[Federal Register Volume 76, Number 9 (Thursday, January 13, 2011)]
[Notices]
[Pages 2337-2344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-627]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-827]
Certain Cased Pencils From the People's Republic of China:
Preliminary Results and Partial Rescission of Antidumping Duty
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
DATES: Effective Date: January 13, 2011.
SUMMARY: The Department of Commerce (``the Department'') has
preliminarily determined that the respondents in this review, for the
period December 1, 2008, through November 30, 2009, have made sales of
subject merchandise at less than normal value. If these preliminary
results are adopted in the final results of this review, we will
instruct U.S. Customs and Border Protection (``CBP'') to assess
antidumping duties on all appropriate entries.
The Department is also rescinding this review for those foreign
producers/exporters for which requests for review were timely
withdrawn. For the
[[Page 2338]]
companies for which this review is rescinded, antidumping duties shall
be assessed at rates equal to the cash deposit of estimated antidumping
duties required at the time of entry, or withdrawal from warehouse, for
consumption.
The Department invites interested parties to comment on these
preliminary results. The Department intends to issue the final results
no later than 120 days from the publication date of this notice,
pursuant to section 751(a)(3)(A) of the Tariff Act of 1930, as amended
(``the Act'').
FOR FURTHER INFORMATION CONTACT: Patricia Tran, Mahnaz Khan or David
Layton, AD/CVD Operations, Office 1, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230; telephone
(202) 482-1503, (202) 482-0914 or (202) 482-0371, respectively.
SUPPLEMENTARY INFORMATION:
Background
On December 28, 1994, the Department published in the Federal
Register an antidumping duty order on certain cased pencils
(``pencils'') from the People's Republic of China (``PRC''). See
Antidumping Duty Order: Certain Cased Pencils from the People's
Republic of China, 59 FR 66909 (December 28, 1994). On December 1,
2009, the Department published a notice of opportunity to request an
administrative review of this order covering the period December 1,
2008, through November 30, 2009. See Antidumping or Countervailing Duty
Order, Finding, or Suspended Investigation; Opportunity to Request
Administrative Review, 74 FR 62743 (December 1, 2009). On December 4,
2009, in accordance with 19 CFR 351.213(b), Shandong Rongxin Import and
Export Co., Ltd. (``Rongxin''), a foreign exporter/producer, requested
that the Department review its sales of subject merchandise. On
December 28, 2009, in accordance with 19 CFR 351.213(b), Beijing Fila
Dixon Stationery Company Ltd. (``Beijing Dixon''), a foreign exporter,
requested that the Department review its sales of subject merchandise.
On December 31, 2009, the following exporters/producers requested
reviews of themselves, in accordance with 19 CFR 351.213(b): Shanghai
Three Star Stationery Industry Co., Ltd. (``Three Star''), Orient
International Holding Shanghai Foreign Trade Corporation (``SFTC''),
and China First Pencil Co., Ltd. (``China First'') and its affiliated
companies including Shanghai First Writing Instrument Co., Ltd.
(``FST''), Fang Zheng Ltd. (``Fang Zheng''), Shanghai Great Wall Pencil
Co. Ltd. (``Great Wall'') and China First Pencil Huadian Co., Ltd.
(``Huadian'').\1\
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\1\ The Department sent a letter to China First on January 13,
2010, asking China First to provide a complete list of its
affiliated companies. China First responded on January 15, 2010,
stating that its affiliated companies subject to the review are FST,
Fang Zheng, Great Wall and Huadian. On March 1, 2010, SFTC withdrew
its December 31, 2009 request for a review.
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On January 29, 2010, the Department published a notice of
initiation for this administrative review covering the companies listed
in the requests received from the interested parties named above. See
Initiation of Antidumping and Countervailing Duty Administrative
Reviews, Request for Revocation in Part, and Deferral of Initiation of
Administrative Review, 75 FR 4770, 4772 (January 29, 2010). On March
29, 2010, China First and its affiliated companies, and Three Star
withdrew their December 31, 2009 requests for a review.
The Department issued antidumping duty questionnaires to Rongxin
and Beijing Dixon on April 6, 2010. Rongxin submitted its Section A
Questionnaire Response on May 6, 2010, and its Section C and Section D
Questionnaire Responses on May 28, 2010. Beijing Dixon submitted its
Section A Questionnaire Response on April 23, 2010, its Section C
Questionnaire Response on May 12, 2010, and its Section D Questionnaire
Response on May 12, 2010. The Department issued supplemental
questionnaires to Rongxin and Beijing Dixon between June 2010 and
December 2010. Both companies timely filed their responses to those
supplemental questionnaires.
