding, ``Lightweight Thermal Paper From
China, Germany, And Korea,'' dated November 19, 2007. Petitioner
requested that the Department include in LWTP's scope language the
HTSUS subheadings 3703.10.60,\11\ 4811.59,\12\ 4820.10,\13\ and 4823.40
\14\ because LWTP may enter the United States under one of these HTSUS
subheadings. Specifically, the petitioner contends that HTSUS
subheading 3703.1060 should be included because LWTP is sensitive to
heat radiation; LWTP with certain latex topcoats could enter as paper
coated with plastic under HTSUS subheading 4811.59; HTSUS subheading
4820.10's description may encompass products converted from thermal
paper; and HTSUS subheading 4823.40's description appears to encompass
LWTP not elsewhere specified within the HTSUS.
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\11\ See ITC Web site located at http://usitc.gov/, which
describes 3703.1060 as ``photographic paper, paperboard, and
textiles, sensitized: other.''
\12\ See id., which describes HTSUS subheading 4859.10 as
``other: In strips or rolls of a width exceeding 15 cm or in
rectangular (including square) sheets with one side exceeding 36 cm
and the other side exceeding 15 cm in the unfolded state.''
\13\ See id., which describes HTSUS subheading 4820.10 as
``Registers, account books, notebooks, order books, receipt books,
letter pads, memorandum pads, diaries and similar articles.''
\14\ See id., which describes HTSUS subheading 4823.40 as
``Rolls, sheets and dials, printed for self-recording apparatus.''
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In the Petition we stated that merchandise subject to this
investigation may be classified in the HTSUS under subheadings
4811.90.8040 and 4811.90.9090. On April 11, 2008 and April 16, 2008,
the Department received a request from U.S. Customs and Border
Protection (``CBP'') to update the antidumping and countervailing duty
(``AD/CVD'') module for LWTP from the PRC. Specifically, CBP requested
that the Department add HTSUS subheadings 3703.10.60, 4811.59.20,
4820.10.20, and 4823.40.00 to the AD/CVD module. See the Department's
memorandum to the file entitled, ``Request from Customs and Border
Protection to update AD/CVD Module,'' dated April 17, 2008. We have
reviewed petitioner's and CBP's request and have updated the AD/CVD
module accordingly.
Non-Market Economy Country
For purposes of initiation, petitioner submitted an LTFV analysis
for the PRC as an NME.\15\ Recently, the Department examined the PRC's
market status and determined that NME status should continue for the
PRC.\16\ Additionally, in two recent investigations, the Department
also determined that the PRC is an NME country.\17\ In accordance with
section 771(18)(C)(i) of the Act, the NME status remains in effect
until revoked by the Department. The presumption of the NME status of
the PRC has not been revoked by the Department and, therefore, remains
in effect for purposes of this investigation.
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\15\ Initiation Notice, 72 FR at 62433.
\16\ See the Department's memorandum entitled, ``Antidumping
Duty Investigation of Certain Lined Paper Products from the People's
Republic of China (``China'')--China's status as a non-market
economy (``NME''),'' dated August 30, 2006. This document is
available online at: http://ia.ita.doc.gov/download/prc-nmestatus/
prc-lined-paper-memo-08302006.pdf.
\17\ See Final Determination of Sales at Less Than Fair Value:
Certain Activated Carbon from the People's Republic of China, 72 FR
9508 (March 2, 2007), and Final Determination of Sales at Less Than
Fair Value and Partial Affirmative Determination of Critical
Circumstances: Certain Polyester Staple Fiber from the People's
Republic of China, 72 FR 19690 (April 19, 2007).
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Selection of Respondents
In accordance with section 777A(c)(2) of the Act, the Department
selected the two largest exporters of LWTP (i.e., Hanhong and Kosoku
Business Paper Ltd. (``Kosoku'')) by volume as the mandatory
respondents in this investigation based on CBP entry data listed in the
data under the HTSUS subheadings 4811.9080.00, 4811.9080.40,
4811.9090.90, 4811.9090.00.\18\ These two companies appeared to cover a
significant share of the total U.S. imports by volume, and both had
been identified in the public realm.\19\
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\18\ See the Department's memorandum entitled, ``Antidumping
Duty Investigation on Lightweight Thermal Paper from the People's
Republic of China: Selection of Respondents,'' dated November 29,
2007 (``Respondent Selection Memo'').
\19\ See the Department's memorandum regarding ``Release of
Customs Entry data from U.S. Customs and Border Security,'' dated
November 5, 2007.
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The Department issued its antidumping questionnaire to Hanhong and
Kosoku on December 3, 2007.\20\ In its questionnaire, the Department
requested that the two firms provide a response to section A of the
Department's questionnaire on December 24, 2007, and to sections C and
D of the questionnaire on January 8, 2008. Additionally we asked
Hanhong and Kosoku to notify the official in charge if they did not
export/ship any merchandise falling within the scope of the
investigation that entered the United States during the POI. On
December 11, 2007, Kosoku contacted the Department and stated that it
did not export or ship any merchandise falling under investigation that
entered the United States during the POI.\21\
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\20\ See, e.g., the Department's letter to Hanhong entitled,
``Antidumping Investigation of Lightweight Thermal Paper from the
People's Republic of China: Questionnaire,'' dated December 3, 2007.
\21\ See the Department's memorandum to the file entitled,
``Lightweight Thermal Paper from the People's Republic of China: No
Shipments,'' dated December 12, 2007.
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[[Page 27506]]
Because our Respondent Selection Memo stated that we had resources
to investigate two firms with the largest export volume during the POI,
and one of the two firms selected (i.e., Kosoku) reported that it did
not export or ship merchandise under investigation during the POI, we
looked to the next four companies listed in the CBP data to identify
and select the next largest exporter by volume as a mandatory
respondent. On December 17, 2007, the Department sent Ampress
Enterprises Ltd. (``Ampress''), Arting Stationery Products Factory Ltd.
(``Arting''), Xiamen Anne Paper Co., Ltd. (``Anne Paper''), and Yalong
Paper Product (Kunshan) Co., Ltd. (``Yalong'') a shipment questionnaire
asking each whether the company exported merchandise under
investigation that entered the United States during the POI. Responses
were due by close of business on December 27, 2007.\22\ The Department
did not receive any responses from any of the four parties as of that
deadline. The Department sent a second letter to each of the four
parties noted above on December 28, 2007, again requesting information
on shipments of merchandise under investigation. Responses were due to
the Department no later than January 11, 2008.\23\
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\22\ See, e.g., the Department's letter to Ampress entitled,
``Antidumping Investigation of Lightweight Thermal Paper from the
People's Republic of China: Shipment Questionnaire,'' dated December
17, 2007.
