Final Affirmative Countervailing Duty Determination: Sulfanilic Acid from Hungary

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of final affirmative countervailing duty determination.

SUMMARY:

The Department of Commerce has made a final determination that countervailable subsidies are being provided to certain producers or exporters of sulfanilic acid from Hungary. For information on the estimated countervailing duty rates, see infra section on “Suspension of Liquidation.”

EFFECTIVE DATE:

September 25, 2002.

FOR FURTHER INFORMATION CONTACT:

Melani Miller or Daniel J. Alexy, Office of Antidumping/Countervailing Duty Enforcement, Group 1, Import Administration, U.S. Department of Commerce, Room 3099, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-0116 and (202) 482-1540, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions of the Tariff Act of 1930, as amended by the Uruguay Round Agreements Act effective January 1, 1995 (“the Act”). In addition, unless otherwise indicated, all citations to the Department of Commerce's (“the Department”) regulations are to the regulations as codified at 19 CFR Part 351 (April 2002).

Petitioner

The petitioner in this investigation is Nation Ford Chemical Company (“the petitioner”).

Case History

The following events have occurred since the publication of the preliminary determination in the Federal Register. See Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Countervailing Duty Determination With Final Antidumping Duty Determination: Sulfanilic Acid from Hungary, 67 FR 9696 (March 4, 2002) (“Preliminary Determination”).

On March 5, 2002, we issued supplemental questionnaires to Nitrokemia 2000 Rt. (“Nitrokemia 2000”) and the Government of Hungary (“GOH”). We received responses to these supplemental questionnaires on March 18 and 19, 2002.

On March 27, 2002, Nitrokemia 2000 submitted comments on the Preliminary Determination. On May 13, 2002, the petitioner also submitted comments on the Preliminary Determination, as well as on the upcoming verifications.

From May 30 to June 4, 2002, we conducted a verification of the questionnaire responses submitted by the GOH and Nitrokemia 2000.

On August 15 and 16, 2002, we received case briefs from Nitrokemia 2000 and the petitioner.

Period of Investigation

The period for which we are measuring subsidies, or the period of investigation, is calendar year 2000.

Scope of Investigation

Imports covered by this investigation are all grades of sulfanilic acid, which include technical (or crude) sulfanilic acid, refined (or purified) sulfanilic acid, and sodium salt of sulfanilic acid.

Sulfanilic acid is a synthetic organic chemical produced from the direct sulfonation of aniline and sulfuric acid. Sulfanilic acid is used as a raw material in the production of optical brighteners, food colors, specialty dyes, and concrete additives. The principal differences between the grades are the undesirable quantities of residual aniline and alkali insoluble materials present in the sulfanilic acid. All grades are available as dry, free flowing powders.

Technical sulfanilic acid, currently classifiable under the subheading 2921.42.22 of the Harmonized Tariff Schedule (“HTS”), contains 96 percent minimum sulfanilic acid, 1.0 percent maximum aniline, and 1.0 percent maximum alkali insoluble materials. Refined sulfanilic acid, also currently classifiable under 2921.42.22 of the HTS, contains 98 percent minimum sulfanilic acid, 0.5 percent maximum aniline, and 0.25 percent maximum alkali insoluble materials.

Sodium salt (sodium sulfanilate), currently classifiable under the HTS subheading 2921.42.90, is a powder, granular, or crystalline material which contains 75 percent minimum equivalent sulfanilic acid, 0.5 percent maximum aniline based on the equivalent sulfanilic acid content, and 0.25 percent maximum alkali insoluble materials based on the equivalent sulfanilic acid content.

Although the HTS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.

Injury Test

Because Hungary is a “Subsidies Agreement Country” within the meaning of section 701(b) of the Act, the International Trade Commission (“ITC”) is required to determine whether imports of the subject merchandise from Hungary materially injure, or threaten material injury to, a U.S. industry. On November 13, 2001, the ITC made its preliminary determination that there is a reasonable indication that an industry in the United States is being materially injured by reason of imports from Hungary of the subject merchandise. See Sulfanilic Acid from Hungary and Portugal, 66 FR 57988 (November 19, 2001).

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” from Richard W. Moreland, Deputy Assistant Secretary, Import Administration to Faryar Shirzad, Assistant Secretary, Import Administration, dated September 18, 2002 (“Decision Memorandum”), which is hereby adopted by this notice. Attached to this notice as Appendix I is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. 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 main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/frn/ under the heading “Hungary.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Suspension of Liquidation

As a result of our Preliminary Determination, we instructed the Customs Service (“Customs”) to suspend liquidation of all entries of sulfanilic acid from Hungary, which were entered or withdrawn from warehouse, for consumption on or after March 4, 2002, the date of publication of the Preliminary Determination in the Federal Register. In accordance with section 703(d) of the Act, we instructed Customs to discontinue the suspension of liquidation for countervailing duty purposes for merchandise entered on or after July 2, 2002, but to continue the suspension of liquidation of entries made between March 4, 2002 and July 1, 2002.

We have calculated an individual net subsidy rate for Nitrokemia 2000, the only investigated manufacturer of the subject merchandise, pursuant to section 705(c)(1)(B)(i) of the Act. Because Nitrokemia 2000 is the only respondent in this case, its rate serves as the “All Others” rate. We determine that the total estimated net subsidy rates for Nitrokemia 2000 and for all other producers and exporters of the subject merchandise are as follows:

We will issue a countervailing duty order and instruct Customs to suspend liquidation under section 706(a) of the Act if the ITC issues a final affirmative injury determination and will require a cash deposit of estimated countervailing duties for such entries of merchandise in the amounts indicated above. If the ITC determines that material injury, or threat of material injury, does not exist, this proceeding will be terminated and all estimated duties deposited or securities posted as a result of the suspension of liquidation will be refunded or cancelled.

ITC Notification

In accordance with section 705(d) of the Act, we will notify the ITC of our determination. In addition, we are making available to the ITC all non-privileged and non-proprietary information relating to this investigation. We will allow the ITC access to all privileged and business proprietary information in our files, provided the ITC confirms that it will not disclose such information, either publicly or under an Administrative Protective Order (“APO”), without the written consent of the Assistant Secretary for Import Administration.

Return or Destruction of Proprietary Information

In the event that the ITC issues a final negative injury determination, this notice will serve as the only reminder to parties subject to an APO of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to comply is a violation of the APO.

This determination is published pursuant to sections 705(d) and 777(i) of the Act.