Certain Activated Carbon From the People's Republic of China: Final Results and Partial Rescission of Second Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On May 13, 2010, the Department of Commerce (“Department”) published in the Federal Register the preliminary results of the second administrative review of the antidumping duty order on certain activated carbon from the People's Republic of China (“PRC”). See Certain Activated Carbon From the People's Republic of China: Notice of Preliminary Results of the Second Antidumping Duty Administrative Review, and Preliminary Rescission in Part, 75 FR 26927 (May 13, 2010) (“Preliminary Results”). We gave interested parties an opportunity to comment on the Preliminary Results. Based upon our analysis of the comments and information received, we made changes to the margin calculations for the final results. We continue to find that certain exporters have sold subject merchandise at less than normal value during the period of review (“POR”), April 1, 2008, through March 31, 2009.

DATES:

Effective Date: November 17, 2010.

FOR FURTHER INFORMATION CONTACT:

Robert Palmer and Katie Marksberry, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-9068 and (202) 482-7906 respectively.

SUPPLEMENTARY INFORMATION:

Background

On May 29, 2009, the Department initiated this review with respect to 187 companies upon which an administrative review was requested. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 74 FR 25711 (May 29, 2009). Subsequently, pursuant to 19 CFR 351.213(d)(1), the Department rescinded the administrative review with respect to 155 companies, based upon Petitioners' timely withdrawal of review requests. On September 16, 2009, the Department rescinded the administrative review with respect to an additional 13 companies, based on Petitioners' timely withdrawal of review requests. Thus, 19 companies remained subject to this review.

On June 2, 2010, Jacobi Carbons AB (“Jacobi”) and Ningxia Huahui Activated Carbon Co., Ltd. (“Huahui”), the mandatory respondents in this review, and Petitioners submitted additional surrogate value (“SV”) information. On June 14, 2010, Petitioners submitted rebuttal SV information.

At the Preliminary Results, we set the deadline for interested parties to submit case briefs and rebuttal briefs to June 14, 2010, and June 21, 2010, respectively. On June 7, 2010, we extended the deadlines for case and rebuttal briefs to June 21, 2010, and June 28, 2010, respectively. Additionally, on June 25, 2010, we extended the deadline for rebuttal briefs by an additional two days to June 30, 2010. On June 21, 2010, Petitioners, Jacobi, and Huahui filed case briefs. On June 21, 2010, Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd. (“GHC”) filed comments on the Department's wage rate methodology. On June 28, 2010, Shanxi DMD Corporation (“Shanxi DMD”) filed a rebuttal brief. On June 30, 2010, Huahui filed a rebuttal brief. On July 1, 2010, Jacobi and Petitioners filed rebuttal briefs. On August 3, 2010, the Department placed wage rate data to value the input of labor on the record for comment by interested parties. On September 27, 2010, the Department issued industry-specific wage rate data for comment. On October 4, 2010, the Department issued a memorandum regarding the Department's industry-specific wage rate methodology for comment. On October 7, 2010, the Department issued a correction to the October 4, 2010, data. On October 4, 2010, Huahui provided comments on the September 27, 2010, data. On October 13, 2010, Petitioners, Jacobi, and Huahui provided comments on the October 4, 2010, and October 7, 2010, memoranda. On October 18, 2010, Huahui provided rebuttal comments. The Department did not hold a public hearing pursuant to 19 CFR 351.310(d), as any hearing requests made by interested parties were withdrawn.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to these reviews are addressed in the “Certain Activated Carbon from the People's Republic of China: Issues and Decision Memorandum for the Final Results of the Second Antidumping Duty Administrative Review,” which is dated concurrently with this notice (“Decision Memo”). A list of the issues which parties raised and to which we respond in the Decision Memo is attached to this notice as an Appendix. The Decision Memo is a public document and is on file in the Central Records Unit, main Commerce building, Room 7046, and is accessible on the Department's Web site at http://www.trade.gov/ia . The paper copy and electronic version of the memorandum are identical in content.

Scope of the Order

The merchandise subject to the order is certain activated carbon. Certain activated carbon is a powdered, granular, or pelletized carbon product obtained by “activating” with heat and steam various materials containing carbon, including but not limited to coal (including bituminous, lignite, and anthracite), wood, coconut shells, olive stones, and peat. The thermal and steam treatments remove organic materials and create an internal pore structure in the carbon material. The producer can also use carbon dioxide gas (CO₂) in place of steam in this process. The vast majority of the internal porosity developed during the high temperature steam (or CO₂ gas) activated process is a direct result of oxidation of a portion of the solid carbon atoms in the raw material, converting them into a gaseous form of carbon.

