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

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 of sulfanilic acid from Portugal. We determine that sulfanilic acid from Portugal is being, or is likely to be, sold in the United States at less than fair value, as provided in section 735(a) 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 Portugal. 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:

S. Anthony Grasso and Andrew Smith, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-3853, (202) 482-1276, 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 (“Department”) 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 and Postponement of Final Determination: Sulfanilic Acid From Portugal, 67 FR 30362 (May 6, 2002) (“Preliminary Determination”)), the following events have occurred:

On July 22 through July 31, 2002, we conducted a verification of the questionnaire responses submitted by Quimigal - Quimical de Portugal, S.A. (“Quimigal” or “the respondent”). We issued the verification report on August 13, 2002.

The petitioner and respondent filed case and rebuttal briefs, respectively, on August 21, 2002 and August 27, 2002. A public hearing was not held because none was requested within a timely manner.

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 Portugal 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 Quimigal's calculation memorandum, which is on file in the Import Administration's Central Records Unit (“CRU”) Room B-099 of the main Department building. See Memorandum from team to the file, “Final Determination Calculation Memorandum for Quimigal - Quimica de Portugal, S.A.” (“Calculation Memorandum”), dated September 18, 2002.

Date of Sale

At the Preliminary Determination, we used Quimigal's invoice date as the date of sale. Based on our review of Quimigal's submissions to the Department and the information examined at verification, we used for this final determination Quimigal's contractual agreements as the date of sale in making our final determination. For more discussion about this decision, see the Memorandum from Richard Moreland to Faryar Shirzad: “Issues and Decision Memorandum for the Antidumping Duty Investigation of Sulfanilic Acid from Portugal; Final Determination,” dated September 19, 2002, (“Decision Memorandum”) at Comment 1.

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 for certain clerical errors noted at verification. See Memorandum from Case Analysts to File: “Verification of the Questionnaire Responses of Quimigal-Quimica de Portugal, S.A.” (“Verification Report”). Additionally, we made adjustments to EP for the few instances where U.S. sales were invoiced in a currency other than Portuguese Escudos. For a detailed description of all U.S. sales changes made to Quimigal's margin calculations for the final determination, see Calculation Memorandum.

As noted above, we have determined that the sales contract date, rather than the invoice date used in the Preliminary Determination, is the appropriate date of sale for U.S sales. Accordingly, we have excluded from our calculation of EP those reported sales with a date of sale prior to the POI. We have added to our calculation of EP certain sales with date of sale during the POI that were not shipped by Quimigal until after the POI. For a detailed description of all U.S. sales changes made to Quimigal'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:

a. Comparison Market Sales

Because we have determined that the sales contract date is the appropriate date of sale, we have excluded from our calculation of NV those reported sales with a date of sale prior to the POI. Additionally, we have made changes to the third-country sales database in accordance with certain clerical errors noted at verification.

b. Cost of Production Analysis

We continued to use the reported COP amounts as adjusted by the Department in the Preliminary Determination to compute a weighted-average COP during the POI, except in the following instances in which the costs were not appropriately quantified or valued. Specifically, we adjusted Quimigal's reported fixed overhead and reported general and administrative (“G&A”) expenses based on findings made during verification. For further information about these adjustments, see the Decision Memorandum at Comments 2 and 4, respectively, and the Calculation Memorandum.

c. Calculation of Normal Value Based on Constructed Value

We calculated constructed value (“CV”) in accordance with section 773(a)(4) of the Act. We calculated CV based on the same methodologies described in the Preliminary Determination, with the following exceptions. Specifically, we recalculated Quimigal's short-term interest rate and subsequently the credit expense ratio. Also, we recalculated the CV profit in accordance with section 773(e)(2)(B) of the Act. For more discussion about this revision, see the Decision Memorandum at Comment 5. For a detailed description of all recalculations made to Quimigal's margin calculations for the final determination, see Calculation Memorandum.

Currency Conversions

We made currency conversions in accordance with section 773A of the Act in the same manner as in the Preliminary Determination.

Verification

As provided in section 782(i)(1) of the Act, we verified the information submitted by Quimigal for our final determination.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the 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 Portugal 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 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 I

List of Comments in the Issues and Decision Memorandum

Comment 1: Date of Sale: Contract Date versus Invoice Date

Comment 2: Overhead: Straight Line Depreciation versus Accelerated Depreciation

Comment 3: Net Interest Expense Ratio

Comment 4: Selling, General, and Administrative Expense Ratio

Comment 5: Constructed Value Profit Ratio

Comment 6: Corrections and Clarifications to the Verification Report