Sebacic Acid From the People's Republic of China; Amended Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-825]

Sebacic Acid From the People's Republic of China; Amended Final

Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Amended final results of antidumping duty administrative review

of sebacic acid from the People's Republic of China.

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SUMMARY: On October 19, 1999, the United States Court of International

Trade (``CIT'') sustained the remand and upheld the Department of

Commerce's (``the Department'') findings in Remand Determination: Union

Camp Corporation v. United States (``Second Remand''), Consol. Court

No. 97-03-00483, Slip Op. 99-40 (September 2, 1999), affecting the

final assessment rate for the 1994/95 administrative review in the case

of sebacic acid from the People's Republic of China. See Union Camp

Corporation v. United States, Slip Op. 99-111, (CIT October 19, 1999)

(Consol. Court No. 97-03-00483). Because no appeal was filed within the

requested period, that decision is final and conclusive. Therefore, we

are amending our final results of review, and we will instruct the U.S.

Customs Service to liquidate entries subject to this review. A summary

of the specific issues from the two remands in this case are listed

below.

EFFECTIVE DATE: January 12, 2000.

FOR FURTHER INFORMATION CONTACT: Brandon Farlander or Rick Johnson,

[[Page 1850]]

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th and Constitution Avenue, NW, Washington,

DC 20230; telephone: (202) 482-0182 or (202) 482-3818, respectively.

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's regulations are

to the current regulations at 19 CFR Part 351 (1998).

SUPPLEMENTARY INFORMATION:

Background

On March 7, 1997, the Department published its final results of the

first administrative review of the antidumping duty order on sebacic

acid from the People's Republic of China (``PRC''). See Sebacic Acid

From the People's Republic of China; Final Results of Antidumping Duty

Administrative Reviews, 62 FR 10530 (March 7, 1997) (``Final

Results''). In the Final Results, we used the Indian price for octanol-

1 as a surrogate for octanol-2 because we determined that octanol-1 was

comparable to octanol-2 based on its similar molecular formula. While

we determined that the value of octanol cited in the Chemical Weekly

(Indian) was a value for octanol-1, it was not clear from the

publication whether the octanol value quoted was actually for octanol-

1, octanol-2, or a combination of the two products. We also determined

that the surrogate values obtained from The Economic Times (Bombay)

were inclusive of taxes. We used an average, tax-exclusive, castor oil

value of $17.93/kg. Finally, we did not allocate a glycerine by-product

credit to sebacic acid and octanol-2.

Both Union Camp and Dastech challenged the Department's final

results on several grounds, and on March 27, 1998, the CIT issued its

first remand to the Department to reconsider the following four issues:

(1) Value octanol-2 based on an appropriate cost of crude octanol-2

(which may be the U.S. cost but which may not be based solely on

similar molecular structure without any additional evidence), and then

recalculate the by-product/co-product determination with the correct

value; (2) reconsider whether the surrogate values obtained from The

Economic Times were inclusive or exclusive of taxes; (3) calculate the

average castor oil prices using the Indian rupee figure 23.32/kg; and

(4) allocate the glycerine by-product credit to sebacic acid and

octanol-2. As discussed below, the Department complied with the Court's

order.

On June 25, 1998, the Department submitted to the CIT the results

of the first remand. See Remand Determination: Union Camp Corporation

v. United States (``First Remand''), Consol. Court No. 97-03-00483,

Slip Op. 98-38 (June 25, 1998). A summarization of our response for

each of the four issues is listed below.

For the first issue, we valued the subsidiary product, capryl

alcohol, also known as octanol-2, based on the ``cost'' of crude

octanol-2, as the CIT instructed. Based on our recalculation of the by-

product/co-product analysis for this subsidiary product, we determined

that octanol-2 was now a by-product, instead of a co-product, as

determined in the Final Results. We complied with the CIT's order;

however, we respectfully disagreed with the CIT's remand to value

octanol-2 based on the ``cost'' of crude octanol-2. Instead, we stated

that we believe that the refined octanol value from the Chemical Weekly

(India) is an appropriate surrogate, based on the following reasons.