The scope of the order covers all forms of activated carbon that are activated by steam or CO₂, regardless of the raw material, grade, mixture, additives, further washing or post-activation chemical treatment (chemical or water washing, chemical impregnation or other treatment), or product form. Unless specifically excluded, the scope of the order covers all physical forms of certain activated carbon, including powdered activated carbon (“PAC”), granular activated carbon (“GAC”), and pelletized activated carbon.

Excluded from the scope of the order are chemically activated carbons. The carbon-based raw material used in the chemical activation process is treated with a strong chemical agent, including but not limited to phosphoric acid, zinc chloride sulfuric acid or potassium hydroxide, that dehydrates molecules in the raw material, and results in the formation of water that is removed from the raw material by moderate heat treatment. The activated carbon created by chemical activation has internal porosity developed primarily due to the action of the chemical dehydration agent. Chemically activated carbons are typically used to activate raw materials with a lignocellulosic component such as cellulose, including wood, sawdust, paper mill waste and peat.

To the extent that an imported activated carbon product is a blend of steam and chemically activated carbons, products containing 50 percent or more steam (or CO₂ gas) activated carbons are within the scope, and those containing more than 50 percent chemically activated carbons are outside the scope. This exclusion language regarding blended material applies only to mixtures of steam and chemically activated carbons.

Also excluded from the scope are reactivated carbons. Reactivated carbons are previously used activated carbons that have had adsorbed materials removed from their pore structure after use through the application of heat, steam and/or chemicals.

Also excluded from the scope is activated carbon cloth. Activated carbon cloth is a woven textile fabric made of or containing activated carbon fibers. It is used in masks and filters and clothing of various types where a woven format is required.

Any activated carbon meeting the physical description of subject merchandise provided above that is not expressly excluded from the scope is included within the scope. The products subject to the order are currently classifiable under the Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 3802.10.00. Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of the order is dispositive.

Changes Since the Preliminary Results

Based on a review of the record as well as comments received from parties regarding our Preliminary Results, we have made revisions to certain SVs and the margin calculations for Jacobi and Huahui in the final results. Specifically, we have updated the SV for labor and the calculation of the surrogate financial ratios. See Decision Memo at Comment 4. For all changes to the margin calculations, see Decision Memo and the company specific analysis memoranda.

Wage Rate Methodology

Pursuant to a recent decision by the United States Court of Appeals for the Federal Circuit, we have calculated a revised hourly wage rate to use in valuing Jacobi's and Huahui's reported labor. The revised wage rate is calculated by averaging earnings and/or wages in countries that are economically comparable to the PRC and that are significant producers of comparable merchandise. See Decision Memo at Comment 4f; see also Memorandum to the File, through Catherine Bertrand, Program Manager, Office 9, Import Administration, from Bob Palmer, Case Analyst, Office 9, Import Administration, Subject: Second Administrative Review of Activated Carbon from the People's Republic of China: Surrogate Values for the Final Results, dated November 9, 2010, for the details of the calculation and supporting data.

Per-Unit Assessment

In the Preliminary Results, we analyzed Jacobi's submitted entered values because Petitioners argued that the Department should calculate specific, per-kilogram cash deposit and importer-specific assessment rates for all respondents in this review based on an allegation that parties are selling the subject merchandise (or importing it) at prices significantly below prevailing market prices to evade assessment of antidumping duties. At the time of the Preliminary Results, we did not find that there was a substantial difference between the average U.S. sales price for activated carbon and the average entered value reported to U.S. Customs and Border Protection (“CBP”) for Jacobi. However, since the Preliminary Results, Jacobi has submitted revised entered value data and, based on a further analysis of the record of this review, we have determined that there is a substantial difference between Jacobi's net unit price for its entries of certain activated carbon and the entered value reported to CBP. While the Department normally directs CBP to collect cash deposits and liquidate entries on an ad valorem basis, we are not required to do so by statute or by our regulations, and have in the past used quantity-based rates where appropriate. Furthermore, the Department has determined in past cases that it would be extremely burdensome to determine whether to apply an ad valorem or a per-unit rate on a company-specific basis. Therefore, consistent with the Department's practice, we are calculating per-unit cash deposit and assessment rates for the mandatory respondents, separate rate companies and companies that are part of the PRC-wide entity. See Decision Memo at Comment 3. To arrive at a per-kilogram rate for the PRC-wide rate entity, we began with the ad valorem PRC-wide rate of 228.11 percent. The Department then multiplied the ad valorem rate of 228.11 percent by the average unit value (“AUV”) for all imports of subject merchandise into the United States during the POR. For the PRC-wide entity, this calculation results in a per-kilogram assessment rate of $2.42. The quantity-based collection and assessment method will begin upon completion of these final results, and will be employed thereafter for all future reviews of this order.