\23\ See, e.g., the Department's letter to Ampress entitled,
``Antidumping Investigation of Lightweight Thermal Paper from the
People's Republic of China: Shipment Questionnaire,'' dated December
28, 2007.
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On January 2, 2008, Ampress submitted a response to the Department
stating that it did not have any shipments of LWTP during the POI.\24\
On January 11, 2008, Arting submitted a response to the Department
stating that it did not have any shipments of LWTP during the POI.\25\
Anne Paper and Yalong did not respond to the Department's first or
second requests for information.\26\ See ``Facts Available and the PRC-
wide Entity'' section below for further information on Anne Paper and
Yalong.
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\24\ See the Department's memorandum to the file entitled,
``Investigation of Lightweight Thermal Paper from the People's
Republic of China: Ampress Enterprises Ltd. Shipment Questionnaire
Response,'' dated January 3, 2008.
\25\ See the Department's memorandum to the file entitled,
``Investigation of Lightweight Thermal Paper from the People's
Republic of China: Arting Stationery Products Factory Ltd. Shipment
Questionnaire Response,'' dated January 11, 2008.
\26\ See id.
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Section 782(a) of the Act states that the Department shall examine
voluntary respondents: (1) if they submit information within the
deadlines established by the Department, and (2) if the number of
voluntary respondents is not so large as to be unduly burdensome and
inhibit the Department's timely completion of the review.
In the Respondent Selection Memo, we noted that, in the event a
mandatory respondent failed to participate, we might, at our
discretion, accept a voluntary respondent for review, provided that the
voluntary respondent had met the two criteria outlined above. As noted
above, one of the two firms selected for investigation, Kosoku, did not
ship the merchandise under investigation during the POI. Also, as noted
above, the Department was unsuccessful in its attempts to select a
second mandatory firm for investigation from the next four firms listed
in the CBP data. Because of our statutory deadlines, we determined that
we could not expend additional resources in attempting to identify the
next largest exporter by volume of merchandise subject to this
investigation during the POI to serve as the second firm to be
investigated.\27\
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\27\ See Respondent Selection Memorandum.
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On December 4, 2007, Guanhao reported that it had shipped
merchandise under consideration during the POI, and requested that it
be treated as a voluntary respondent in this investigation. Further,
Guanhao submitted sections A, C, and D questionnaire responses on
December 21, 2007, January 9, 2008, and January 16, 2008, respectively,
within the Department's deadlines established in this investigation.
Therefore, on January 18, 2008, we determined to accept the voluntary
respondent (i.e., Guanhao), pursuant to section 782(a) of the Act.\28\
Thus, the Department is examining two firms (i.e., Hanhong and Guanhao)
in this investigation.
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\28\ See the Department's memorandum regarding, ``Lightweight
Thermal Paper from the People's Republic of China: Antidumping Duty
Investigation: Selection of Voluntary Respondent: Guangdong Guanhao
High-Tech co., Ltd.,'' dated January 18, 2008.
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We noted, however, that as explained in our Respondent Selection
Memorandum, the Department will exclude any individually calculated
rate for voluntary respondents (i.e., Guanhao) from the calculation of
the rate to be applied to exporters/producers which qualify for a
separate rate but were not selected for examination as mandatory
respondents. As stated in the ``Initiation'' section above, no party
filed an SRA in this investigation. Thus, it is not necessary to
calculate a weighted-average margin for exporters/producers that were
not selected for examination as mandatory respondents in this
investigation.
Surrogate Value Comments
Surrogate factor valuation comments and surrogate value information
with which to value the factors of production (``FOPs'') in this
proceeding were filed on February 28, 2008, by Guanhao and on February
29, 2008, by petitioner and Hanhong. On March 12, 2008, petitioner and
Hanhong filed rebuttal comments on surrogate factor valuation comments
and surrogate value information. For a detailed discussion of the
surrogate values used in this LTFV proceeding, see the ``Factor
Valuation'' section below and the Department's memorandum to the file
entitled, ``Antidumping Investigation of Lightweight Thermal Paper from
the People's Republic of China: Factor Valuations for the Preliminary
Determination,'' dated concurrently with this notice (``Surrogate Value
Memorandum'').
Surrogate Country
Section 773(c)(1) of the Act directs the Department to base normal
value (``NV'') on the NME producer's FOPs, valued in a surrogate market
economy (``ME'') country or countries considered to be appropriate by
the Department. In accordance with section 773(c)(4) of the Act, in
valuing the FOPs, the Department shall use, to the extent possible, the
prices or costs of the FOPs in one or more ME countries that are: (1)
At a level of economic development comparable to that of the NME
country; and (2) significant producers of comparable merchandise. The
sources of the surrogate factor values are discussed under the ``Factor
Valuations'' section below. See also Surrogate Value Memorandum.
On December 20, 2007, the Department determined that India,
Indonesia, Thailand, the Philippines, and Colombia are countries
comparable to the PRC in terms of economic development.\29\ On January
15, 2008, the Department requested comments on the selection of a
surrogate country from the interested parties in this investigation.
Petitioner submitted comments on February 12, 2008, and
[[Page 27507]]
Hanhong submitted comments on February 13, 2008.
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\29\ See the Department's Office of Policy memorandum entitled,
``Antidumping Duty Investigation of Lightweight Thermal Paper from
the People's Republic of China (PRC): Request for a List of
Surrogate Countries,'' dated December 20, 2007 (``Policy
Memorandum'').
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Customarily, we select an appropriate surrogate country from the
Policy Memorandum based on the availability and reliability of data
from the countries that are significant producers of comparable
merchandise. In this case, we found that India is at a level of
economic development comparable to that of the PRC; is a significant
producer of comparable merchandise (i.e., LWTP); and has publicly
available and reliable data.\30\ Accordingly, we selected India as the
primary surrogate country for purposes of valuing the FOPs in the
calculation of NV because it meets the Department's criteria for
surrogate country selection.\31\ We obtained and relied upon publicly
available information wherever possible.
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\30\ See the Department's memorandum to the file entitled,
``Antidumping Investigation of Lightweight Thermal Paper from the
People's Republic of China: Selection of a Surrogate Country,''
dated April 21, 2008 (``Surrogate Country Memorandum'')
\31\ See id.
