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

of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative

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

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SUMMARY: On August 8, 1997, the Department of Commerce (the Department)

published the preliminary results of its administrative review of the

antidumping duty order on sebacic acid from the People's Republic of

China (PRC) (62 FR 42755). This review covers shipments of this

merchandise to the United States during the period of July 1, 1995,

through June 30, 1996. We gave interested parties an opportunity to

comment on our preliminary results. Based upon our analysis of the

comments received we have changed the results from those presented in

the preliminary results of the review. In accordance with the decision

in Sigma Corp. v. the United States, 117 F.3d 1401 (Fed. Cir. 1997), we

revised our calculations of source-to-factory surrogate freight for

those material inputs that are based in CIF import values in the

surrogate country. We have added to CIF surrogate values from India, a

surrogate freight cost using the shorter of the reported distances from

either the closest PRC port to the factory, or from the domestic

supplier to the factory. See Notice of Final Determination of Sales at

Less Than Fair Value: Collated Roofing Nails from the People's Republic

of China, 62 FR 51415, 51410 (October 1, 1997); Notice of Final

Determination of Sales at Less Than Fair Value: Certain Cut-to-Length

Carbon Steel Plate from the People's Republic of China 62 FR 61964,

61977 (November 20, 1997).

EFFECTIVE DATE: December 15, 1997.

FOR FURTHER INFORMATION CONTACT: Doreen Chen or Stephen Jacques, Import

Administration, International Trade Administration, U.S. Department of

Commerce, 14th and Constitution Avenue, N.W., Washington, D.C. 20230;

telephone: (202) 482-0413 or (202) 482-1391, 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 Rounds Agreements Act

(URAA). In addition, unless otherwise indicated, all citations to the

Department's regulations are in reference to the regulations, codified

at 19 CFR 353 (April 1, 1996).

Supplementary Information:

Background

The Department published in the Federal Register an antidumping

duty order on sebacic acid from the PRC on July 14, 1995 (59 FR 35909).

On August 8, 1997, the Department of Commerce (the Department)

published the preliminary results of its administrative review of the

antidumping duty order on sebacic acid from the PRC (62 FR 42755 August

8, 1997) for the period July 1, 1995 through June 30, 1996. We received

written comments from Tianjin Chemicals Import and Export Corporation

(Tianjin), Guangdong Chemicals Import and Export Corporation

(Guangdong), and Sinochem International Chemicals

[[Page 65675]]

Company, Ltd. (SICC) (collectively, respondents); and from the

petitioner, Union Camp Corporation. On November 24, 1997, the

Department informed parties that certain information in respondents'

September 15, 1997 rebuttal brief and petitioner's September 8, 1997

case brief contained untimely new information that should be stricken

from the record of this review. The Department is conducting this

administrative review in accordance with section 751 of the Act.

Scope of Review

The products covered by this order are all grades of sebacic acid,

a dicarboxylic acid with the formula (CH2)8(COOH)2, which

include but are not limited to CP Grade (500ppm maximum ash, 25 maximum

APHA color), Purified Grade (1000ppm maximum ash, 50 maximum APHA

color), and Nylon Grade (500ppm maximum ash, 70 maximum ICV color). The

principal difference between the grades is the quantity of ash and

color. Sebacic acid contains a minimum of 85 percent dibasic acids of

which the predominant species is the C10 dibasic acid.

Sebacic acid is sold generally as a free-flowing powder/flake.

Sebacic acid has numerous industrial uses, including the production

of nylon 6/10 (a polymer used for paintbrush and toothbrush bristles

and paper machine felts), plasticizers, esters, automotive coolants,

polyamides, polyester castings and films, inks and adhesives,

lubricants, and polyurethane castings and coatings.

Sebacic acid is currently classifiable under subheading

2917.13.00.00 of the Harmonized Tariff Schedule of the United States

(HTSUS). Although the HTSUS subheading is provided for convenience and

customs purposes, our written description of the scope of this

proceeding remains dispositive.

This review covers the period July 1, 1995, through June 30, 1996,

and four exporters of Chinese sebacic acid.