Separate Rates

In our Preliminary Results, we determined that the following companies met the criteria for separate rate status: Datong Juqiang Activated Carbon Co., Ltd., Datong Municipal Yunguang Activated Carbon Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd., Ningxia Mineral & Chemical Limited, Shanxi DMD, Shanxi Industry Technology Trading Co., Ltd., and Shanxi Qixian Foreign Trade Corporation.

Additionally, in the Preliminary Results, we also noted that the Department received completed responses to the Section A portion of the non-market economy questionnaire from the individually reviewed respondents (Jacobi and Huahui), which contained information pertaining to the companies' eligibility for a separate rate. With respect to Jacobi, we preliminarily determined that there is no PRC ownership of this company and, because the Department has no evidence indicating that Jacobi is under the control of the PRC, a separate rates analysis is not necessary to determine whether it is independent from government control. With respect to Huahui, we preliminarily granted separate rate status to it based on the submitted information. We also preliminarily determined that one of the exporters under review not selected for individual examination, Tangshan Solid Carbon Co., Ltd., reported that it is 100-percent foreign owned. Accordingly, the Department also preliminarily granted separate rate status to Tangshan Solid Carbon Co. Ltd. See Preliminary Results.

With the exception of comments regarding the Department's treatment of Shanxi DMD, we have not received any information since the issuance of the Preliminary Results that provides a basis for the reconsideration of these preliminary determinations. Therefore, the Department continues to find that Jacobi, Huahui, Datong Juqiang Activated Carbon Co., Ltd., Datong Municipal Yunguang Activated Carbon Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Guanghua Cherishmet Activated Carbon Co., Ltd., Ningxia Mineral & Chemical Limited, Shanxi Industry Technology Trading Co., Ltd., Shanxi Qixian Foreign Trade Corporation, and Tangshan Solid Carbon Co., Ltd. meet the criteria for a separate rate.

With respect to Shanxi DMD, for the Preliminary Results the Department found that Shanxi DMD had cooperated to the best of its ability and, accordingly, we did not apply adverse facts available (“AFA”) by assigning the PRC-wide rate to Shanxi DMD. Since the Preliminary Results, Petitioners filed comments in their case brief and Shanxi DMD filed a rebuttal brief concerning whether the Department should apply total AFA to Shanxi DMD for these final results. After full consideration of the facts on the record of this review, we have determined that it is not appropriate to apply total AFA to Shanxi DMD. Therefore, because we continue to find that Shanxi DMD cooperated to the best of its ability, we are continuing to grant Shanxi DMD separate rate status. For a full discussion of parties' arguments and the Department's position on this matter, please see Decision Memo at Comment 10.

Additionally, in the Preliminary Results, we stated that, United Manufacturing International (Beijing) Ltd. (“UMI”), Datong Yunguang Chemicals Plant, Hebei Foreign Trade and Advertising Corporation, and Shanxi Newtime Co., Ltd., all companies with an active review request, did not timely submit either a separate rate application or certification. Thus, we preliminarily determined that these companies did not demonstrate their eligibility for separate rate status, and were included as part of the PRC-wide entity. See Preliminary Results at 26932 and 26933. Because we have not received any information since the issuance of the Preliminary Results that provides a basis for a reconsideration of that finding, we continue to find UMI, Datong Yunguang Chemicals Plant, Hebei Foreign Trade and Advertising Corporation, and Shanxi Newtime Co., Ltd., did not meet the criteria for a separate rate for the final results. Thus, these companies will be subject to the PRC-wide entity rate.

In the Preliminary Results, the Department determined that those companies which did not demonstrate eligibility for a separate rate are properly considered part of the PRC-wide entity. Since the Preliminary Results, none of the companies which did not file separate rate applications or certifications submitted comments regarding these findings. Therefore, we continue to treat these entities as part of the PRC-wide entity.