On September 3, 2010, we extended the time limit for the
preliminary results in this review until January 7, 2011. See Certain
Cased Pencils From the People's Republic of China: Extension of Time
Limit for Preliminary Results of the Antidumping Duty Administrative
Review, 75 FR 54089 (September 3, 2010).
Scope of the Order
Imports covered by the order are shipments of certain cased pencils
of any shape or dimension (except as described below) which are writing
and/or drawing instruments that feature cores of graphite or other
materials, encased in wood and/or man-made materials, whether or not
decorated and whether or not tipped (e.g., with erasers, etc.) in any
fashion, and either sharpened or unsharpened. The pencils subject to
the order are currently classifiable under subheading 9609.10.00 of the
Harmonized Tariff Schedule of the United States (``HTSUS'').
Specifically excluded from the scope of the order are mechanical
pencils, cosmetic pencils, pens, non-cased crayons (wax), pastels,
charcoals, chalks, and pencils produced under U.S. patent number
6,217,242, from paper infused with scents by the means covered in the
above-referenced patent, thereby having odors distinct from those that
may emanate from pencils lacking the scent infusion. Also excluded from
the scope of the order are pencils with all of the following physical
characteristics: (1) Length: 13.5 or more inches; (2) sheath diameter:
not less than one-and-one quarter inches at any point (before
sharpening); and (3) core length: not more than 15 percent of the
length of the pencil.
In addition, pencils with all of the following physical
characteristics are excluded from the scope of the order: novelty jumbo
pencils that are octagonal in shape, approximately ten inches long, one
inch in diameter before sharpening, and three-and-one eighth inches in
circumference, composed of turned wood encasing one-and-one half inches
of sharpened lead on one end and a rubber eraser on the other end.
Although the HTSUS subheading is provided for convenience and
customs purposes, the written description of the scope of the order is
dispositive.
Partial Rescission of Review
The Department's regulations at 19 CFR 351.213(d)(1) provide that
the Department will rescind an administrative review, in part, if a
party that requested a review withdraws the request within 90 days of
the date of publication of the notice of initiation of the requested
review. As explained above, SFTC withdrew its request for a review on
March 1, 2010. On March 29, 2010, China First and its affiliated
companies, and Three Star withdrew their requests for a review. These
withdrawals occurred within the 90-day deadline, and no other party
requested a review with respect to these companies. Therefore, the
Department is rescinding this administrative review with regard to
SFTC, China First and its affiliated companies, and Three Star.
Non-Market Economy Country Status
In every case conducted by the Department involving the PRC, the
PRC has been treated as a non-market economy (``NME'') country. In
accordance with section 771(18)(C)(i) of the Act, any determination
that a foreign country is an NME country shall remain in effect until
revoked by the
[[Page 2339]]
administering authority. See, e.g., Brake Rotors From the People's
Republic of China: Final Results and Partial Rescission of the 2004/
2005 Administrative Review and Notice of Rescission of 2004/2005 New
Shipper Review, 71 FR 66304 (November 14, 2006). None of the parties to
this proceeding has contested such treatment. Accordingly, we
calculated normal value (``NV'') in accordance with section 773(c) of
the Act, which applies to NME countries.
Surrogate Country and Surrogate Values
When the Department investigates imports from an NME country and
available information does not permit the Department to determine NV
pursuant to section 773(a) of the Act, then, pursuant to section
773(c)(4) of the Act, the Department bases NV on an NME producer's
factors of production (``FOPs''), to the extent possible, valued in one
or more market-economy countries (``ME'') that (1) are at a level of
economic development comparable to that of the NME country, and (2) are
significant producers of comparable merchandise. The Department
determined that India, Indonesia, the Philippines, Ukraine, Thailand,
and Peru are countries comparable to the PRC in terms of economic
development. See Memorandum from Carole Showers, Director, Office of
Policy, to Brandon Farlander, Program Manager, Office 1, entitled
``Request for a List of Surrogate Countries for Administrative Review
of the Antidumping Duty Order on Certain Cased Pencils from the
People's Republic of China (``PRC''),'' dated April 14, 2010. On April
15, 2010, the Department invited the interested parties to comment on
surrogate country selection and to submit surrogate value data. On
September 1 and on September 27, 2010, the Department extended the
deadline for submission of publicly available information to value
factors. See the Department's Letters to All Interested Parties,
``Certain Cased Pencils from the People's Republic of China: Deadlines
for Surrogate Country and Surrogate Value Comments,'' dated April 15,
2010 and September 1, 2010, and Memorandum to the File from David
Layton, ``2008/2009 Administrative Review of Certain Cased Pencils from
the People's Republic of China: Extension Request from Rongxin Import &
Export Co., Ltd. Regarding the Submission of Surrogate Values,'' dated
September 27, 2010. Beijing Dixon submitted publicly available
information to value factors on October 15, 2010, and November 22,
2010. Rongxin submitted publicly available information on June 25,
2010, and October 18, 2010. Both respondents also provided certain
surrogate value information in their supplemental responses.