Analysis of Comments Received

Comment 1: surrogate country: Petitioner asserts that India should

not be used as the surrogate country for the PRC because they claim

there is no sebacic acid production in India. Petitioner contends that

it would be inconsistent with the statute to use India as a surrogate

because: (1) India is not a producer of sebacic acid; and (2) oxalic

acid is not commercially or chemically comparable to sebacic acid. See

19 U.S.C. Sec. 1677b(c)(1). Petitioner argues that while it is true

that both oxalic and sebacic acid are dicarboxylic acids, oxalic acid

has two carbon atoms (C2H2O4) and

sebacic acid has ten carbon atoms

(C10H18O4), giving the two acids

completely different properties and uses. Petitioner contends that the

production process inputs for the two acids are very different.

Additionally, petitioner argues that the commercial value of sebacic

acid is nearly 5 times greater than the U.S. value for oxalic acid.

Petitioner suggests that the Department should value the factors of

production based on either U.S. or Japanese values, the only two market

economies where sebacic acid is produced using the caustic fusion

process. Petitioner contends that there is no known sebacic acid

production in India. Petitioner maintains that they did not find any

Indian chemicals companies which produced sebacic acid during the

period of review and that the absence of the price for sebacic acid in

the Indian Chemical Weekly publication suggests further evidence of the

lack of sebacic acid production in India. Because sebacic acid is not

produced in India, petitioner argues that pursuant to 19 CFR 353.52(c),

the United States is the appropriate surrogate country for this

administrative review.

Respondents maintain that there is now evidence on the record of

this review that sebacic acid is produced in India. Respondents note

that on January 6, 1997, they submitted a letter dated September 25,

1996 from an Indian chemical company, Siris Limited, stating that

sebacic acid is now produced in India. Consequently, respondents urge

the Department to reject petitioner's argument for using Japan or the

United States as the surrogate country and instead, continue to use

India as the surrogate country.

Respondents argue that 19 U.S.C. Sec. 1677b(c)(4) provides that

``[t]he administering authority, in valuing factors of production under

paragraph (1), shall utilize, to the extent possible, the prices or

cost of factors of production in one or more market economy countries

that are--(A) at a level of economic development comparable to that of

the nonmarket economy country, and (B) significant producers of

comparable merchandise.'' (Respondent Rebuttal Brief at p. 2) (emphasis

in original). Respondents argue that the words ``to the extent

possible'' give the Commerce Department the option to choose, as a

surrogate country, a country that does not produce the same merchandise

or even comparable merchandise, if no country meets both criteria set

forth in the statute. Respondents argue that petitioner's asserted

definition of ``comparable'' merchandise requires that products have

identical characteristics, including identical chemical formula and

uses. Respondents also note that under petitioner's definition of

``comparable'' merchandise, there is no country that would meet both

aspects of the statute. Respondents maintain that such a narrow

definition defeats the Congressional purpose in giving the Department

the discretion to determine what constitutes a comparable product.

Respondents also note that the statute suggests that it was Congress'

intent to give to the Department substantial discretion in determining

what are comparable products and choosing surrogate countries.

In addition, respondents contend that the values of oxalic and

sebacic acid are different should have no bearing on the choice of a

surrogate country since in this review, the Department is not using the

value of oxalic acid to value sebacic acid. Respondents also maintain

that there is substantial evidence on the record of this investigation

that India is a substantial producer of castor oil, the primary input

for sebacic acid. Furthermore, respondents point out that the

Department verified that Tianjin Zhonghe, the Chinese sebacic acid

producer, used imported castor oil from India to produce sebacic acid.

Respondents disagree with petitioner that the absence of a price

for sebacic acid from Indian Chemical Weekly and Chemical Business

suggests that the chemical is not produced in India. Respondents note

that the Department has in the past been forced to rely on Indian

import statistics because neither the Chemical Weekly nor the Chemical

Business report a certain price for a chemical.

Department's Position: In valuing factors of production, the

Department used surrogate values from India. In accordance with 19

U.S.C. Sec. 1677b(c)(4), the Department chose India as its surrogate

because it was most comparable to the PRC in terms of overall economic

development based on per capita gross national product (GNP), the

national distribution of labor, and growth rate in per capita GNP, and

because it was a significant producer of comparable merchandise (oxalic

acid).

The statute and the regulations instruct the Department to value

factors of production in an appropriate surrogate country. The

Department rarely departs from use of a surrogate value from a country

comparable to the NME in terms of overall economic development. 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).