First, the Department believed that a more accurate margin results if

subsidiary products, such as octanol-2, are valued using publicly

available information reflecting actual market prices rather than

petitioner's internal cost. We noted that we used petitioner's U.S.

internal cost for octanol-2 because we did not have any other surrogate

value for crude octanol-2. Also, we noted that the production of

sebacic acid results in the production of crude octanol-2 as a

subsidiary product. However, the additional sebacic acid factors of

production used to calculate normal value already incorporate the

relatively few factors of production (labor and energy) necessary to

refine crude octanol-2. Thus, the Department believed that its use of

the surrogate value for refined octanol-2 resulted in a more accurate

by-product/co-product analysis. Finally, we noted our belief to the CIT

that the use of crude octanol-2 as a surrogate value results in less

accurate dumping margins.

Second, we addressed additional information on the record, which

demonstrated that octanol-1 and octanol-2 are comparable merchandise,

based on overlapping uses. Thus, we noted that given the fact that the

Chemical Weekly (India) does not specify a particular type of octanol,

we believed that evidence on the record suggested that the refined

octanol price listed in the Chemical Weekly (India) is a reasonable

surrogate value for octanol-2.

Third, we noted that, as directed by the statue, to the extent

possible, the Department values factors of production from a country

comparable to the non-market economy in terms of overall economic

development. We continued, stating that while the Department may use

specific values from a country not at a comparable level of development

(including the United States), we do so only rarely and only if we

cannot find an appropriate value in a comparable economy. See Final

Determination of Sales at Less Than Fair Value: Beryllium Metal and

High Beryllium Alloys from the Republic of Kazakstan, 62 FR 2648

(January 17, 1997).

For the second issue, we did not deduct taxes for castor oil,

castor seed, and castor seed cake price quotes from The Economic Times

(India), consistent with the Department's practice to exclude taxes

only when a price quote is specifically identified as being inclusive

of taxes. See Final Antidumping Duty Determination: Polyvinyl Alcohol

from the People's Republic of China, 61 FR 14057 (March 29, 1996).

For the third issue, we used the Indian rupee value of 23.32/kg for

castor oil as the surrogate value.

For the fourth issue, we did not allocate the glycerine by-product

credit to sebacic acid and octanol-2 because there was no co-product.

On April 29, 1999, the CIT issued its second remand in this segment

of the proceeding to the Department to reconsider the following three

issues: (1) Value the octanol-2 that results from the sebacic acid

production process based on an appropriate surrogate value for this

product, and then recalculate the by-product/co-product determination

in light of this surrogate value. This surrogate value may be an

appropriate foreign or U.S. price or cost for comparable merchandise.

In seeking the best information available to use as a surrogate, the

Department was instructed to specifically consider and address all

alternative surrogate values that have been placed on the record by the

parties; (2) open the administrative record and consider the letter

from the editor of the Chemical Weekly (India). Unless the Department

was unable to identify substantial record evidence on remand which

demonstrated that, notwithstanding the letter from the editor of the

Chemical Weekly (India), the ``octanol'' quote from the Chemical Weekly

(India) was actually a quote for octanol-1, the Department may not

continue to argue for the use of this figure on the grounds that

octanol-1 and

[[Page 1851]]

octanol-2 are ``comparable merchandise''; and (3) consider, and express

its views on, whether it should accept new evidence concerning the

comparability of 2-ethylhexanol and octanol-2. Should the Department

come to the conclusion that it should accept such evidence, the

Department may do so on remand and, if appropriate, use this evidence

as a basis for justifying its use of the Chemical Weekly (India) value

for ``octanol.'' As discussed below, the Department complied with the

Court's order.