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In accordance with 19 CFR 351.301(c)(3)(i), for the final
determination in antidumping investigations, interested parties may
submit publicly available information to value FOPs under 19 CFR
351.408(c) within 40 days after the date of publication of this
preliminary determination.\32\
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\32\ In accordance with 19 CFR 351.301(c)(1), for the final
determination of this investigation, 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.
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Separate Rates
In the Initiation Notice, the Department notified parties of the
recent application process by which exporters and producers may obtain
separate-rate status in NME investigations. See Initiation Notice at
62434. The process requires exporters and producers to submit an SRA.
See also Policy Bulletin 05.1.\33\ However, the standard for
eligibility for a separate rate (which is whether a firm can
demonstrate an absence of both de jure and de facto government control
over its export activities) has not changed.
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\33\ Policy Bulletin 05.1 states: ``while continuing the
practice of assigning separate rates only to exporters, all separate
rates that the Department will now assign in its NME investigations
will be specific to those producers that supplied the exporter
during the period of investigation. Note, however, that one rate is
calculated for the exporter and all of the producers which supplied
subject merchandise to it during the period of investigation. This
practice applied both to mandatory respondents receiving an
individually calculated separate rate as well as the pool of non-
investigated firms receiving the weighted-average of the
individually calculated rates. This practice is referred to as the
application of ``combination rates'' because such rates apply to
specific combinations of exporters and one or more producers. The
cash-deposit rate assigned to an exporter will apply only to
merchandise both exported by the firm in question and produced by a
firm that supplied the exporter during the period of
investigation.'' See Policy Bulletin 05.1 at 6.
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In proceedings involving NME countries, the Department has a
rebuttable presumption that all companies within the country are
subject to government control and thus should be assessed a single
antidumping duty rate. It is the Department's policy to assign all
exporters of merchandise subject to this investigation in an NME
country this single rate unless an exporter can demonstrate that it is
sufficiently independent so as to be entitled to a separate rate.
Exporters can demonstrate this independence through the absence of both
de jure and de facto government control over export activities. The
Department analyzes each entity exporting the merchandise subject to
this investigation under a test arising from the Notice of 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 further developed in 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''). However, if the
Department determines that a company is wholly foreign-owned or located
in a market economy, then a separate-rate analysis is not necessary to
determine whether it is independent from government control.
A. Separate-Rate Recipients
No company reported that it is wholly owned by individuals or
companies located in a market economy or that it is located outside the
PRC in this investigation. Therefore, we are not addressing these
ownership structures in this preliminary determination.
1. Joint Ventures between Chinese and Foreign Companies or Wholly
Chinese-Owned Companies
In this investigation no company reported that its ownership
structure is a joint venture between Chinese and Foreign companies.
However, both respondents examined (i.e., Hanhong and Guanhao) reported
that they are wholly Chinese-owned companies. Therefore, the Department
must analyze whether Hanhong and Guanhao can demonstrate the absence of
both de jure and de facto government control over their export
activities.
a. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) An absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies. See
Sparklers, 56 FR at 20589.
The evidence provided by Hanhong and Guanhao supports a preliminary
finding of de jure absence of government control based on the
following: (1) An absence of restrictive stipulations associated with
the individual exporters' business and export licenses; (2) there are
applicable legislative enactments decentralizing control of the
companies; and (3) there are formal measures by the government
decentralizing control of companies. See, e.g., Hanhong's and Guanhao's
section A submissions dated January 4, 2008, and December 21, 2007,
respectively.
b. Absence of De Facto Control
Typically the Department considers four factors in evaluating
whether each respondent is subject to de facto government control of
its export functions: (1) Whether the export prices are set by or are
subject to the approval of a government agency; (2) whether the
respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also
Notice of Final Determination of Sales at Less Than Fair Value:
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544,
22545 (May 8, 1995). The Department has determined that an analysis of
de facto control is critical in determining whether respondents are, in
fact, subject to a degree of government control which would
[[Page 27508]]
preclude the Department from assigning separate rates.
In this case petitioner alleged that Guanhao should not receive a
separate rate because there is de facto control over Guanhao by the PRC
government. See petitioner's March 20, 2008, submission regarding its
comments on the Second Supplemental A Questionnaire Response of
Guanhao. Among other things, petitioner alleged that Guanhao's chairman
of the board of directors (``BoD'') and general manager (``GM'') are
PRC government officials. We solicited additional information from
Guanhao regarding petitioner's allegations as they relate to the
Department's criteria in determining whether there is de facto control
by the PRC government over a company's export activities. See, e.g.,
Guanhao's April 4, 2008, and April 18, 2008, supplemental questionnaire
responses. In response, Guanhao reported that in addition to its
chairman of the BoD and GM, there are several company officials (e.g.
directors, managers) that have authority to sign and negotiate sales
contracts. Guanhao further reported descriptions of the roles and
duties that the BoD and GM assume in their respective non-Guanhao
positions in various associations and government-owned entities. The
mere fact that Guanhao's chairman of the BoD is a board member of a
government-owned entity does not in itself demonstrate that he is a
government official or is controlled by the PRC central government, nor
does membership in various associations, committees, etc. mean that the
chairman of the BoD or the GM are controlled by the central PRC
government. Instead, we examine whether their roles, duties, etc. in
these outside entities and at Guanhao, may potentially or effectively
allow these officials to exercise control over certain activities at
Guanhao. We do not believe that the roles and duties undertaken by
these company officials outside of Guanhao confer government control
over the day-to-day activities and decisions regarding its export
activities. Furthermore, neither of these company officials have
majority control over the disposition of Guanhao's profits. Guanhao
reported that the BoD determined the plan for Guanhao's disposition of
profits, which is then presented to the general shareholders for a vote
of approval. Based on the information on the record, there is no
evidence that would lead us to conclude that Guanhao's export prices,
sales negotiations or management decisions are controlled by the PRC
government.
The evidence placed on the record of this investigation by Hanhong
and Guanhao demonstrate an absence of de jure and de facto government
control with respect to their respective exports of the merchandise
under investigation, in accordance with the criteria identified in
Sparklers and Silicon Carbide.
B. Companies Not Receiving a Separate Rate
The Department has determined that all parties applying for a
separate rate in this segment of the proceeding have demonstrated an
absence of government control both in law and in fact (see discussion
above), and is, therefore, not denying separate-rate status to any
respondent (i.e., Hanhong and Guanhao).