[[Page 65676]]

Surrogate values from countries at a similar level of development are

considered to be the most appropriate and comparable for valuation of

the factors of production used in the similarly situated nonmarket

economy country. While the Department may use values from the United

States or other countries not at a comparable level of development for

individual factors, its practice is to do so only if it cannot find

those values in a comparable economy that produce comparable

merchandise. Use of the United States, Japan or another country not on

the list of recommended surrogate countries proposed by the

Department's Office of Policy is less desirable specifically because

surrogate values from countries not at a level of economic development

comparable to that of the nonmarket economy are not considered to be as

representative of the nonmarket economy country's costs and prices. See

Memorandum from Director, Office of Policy to Office Director, AD/CVD

Group II/OIX, Sebacic Acid from the People's Republic of China:

Nonmarket Economy Status and Surrogate Country Selection, June 24,

1997.

The fact that sebacic acid is produced in the United States or

Japan does not make either country an appropriate surrogate. Neither

the United States nor Japan are at a level of economic development

comparable to the that of the PRC. Moreover, the Department has

concluded that using values from India is appropriate because India is

at a comparable level of development and, based on U.S. import

statistics for the POR, is a significant producer of comparable

merchandise--oxalic acid. See Analysis Memorandum for the Preliminary

Results of the 1995/1996 Review. (Preliminary Analysis Memorandum).

We disagree with petitioner that oxalic acid is not comparable to

sebacic acid. The statute does not define ``comparable merchandise''

and the relevant legislative history evidences Congress' intent to

allow the agency to select from a wide category of merchandise in

identifying comparable merchandise. See H.R. Conf. Rep. No. 100-576

(1988), reprinted in 1988 U.S.C.C.A.N. 1547. Thus, to impose a

requirement that merchandise must be produced by the same process and

share the same end uses to be considered comparable would be contrary

to the intent of the statute. Therefore, in the final determination for

the 1994-1995 review, we determined that oxalic acid and sebacic acid

were comparable products. See Sebacic Acid from the People's Republic

of China: Final Results of Antidumping Duty Administrative Review, 62

FR 10530, 10533 (March 7, 1997). In that review, the Department found

that although the chemicals may have different production processes,

oxalic acid and sebacic acid are comparable products since both are

dicarboxylic acids and have similar end uses as they are both used in

the rubber industry. Id.

Finally, we determine that the documents submitted by interested

parties on January 3, 1997 and January 6, 1997 do not conclusively

demonstrate that sebacic acid was produced in India during the period

of review (POR). Therefore, we have not relied on these documents as a

basis for our decision to use India as the surrogate country for this

review.

Comment 2: Petitioner argues that the Department should value

capryl alcohol consistent with the CIT's decision in Union Camp Corp.

v. United States, 941 F. Supp. 108 (Ct. Int'l Trade, 1996).

Specifically, petitioner asserts that the CIT ordered the Department to

value capryl alcohol (octanol-2) based on an appropriate cost of crude

octanol-2 rather than the Indian selling price for refined octanol-1

listed in Chemical Weekly. Id. at 119.

Petitioner questions the letter from the editor of Chemical Weekly

submitted by respondents and relied upon by the Department for the

preliminary results, which states that ``the octanol price referred by

you corresponds to the more common 2-octanol (2 ethylhexanol).'' See

Preliminary Results of Antidumping Duty Administrative Review; Sebacic

Acid from the PRC 62 FR 42,758 (August 8, 1997); (Preliminary Analysis

Memorandum at 6); Letter from Williams Mullen Christian & Dobbins, Jan.

3, 1997, at Attachment 4. Petitioner contends that because respondents

failed to provide the original letter to the editor of Chemical Weekly,

there is no evidence to indicate whether the octanol price referred to

in the original letter to the editor corresponds to the octanol price

in the Chemical Weekly. In addition, petitioner argues that there is no

evidence on the record to indicate that the Chemical Weekly editor is

sufficiently familiar with the chemical composition of the octanol

product published in the Chemical Weekly to declare that it is octanol-

2 (2-ethylhexanol). Petitioner argues because octanol-1 is not

comparable to octanol-2, the Department should not use the Chemical

Weekly price for octanol-1 to value crude octanol-2.