As explained above, we determined that India is comparable to the
PRC. Furthermore, India is a significant producer of comparable
merchandise. See Memorandum from Mahnaz Khan to the File, ``2008-2009
Antidumping Duty Administrative Review on Certain Cased Pencils from
the People's Republic of China: Selection of a Surrogate Country,''
dated January 7, 2011. Finally, it is the Department's practice to
select an appropriate surrogate country based on the availability and
reliability of data from those countries. In this instance, India has
publicly available, reliable data. See Department Policy Bulletin No.
04.1: Non-Market Economy Surrogate Country Selection Process, March 1,
2004.
Therefore, because India is at a comparable level of economic
development to the PRC, is a significant producer of comparable
merchandise, and has publicly available and reliable data, we have
selected India as the primary surrogate country for this review. The
Department notes that India has been the primary surrogate country in
past segments of this proceeding.
Separate Rates Determination
A designation as an NME remains in effect until it is revoked by
the Department. See section 771(18)(C) of the Act. Accordingly, the
Department begins with a rebuttable presumption that all companies
within the country are subject to government control and, thus, should
be assessed a single antidumping duty deposit rate (i.e., a country-
wide rate). See, e.g., Department Policy Bulletin 05.1: Separate-Rates
Practice and Application of Combination Rates in Antidumping
Investigations involving Non-Market Economy Countries, April 5, 2005;
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); Final Determination of Sales at Less Than Fair
Value and Final Partial Affirmative Determination of Critical
Circumstances: Diamond Sawblades and Parts Thereof from the People's
Republic of China, 71 FR 29303, 29307 (May 22, 2006) (``Diamond
Sawblades'').
It is the Department's policy to assign all exporters of the
merchandise subject to review in NME countries a single rate unless an
exporter can affirmatively demonstrate an absence of government
control, both in law (de jure) and in fact (de facto), with respect to
exports. See, e.g., Diamond Sawblades, 71 FR at 29307. Exporters can
demonstrate this independence through the absence of both de jure and
de facto government control over export activities. Id. The Department
analyzes each entity exporting the subject merchandise under a test
arising from the Final Determination of Sales at Less than Fair Value:
Sparklers From the People's Republic of China, 56 FR 20588, 20589 (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, 22586-87 (May 2, 1994)
(``Silicon Carbide''). However, if the Department determines that a
company is wholly foreign-owned or located in an ME, then a separate
rate analysis is not necessary to determine whether it is independent
from government control. See, e.g., Final Results of Antidumping Duty
Administrative Review: Petroleum Wax Candles from the People's Republic
of China, 72 FR 52355, 52356 (September 13, 2007).
The Department received a separate rate certification from Rongxin
on February 26, 2010, and a separate rate certification from Beijing
Dixon on March 5, 2010. China First, Three Star, and SFTC requested an
extension until March 29, 2010, to file a separate rate certification
before withdrawing their respective requests for a review.
Consequently, SFTC, China First, and Three Star never filed separate
rate certifications before the March 29, 2010 deadline.
In its separate rate application, Beijing Dixon reported that it is
owned wholly by an entity located and registered in an ME country
(i.e., the United States). Thus, because we have no evidence indicating
that Beijing Dixon is under the control of the PRC government, a
separate-rate analysis is not necessary to determine whether it is
independent from government control, and we determine Beijing Dixon has
met the criteria for the application of a separate rate. See Brake
Rotors From the People's Republic of China: Preliminary Results and
Partial Rescission of Fifth New Shipper Review, 66 FR 29080, 29081 (May
29, 2001) (where the respondent was wholly owned by a U.S. registered
company), unchanged in Brake Rotors From the People's Republic of
China: Final Results and Partial Rescission of Fifth New Shipper
Review, 66 FR 44331 (August 23, 2001); Brake Rotors From the People's
Republic of China: Preliminary Results and Partial Rescission of the
Fourth New Shipper
[[Page 2340]]
Review and Rescission of the Third Antidumping Duty Administrative
Review, 66 FR 1303, 1306 (January 8, 2001) (where the respondent was
wholly owned by a company located in Hong Kong), unchanged in Brake
Rotors From the People's Republic of China: Final Results and Partial
Rescission of Fourth New Shipper Review and Rescission of Third
Antidumping Duty Administrative Review, 66 FR 27063 (May 16, 2001); and
Notice of Final Determination of Sales at Less Than Fair Value:
Creatine Monohydrate From the People's Republic of China, 64 FR 71104,
71105 (December 20, 1999) (where the respondent was wholly owned by
persons located in Hong Kong).
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 the
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) any other
formal measures by the government decentralizing control of companies.
