Synthetic Indigo From the People's Republic of China; Notice of Final Determination of Sales at Less Than Fair Value

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final determination of sales at less than fair value.

SUMMARY:

On December 14, 1999, the Department of Commerce published its preliminary determination of sales at less than fair value of synthetic indigo from the People's Republic of China. The period of investigation is October 1, 1998, through March 31, 1999.

Based on our analysis of the comments received, we have made changes in the margin calculations. Therefore, the final determination differs from the preliminary determination. The final weighted-average dumping margins for the investigated companies are listed below in the section entitled “Final Determination of Investigation.”

EFFECTIVE DATE:

May 3, 2000.

FOR FURTHER INFORMATION CONTACT:

David J. Goldberger or Dinah McDougall, Import Administration, International Trade Administration, U.S. Department of Commerce, Washington, D.C. 20230; telephone: (202) 482-4136 or (202) 482-3773, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (“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 refer to 19 CFR Part 351 (April 1999).

Background

On December 14, 1999, the Department published the Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Synthetic Indigo from the People's Republic of China (“PRC”) (64 FR 69723) (“Preliminary Determination”). The period of investigation is October 1, 1998 through March 31, 1999. We invited parties to comment on our preliminary determination of the investigation. The Department has conducted this investigation in accordance with section 731 of the Act.

Verification of the responses to the Department's sales and factors of production questionnaires took place in January 2000 (see the “Verification” section below).

The petitioners, Buffalo Color Corporation and the United Steelworkers of America, AFL-CIO/CLC, and the respondents, the China Chamber of Commerce of Metals, Minerals and Chemicals, and its respondent member firms, filed case and rebuttal briefs on March 23 and 28, 2000, respectively.

Scope of Investigation

The products subject to this investigation are the deep blue synthetic vat dye known as synthetic indigo and those of its derivatives designated commercially as “Vat Blue 1.” Included are Vat Blue 1 (synthetic indigo), Color Index No. 73000, and its derivatives, pre-reduced indigo or indigo white (Color Index No. 73001) and solubilized indigo (Color Index No. 73002). The subject merchandise may be sold in any form (e.g., powder, granular, paste, liquid, or solution) and in any strength. Synthetic indigo and its derivatives subject to this investigation are currently classifiable under subheadings 3204.15.10.00, 3204.15.40.00 or 3204.15.80.00 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.

Verification

As provided in section 782(i)(1) of the Act, we verified the information submitted by the respondents for use in our final determination. We used standard verification procedures, including examination of relevant accounting and production records, as well as original source documents provided by the respondents.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the “Issues and Decision Memorandum” (“Decision Memorandum”) from Richard W. Moreland, Deputy Assistant Secretary, Import Administration, to Troy H. Cribb, Acting Assistant Secretary for Import Administration, dated April 27, 2000, which is hereby adopted by this notice. A list of the issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as an Appendix. 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 Central Records Unit, Room B-099 of the Department. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at: www.ita.doc.gov/import_admin/records/frn/ . The paper copy and electronic version of the Decision Memorandum are identical in content.

Separate Rates

All responding exporting entities have requested separate, company-specific antidumping duty rates. In the Preliminary Determination we determined that, based on the information contained in the questionnaire responses, the mandatory respondents, Wonderful Chemical Industrial Ltd. (“Wonderful”) and its affiliate Jiangsu Taifeng Chemical Industry Co. (“Jiangsu Taifeng”), and Tianjin Hongfa Group Co. (“Tianjin Hongfa”), had met the de jure and de facto criteria for the application of separate antidumping rates. See Preliminary Determination, 64 FR at 69725-6. However, during the course of verification, the Department was unable to completely verify the reported separate rates information for Tianjin Hongfa, and therefore, has determined that Tianjin Hongfa is not eligible to receive a separate rate. Accordingly, we have assigned Tianjin Hongfa the PRC-wide rate, as discussed in the “PRC-Wide Rate” section below. For a discussion of our determination with respect to separate rates and the application of the PRC-wide rate, see the “Separate Rates” section of the Decision Memorandum, which is available in B-099 and on the Web at www.ita.doc.gov/import_admin/records/frn/ .

Margins for Exporters Whose Responses Were Not Analyzed

With respect to the responding companies that provided all of the questionnaire responses requested of them and otherwise fully cooperated with the Department's investigation, but nonetheless, were not fully analyzed by the Department due to limited resources (see Preliminary Determination, 64 FR at 69726), we assigned to them the rate calculated for the only mandatory respondent which was fully analyzed and which established its eligibility for a separate rate in this investigation (i.e., Wonderful/Jiangsu Taifeng), as a non-adverse facts available rate. Companies receiving this rate are identified by name in the “Continuation of Suspension of Liquidation” section of this notice. For a discussion of our determination with respect to the cooperating, non-mandatory respondents, see the “Separate Rates” section of the Decision Memorandum.