Petitioner contends that Union Camp and respondents Tianjin Zhong

He and Hengshui Dongfeng Chemical Factory all treat capryl alcohol as a

by-product. Therefore, petitioner argues that Department should treat

capryl alcohol as a by-product and not a co-product. Petitioner claims

that because the Department used the high Indian value of octanol-1 to

value octanol-2, the Department incorrectly determined octanol-2 to be

a co-product rather than a by-product of the sebacic acid process.

Petitioner argues that because octanol-2 is only produced during

the sebacic acid production process and because there is no sebacic

acid production in India, octanol-2 is not sold in India. Petitioner

points out that there is a large value difference between the U.S.

octanol-1 price and the U.S. capryl alcohol price. Moreover, petitioner

rejects respondents' surrogate price for capryl alcohol, $0.68/lb.,

from the Chemical Marketing Reporter, because it is the same as Union

Camp's offering price for refined capryl alcohol. According to

petitioner, crude capryl alcohol, the subsidiary product of the sebacic

acid process, must be further processed to achieve a 98 percent pure

refined product. The Chemical Marketing Reporter reported the market

value of octanol-1 at $0.925/lb during the POR. Petitioner argues that

the U.S. value of octanol-1 during the POR was 36 percent higher than

the U.S. value of refined capryl alcohol and that the value difference

between octanol-1 and crude capryl alcohol is even larger. Therefore,

petitioner concludes that because octanol-1 is not comparable to

octanol-2 either chemically or commercially, the Department should not

use octanol-1 as a surrogate value for octanol-2.

Petitioner offers its own by-product credit value for crude capryl

alcohol, $0.15/lb., as the best available surrogate price for the

subsidiary product. However, petitioner states that if the Department

chooses to use the $0.68/lb price, it should make adjustments for input

costs in converting crude capryl alcohol to refined capryl alcohol.

Petitioner supplies such a calculation where the resulting value is

$0.1544/lb.

Respondents argue that the Department should continue to use a

surrogate value for octanol from India. Respondents maintain that the

evidence on the record supports that the octanol price in Chemical

Weekly is equivalent to the Indian price for octanol-2, not the

octanol-1 as argued by the petitioner. Respondents submitted a letter

from the Indian Chemical Weekly, which states that the ``octanol''

price in the Indian Chemical Weekly ``corresponds to the more common

octanol-2 (ethylhexanol-2).'' See Submission, January 6, 1997.

Respondents argue that according to Hawley's Condensed Chemical

Dictionary, ethylhexanol-2 is another

[[Page 65677]]

form of octanol. Id. Respondents also submitted additional information

from the U.S. chemical company, Ivanhoe Industries, which stated that

``octanol'' is a generic term which can include octanol-1, octanol-2,

octanol-3, ethyl hexanol-2 and other products. In addition, respondents

argue that all octyl alcohols can be used interchangeably to produce

plastercizers for vinyl resins and as esters for lube oils and

therefore are comparable products.

Respondents disagree with petitioner's claims that the octanol

price in the Indian Chemical Weekly significantly overstates the price

of capryl alcohol. Respondents claim they provided prices from the U.S.

Chemical Marketing Reporter in their January 6, 1997 PAPI submission,

which they argue, demonstrates that ethyl hexanol-2 is less expensive

than octanol-2. Moreover, respondents maintain that the Indian Chemical

Weekly price of octanol of $1520 per metric ton is within a reasonable

range of the $1450 price quote respondents obtained for capryl alcohol

from SIRIS, a chemical company in India. Respondents argue that Union

Camp's internal price for octanol-2 at 15 cents a pound is a less

reasonable price to value Chinese capryl alcohol in comparison to the

Indian prices for octanol quoted by SIRIS and reported by Chemical

Weekly.

In addition, respondents maintain that Tianjin Zhonghe cannot break

out the additional costs for refining capryl alcohol, which respondents

claim, merely amount to additional electricity to distill the product.

Therefore, respondents argue for valuing capryl alcohol, the Department

should not use Union Camp's unverified internal costs for production of

capryl alcohol, since Union Camp uses an entirely different production

process from the Chinese production process.

If, in the alternative, the Department decides to use a U.S.

surrogate value for octanol-2, respondents urge that we use a surrogate

value from the U.S. Chemical Marketing Reporter for the price of capryl

alcohol in the United States because it is publicly available

information rather than Union Camp's internal price.

