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138 / 198

sroberts on PROD1PC70 with NOTICES

68540

Federal Register / Vol. 71, No. 227 / Monday, November

27, 2006 / Notices

Cost of Production Indonesia

Pursuant to section 773(b)(3) of the Act, COP consists of the cost of manufacturing (COM); selling, general and administrative (SG&A) expenses; financial expenses; and packing expenses. The petitioner calculated the quantity of each of the inputs into COM (except factory overhead) and packing based on the input quantities of a U.S. CFS producer during the POI, multiplied by the value of inputs used to manufacture CFS in Indonesia using publicly available data adjusted for inflation. To calculate average factory overhead, SG&A and the financial expense rate, the petitioner relied on the most current financial statements of two Indonesian producers of CFS.

Korea

Pursuant to section 773(b)(3) of the Act, COP consists of the COM; SG&A expenses; financial expenses; and packing expenses. The petitioner calculated COM (except for pulp and factory overhead) and packing expenses using input quantities based on the production experience of a U.S. CFS producer during the POI, multiplied by the value of inputs used to manufacture CFS in Korea using publicly available data. For pulp, the petitioner used input quantities from an independent study, multiplied by the costs incurred to manufacture CFS in Korea using publicly available data. To calculate average factory overhead, SG&A and the financial expense rates, the petitioner relied on the most current financial statements of six Korean producers of CFS.

Indonesia and Korea

Based on a comparison of the Malaysian market prices of CFS for Indonesia, and the Australian and Bangladeshi market prices of CFS for Korea, to the COP calculated for Indonesia and Korea, respectively, in the petitions, we find reasonable grounds to believe or suspect that sales of the foreign like products in Malaysia (for Indonesia) and Australia and Bangladesh (for Korea) were made at prices below COP within the meaning of section 773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating country-wide cost investigations relating to third-country sales to Malaysia (for Indonesia) and to Australia and Bangladesh (for Korea). We note, however, that if we determine that the home markets (i.e., Indonesia and Korea) are viable, our initiation of country-wide cost investigations with respect to sales to the third country

markets will be rendered moot. See Indonesia Initiation Checklist and Korea Initiation Checklist.

Normal Value Based on CV

Because it alleged sales below cost, pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the petitioner calculated NV based on CV for Indonesia and Korea. The petitioner calculated CV using the same average COM, SG&A, financial and packing figures used to compute the COP. The petitioner then added the average profit rate based on the most recent financial statements of two Indonesian producers of CFS for Indonesia and three Korean producers of CFS for Korea. See Indonesia Initiation Checklist and Korea Initiation Checklist.

PRC EP

The petitioner calculated a single EP using the AUVs for import data collected by the U.S. Census Bureau. The petitioner used a weighted average of two HTSUS numbers under which CFS is imported into the United States and that fall within the scope of the investigation. These HTSUS numbers containing imports of products which were most similar to the product on which the petitioner based NV in the PRC petition: 4810.14.19.00 and 4810.19.19.00.3 In addition, the HTSUS numbers account for over 87 percent of the imports of CFS from China, by volume. To calculate EP, the petitioner deducted foreign brokerage charges from the AUV (the petitioner did not deduct foreign inland freight charges from the AUV because it was unable to establish the distances between the Chinese mills and the ports closest to them). See PRC Initiation Checklist.

Normal Value

The petitioner stated that the PRC was a non-market economy (NME) and no determination to the contrary has been made by the Department. In previous investigations, the Department has determined that the PRC is an NME. See Notice of Final Determination of Sales at Less Than Fair Value: Chlorinated Isocyanurates From the Peoples Republic of China, 70 FR 24502 (May 10, 2005), Notice of Final Determination of Sales at Less Than Fair Value and Affirmative Critical Circumstances: Magnesium Metal from the Peoples Republic of China, 70 FR 9037 (Feb. 24, 2005) and Notice of Final Determination

The petitioner based the AUV on customs data for the period April 1, 2006, through August 30, 2006, the most recently available data for the POI at the time of the petition filing. 3

of Sales at Less Than Fair Value: Certain Tissue Paper Products from the Peoples Republic of China, 70 FR 7475 (Feb.14, 2005). In accordance with section 771(18)(C)(i) of the Act, the presumption of NME status remains in effect until revoked by the Department. The presumption of NME status for the PRC has not been revoked by the Department and remains in effect for purposes of the initiation of this investigation. Accordingly, because available information does not permit the NV of the merchandise to be determined under section 773(a) of the Act, the NV of the product is appropriately based on factors of production valued in a surrogate market economy country in accordance with section 773(c) of the Act. In the course of this investigation, all parties will have the opportunity to provide relevant information related to the issues of the PRCs NME status and the granting of separate rates to individual exporters.

The petitioner identified India as the surrogate country, arguing that India is an appropriate surrogate, pursuant to section 773(c)(4) of the Act, because it is a market economy country that is at a level of economic development comparable to that of the PRC and is a significant producer and exporter of CFS. See Volume II of the PRC petition at pages 23. Based on the information provided by the petitioner, we believe that its use of India as a surrogate country is appropriate for purposes of initiating this investigation. After the initiation of the investigation, the Department will solicit comments regarding surrogate country selection. Also, pursuant to 19 CFR 351.301(c)(3)(i), interested parties will be provided an opportunity to submit publicly available information to value factors of production within 40 days after the date of publication of the preliminary determination.

The petitioner explained that the production process for CFS begins with the manufacture of groundwood free pulp, which involves the use of wood fiber as the primary raw material. The wood is then placed into digester cooking vessels and mixed with various chemicals to produce pulp which is then washed and bleached. The chemical pulp is then placed in a paper machine which spreads the pulp into a uniform flat surface and removes water from the pulp through both mechanical and thermal means. The last section of the paper machine consists of several calendaring rolls with a reel device for winding the paper into a roll, which is then sent through a coating process. See Volume II of the PRC petition at pages 3 through 6, and Exhibit I5. The

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