Facts Available and the PRC-Wide Entity
Sections 776(a)(1) and (2) of the Act provide that the Department
shall apply ``facts otherwise available'' if, inter alia, necessary
information is not on the record or an interested party: (A) Withholds
information requested by the Department, (B) fails to provide such
information by the deadline, or in the form or manner requested, (C)
significantly impedes a proceeding, or (D) provides information that
cannot be verified, as provided by section 782(i) of the Act.
Where the Department determines that a response to a request for
information does not comply with the request, section 782(d) of the Act
provides that the Department will so inform the party submitting the
response and will, to the extent practicable, provide that party the
opportunity to remedy or explain the deficiency. If the party fails to
remedy the deficiency within the applicable time limits, subject to
section 782(e) of the Act, the Department may disregard all or part of
the original and subsequent responses, as appropriate. Pursuant to
section 782(e) of the Act, the Department shall not decline to consider
submitted information if all of the following requirements are met: (1)
The information is submitted by the established deadline; (2) the
information can be verified; (3) the information is not so incomplete
that it cannot serve as a reliable basis for reaching the applicable
determination; (4) the interested party has demonstrated that it acted
to the best of its ability; and (5) the information can be used without
undue difficulties.
On December 17, 2007, and December 28, 2007, the Department sent
Anne Paper and Yalong a questionnaire asking each whether the company
exported merchandise under investigation that entered the United States
during the POI.\34\ We have confirmed that the questionnaires were
delivered to Anne Paper and Yalong.\35\ Responses were due by close of
business on December 27, 2007 and January 11, 2008, respectively.\36\
The Department did not receive any responses from Anne Paper and
Yalong.
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\34\ See Respondent Selection Memorandum.
\35\ See the Department's memorandum regarding, ``Lightweight
Thermal Paper from the People's Republic of China: Delivery of
Shipment Questionnaires,'' dated March 12, 2008.
\36\ See, e.g., the Department's letter to Ampress entitled,
``Antidumping Investigation of Lightweight Thermal Paper from the
People's Republic of China: Shipment Questionnaire,'' dated December
17, 2007.
---------------------------------------------------------------------------
Because Anne Paper and Yalong did not provide any information, we
determine that sections 782(d) and (e) of the Act are not relevant to
our analysis. We further find that the Anne Paper and Yalong failed to
respond to the Department's requests for information and, therefore,
failed to demonstrate that they operate free of government control and
that they are entitled to a separate rate. Based on the above facts,
the Department preliminarily determines that there were exports of the
merchandise subject to this investigation from PRC exporters/producers
that did not respond to the Department's shipment questionnaire, and we
are treating these PRC exporters/producers as part of the PRC-wide
entity. Moreover, because the PRC-wide entity did not cooperate to the
best of its ability when it did not respond to our questionnaire asking
whether it exported merchandise under investigation that entered the
United States during the POI, use of facts available pursuant to
section 776(a)(2)(A) and (B) of the Act is warranted for the PRC
entity, which includes Anne Paper and Yalong.\37\
---------------------------------------------------------------------------
\37\ See, e.g., Final Determination of Sales at Less Than Fair
Value: Certain Artist Canvas from the People's Republic of China, 71
FR 16116 (March 30, 2006) (``Artist Canvas'').
---------------------------------------------------------------------------
Section 776(b) of the Act provides that if an interested party
fails to cooperate by not acting to the best of its ability to comply
with requests for information, the Department may employ adverse
inferences.\38\ We find that, because the PRC-wide entity did not
respond to our request for information, it has failed to cooperate to
the best of its ability. Therefore, the Department preliminarily finds
that, in selecting from among the facts available, an adverse inference
is appropriate.
---------------------------------------------------------------------------
\38\ See, e.g., Artist Canvas, 71 FR 16116, 16118 (March 30,
2006). See also, Statement of Administrative Action accompanying the
URAA, H.R. Rep No. 103-316 (``SAA'') at 870.
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[[Page 27509]]
Selection of the Adverse Facts Available Rate
In deciding which facts to use as adverse facts available
(``AFA''), section 776(b) of the Act and 19 CFR 351.308(c)(1) provide
that the Department may rely on information derived from (1) The
petition, (2) a final determination in the investigation, (3) any
previous review or determination, or (4) any information placed on the
record. In selecting a rate for AFA, the Department selects a rate that
is sufficiently adverse ``as to effectuate the purpose of the facts
available rule to induce respondents to provide the Department with
complete and accurate information in a timely manner.'' \39\ It is also
the Department's practice to select a rate that ensures ``that the
party does not obtain a more favorable result by failing to cooperate
than if it had cooperated fully.'' \40\
---------------------------------------------------------------------------
\39\ See Notice of Final Determination of Sales at Less than
Fair Value: Static Random Access Memory Semiconductors From Taiwan,
63 FR 8909, 8932 (February 23, 1998).
\40\ See Brake Rotors From the People's Republic of China: Final
Results and Partial Rescission of the Seventh Administrative Review;
Final Results of the Eleventh New Shipper Review, 70 FR 69937, 69939
(November 18, 2005); see also, SAA at 870.
---------------------------------------------------------------------------
Generally, the Department finds selecting the highest rate in any
segment of the proceeding as AFA to be appropriate.\41\ It is the
Department's practice to select, as AFA, the higher of the (a) highest
margin alleged in the petition, or (b) the highest calculated rate of
any respondent in the investigation.\42\ In the instant investigation,
as AFA, we have preliminarily assigned to the PRC-wide entity,
including Anne Paper and Yalong, the highest calculated rate on the
record of this proceeding, which in this case is the calculated margin
for Hanhong. The Department preliminarily determines that this
information is the most appropriate from the available sources to
effectuate the purposes of AFA.
---------------------------------------------------------------------------
\41\ See, e.g., Certain Cased Pencils from the People's Republic
of China; Preliminary Results of Antidumping Duty Administrative
Review and Intent to Rescind in Part, 70 FR 76755, 76761 (December
28, 2005) Unchanged in 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 10.
\42\ See Final Determination of Sales at Less Than Fair Value:
Certain Cold-Rolled Carbon Quality Steel Products from the People's
Republic of China, 65 FR 34660 (May 21, 2000), and accompanying
Issues and Decision Memorandum at ``Facts Available.''