On September 2, 1999, the Department submitted the results of the

second remand to the CIT. See Second Remand, Consol. Court No. 97-03-

00483, Slip Op. 99-40 (September 2, 1999). A summarization of our

response for each of the three issues is listed below.

For the first issue, we determined that 2-ethylhexanol and octanol-

2 are comparable chemicals, and that the octanol value quoted in the

Chemical Weekly (India) is a value for 2-ethylhexanol. We considered

the other surrogate values placed on the record, such as the U.S. cost

for crude octanol-2 and the U.S. price for refined octanol-2, and

determined, based on our criteria for selecting the appropriate

surrogate value for octanol-2 as stated in the First Remand, that the

refined octanol value from Chemical Weekly (India), which was for 2-

ethylhexanol, was the best available surrogate value. Based on

reexamination of the by-product/co-product determination in light of

this surrogate value, we determined that octanol-2 was a co-product of

sebacic acid production because the overall value of octanol-2 was

significant relative to the value of sebacic acid and the other

subsidiary products. Also, because octanol-2 was now a co-product,

rather than a by-product, we were able to allocate the glycerine by-

product credit to sebacic acid and octanol-2, as instructed by the CIT

in the First Remand.

For the second issue, after an analysis of certain information

placed on the record, we determined that the octanol value quoted in

the Chemical Weekly (India) was for 2-ethylhexanol, and not for

octanol-1.

For the third issue, we determined to open the administrative

record to accept new evidence concerning the comparability of 2-

ethylhexanol and octanol-2. Based on this new information, we

determined that we had substantial evidence establishing that 2-

ethylhexanol (also known as 2-ethylhexanol alcohol and octyl alcohol)

and octanol-2 were comparable merchandise based on similar uses. Thus,

we concluded that the Chemical Weekly (India) value for 2-ethylhexanol

is the most appropriate surrogate value.

As noted above, on October 19, 1999, the CIT sustained and upheld

our finding of the Department's Second Remand and no appeal was filed.

As there is now a final and conclusive court decision in this action,

we are amending our final results of review in this matter and we will

instruct the U.S. Customs Service to liquidate entries subject to this

review in accordance with the remand results. Because the Department

has published subsequent administrative reviews that govern future cash

deposits, the cash deposit rates will be governed not by the rate

published in the Second Remand, but by the most recently completed

administrative review, according to the Department's normal procedures.

See Sebacic Acid From the People's Republic of China; Final Results of

Antidumping Duty Administrative Review, 63 FR 43373-43379 (August 13,

1998).

Amended Final Results

Pursuant to 516A(e) of the Act, we are now amending the final

results of administrative review of the antidumping duty order on

sebacic acid from the People's Republic of China for the period July 1,

1994, through June 30, 1995. As a result of our recalculation of the

margins from the Second Remand, the final weighted-average margins for

Sinochem International Chemicals Company (``SICC''), Tianjin Chemicals

Import and Export Corporation (``Tianjin''), and Guangdong Chemicals

Import and Export Corporation (``Guangdong'') changed. The final

weighted-average margins for the above period of review are as follows:

------------------------------------------------------------------------

Margin

Manufacturer/exporter (percent)

------------------------------------------------------------------------

SICC....................................................... 75.36

Tianjin.................................................... 5.74

Guangdong.................................................. 36.5

Sinochem Jiangu Import and Export Corporation.............. 243.40

Country-Wide Rate.......................................... 243.40

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The Department will determine, and the U.S. Customs Service shall

assess, antidumping duties on all appropriate entries. We calculated

importer-specific duty assessment rates for the merchandise based on

the ratio of the total amount of antidumping duties calculated for the

examined sales to the total entered value of sales examined. The

Department will issue appraisement instructions to the U.S. Customs

Service after publication of this amended final results of review.

This determination is issued and published in accordance with

sections 751(a)(1) and 777(i)(1) of the Act.

Dated: January 5, 2000.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 00-745 Filed 1-11-00; 8:45 am]

BILLING CODE 3510-DS-P