See Sparklers, 56 FR at 20589. The evidence provided by Rongxin
supports a preliminary finding of de jure absence of government
control.
Rongxin has placed on the administrative record a copy of its
business license and articles of association.\2\ Neither of these
documents contains restrictions with respect to export activities.
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\2\ See Rongxin's Separate Rate Certification submission dated
February 26, 2010, and Rongxin's Section A submission dated May 6,
2010.
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In its separate rates certification, Rongxin certified that during
the POR: (1) As with the segment of the proceeding in which the firm
was previously granted a separate rate (``previous Granting Period''),
there were no government laws or regulations that controlled the firm's
export activities; (2) the ownership under which the firm registered
itself with the official government business license issuing authority
remains the same as for the previous Granting Period; (3) the firm had
a valid PRC Export Certificate of Approval, now referred to and labeled
as a Registration Form for Foreign Trade Operator; (4) as in the
previous Granting Period, in order to conduct export activities, the
firm was not required by law or regulation at any level of government
to possess additional certificates or other documents related to the
legal status and/or operation of its business beyond those discussed
above; and (5) PRC government laws and legislative enactments
applicable to Rongxin remained the same as in the previous Granting
Period.
In prior cases, we have found an absence of de jure control absent
proof on the record to the contrary. See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From
the People's Republic of China, 60 FR 22544 (May 8, 1995) (``Furfuryl
Alcohol''). We have no information in this proceeding that would cause
us to reconsider this determination. Thus, we determine that the
evidence on the record supports a preliminary finding of absence of de
jure government control for Rongxin.
Absence of De Facto Control
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Silicon Carbide, 59 FR at 22587. Therefore, the Department has
determined that an analysis of de facto control is critical in
determining whether respondents are, in fact, subject to a degree of
government control which would preclude the Department from assigning
separate rates.
The Department typically considers the following four factors in
evaluating whether a respondent is subject to de facto government
control of its export functions: (1) Whether the export prices are set
by, or subject to the approval of, a government agency; (2) whether the
respondent has the authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding the disposition of profits or
financing of losses. See Silicon Carbide, 59 FR at 22586-87, and
Furfuryl Alcohol, 60 FR at 22545.
Rongxin has asserted the following: (1) It establishes its own
export prices; (2) it negotiates contracts without guidance from any
government entities or organizations; (3) it makes its own personnel
decisions; and (4) it retains the proceeds of its export sales, uses
profits according to its business needs, and has the authority to sell
its assets and to obtain loans. Additionally, Rongxin's questionnaire
responses indicate that its pricing during the POR was not coordinated
with other exporters. As a result, there is a sufficient basis to
preliminarily determine that Rongxin has demonstrated a de facto
absence of government control of its export functions and it is
entitled to a separate rate.
Fair-Value Comparisons
To determine whether Rongxin's sales of subject merchandise were
made at less than NV, we compared the NV to individual export price
(``EP'') transactions in accordance with section 777A(d)(2) of the Act.
See ``Export Price'' and ``Normal Value'' sections of this notice,
below. To determine whether Beijing Dixon's sales were made at less
than NV, we compared constructed export price (``CEP'') to NV as
described in the ``Constructed Export Price'' section of the notice
below.
Export Price
In accordance with section 772(a) of the Act, EP is ``the price at
which subject merchandise is first sold (or agreed to be sold) before
the date of importation by the producer or exporter of the subject
merchandise 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 EPs for sales by
Rongxin to the United States because the first sale to an unaffiliated
party was made before the date of importation, and CEP methodology was
not otherwise indicated. We based EP on the price to unaffiliated
purchasers in the United States. In accordance with section
772(c)(2)(A) of the Act, we made deductions for Rongxin's foreign
inland freight and foreign brokeage and handling where appropriate.
We valued brokerage and handling using a price list of export
procedures necessary to export a standardized cargo of goods in India.
The price list is compiled based on a survey case study of the
procedural requirements for trading a standard shipment of goods by
ocean transport in India as reported in Doing Business 2010: India,
published by the World Bank. See Memorandum from David Layton to File,
``Factor Valuation for the Preliminary Results Memorandum,'' dated
January 7, 2011 (``Factor Valuation Memorandum'').
Constructed Export Price
In accordance with section 772(a) of the Act, CEP is the price at
which the subject merchandise is first sold (or agreed to be sold) in
the United States before or after the date of importation by or for the
account of the producer or exporter of such merchandise or by a seller
affiliated with the producer or
[[Page 2341]]
exporter, to a purchaser not affiliated with the producer or exporter,
as adjusted under subsections (c) and (d). In its questionnaire
responses, Beijing Dixon stated that it made CEP sales through its U.S.
affiliate, Dixon Ticonderoga Company. In accordance with section 772(a)
of the Act, we used CEP for Beijing Dixon's U.S. sales because all
sales to unaffiliated customers were made after the date of importation
and by its U.S. affiliate.