---------------------------------------------------------------------------
The Department will consider all margins on the record at the time
of the final determination for the purpose of determining the most
appropriate AFA rate for the PRC-wide entity including Anne Paper and
Yalong.\43\
---------------------------------------------------------------------------
\43\ See Notice of Preliminary Determination of Sales at Less
Than Fair Value: Saccharin from the People's Republic of China, 67
FR 79049, 79053-54 (December 27, 2002), unchanged in Notice of Final
Determination of Sales at Less Than Fair Value: Saccharin From the
People's Republic of China, 68 FR 27530 (May 20, 2003).
---------------------------------------------------------------------------
Corroboration
Section 776(c) of the Act provides that, when the Department relies
on secondary information rather than on information obtained in the
course of an investigation as facts available, it must, to the extent
practicable, corroborate that information from independent sources
reasonably at its disposal. Secondary information is described as
``information derived from the petition that gave rise to the
investigation or review, the final determination concerning merchandise
subject to this investigation, or any previous review under section 751
concerning the merchandise subject to this investigation.'' \44\ To
``corroborate'' means simply that the Department will satisfy itself
that the secondary information to be used has probative value.\45\
Independent sources used to corroborate may include, for example,
published price lists, official import statistics and customs data, and
information obtained from interested parties during the particular
investigation.\46\ To corroborate secondary information, the Department
will, to the extent practicable, examine the reliability and relevance
of the information used.\47\
---------------------------------------------------------------------------
\44\ See Final Determination of Sales at Less Than Fair Value:
Sodium Hexametaphosphate From the People's Republic of China, 73 FR
6479, 6481 (February 4, 2008); see also, SAA at 870.
\45\ See id.
\46\ See id.
\47\ See Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, from Japan, and Tapered Roller Bearings, Four Inches or
Less in Outside Diameter, and Components Thereof, from Japan;
Preliminary Results of Antidumping Duty Administrative Reviews and
Partial Termination of Administrative Reviews, 61 FR 57391, 57392
(November 6, 1996), unchanged in Tapered Roller Bearings and Parts
Thereof, Finished and Unfinished, From Japan, and Tapered Roller
Bearings, Four Inches or Less in Outside Diameter, and Components
Thereof, From Japan; Final Results of Antidumping Duty
Administrative Reviews and Termination in Part, 62 FR 11825 (March
13, 1997).
---------------------------------------------------------------------------
As we did not rely upon secondary information, no corroboration was
required under section 776(c) of the Act; rather we used the highest
margin rate calculated for any respondent in this investigation as the
AFA rate for this investigation.\48\ See the ``Preliminary
Determination'' section of this notice below.
---------------------------------------------------------------------------
\48\ See Final Determination of Sales at Less Than Fair Value:
Sodium Hexametaphosphate From the People's Republic of China, 73 FR
6479 (February 4, 2008).
---------------------------------------------------------------------------
Consequently, we are applying a single antidumping rate--the PRC-
wide rate--to producers/exporters that failed to respond to the
Department's antidumping questionnaires, or requests for shipment
information, or did not apply for a separate rate, as applicable. The
PRC-wide rate applies to all entries of the merchandise under
investigation except for entries from respondents, Hanhong and Guanhao.
These companies and their corresponding antidumping duty cash deposit
rates are listed below in the ``Preliminary Determination'' section of
this notice.
Fair Value Comparisons
To determine whether sales of LWTP to the United States by the
respondents were made at LTFV, we compared export price (``EP'') to NV,
as described in the ``Export Price'' and ``Normal Value'' sections of
this notice.
Export Price
In accordance with section 772(a) of the Act, EP is the price at
which the merchandise subject to this investigation is first sold (or
agreed to be sold) before the date of importation by the producer or
exporter of the merchandise subject to this investigation outside of
the United States to an unaffiliated purchaser in the United States or
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 EP for Hanhong's and Guanhao's U.S. sales
because the merchandise subject to this investigation was sold directly
to the unaffiliated customers in the United States prior to importation
and because constructed export price (``CEP'') was not otherwise
indicated.
In response to questions raised by the Petitioner, we reviewed
Hanhong's relationship with its U.S. customer and find that Hanhong and
its U.S. customer were not affiliated during the POI under the meaning
of section 771(33) of the Act. Our determination in this regard is
based on Hanhong's response that: (1) Its U.S. customer controls the
price at which it resells the merchandise under consideration to its
U.S. customers; (2) Hanhong's U.S. customer takes title to the
merchandise and thus bears the risk of loss; and (3) the written
agreement between Hanhong and its U.S. customer allows Hanhong to sell
to other U.S. customers and does not restrict its U.S. customer from
purchasing thermal paper from other U.S. domestic or foreign suppliers.
Accordingly, we treated Hanhong's reported sales to the
[[Page 27510]]
United States as EP transactions for the preliminary determination.
We calculated EP based on the packed FOB delivered prices to
unaffiliated purchasers in, or for exportation to, the United States.
We made deductions, as appropriate, for any movement expenses (e.g.,
foreign inland freight from the plant to the port of exportation,
domestic brokerage) in accordance with section 772(c)(2)(A) of the
Act.\49\ Where foreign inland freight or foreign brokerage and handling
fees were provided by PRC service providers or paid for in renminbi, we
based those charges on surrogate value rates from India. See ``Factor
Valuation'' section below for further discussion of surrogate value
rates.
---------------------------------------------------------------------------
\49\ For a detailed description of all adjustments, see the
Department's Memorandum to the File entitled, ``Lightweight Thermal
Paper from the People's Republic of China: Analysis of the
Preliminary Determination Margin Calculation for Hanhong'' dated May
6, 2008 (``Hanhong Preliminary Analysis Memorandum''); and the
Department's Memorandum to the File entitled, ``Lightweight Thermal
Paper from the People's Republic of China: Analysis of the
Preliminary Determination Margin Calculation for Guangdong Guanhao
High-Tech Co., Ltd.'' dated May 6, 2008 (``Guanhao Preliminary
Analysis Memorandum'').