Department's Position: The petitioner's argument that to be

consistent with the CIT's decision Union Camp Corp. v. United States,

941 F. Supp. 108, 112 (Ct. Int'l Trade, 1996), the Department should

value capryl alcohol based on the cost of octanol-2 is unpersuasive.

First, the Department is not bound by the decision in Union Camp

because the CIT's decision was rendered moot by the issuance of the

results of the first administrative review. See Sebacic Acid From the

People's Republic of China: Final Results of Antidumping Duty

Administrative Review, 62 FR 10530 (March 7, 1997).

Second, use of the value of octanol-1 as a surrogate value is

consistent with the statute and Department practice. In valuing factors

of production, the Department's practice is to rely, to the extent

possible, on publicly available information. The Department prefers to

use publicly available information because: (1) It alleviates

difficulties in obtaining, and concerns about the quality of, cable

data from embassies and consulates (previously often used as sources

for surrogate values); (2) it allows interested parties an opportunity

to actively submit and comment on surrogate value data; (3) the

establishment of a clear surrogate values hierarchy, with a preference

for surrogate values from a single country based on publicly available

information, increases the certainty and predictability of the outcome

of the Department's factor valuations; (4) the methodological framework

helps to focus comments made by petitioner and respondent in the case

and rebuttal briefs and reduces miscellaneous submissions throughout

the course of proceedings regarding the appropriateness of various

surrogate values; and (5) it alleviates the administrative burden on

U.S. embassies and consulates caused by requests for large amounts of

data. See Final Determination of Sales at Less Than Fair Value: Certain

Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of

China, 57 FR 21058, 21062 (May 18, 1992). In determining which

surrogate value to use for valuing each factor of production,

therefore, the Department selects, where possible, publicly available

information which is: (1) An average non-export value; (2)

representative of a range of prices within the period of review, if

submitted by an interested party, or most contemporaneous with the POR;

(3) product-specific; and (4) tax-exclusive.

In this review, the Department was unable to locate an Indian value

for octanol-2. In addition, the Department specifically asked

interested parties to submit any publicly available, published values

for octanol-2. Neither the petitioner, Union Camp, nor the respondents

were able to locate a specific Indian value for octanol-2. As a result,

the Department used an Indian price for octanol-1 as a surrogate value

for octanol-2 as the best available information. The Department

concluded that, for purposes of factor valuation, octanol-1 was

comparable to octanol-2. We find that octanol-1 and capryl alcohol

(octanol-2) share very similar molecular formula though they are not

identical products. Since product-specific price information is not

available from our preferred surrogate countries, we have relied on the

price of the most physically similar product for which we could obtain

value information.

We disagree with petitioner's argument that we should not use the

octanol price from the Indian Chemical Weekly because octanol-1 and

octanol-2 are not commercially comparable. In support of their

argument, petitioner relies on the publication Chemical Marketing

Reporter which, petitioner claims, indicates that there is a

significant difference in value between capryl alcohol and octanol-1.

However, prices from Chemical Marketing Reporter are prices from the

United States, which is not the surrogate country in this case. On the

other hand, respondents have provided sufficient evidence from India,

which is the surrogate country in this case, to support the conclusion

that octanol-1 and octanol-2 are commercially comparable. Respondents

provided evidence demonstrating that the octanol price reported in the

Indian Chemical Weekly is comparable to the octanol-2 price obtained

from SIRIS, a chemical company in India. Since India is the surrogate

country in this case and the price for octanol reported in Chemical

Weekly is commercially comparable to the Indian price for octanol-2

from another source, we used the octanol price for Chemical Weekly in

our surrogate value analysis.

Moreover, Union Camp's statements that octanol-1 is derived from a

process entirely unrelated to the sebacic acid process and that

octanol-1 is a high-priced petrochemical are not dispositive on the

issue of the comparability of octanol-1 and octanol-2 for purposes of

factor valuation. In a nonmarket economy case, the Department may need

to value anywhere from a few to hundreds of factors of production; in

this case we needed to value approximately 25. Although we strive to

locate exact surrogate matches in our preferred surrogate country, we

often are unable to do so. In those instances, the Department's

practice is to use the most comparable surrogate match that meets our

publicly available information criteria in an appropriate surrogate

country.