Final Partial Rescission

In the Preliminary Results, the Department preliminarily rescinded this review with respect to Ningxia Lingzhou Foreign Trade Co., Ltd. (“Lingzhou”) because the Department preliminarily determined that it had no shipments of subject merchandise to the United States during the POR. Subsequent to the Preliminary Results, Petitioners pointed out that Lingzhou submitted its certification of no shipments past the deadline established by the Department. However, no party submitted information on the record indicating that Lingzhou made sales to the United States of subject merchandise during the POR. The Department acknowledges that it erred in not noticing the submission was late and rejecting it at the time of filing. However, because the Department actually reviewed the submission, confirmed with CBP that Lingzhou did not have any shipments during the instant POR, and preliminarily rescinded the review with respect to Lingzhou, the Department now finds that it would be unfair to the respondent to reject the submission for being untimely filed it after it has been on the record for over a year. Therefore, in this particular instance, the Department will allow Lingzhou's no shipment certification to remain on the record. Thus, in accordance with 19 CFR 351.213(d)(3), and consistent with our practice, we are rescinding this review with respect to Lingzhou. For a full discussion of parties' comments and the Department's determination with regard to Lingzhou's no shipments certification, see Decision Memo at Comment11.

Duty Absorption

In the Preliminary Results, we conducted a duty absorption inquiry with regard to Jacobi, pursuant to section 751(a)(4) of the Tariff Act of 1930, as amended (“Act”), and preliminarily found that Jacobi has absorbed antidumping duties on U.S. sales made through its affiliated importer. See Preliminary Results. We have not received any further information which would provide a basis for the reconsideration of our determination. Therefore, the Department continues to find that Jacobi has absorbed antidumping duties on U.S. sales made through its affiliated importer, pursuant to section 751(a)(4) of the Act.

Final Results of Review

The dumping margins for the POR are as follows:

Assessment

The Department will determine, and CBP shall assess, antidumping duties on all appropriate entries, pursuant to 19 CFR 351.212(b). We have calculated importer-specific duty assessment rates on a per-unit basis. In this and future reviews, we will direct CBP to assess importer-specific assessment rates based on the resulting per-unit (i.e., per-kilogram) rates by the weight in kilograms of each entry of the subject merchandise during the POR. The Department intends to issue appropriate assessment instructions directly to CBP 15 days after publication of the final results of this administrative review.

Cash Deposit Requirements

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)(2)(C) of the Act: (1) The cash deposit rate for each of the reviewed companies that received a separate rate in this review will be the rate listed in the final results of review (except that if the rate for a particular company is de minimis, i.e., less than 0.5 percent, no cash deposit will be required for that company); (2) for previously investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period of review; (3) if the exporter is not a firm covered in this review, a prior review, or the original less than fair value investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will be the PRC-wide rate of $2.42 per kilogram. These deposit requirements, when imposed, shall remain in effect until further notice.

Reimbursement of Duties

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties has occurred and the subsequent assessment of doubled antidumping duties.

Administrative Protective Orders

This notice also serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

We are issuing and publishing this administrative review and notice in accordance with sections 751(a)(1) and 777(i) of the Act.

Appendix I—Decision Memorandum

General Issues

Comment 1: Assignment of Combination Rates

Comment 2: Treatment of Sales with Negative Margins

Comment 3: Per-Unit Assessment Rates

Comment 4: Surrogate Values

a. Coconut Shell Charcoal

b. Steam Coal

c. Electricity

d. Steam

e. Expense Exclusion in Kalpalka Financial Ratios

f. Wage Rate Methodology

Company-Specific Issues

Jacobi

Comment 5: Issues Regarding Ningxia Guanghua Activated Carbon

a. Facts Available for Water

b. Transport Bag Surrogate Value

Comment 6: Corrections to Submitted Data

a. Treatment of Indirect Labor

b. Treatment of U.S. Indirect Selling Expenses

Comment 7: Freight Revenue Expense Calculation

Huahui

Comment 8: Ministerial Error for Truck Freight Unit of Measure

Comment 9: Treatment of Domestic Freight Expenses

Shanxi DMD

Comment 10: Application of Total Adverse Facts Available

Ningxia Lingzhou

Comment 11: Status of No Shipment Certification