The Department calculated CEP based on the packed, delivered prices
to unaffiliated purchasers in the United States, net of billing
adjustments, rebates and early payment discounts. We adjusted these
prices for movement expenses, including foreign inland freight,
international freight, marine insurance, foreign and U.S. brokerage and
handling (U.S. brokerage and handling was reported as three ``other
transportation expense'' categories), U.S. customs duties, U.S. inland
freight from port to warehouse and U.S inland shipment insurance in
accordance with section 772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act, we deducted from
Beijing Dixon's starting price those selling expenses that were
incurred in selling the subject merchandise in the United States,
including imputed credit expenses, applicable advertising expenses,
commissions, royalties and indirect selling expenses. We also made an
adjustment for profit in accordance with section 772(d)(3) of the Act.
For a detailed description of all adjustments, see Memorandum from
Mahnaz Khan to the File, ``Analysis for the Preliminary Results of
Antidumping Duty Administrative Review of Certain Cased Pencils from
the People's Republic of China: Beijing Fila Dixon Stationery Company
Ltd.,'' dated January 7, 2011 (``Beijing Dixon Preliminary Calculation
Memo'').
For our CEP adjustments for Beijing Dixon, we valued foreign
brokerage and handling, and foreign inland truck rates using the same
surrogate values described above in the ``Export Price'' section.
For its calculation of the CEP, the Department changed certain data
in Beijing Dixon's U.S. sales database. Beijing Dixon reported no
payment date for certain observations in the U.S. sales database. For
these observations, the Department, as is its practice, applied as the
payment date May 20, 2010, the deadline for submission of factual
information in this administrative review as provided in 19 CFR
351.301(b)(2). We have also calculated the credit expense for each of
the specific observations with missing payment dates based on the May
20, 2010 payment date. See Beijing Dixon Preliminary Calculation Memo
at 3-4. We have not yet requested clarification from Beijing Dixon
regarding the missing payment dates, but intend to do so after these
preliminary results.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine NV using a FOP methodology if the merchandise is exported
from an NME country and the information does not permit the calculation
of NV using home-market prices, third-country prices, or constructed
value under section 773(a) of the Act.
The Department will base NV on FOPs where the presence of
government controls on various aspects of NMEs renders price
comparisons and the calculation of production costs invalid under our
normal ME methodologies. Therefore, we calculated NV based on FOPs in
accordance with sections 773(c)(3) and (4) of the Act and 19 CFR
351.408(c). The FOPs include: (1) Hours of labor required; (2)
quantities of raw materials employed; (3) amounts of energy and other
utilities consumed; and (4) representative capital costs. We used the
FOPs reported by the respondents for materials, energy, labor, and
packing.
In accordance with 19 CFR 351.408(c)(1), when a producer sources an
input from an ME country and pays for it in ME currency, the Department
will normally value the factor using the actual price paid to the ME
supplier for the input. See 19 CFR 351.408(c)(1). Where a portion of
the input is purchased from an ME supplier and the remainder from an
NME supplier, the Department will normally use the price paid for the
input sourced from ME suppliers to value all of the input, provided the
volume of the ME input as a share of total purchases from all sources
is ``meaningful.'' See Antidumping Duties; Countervailing Duties, 62 FR
27296, 27366 (May 19, 1997); Shakeproof Assembly Components, Div. of
Ill. Tool Works, Inc. v. United States, 268 F.3d 1376, 1382 (Fed. Cir.
2001); 19 CFR 351.408(c)(1); see also Antidumping Methodologies: Market
Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and
Request for Comments, 71 FR 61716, 61716-61719 (October 19, 2006)
(regarding the Department's flexible 33 percent threshold for ME
inputs). In this administrative review, Beijing Dixon reports
purchasing four ME material inputs in volumes that exceed the threshold
percentage that the Department normally considers ``meaningful.'' See
Beijing Dixon Preliminary Calculation Memorandum. At the Department's
request, Beijing Dixon provided documentation to support its claim that
these four inputs were obtained from ME sources. See Sections C & D
First and Second Supplemental Questionnaire Response of Beijing Fila
Dixon Stationery Company, Ltd., dated September 10, 2010, at Exhibits
Supplemental C-12 and D-5-D-9. Accordingly, we have calculated NV for
these preliminary results using the ME prices paid by Beijing Dixon for
these four inputs to value the relevant factors.
Factor Valuations
In accordance with section 773(c)(3) of the Act, we calculated NV
based on FOPs reported by the respondents for the POR. Except as noted
above for Beijing Dixon's ME inputs, we multiplied the reported per-
unit factor quantities by publicly available Indian surrogate values.
