Notice of Final Determination of Sales at Less Than Fair Value: Sulfanilic Acid from Hungary

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Determination of Sales at Less Than Fair Value.

SUMMARY:

The Department of Commerce is conducting an antidumping duty investigation on sulfanilic acid from Hungary. We determine that sulfanilic acid from Hungary is being, or is likely to be, sold in the United States at less than fair value, as provided in section 731 of the Tariff Act of 1930, as amended. On May 6, 2002, the Department of Commerce published its preliminary determination of sales at less than fair value of sulfanilic acid from Hungary. Based on the results of verification and our analysis of the comments received, we have made changes in the margin calculations. Therefore, this final determination differs from the preliminary determination. The final weighted-average dumping margins are listed below in the section entitled “Continuation of Suspension of Liquidation.”

EFFECTIVE DATE:

September 25, 2002.

FOR FURTHER INFORMATION CONTACT:

John Brinkmann or Audrey Twyman, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-4126 or (202) 482-3534, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department of Commerce's (“the Department's”) regulations are to the regulations as codified at 19 CFR Part 351 (April 2001).

Petitioner

The petitioner in this investigation is Nation Ford Chemical Company.

Case History

Since the publication of the preliminary determination in this investigation (see Notice of Preliminary Determination of Sales at Less Than Fair Value: Sulfanilic Acid from Hungary, 67 FR 30358 (May 6, 2002) (“Preliminary Determination”)), the following events have occurred:

Nitrokemia 2000 (the “respondent”) requested a postponement of the final determination on May 13, 2002. See Sulfanilic Acid from Hungary: Postponement of Final Determination and Extension of Provisional Measures of Antidumping Duty Investigation, 67 FR 36151 (May 23, 2002).

We verified the questionnaire responses submitted by Nitrokemia 2000 between June 3 and 11, 2002. We issued the verification report on July 1, 2002.

The petitioner and the respondent submitted case briefs on July 31, 2002, and August 1, 2002, respectively. Neither party submitted rebuttal briefs. No public hearing was held because none was requested.

Scope of Investigation

Imports covered by this investigation are all grades of sulfanilic acid, which include technical (or crude) sulfanilic acid, refined (or purified) sulfanilic acid and sodium salt of sulfanilic acid.

Sulfanilic acid is a synthetic organic chemical produced from the direct sulfonation of aniline and sulfuric acid. Sulfanilic acid is used as a raw material in the production of optical brighteners, food colors, specialty dyes, and concrete additives. The principal differences between the grades are the undesirable quantities of residual aniline and alkali insoluble materials present in the sulfanilic acid. All grades are available as dry, free flowing powders.

Technical sulfanilic acid, currently classifiable under the subheading 2921.42.22 of the Harmonized Tariff Schedule (“HTS”), contains 96 percent minimum sulfanilic acid, 1.0 percent maximum aniline, and 1.0 percent maximum alkali insoluble materials. Refined sulfanilic acid, also currently classifiable under 2921.42.22 of the HTS, contains 98 percent minimum sulfanilic acid, 0.5 percent maximum aniline, and 0.25 percent maximum alkali insoluble materials.

Sodium salt (sodium sulfanilate), currently classifiable under the HTS subheading 2921.42.90, is a powder, granular, or crystalline material which contains 75 percent minimum equivalent sulfanilic acid, 0.5 percent maximum aniline based on the equivalent sulfanilic acid content, and 0.25 percent maximum alkali insoluble materials based on the equivalent sulfanilic acid content.

Although the HTS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.

Period of Investigation

The period of investigation (“POI”) for this investigation is July 1, 2000, through June 30, 2001.

Fair Value Comparisons

To determine whether sales of sulfanilic acid from Hungary to the United States were made at less than fair value, we compared the export price (“EP”) to the normal value (“NV”). Our calculations followed the methodologies described in the Preliminary Determination, except as noted below and in Nitrokemia 2000's September 11, 2002, calculation memorandum which is on file in the Import Administration's Central Records Unit (“CRU”), Room B-099 of the main Department of Commerce building. See Memorandum from Team to the file “Final Determination Calculation Memorandum for Nitrokemia 2000” (“Calculation Memorandum”) dated September 18, 2002.

Export Price

We calculated EP in accordance with section 772(a) of the Act. We calculated EP based on the same methodologies described in the Preliminary Determination, with the following exceptions. We have made changes to EP based on our findings at verification. We did not deduct certain expenses reported by Nitrokemia 2000 as “direct expenses” as we determined that these expenses had been separately reported by Nitrokemia 2000 and already had been deducted from EP. We revised credit to reflect the verified short-term interest rate. We have also determined that the contract date is the appropriate date of sale for U.S. sales. Accordingly, we have excluded from our calculation of EP, those reported sales with a contract date prior to the POI. We have added to our calculation of EP, certain sales with contract dates during the POI that were not shipped by Nitrokemia 2000 until after the POI. For a detailed description of all U.S. sales changes made to Nitrokemia 2000's margin calculations for the final determination, see Calculation Memorandum.

Normal Value

We used the same methodology as that described in the Preliminary Determination to determine the cost of production (“COP”), whether comparison market sales were at prices below the COP, and the NV, with the following exceptions:

1. Cost of Production Analysis

We based fixed and variable overhead, and general and administrative expenses, on Nitrokemia 2000's costs obtained during verification for 2001. We based interest expense on information obtained from Nitrokemia 2000's financial statement for 2001. For a detailed description of changes made to Nitrokemia 2000's cost of production calculation, see Calculation Memorandum.

2. Calculation of NV

We have made changes to NV based on our findings at verification. We did not deduct certain expenses reported by Nitrokemia 2000 as “direct expenses” as we determined that these expenses had been separately reported by Nitrokemia 2000 and already deducted from NV. We revised credit and inventory expenses to reflect the verified short-term interest rate.

Verification

As provided in section 782(i)(1) of the Act, we verified all information relied upon in making our final determination.

Analysis of Comments Received

All issues raised in the case briefs by parties to this investigation are addressed in the “Issues and Decision Memorandum for the Antidumping Duty Investigation of Sulfanilic Acid from Hungary: Final Determination” from Richard W. Moreland, Deputy Assistant Secretary, Import Administration to Faryar Shirzad, Assistant Secretary, Import Administration, dated September 18, 2002 (“Decision Memorandum”), which is hereby adopted by this notice. Attached to this notice as Appendix I is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Department's CRU. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/frn/frnhome.htm. The paper copy and electronic version of the Decision Memorandum are identical in content.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we are directing the U.S. Customs Service to continue to suspend liquidation of all imports of sulfanilic acid from Hungary that are entered, or withdrawn from warehouse, for consumption on or after May 6, 2002, the date of publication of the Preliminary Determination in the Federal Register. The Customs Service shall continue to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP, as indicated in the chart below. These suspension of liquidation instructions will remain in effect until further notice.

The weighted-average dumping margins are as follows:

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our determination. As our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order.

Return or Destruction of Proprietary Information

This notice also serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

APPENDIX

List of Comments in the Issues and Decision Memorandum

Comment 1: Use of adverse facts available for the entire response

Comment 2: Use of the verified cost of manufacture for the cost test

Comment 3: Use of adverse facts available for G&A and interest expenses

Comment 4: Use of adverse facts available in the COP analysis for the unreported adjustments to comparison market sales

Comment 5: Calculation of NV based on comparison market sales after disregarding sales below COP

Comment 6: Inclusion in the dumping margin calculation of certain sales to the United States