PRC-Wide Rate

As explained in the Preliminary Determination, the PRC-wide antidumping rate is based on adverse facts available, in accordance with section 776(b) of the Act. See Preliminary Determination, 64 FR at 69726. Information on the record of this investigation indicates that there are numerous producers/exporters of the subject merchandise in the PRC in addition to the companies participating in this investigation. U.S. import statistics show that the responding companies did not account for all imports of synthetic indigo into the United States from the PRC. Given this discrepancy, it appears that not all PRC exporters of synthetic indigo responded to our antidumping duty questionnaire. Consistent with our preliminary determination, we have applied a single antidumping duty deposit rate (“PRC-wide rate”) to all synthetic indigo exporters in the PRC, except those specifically identified in the “Continuation of Suspension of Liquidation” section of this notice, based on our presumption that the export activities of the companies that failed to respond to the Department's questionnaire are controlled by the PRC government. We have also applied this rate to Tianjin Hongfa based on its failure to establish its eligibility for a separate rate, as discussed in the “Separate Rates” section above. The PRC-wide rate, which in this case is the highest margin from the petition, has been corroborated pursuant to section 776(c) of the Act using the method outlined in the Preliminary Determination. See 64 FR at 69726.

Changes Since the Preliminary Determination

Based on our analysis of comments received, we have made certain changes in the margin calculations. We have also corrected certain programming and clerical errors in our Preliminary Determination, where applicable. Any programming or clerical errors alleged by the parties with which we do not agree are discussed in the relevant sections of the Decision Memorandum.

Critical Circumstances

In our Preliminary Determination, we found, pursuant to section 733(e)(1) of the Act, that there was a reasonable basis to believe or suspect that critical circumstances exist with respect to the subject merchandise from the mandatory and non-mandatory respondents and all other producers/exporters. As discussed in detail in the Preliminary Determination, we first found that importers either knew or should have known that imports of synthetic indigo from the PRC were being sold at less than fair value and there was likely to be material injury. We then analyzed the import volume and value data placed on the record, in accordance with 19 CFR 351.206, and preliminarily determined that imports of the subject merchandise have been massive over the short period of time subsequent to the filing of the petition. In accordance with section 735(a)(3) of the Act, and based upon our verification of the shipment data placed on the record, we determine that critical circumstances exist with respect to synthetic indigo from the mandatory respondents in this investigation as well as the non-mandatory respondents and all other producers/exporters. Therefore, we are directing the Customs Service (“Customs”) to continue to suspend liquidation of any unliquidated entries of subject merchandise on or after the date 90 days prior to the date of publication of the preliminary determination in the Federal Register, as discussed below in the “Continuation of Suspension of Liquidation” section.

Continuation of Suspension of Liquidation

In accordance with section 735(c) of the Act, we are directing Customs to continue to suspend liquidation of all imports of the subject merchandise from the PRC that are entered, or withdrawn from warehouse, for consumption on or after September 15, 1999, the date 90 days prior to the date of publication of the preliminary determination in the Federal Register, in accordance with our critical circumstances finding.

Effective on or after the date of publication of the Department's final determination, Customs shall continue to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the normal value exceeds the export price or constructed export price, as appropriate, 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:

Except for entries of synthetic indigo from exporters that are identified individually above, the PRC-wide rate applies to all other entries of the subject merchandise.

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 directing Customs officials to assess antidumping duties on all imports of the subject merchandise entered for consumption on or after the effective date of the suspension of liquidation.

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

Appendix—Issues in the Decision Memorandum

I. Respondent Selection

Comment 1: Tianjin Hongfa vs. Kwong Fat as Exporter

Comment 2: Wonderful vs. Intermediate Trading Company as Exporter

II. Separate Rates

Comment 3: Separate Rate for Tianjin Hongfa

Comment 4: Separate Rate for Wonderful/Jiangsu Taifeng

Comment 5: Cooperating Non-Mandatory Respondents

III. Factor Valuation

Comment 6: Valuation of Factory Overhead, SG&A, and Profit

Comment 7: Valuation of International Freight

Comment 8: Valuation of Certain Minor Inputs

Comment 9: Valuation of Water

Comment 10: Classification of “Managerial Remuneration” in Surrogate Value Financial Data

Comment 11: Date of Sale

Comment 12: Labor Hours Factor Reporting

Comment 13: Deduction of Trading Company Fees