Melamine From the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

DATES:

Effective date June 18, 2015.

SUMMARY:

The Department of Commerce (“Department”) preliminarily determines that melamine 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 period of investigation (“POI”) is April 1, 2014, through September 30, 2014. The estimated margin of sales at LTFV is shown in the “Preliminary Determination” section of this notice. Interested parties are invited to comment on this preliminary determination.

FOR FURTHER INFORMATION CONTACT:

James Terpstra, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-3965.

SUPPLEMENTARY INFORMATION:

The Department published the notice of initiation of this investigation on December 9, 2014. Pursuant to section 733(c)(1)(A) of the Act, on March 12, 2015, the Department postponed this preliminary LTFV determination by a period of 50 days.

Scope of the Investigation

The merchandise subject to this investigation is melamine (Chemical Abstracts Service (“CAS”) registry number 108-78-01, molecular formula C₃ H₆ N₆). Melamine is a crystalline powder or granule typically (but not exclusively) used to manufacture melamine formaldehyde resins. All melamine is covered by the scope of this investigation irrespective of purity, particle size, or physical form. Melamine that has been blended with other products is included within this scope when such blends include constituent parts that have been intermingled, but that have not been chemically reacted with each other to produce a different product. For such blends, only the melamine component of the mixture is covered by the scope of these investigations. Melamine that is otherwise subject to this investigation is not excluded when commingled with melamine from sources not subject to this investigation. Only the subject component of such commingled products is covered by the scope of this investigation.

The subject merchandise is provided for in subheading 2933.61.0000 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheading and CAS registry number are provided for convenience and customs purposes, the written description of the scope is dispositive.

Methodology

The Department is conducting this investigation in accordance with section 731 of the Act. Because the mandatory respondents in this investigation either withdrew from the proceeding or did not cooperate to the best of their ability with the Department's requests for information, the Department preliminarily determines that the application of adverse facts available (“AFA”) is warranted for this preliminary determination, in accordance with section 776 of the Act and 19 CFR 351.308. As a part of the application of AFA, we are treating the mandatory respondents as part of the PRC-wide entity. Because the PRC-wide entity also failed to cooperate to the best of its ability in complying with our requests for information, we preliminarily determined an estimated weighted-average dumping margin based on adverse facts available for the PRC-wide entity, which includes the mandatory respondents.

For a full description of the methodology underlying our conclusions, see the Preliminary Decision Memorandum hereby adopted by this notice. The list of topics discussed in the Preliminary Decision Memorandum is provided as an appendix to this notice. The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (“ACCESS”). ACCESS is available to registered users at http://access.trade.gov,, and is available to all parties in the Central Records Unit, room 7046 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly at http://trade.gov/enforcement/ . The signed Preliminary Decision Memorandum and the electronic version of the Preliminary Decision Memorandum are identical in content.

Combination Rates

In the Initiation Notice, the Department stated that it would calculate combination rates for the respondents that are eligible for a separate rate in this investigation. Policy Bulletin 05.1 sets forth this practice. However, as described in the Preliminary Decision Memorandum, all parties subject to this investigation are preliminarily found to be part of the PRC-wide entity, to which we do not assign a separate combination rate.

Preliminary Determination

The preliminary weighted-average antidumping duty margin percentage is as follows:

Disclosure and Public Comment

Normally, the Department discloses to interested parties the calculations performed in connection with a preliminary determination within five days of the date of publication of the notice of preliminary determination in the Federal Register, in accordance with 19 CFR 351.224(b). However, because the Department preliminarily applied AFA to the mandatory respondents in this investigation, in accordance with section 776 of the Act, there are no calculations to disclose. Accordingly, the calculations performed in connection with this preliminary determination are not proprietary in nature, and are described in the Preliminary Decision Memorandum.

Interested parties are invited to comment on this preliminary determination. Interested parties may submit case briefs to the Department no later than 30 days after the date of publication of this preliminary determination. A table of contents, list of authorities used, and an executive summary of issues should accompany any briefs submitted to the Department.

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 Enforcement and Compliance, U.S. Department of Commerce, filed electronically in ACCESS. An electronically filed document must be received successfully in its entirety in ACCESS, by 5:00 p.m. Eastern Standard Time, within 30 days after the date of publication of this notice. Hearing requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues you intend to present at the hearing. If a request for a hearing is made, the Department intends to hold the hearing at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, at a time and location to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

Suspension of Liquidation

In accordance with section 733(d) of the Act, the Department will instruct U.S. Customs and Border Protection (“CBP”) to suspend liquidation of all entries of melamine from the PRC, as described in the “Scope of the Investigation” section, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register.

Pursuant to 19 CFR 351.205(d), the Department will instruct CBP to require a cash deposit equal to the weighted-average amount by which normal value (NV) exceeds U.S. price, adjusted where appropriate for export subsidies and estimated domestic subsidy pass-through, as follows: (1) The cash deposit rate for any exporter/producer combinations listed in the table above will be the rate the Department determines in this preliminary determination; (2) for all combinations of PRC exporters/producers of merchandise under consideration that have not received their own separate rate above, the cash-deposit rate will be the cash deposit rate established for the PRC-wide entity; and (3) for all non-PRC exporters of merchandise under consideration which have not received their own separate rate above, the cash-deposit rate will be the cash deposit rate applicable to the PRC exporter/producer combination that supplied that non-PRC exporter.

Furthermore, consistent with our practice, where the product under investigation is also subject to a concurrent countervailing duty investigation, we instruct CBP to require a cash deposit equal to the amount by which the NV exceeds the export price or constructed export price, less the amount of the countervailing duty determined to constitute an export subsidy. In this LTFV investigation, with regard to PRC-wide entity, export subsidies constitute 3.28 percent of the preliminarily calculated countervailing duty rate in the concurrent countervailing duty investigation, and, thus, we will offset the PRC-wide rate of 363.31 percent by the countervailing duty rate attributable to export subsidies (i.e., 3.28 percent) to calculate the cash deposit rate for this LTFV investigation. We are not adjusting the PRC-wide rate for estimated domestic subsidy pass-through because we have no basis upon which to make such an adjustment.

International Trade Commission (“ITC”) Notification

In accordance with section 733(f) of the Act, we 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 melamine, or sales (or the likelihood of sales) for importation, of the merchandise under consideration within 45 days of our final determination.

This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act and 19 CFR 351.205(b)(2).

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary

II. Background

1. Initiation

2. Period of Investigation

3. Postponement of Preliminary Determination

4. Scope of the Investigation

5. Scope Comments

6. Selection of Respondents

III. Discussion of the Methodology

1. Non-Market Economy Country

2. Separate Rates and the PRC-wide Entity

3. Application of Facts Available and Selection Based Upon Adverse Inferences for the PRC-Wide Entity

4. Corroboration of AFA Rate

5. Verification

6. Section 777A(f) of the Act

IV. ITC Notification

V. Conclusion