There is no basis in the statute or legislative history to suggest

that the Department is required to research or

[[Page 65678]]

consider the production process or use for each factor so as to locate

a surrogate match with an identical or even similar production process

or use. In valuing factors of production, the Department is attempting

to assign a market-economy value, i.e., a price or a cost, to some non-

market economy factor, e.g., 50 kilograms of chemical ``x'', 12 nuts

and bolts, 3 plastic bags, 7 hours of labor. The Department does not

delve into intricacies of the production and use of every potential

surrogate factors of production precisely because production and use

are not necessarily relevant to valuation of these factors. The

Department is foremost concerned about assigning an appropriate

surrogate value to a specific factor of production. As a result, the

Department will consider rejecting a potential surrogate where it has

evidence that a possible surrogate value does not reasonably reflect

the ``value'' of the factor. For example, if the Department had

evidence that a surrogate price was significantly higher than other

potential surrogate prices for a particular factor, the Department

might find that it was not reasonable to use that particular price as a

surrogate value.

Similarly, the Department is not required to consider

interchangeability in determining whether to use a particular surrogate

to value a factor of production and we disagree with the Court's

suggestion to the contrary in Union Camp. If interchangeability were a

prerequisite, the Department would have extreme difficulty in valuing

factors of production. The Department would be required to locate

precise matches between surrogates and factors--an impracticable if not

virtually impossible task given the amount of data the Department would

have to collect and analyze for each factor. The very nature of

chemicals, in particular, is such that a small difference in grade or a

change in molecular structure would preclude ever finding two different

chemicals comparable for purposes of factor valuation. In this case,

for example, the Department recognizes that octanol-1 and octanol-2 are

two different products, and, hence not interchangeable. Nevertheless,

octanol-1 and octanol-2 are sufficiently similar, physically and

commercially, for octanol-1 to serve as a reasonable surrogate for

octanol-2.

The statute and the regulations instruct the Department to value

factors of production, to the extent practicable, in an appropriate

surrogate country. Using an internal price from the United States for

an input, as suggested by petitioner, would be inappropriate. First,

the evidence on the record of this review establishes that respondents'

octanol-1 value, which is from a publicly available publication, is a

reasonable substitute for octanol-2 in our calculations, given the

limited public and published data from India available to the

Department. In contrast, the petitioner's cost is neither a value from

one of the selected surrogate countries nor is it a public or published

figure. As explained above, the Department's practice is to use

publically available figures because, among other reasons, it increases

the certainty and predictability of the outcome of the Department's

factor valuations in NME cases, and it affords all interested parties

an opportunity to submit and comment on surrogate value data. Thus,

based on the facts of this case, use of an unpublished, internal cost

from a country not on the list of preferred surrogates is contrary to

the Department's established practice. See Magnesium Corp. of America

v. United States, 938 F. Supp. 885 (Ct. Intl' Trade, 1996) (``It is

Commerce's standard practice to disregard petitioner's costs because

they are not `an appropriate benchmark by which to test the accuracy of

surrogate country values.' '') Furthermore, because preference is for

values from the selected surrogate country, we did not use the U.S.

price for octanol-2 from Chemical Marketing Reporter submitted by

respondents. Therefore, we have used the 76 rupees/kg value from the

Indian Chemical Weekly as a surrogate value for capryl alcohol as the

best information available to the Department.

We also disagree with petitioner's argument that capryl alcohol

should be treated as a by-product rather than a co-product. Consistent

with the methodology employed in the final determination in the less-

than-fair-value investigation, we have determined that capryl alcohol

is a co-product. Therefore, we have allocated the factor inputs, based

on the relative quantity of output of this product and sebacic acid.

Additionally, we have used the production times necessary to complete

each production stage of sebacic acid as a basis for allocating the

amount of labor, energy usage, and factory overhead among the products.

This treatment of co-products is consistent with generally accepted

accounting principles. (See Cost Accounting: A Managerial Emphasis

(1991) at pages 528-533). See Final Results Analysis Memorandum, at

Attachment I and II.