In selecting the surrogate values, we considered the quality,
specificity, and contemporaneousness of the data.
In accordance with section 773(c)(1) of the Act, for purposes of
calculating NV, we attempted to value the FOPs using surrogate values
that were in effect during the POR. If we were unable to obtain
surrogate values that were in effect during the POR, we adjusted the
values, as appropriate, to account for inflation or deflation between
the effective period and the POR. We calculated the inflation or
deflation adjustments for all factor values, except labor and
utilities, using the India Wholesale Price Index as published in the
International Monetary Fund's International Financial Statistics.
When relying on prices of imports into India as surrogate values,
we have disregarded prices that we have reason to believe or suspect
may be subsidized. See Tapered Roller Bearings and Parts Thereof,
Finished and Unfinished, From the People's Republic of China; Final
Results of 1999-2000 Administrative Review, Partial Rescission of
Review, and Determination Not To Revoke Order in Part, 66 FR 57420
(November 15, 2001), and accompanying Issues and Decision Memorandum at
Comment 1. We have found that Indonesia, South Korea, and Thailand
maintain broadly available, non-industry-specific export subsidies.
Accordingly, it is reasonable to infer that exports to all markets from
those countries may be subsidized. See Certain Frozen Fish Fillets from
the Socialist Republic of Vietnam: Preliminary Results and Preliminary
Partial Rescission of Antidumping Duty Administrative Review, 70 FR
54007,
[[Page 2342]]
54011 (September 13, 2005), unchanged in Certain Frozen Fish Fillets
From the Socialist Republic of Vietnam: Final Results of the First
Administrative Review, 71 FR 14170 (March 21, 2006); and China Nat'l
Machinery Import & Export Corp. v. United States, 293 F. Supp. 2d 1334,
1336 (Ct. Int'l. Trade 2003), aff'd 104 Fed. Appx. 183 (Fed. Cir.
2004).
In avoiding the use of prices that may be subsidized, the
Department does not conduct a formal investigation to ensure that such
prices are not subsidized. See H.R. Rep. 100-576 at 590-91 (1988),
reprinted in 1988 U.S.C.C.A.N. 1547, 1623. Rather, the Department
relies on information that is generally available at the time of its
determination. Therefore, we have not used prices from those countries
in calculating the Indian import-based surrogate values. See Factor
Valuation Memorandum.
As appropriate, we adjusted input prices by including freight costs
to make them delivered prices. Specifically, we added to the Indian
import surrogate values a surrogate freight cost calculated using the
shorter of the reported distance from the domestic supplier to the
factory or the distance from the nearest port of export to the factory,
where appropriate. This adjustment is in accordance with the decision
of the Court of Appeals for the Federal Circuit (``Federal Circuit'')
in Sigma Corp. v. United States, 117 F.3d 1401, 1407-08 (Fed. Cir.
1997). See also Department Policy Bulletin No. 10.2: Inclusion of
International Freight Costs When Import Prices Constitute Normal Value,
November 1, 2010.
We valued the FOPs as follows:
(1) Except where noted below, we valued all reported material and
packing inputs using Indian import data from the Global Trade Atlas for
December 2008 through November 2009.
(2) We calculated the slats surrogate value using data from ``Paper
and Stationery.'' \3\ The slats, for which values were reported in
``Paper and Stationery,'' are used for pencil production and are made
from Ajanta, valued at Rs. 210 per 1000 cubic feet, and Vatta II,
valued at Rs. 200 per 1000 cubic feet. We averaged the values for
Ajanta and Vatta II to arrive at a surrogate value of Rs. 205 per 1000
cubic feet. We converted Rupees-per-1000 cubic-feet to Rupees-per-
kilogram. We adjusted this value to account for inflation between the
effective period and the POR. See Attachment 4 of the Factor Valuation
Memorandum for the calculation of the surrogate values for slats.
---------------------------------------------------------------------------
\3\ See ``Pencil Industry in India--A Robust Future,'' Divya
Jha, in ``Paper & Stationery Samachar'' (Delhi, November 2008), an
Indian trade journal (``Paper and Stationery'') at 54, attached as
Exhibit 3 to Rongxin's June 25, 2010 Surrogate Value Submission.
---------------------------------------------------------------------------
(3) We calculated separate surrogate values for black and color
cores, and, for valuation purposes, distinguished between regular and
thick core dimensions. We obtained surrogate values for black and color
cores from ``Paper and Stationery.'' \4\ We adjusted these values to
account for inflation between the effective period and the POR. See
Attachment 4 of the Factor Valuation Memorandum for the calculation of
the surrogate values for black and color cores.
---------------------------------------------------------------------------
\4\ See id.