---------------------------------------------------------------------------
In determining the most appropriate surrogate values to use in a
given case, the Department's stated practice is to use period-wide
price averages, prices specific to the input in question, prices that
are net of taxes and import duties, prices that are contemporaneous
with the POI, and publicly available data.\50\ The data we used for
brokerage and handling expenses fulfill all of the foregoing criteria
except that they are not specific to the merchandise subject to this
investigation. There is no information of that type on the record of
this investigation. The Department used two sources to calculate a
surrogate value for domestic brokerage expenses: (1) data from the
January 9, 2006, public version of the Section C questionnaire response
from Kejriwal Paper Ltd. (``Kejriwal'') in the investigation of certain
lined paper products from India; \51\ and (2) data from Agro Dutch
Industries Ltd. in the administrative review of certain preserved
mushrooms from India.\52\ Because these values were not concurrent with
the POI of this investigation, we adjusted these rates for inflation
using the Wholesale Price Indices (``WPI'') for India as published in
the International Monetary Fund's (``IMF's'') International Financial
Statistics, available at http://ifs.apdi.net/imf, and then calculated a
simple average of the two companies' brokerage expense data.\53\
---------------------------------------------------------------------------
\50\ 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 1.
\51\ Kejriwal was a respondent in the certain lined paper
products from India investigation for which the POI was July 1,
2004, to June 30, 2005. See 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) (``CLPP'') (unchanged in final determination).
\52\ See Certain Preserved Mushrooms From India: Final Results
of Antidumping Duty Administrative Review, 70 FR 37757 (June 30,
2005) (unchanged in final results).
\53\ See, e.g., Helical Spring Lock Washers From the People's
Republic of China: Preliminary Results of Antidumping Duty
Administrative Review, 72 FR 52073, 52076 (September 12, 2007)
(unchanged in final results).
---------------------------------------------------------------------------
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine the NV using an FOP methodology if the merchandise is
exported from an NME 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 bases
NV on the FOPs because the presence of government controls on various
aspects of NMEs renders price comparisons and the calculation of
production costs invalid under the Department's normal methodologies.
See, e.g., CLPP, 71 FR at 19703 (unchanged in final determination).
Guanhao has not provided a complete cost reconciliation to the
Department nor has it shown that Guanhao's reported FOPs tie to its
accounting system. However, the Department is using Guanhao's reported
FOPs to calculate its margin for the preliminary determination and is
providing Guanhao with a final opportunity to provide a complete cost
reconciliation as requested by the Department in the original
questionnaire issued on December 3, 2008, and in the two supplemental
questionnaires, issued to Guanhao on February 5, 2008, and March 25,
2008.
A complete cost reconciliation, including all requested support
documentation, is hereby due to the Department no later than 14 days
after its receipt of our supplemental questionnaire requesting Guanhao
to provide its complete cost reconciliation, which we soon intend to
issue to Guanhao. Given the fact that Guanhao was first instructed to
provide this cost reconciliation on December 3, 2008, the fact that the
Department has granted numerous extensions to Guanhao in which to
provide its complete cost reconciliation, and in light of the impending
verification, which is currently scheduled for early June 2008, and
statutorily prescribed deadlines, it is unlikely that the Department
will be able to grant Guanhao any additional time to provide a complete
cost reconciliation in accordance with the Department's instructions
and questions. If Guanhao does not provide a complete cost
reconciliation in accordance with the Department's instructions, we may
not conduct verification or consider this company's data usable for the
final determination and may resort to the use of facts available or AFA
for all of Guanhao's data pursuant to sections 776(a) and (b) of the
Act. We may revisit this issue for the final determination pending
receipt of the data.
Factor Valuations
In accordance with section 773(c) of the Act, we calculated NV
based on FOPs reported by respondents for the POI. To calculate NV, we
multiplied the reported per-unit factor-consumption rates by publicly
available Indian surrogate values. 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. Specifically, we added to Indian
import surrogate values a surrogate freight cost using the shorter of
the reported distance from the domestic supplier to the factory of
production or the distance from the nearest seaport to the factory of
production, where appropriate. This adjustment is in accordance with
the U.S. Court of Appeals for the Federal Circuit decision in Sigma
Corp. v. United States, 117 F. 3d 1401, 1407-1408 (Fed. Cir. 1997).
Guanhao reported that certain of its reported raw material inputs
were sourced from a ME country and paid for in ME currencies. Pursuant
to 19 CFR 351.408(c)(1), when a respondent sources inputs from an ME
supplier in meaningful quantities (i.e., not insignificant quantities),
we use the actual price paid by respondents for those inputs, except
when prices may have been distorted by findings of dumping by the PRC
and/or subsidies.\54\ Guanhao's reported information demonstrates that
it has both significant and insignificant quantities of certain raw
materials purchased from ME suppliers. Where we found ME
[[Page 27511]]
purchases to be of significant quantities, in accordance with our
statement of policy as outlined in Antidumping Methodologies: Market
Economy Inputs,\55\ we used the actual purchases of these inputs to
value the inputs. Accordingly, we valued Guanhao's inputs using the ME
prices paid for in ME currencies for the inputs where the total volume
of the input purchased from all ME sources during the POI exceeded 33
percent of the total volume of the input purchased from all sources
during the period.\56\ Where the quantity of the reported input
purchased from ME suppliers was below 33 percent of the total volume of
the input purchased from all sources during the POI, and were otherwise
valid, we weight averaged the ME input's purchase price with the
appropriate surrogate value for the input according to their respective
shares of the reported total volume of purchases.\57\ Where
appropriate, we added freight to the ME prices of inputs. For a
detailed description of the actual values used for the ME inputs
reported, see Guanhao Preliminary.
---------------------------------------------------------------------------
\54\ See Antidumping Duties; Countervailing Duties; Final Rule,
62 FR 27296, 27366 (May 19, 1997).
\55\ See Antidumping Methodologies: Market Economy Inputs,
Expected Non-Market Economy Wages, Duty Drawback; and Request for
Comments, 71 FR 61716, 61717 (October 19, 2006) (``Antidumping
Methodologies: Market Economy Inputs'').
\56\ See Guanhao's December 21, 2007 section D submission at
Exhibit 10. See also Guanhao's March 20, 2008, supplemental D
submission at Exhibit 3.
\57\ See Antidumping Methodologies: Market Economy Inputs at 71
FR 61718.
---------------------------------------------------------------------------
Analysis Memorandum.
For this preliminary determination, in accordance with past
practice, we used import values from the World Trade Atlas online
(``Indian Import Statistics''), published by the Directorate General of
Commercial Intelligence and Statistics, Ministry of Commerce of India,
which were reported in rupees and are contemporaneous with the POI to
calculate surrogate values for the respondents' reported material
inputs.\58\ In selecting the best available information for valuing
FOPs in accordance with section 773(c)(1) of the Act, the Department's
practice is to select, to the extent practicable, surrogate values
which are non-export average values, most contemporaneous with the POI,
product-specific, and tax-exclusive.\59\
---------------------------------------------------------------------------
\58\ See Surrogate Value Memorandum.