Comment 3: Petitioner argues that the Department was incorrect in

making tax adjustments to prices from the Economic Times used to value

inputs castor oil, castor seed and castor seed cake. Petitioner argues

that there is no evidence on the record to support the assumption that

price information from the Economic Times is tax inclusive. Petitioner

notes that there is evidence on the record that at least one price for

castor seed oil is tax exclusive, that is the price for Madras which

indicates ``tax extra.'' Analysis Memorandum, at Attachment XII.

Petitioner notes that it is the Department's policy to rely first on

tax-exclusive prices in the surrogate market. Preliminary Determination

of Sales at Less than Fair Value: Certain Cut-to-Length Carbon Steel

Plate from the PRC, 62 FR 31,972, 31,977 (June 11, 1997).

Respondents had no comment on this issue.

Department's Position: We agree with petitioner. We have not

adjusted prices derived from the Economic Times for taxes because there

is not substantial evidence on the record to indicate that the prices

from the Economic Times were tax inclusive.

Comment 4: Petitioner maintains that the Department should correct

certain ministerial errors discussed in the Department's August 13,

1997 Memorandum to the File from Lyn A. Baranowski, namely: (1) Include

a freight expense for SICC's transportation of coal; (2) include a

freight expense for Tianjin's transportation of castor seed; (3) adjust

sodium chloride, coal, plastic bags, middle bags, woven bags, and

castor seed in Tianjin's freight calculation worksheet; and (4) include

a freight expense for Tianjin's purchased castor oil and adjust the

expense for coal.

Respondents had no comment on these errors.

Department's Position: We agree with petitioner. We revised

calculations accordingly to correct the aforementioned ministerial

errors raised by the Department in the August 13, 1997 Memorandum.

Comment 5: Respondents contend that the Department used the

incorrect weights for plastic bags in the preliminary results.

Respondents maintains that the Department should use the weights stated

in verification report. In addition, respondents argue that the

Department should not use a surrogate value for plastic bags which are

abberrational.

Petitioner had no comment on this issue.

Department's Position: We agree with respondents. We have used the

correct weights for the bags as reported at verification. In addition,

we have continued to use Import Statistics from India to value bags as

the price information from Import Statistics is a

[[Page 65679]]

publicly available publication and has been used to value plastic bags

in past determinations. See Notice of the Preliminary Determination of

the Sales of Less than Fair Value: Bicycles from the PRC 60 FR 56567,

56573 (November 9, 1995).

Final Results of Review

For Jiangsu, which failed to respond to the questionnaire, we have

not granted a separate rate and the country-wide rate will apply to all

of its sales. For Guangdong, which reported that it had no sales during

the POR, its company-specific rate from the previous administrative

review remains unchanged.

As a result of our review of the comments received, we have changed

the results from those presented in our preliminary results of the

review. Therefore, we determine that the following margins exists as a

result of our review:

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Margin

Manufacturer/exporter Time period (percent)

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Tianjin Chemicals I/E Corp................ 7/01/95-6/30/96 0.00

Sinochem International Chemicals Corp..... 7/01/95-6/30/96 1.78

Guangdong Chemicals I/E Corp.............. 7/01/95-6/30/96 13.54

Country-Wide Rate......................... 7/01/95-6/30/96 243.40

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

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between USP and NV may vary from the percentages stated

above. The Department will issue appraisement instructions directly to

the Customs Service.

Furthermore, the following cash deposit requirements will be

effective upon publication of the final results of this administrative

review for all shipments of the subject merchandise entered, or

withdrawn from warehouse, for consumption on or after the publication

date, as provided for by section 751(a)(1) of the Act: (1) For the

reviewed companies named above which have separate rates (SICC and

Tianjin), the cash deposit rates will be the rates for those firms

indicated above; (2) for companies previously found to be entitled to a

separate rate and for which no review was requested, the cash deposit

rates will be the rate established in the most recent review of that

company; (3) for all other PRC exporters of subject merchandise from

the PRC, the cash deposit rates will be the PRC country-wide rate

indicated above; and (4) the cash deposit rate for non-PRC exporters of

subject merchandise from the PRC will be the rate applicable to the PRC

supplier of that exporter. These deposit rates, when imposed, shall

remain in effect until publication of the final results of the next

administrative review.

Notification of Interested Parties

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26 to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during this review period. Failure to comply

with this requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22

of the Department's regulations.

Dated: December 8, 1997.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-32632 Filed 12-12-97; 8:45 am]

BILLING CODE 3510-DS-P