---------------------------------------------------------------------------
(4) We valued electricity using price data for small, medium, and
large industries, as published by the Central Electricity Authority of
the Government of India in its publication titled ``Electricity Tariff
& Duty and Average Rates of Electricity Supply in India,'' dated March
2008. Those electricity rates represent actual country-wide, publicly-
available information on tax-exclusive electricity rates charged to
industries in India. See Factor Valuation Memorandum.
(5) For Rongxin, we valued steam coal using data obtained for grade
E non-long flame non-coking coal reported on the 2007 Coal India Data
website. For Beijing Dixon, we valued steam coal using data obtained
for grade C long flame non-coking coal reported on the 2007 Coal India
Data Web site. See Factor Valuation Memorandum.
(6) On May 14, 2010, the Federal Circuit in Dorbest Ltd. v. United
States, 604 F.3d 1363, 1372 (Fed. Cir. 2010), found that the
``{regression-based{time} method for calculating wage rates {as
stipulated by 19 CFR 351.408(c)(3){time} uses data not permitted by
{the statutory requirements laid out in section 773 of the Act (i.e.,
19 U.S.C. 1677b(c)){time} .'' The Department is continuing to evaluate
options for determining labor values in light of the recent Federal
Circuit decision. However, for these preliminary results, we have
calculated an hourly wage rate to use in valuing the respondents'
reported labor input by averaging industry-specific earnings and/or
wages in countries that are economically comparable to the PRC and that
are significant producers of comparable merchandise. Our methodology is
described below.
The Department is valuing labor using a simple average, industry-
specific wage rate derived from earnings or wage data reported under
Chapter 5B by the International Labor Organization (``ILO'').
Specifically, the Department has calculated the wage rate as a simple
average of the data provided to the ILO under Sub-Classification 36 of
the ISIC-Revision 3 standard by countries determined to be both
economically comparable to the PRC and significant producers of
comparable merchandise. The Department finds the two-digit description
under ISIC-Revision 3 (``Manufacture of Furniture; Manufacturing
n.e.c.'') to be the best available information for valuing the
respondents' labor input because it is specific and derived from
industries that produce merchandise comparable to the subject
merchandise. Consequently, we averaged the ILO industry-specific wage
rate data or earnings data available from the following countries found
to be economically comparable to the PRC and to be significant
producers of comparable merchandise: Ecuador, Egypt, Indonesia, Jordan,
Peru, Philippines, and Thailand. On this basis, the Department
calculated a simple average, industry-specific wage rate of $1.23 for
these preliminary results. For further information on the calculation
of the wage rate, see Factor Valuation Memorandum.
(7) We derived ratios for factory overhead, depreciation, selling,
general and administrative expenses, interest expenses, and profit for
the finished product using the 2006-2007 financial statement of Triveni
Pencils Ltd. (``Triveni''), an Indian producer of pencils, in
accordance with the Department's practice with respect to selecting
financial statements for use in NME cases. See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Chlorinated
Isocyanurates From the People's Republic of China, 70 FR 24502 (May 10,
2005), and accompanying Issues and Decision Memorandum at Comment 2.
Reliance upon Triveni's financial statements is consistent with the
2007-2008 administrative review.
(8) We valued inland truck freight expenses using a per-unit
average rate calculated from data on the following publicly accessible
Web site: http://www.infobanc.com/logistics/logtruck.htm. The logistics
section of this website contains inland freight truck rates between
many large Indian cities. Since the truck rate value is based on an
annual per-unit rate and falls within the POR (August 2008 through July
2009), we are treating the derived average rate as contemporaneous with
the POR. For rail freight, we used 2006-2007 data from the publicly
accessible website http://www.Indianrailways.gov.in/ to derive, where
appropriate, input-specific train rates on a rupees-per-kilogram per-
[[Page 2343]]
kilometer basis (``Rs/kg/km''). The Department is not inflating the
2006-2007 rail freight data from the http://www.Indianrailways.gov.in
website since these rates are currently published on their website, and
the website does not have any updated rail freights for the POR.
Therefore, the Department continues to treat these rail freights on the
http://www.Indianrailways.gov.in Web site as contemporaneous with the
POR in this administrative review.
Currency Conversion
We made currency conversions into U.S. dollars, in accordance with
section 773A(a) of the Act, based on the exchange rates in effect on
the dates of the U.S. sales, as certified by the Federal Reserve Bank.
Preliminary Results of Review
We preliminarily determine that the following margins exist for the
period December 1, 2008, through November 30, 2009:
------------------------------------------------------------------------
Margin
Exporter (percent)
------------------------------------------------------------------------
Beijing Dixon Stationery Company Ltd........................ 0.00
Shandong Rongxin Import and Export Co., Ltd................. 0.17
------------------------------------------------------------------------
As stated above in the ``Separate Rates Determination'' section of
this notice, Dixon and Rongxin each qualify for a separate rate in this
review.