\59\ See, e.g., Notice of Preliminary Determination of Sales at
Less Than Fair Value, Negative Preliminary Determination of Critical
Circumstances and Postponement of Final Determination: Certain
Frozen and Canned Warmwater Shrimp From the Socialist Republic of
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final
Determination of Sales at Less Than Fair Value: Certain Frozen and
Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69
FR 71005 (December 8. 2004).
---------------------------------------------------------------------------
Where we could not obtain publicly available information
contemporaneous with the POI with which to value FOPs, we adjusted the
surrogate values using, where appropriate, the Indian WPI as published
in the IMF's.
Furthermore, with regard to the Indian import-based surrogate
values, we have disregarded import prices that we have reason to
believe or suspect may be subsidized. We have reason to believe or
suspect that prices of inputs from 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 may be subsidized.\60\ We are also
directed by the legislative history not to conduct a formal
investigation to ensure that such prices are not subsidized.\61\
Rather, Congress directed the Department to base its decision on
information that is available to it at the time it makes its
determination. Therefore, we have not used prices from these countries
in calculating the Indian import-based surrogate values. In instances
where an ME input was obtained solely from suppliers located in these
countries, we used Indian import-based surrogate values to value the
input. In addition, we excluded Indian import data from NME and
undesignated countries from our surrogate value calculations.\62\
---------------------------------------------------------------------------
\60\ See Notice of Final Determination of Sales at Less Than
Fair Value and Negative Final Determination of Critical
Circumstances: Certain Color Television Receivers From the People's
Republic of China, 69 FR 20594 (April 16, 2004), and accompanying
Issues and Decision Memorandum at Comment 7.
\61\ See Omnibus Trade and Competitiveness Act of 1988,
Conference Report to Accompanying H.R. 3, H.R. Rep. 100-576 at 590
(1988).
\62\ See Surrogate Value Memorandum.
---------------------------------------------------------------------------
In this case, parties have debated which surrogate value is the
best available information for valuing coated jumbo rolls of thermal
paper (``CJRs''). Hanhong argues in favor of using the average of three
Indonesian HTS categories contending that these data account for much
larger import quantities than Indian imports of CJRs and represent
average unit prices that are more comparative to the ``normal value''
German benchmark which it calculated from publicly available data from
the companion German investigation. Hanhong also asserts that Indian
import values for CJRs during the POI are aberrational because of small
quantities and specialized imports.\63\
---------------------------------------------------------------------------
\63\ See, e.g., Hanhong's submission regarding, ``Lightweight
Thermal Paper from the People's Republic of China: Rebuttal
regarding Surrogate Values,'' dated March 12, 2008, at pages 3 and
4.
---------------------------------------------------------------------------
Petitioner argues that the single Indian HTS category is more
appropriate as a surrogate value because it is the only value that is
specific to CJRs. Additionally, petitioner asserts that these Indian
data are not aberrational as evidenced by the pattern of the WTA yearly
data for the category showing average prices remaining constant over a
three-year period. Petitioner claims that two of the three Indonesian
HTS categories submitted by Hanhong do not exist, and the third is
incorrect.
All the HTS data, including the Indian and Indonesian values that
parties have proposed that the Department use to value the CJRs in this
preliminary determination are contemporaneous with the POI and are tax-
exclusive values. However, the Indonesian HTS categories submitted by
Hanhong are broad basket categories. Where a category is more specific
to an input it is the Department's preference to use that category
rather than a basket category. See Amended Final Results of Antidumping
Duty Administrative Review and New Shipper Reviews: Wooden Bedroom
Furniture From the People's Republic of China, 72 FR 46957 (August 22,
2007), and accompanying Issues and Decision Memorandum at Comment 13;
See also 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), and accompanying Issues and Decision Memorandum at
Comment 3 (where the Department declined to use a broad basket category
because it was not as specific to the input being valued as other
potential sources on the record of the proceeding). Furthermore, we
have not considered using the German value as a benchmark (provided by
Hanhong) because Germany is not on the list of possible surrogate
countries due to its advanced level of economic development, and we
have a value on the record from India, a country deemed in this
proceeding to be economically comparable to the PRC, which is specific
to CJRs. Therefore, the Department has valued CJRs with Indian imports
from HTS 4811.90.94 for this preliminary determination because this
Indian HTS category is more specific to CJRs reported by the
respondent, and as
[[Page 27512]]
such, is the best available information currently on the record.
Pursuant to 19 CFR 351.301(c)(3)(i), we encourage interested parties to
submit additional publicly available information for consideration in
valuing CJRs within 40 days after the date of publication of this
determination.
We used Indian transport information to value the inland truck,
rail, and waterway freight cost of the raw materials. The Department
valued truck freight using Indian freight rates published by Indian
Freight Exchange available at http://www.infreight.com. This source
provided daily rates from six major points of origin to six
destinations in India for the period April 2005, through October 2005.
We averaged the monthly rates for each rate observation to obtain a
surrogate value. The Department determined the best available
information for valuing rail freight to be from http://
www.indianrailways.gov.in. To value waterway freight, we used an Indian
domestic ship rate from Indian Waterways Authority. For data that were
not contemporaneous with the POI, we adjusted the rates for inflation
using WPI, where applicable.
For direct, indirect, and packing labor, consistent with 19 CFR
351.408(c)(3), we used the PRC regression-based wage rate as reported
on Import Administration's web page, Import Library, Expected Wages of
Selected NME Countries, revised in January 2007, available at http://
ia.ita.doc.gov/wages/index.html. Because 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 reported by the respondent. If the NME wage rates
are updated by the Department prior to issuance of the final
determination, we will use the updated wage rate in the final LTFV
determination. The Department is currently in the process of updating
its regression-based wage rate for the PRC for 2007. The deadline for
submitting comments on the 2007 expected wages of selected NME
countries' calculation was May 1, 2008 and the Department intends to
finalize its calculations based on 2005 GNI within one month
thereafter. See http://www.trade.gov/ia/. Therefore, for the final
determination of this investigation we intend to update our PRC
Expected Hourly Wage Rate with the finalized 2007 expected wages
calculation.
To value electricity, we used data from the International Energy
Agency Key World Energy Statistics (2003 edition). Because the value
was not contemporaneous with the POI, we adjusted the value for
inflation.
The Department valued water using data from the Maharashtra
Industrial Development Corporation http://www.midcindia.org because it
includes a wide range of industrial water tariffs. This source provides
386 industrial water rates within the Maharashtra province from June
2003: 193 for the ``inside industrial areas'' usage category and 193
for the ``outside industrial areas'' usage category. Because the value
was not contemporaneous with the POI, we adjusted the rate for
inflation.
To value factory overhead, selling, general, and administrative
expenses, and profit, we used audited financial statements for the year
ending March 31, 2006, of two Indian producers of identical and
comparable merchandise, Parag Copigraph Pvt. Ltd. (``Parag'') and Alpha
Carbonless Paper Ltd. (``Alpha'').\64\ The Department may consider
other publicly available financial statements for the final
determination, as appropriate.
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\64\ See petitioner's submission entitled, ``Lightweight Thermal
Paper From China,'' dated March 19, 2008, and Surrogate Value
Memorandum.
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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)(1) of the Act, we intend to verify
the information from Hanhong and Guanhao upon which we will rely in
making our final determination. However, as noted in the ``Normal
Value'' section above, should Guanhao fail to provide a complete cost
reconciliation, the Department may determine that there is insufficient
cost reconciliation information to warrant verification of any of
Guanhao's information on the record.
Combination Rates
In the Initiation Notice, the Department stated that it would
calculate combination rates for certain respondents that are eligible
for a separate rate in this investigation.\65\ This practice is
described in the Separate Rate Policy Bulletin.
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\65\ See Initiation Notice, 72 FR at 62435.
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Preliminary Determination
The weighted-average dumping margin percentages are as follows:
----------------------------------------------------------------------------------------------------------------
Exporter/producer combination Customs ID No. Percent margin
----------------------------------------------------------------------------------------------------------------
Exporter: Shanghai Hanhong Paper Co., Ltd., also known as, Hanhong A-570-920-001 132.95
International Limited; Producer: Shanghai Hanhong Paper Co. Ltd............
Exporter: Guangdong Guanhao High-Tech Co., Ltd.; Producer: Guangdong Guanhao A-570-920-002 2.30
High-Tech Co., Ltd.........................................................
PRC-Wide Entity*............................................................ A-570-920-000 132.95
----------------------------------------------------------------------------------------------------------------
* Includes Anne Paper and Yalong.
Disclosure
We will disclose the calculations performed to parties in this
proceeding within five days of the date of publication of this notice
in accordance with 19 CFR 351.224(b).
Suspension of Liquidation
In accordance with section 733(d) of the Act, we will instruct CBP
to suspend liquidation of all entries of merchandise subject to this
investigation, entered, or withdrawn from warehouse, for consumption on
or after the date of publication of this notice in the Federal
Register. The Department has determined in its Lightweight Thermal
Paper from the People's Republic of China: Preliminary Affirmative
Countervailing Duty Determination and Alignment of Final Countervailing
Duty Determination with Final Antidumping Duty Determination, 73 FR
13850 (March 14, 2008) (``CVD LWTP Prelim''), that the product under
investigation, exported and produced by Guanhao, benefitted from an
export subsidy. Normally, where the product under investigation is also
subject to a concurrent countervailing duty investigation, we instruct
CBP to require an antidumping cash deposit or posting of a bond equal
to the weighted-average amount by which the NV exceeds the EP, as
indicated above, minus the amount determined to constitute an
[[Page 27513]]
export subsidy. See, e.g., Notice of Final Determination of Sales at
Less Than Fair Value: Carbazole Violet Pigment 23 From India, 69 FR
67306, 67307 (November 17, 2007). Therefore, for merchandise under
consideration entered, or withdrawn from warehouse, for consumption on
or after publication date of this preliminary determination exported
and produced by Guanhao, we will instruct CBP to require an antidumping
cash deposit or the posting of a bond for each entry equal to the
weighted-average margin indicated above, adjusted for the export
subsidy rate determined in CVD LWTP Prelim.
For the remaining exporter/producer combinations listed in the
chart above, the following cash deposit requirements will be effective
upon publication of the preliminary determination for all shipments of
merchandise under consideration entered or withdrawn from warehouse,
for consumption on or after publication date: (1) The rate for the
exporter/producer combinations listed in the chart above will be the
rate we have determined in this preliminary determination, except as
noted above for Guanhao; (2) for all PRC exporters of merchandise
subject to this investigation that have not received their own rate,
the cash-deposit rate will be the PRC-wide rate; (3) for all non-PRC
exporters of merchandise subject to this investigation that have not
received their own rate, the cash-deposit rate will be the rate
applicable to the PRC exporter/producer combination that supplied that
non-PRC exporter. These suspension-of-liquidation instructions will
remain in effect until further notice. We will instruct CBP to require
a cash deposit or the posting of a bond equal to the weighted-average
amount by which the NV exceeds U.S. price, as indicated above. The
suspension of liquidation will remain in effect until further notice.
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our preliminary affirmative determination of sales at LTFV.
Section 735(b)(2) of the Act requires the ITC to make its final
determination as to whether the domestic industry in the United States
is materially injured, or threatened with material injury, by reason of
imports of LWTP, or sales (or the likelihood of sales) for importation,
of the merchandise under consideration 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 on which the final verification report is issued in this
proceeding and rebuttal briefs, limited to issues raised in case
briefs, may be submitted no later than five days after the deadline
date for case briefs. See 19 CFR 351.309. A table of contents, list of
authorities 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. The Department also requests
that parties provide an electronic copy of its case and rebuttal brief
submissions in either a ``Microsoft Word'' or a ``pdf'' format.
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. 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 after the date of publication of this notice.\66\ Requests
should contain the party's name, address, and telephone number, the
number of participants, and a list of the issues to be discussed. If a
request for a hearing is made, we intend to hold the hearing three days
after the deadline of submission of rebuttal briefs at the U.S.
Department of Commerce, 14th Street and Constitution Ave., NW.,
Washington, DC 20230, at a time and location to be determined. See 19
CFR 351.310. Parties should confirm by telephone the date, time, and
location of the hearing two days before the scheduled date.
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\66\ See 19 CFR 351.310(c).
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We will make our final determination no later than 135 days after
the date of publication of this preliminary determination, pursuant to
section 735(a)(2) of the Act.
This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: May 6, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-10663 Filed 5-12-08; 8:45 am]
BILLING CODE 3510-DS-P