The Department will disclose calculations performed for these
preliminary results to the parties within five days of the date of
publication of this notice in accordance with 19 CFR 351.224(b).
In accordance with 19 CFR 351.301(c)(3)(ii), for the final results
of this administrative review, interested parties may submit publicly
available information to value FOPs within 20 days after the date of
publication of these preliminary results. Interested parties must
provide the Department with supporting documentation for the publicly
available information to value each FOP. Additionally, in accordance
with 19 CFR 351.301(c)(1), for the final results of this administrative
review, interested parties may submit factual information to rebut,
clarify, or correct factual information submitted by an interested
party less than ten days before, on, or after, the applicable deadline
for submission of such factual information. However, the Department
notes that 19 CFR 351.301(c)(1) permits new information only insofar as
it rebuts, clarifies, or corrects information recently placed on the
record. The Department generally cannot accept the submission of
additional, previously absent-from-the-record alternative surrogate
value information pursuant to 19 CFR 351.301(c)(1). See Glycine from
the People's Republic of China: Final Results of Antidumping Duty
Administrative Review and Final Rescission, in Part, 72 FR 58809
(October 17, 2007), and accompanying Issues and Decision Memorandum at
Comment 2.
An interested party may request a hearing within 30 days of
publication of the preliminary results. See 19 CFR 351.310(c).
Interested parties may submit written comments (case briefs) no later
than 30 days after publication of these preliminary results of review,
and rebuttal comments (rebuttal briefs), which must be limited to
issues raised in the case briefs, within five days after the time limit
for filing case briefs. See 19 CFR 351.309(c)(1)(ii) and 19 CFR
351.309(d). Parties who submit arguments are requested to submit with
the argument: (1) A statement of the issue(s); (2) a brief summary of
the argument; and (3) a table of authorities. Further, the Department
requests that parties submitting written comments provide the
Department with a compact disk containing the public version of those
comments. We will issue a memorandum identifying the date and time of a
hearing, if one is requested.
The Department will issue the final results of this administrative
review, including the results of our analysis of the issues raised by
the parties in their comments, within 120 days of publication of the
preliminary results, pursuant to section 751(a)(3)(A) of the Act.
Assessment Rates
Upon completion of this administration review, the Department will
determine, and CBP shall assess, antidumping duties on all appropriate
entries. The Department intends to issue assessment instructions to CBP
15 days after the date of publication of the final results of review.
For assessment purposes, we calculated exporter/importer-specific (or
customer-specific) assessment rates for merchandise subject to this
review.
Rongxin did not report entered values for its U.S. sales.
Therefore, we calculated a per-unit assessment rate for each importer
(or customer) by dividing the total dumping margins for reviewed sales
to that party by the total sales quantity associated with those
transactions. For duty-assessment rates calculated on this basis, we
will direct CBP to assess the resulting per-unit rate against the
entered quantity of the subject merchandise. To determine whether the
duty assessment rates are de minimis, in accordance with the
requirement set forth in 19 CFR 351.106(c)(2), we calculated importer
(or customer) specific ad valorem ratios based on the estimated entered
value. Where an importer-specific (or customer-specific) rate is de
minimis (i.e., less than 0.50 percent), the Department will instruct
CBP to liquidate that importer's (or customer's) entries of subject
merchandise without regard to antidumping duties.
For the companies for which this review is rescinded, antidumping
duties shall be assessed at rates equal to the cash deposit of
estimated antidumping duties required at the time of entry, or
withdrawal from warehouse, for consumption, in accordance with 19 CFR
351.212.(c)(1)(i). The Department intends to issue appropriate
assessment instructions regarding entries of the rescinded companies
directly to CBP 15 days after publication of this notice.
Cash Deposit Requirements
The following cash-deposit requirements will apply to all shipments
of certain cased pencils from the PRC entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided by section
751(a)(1) of the Act: (1) The cash deposit rates for the reviewed
companies named above will be the rates for those firms established in
the final results of this administrative review; (2) for any previously
reviewed or investigated PRC or non-PRC exporter, not covered in this
review, with a separate rate, the cash deposit rate will be the
company-specific rate established in the most recent segment of this
proceeding; (3) for all other PRC exporters, the cash deposit rate will
be the PRC-wide rate established in the final results of this review;
and (4) the cash-deposit rate for any non-PRC exporter of subject
merchandise from the PRC will be the rate applicable to the PRC
exporter that supplied that exporter. These deposit requirements, when
imposed, shall remain in effect until further notice.
Notification to Interested Parties
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f)(2) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties
[[Page 2344]]
occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing the preliminary results determination
in accordance with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: January 7, 2011.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-627 Filed 1-12-11; 8:45 am]
BILLING CODE 3510-DS-P