Final Determination of Sales at Less Than Fair Value: Certain Activated Carbon from the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

DATES:

March 2, 2007.

SUMMARY:

On October 11, 2006, the Department of Commerce (“the Department”) published its preliminary determination of sales at less than fair value (“LTFV”) in the antidumping investigation of certain activated carbon from the People's Republic of China (“PRC”). The period of investigation (“POI”) is July 1, 2005, through December 31, 2005. We invited interested parties to comment on our preliminary determination of sales at LTFV. Based on our analysis of the comments we received, we have made changes to our calculations for the mandatory respondents. The final dumping margins for this investigation are listed in the “Final Determination Margins” section below.

FOR FURTHER INFORMATION CONTACT:

Catherine Bertrand or Anya Naschak, 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) 482-3207 or 482-6375, respectively.

Final Determination

We determine that certain activated carbon from the PRC is being, or is likely to be, sold in the United States at LTFV as provided in section 735 of the Tariff Act of 1930, as amended (“the Act”). The estimated margins of sales at LTFV are shown in the “Final Determination Margins” section of this notice.

SUPPLEMENTARY INFORMATION:

Case History

The Department published its preliminary determination of sales at LTFV on October 11, 2006. See Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Activated Carbon from the People's Republic of China, 71 FR 59721 (October 11, 2006) (“Preliminary Determination”). The Department conducted verification of Calgon Carbon (Tianjin) Co., Ltd. (“CCT”) and certain of its suppliers. As the Department determined in the Preliminary Determination that Jacobi Carbons AB (“Jacobi AB”) was the appropriate mandatory respondent in this case (see Preliminary Determination at 71 FR at 59725), the Department conducted verification of Jacobi AB and certain of its suppliers. The Department also conducted verification of Jilin Province Bright Future Chemicals Co. Ltd. (“JBF Chemical”) and its affiliated company Jilin Province Bright Future Industry & Commerce Co. Ltd. (“JBF Industry”) (collectively, “Jilin Bright Future”) and one of its suppliers, in both the PRC and the United States (where applicable), and Ningxia Huahui Activated Carbon Co., Ltd., one of the separate rate applicants. See the “Verification” section below for additional information.

We invited parties to comment on the Preliminary Determination. We received a case brief from Carbochem Inc. (“Carbochem”) on January 11, 2007. We received case briefs from respondents Jacobi AB and CCT on January 16, 2007. We also received a case brief from Calgon Carbon Corporation and Norit Americas Inc. (“Petitioners”), on January 12, 2007. We received rebuttal briefs on January 22, 2007, from the following companies: Jacobi AB, CCT, Jilin Bright Future, and Petitioners. All parties that timely requested a hearing in this case withdrew those requests prior to the submission of case briefs. Therefore, the Department did not hold a hearing in this case.

On February 2, 2007, we invited parties to comment on the revised NME wage rate, to be used in the final determination of this investigation. No parties submitted comments on this issue.

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 for the Final Determination in the Investigation of Certain Activated Carbon from the People's Republic of China, dated February 23, 2007, which is hereby adopted by this notice (“Issues and Decision Memorandum”). A list of the issues which parties raised and to which we respond in the Issues and Decision Memorandum is attached to this notice as an Appendix. The Issue and Decision Memorandum is a public document and is on file in the Central Records Unit (“CRU”), Main Commerce Building, Room B-099, and is accessible on the Web at http://www.trade.gov/ia . The paper copy and electronic version of the memorandum are identical in content.

Changes Since the Preliminary Determination

Based on our analysis of comments received, we have made changes to the margin calculation for CCT, Jacobi AB and Jilin Bright Future as follows.

CCT:

We have made changes resulting from minor corrections and findings at CCT's verifications. For a detailed analysis of CCT's margin calculation see the Final Analysis Memorandum for CCT, dated February 23, 2007.

Jacobi:

We have made the following changes to Jacobi AB's margin calculation:

We have determined that it is appropriate to apply partial adverse facts available (“AFA”) to Jacobi for its reported factors of production supplied by Ningxia Guanghua Activated Carbon Co., Ltd.'s (“NXGH”). See below and Issues and Decision Memorandum at Comment 7. We have revised the application of facts available for one of Jacobi AB's suppliers. In addition, we have made changes to Jacobi AB's U.S. sales and factors of production resulting from minor corrections and findings at Jacobi AB's verifications. See Issues and Decision Memorandum at Comment 19 and Memorandum to the File from Anya L. Naschak: Jacobi Carbons AB, Tianjin Jacobi International Trading Co., Ltd., and Jacobi Carbons, Inc. Program Analysis for the Final Determination, dated February 23, 2007 (“Jacobi Final Analysis Memorandum”). For a detailed analysis of Jacobi AB's margin calculation, see Jacobi Final Analysis Memorandum. Jilin Bright Future:

As discussed in Comment 27 of the Issues and Decision Memorandum, we have determined to apply total adverse facts available to Jilin Bright Future. We have assigned the PRC-wide margin of 228.11 percent to Jilin Bright Future.

In addition, the Department has made changes to its calculation of the truck freight surrogate value as described in the Issues and Decision Memorandum at Comment 3, and to the calculation of certain chemical inputs as described in the Issues and Decision Memorandum at Comment 18. See also, Jacobi and CCT's Final Analysis Memoranda. The Department has also revised the surrogate value for labor to $0.83, a the revised expected wage rate posted on the Department's website on February 2, 2007. Further, the Department determines that it is appropriate to apply the methodology described in the December 27, 2006 Federal Register Notice to this investigation. See Issues and Decision Memorandum at Comment 4 and Final Modification; Calculation of the Weighted-Average Dumping Margin During an Antidumping Investigation, 71 FR 77722 (December 27, 2006).

Affiliation

The Department preliminarily determined that Jacobi AB, Tianjin Jacobi International Trading Co., Ltd. (“Jacobi Tianjin”), and Jacobi Carbons, Inc. (“Jacobi US”) (collectively, “Jacobi”) are affiliated with each other, and that Jacobi AB is the appropriate mandatory respondent in this case. See Memorandum to the File: Certain Activated Carbon from the People's Republic of China: Affiliation and Treatment of Sales of Jacobi Tianjin International Trading Co., Ltd., Jacobi Carbons AB, and Jacobi Carbons, Inc., dated October 4, 2006, for further details regarding this issue. No comments were received on this issue and no information was placed on the record that would call into question the Department's determination in this regard. Therefore, the Department continues to find that Jacobi AB, Jacobi Tianjin, and Jacobi US are affiliated and Jacobi AB is the appropriate mandatory respondent in this case.

Scope of Investigation

The merchandise subject to this investigation 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 this investigation 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 this investigation 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 investigation 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 this scope, and those containing more than 50 percent chemically activated carbons are outside this 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 this scope. The products under investigation are currently classifiable under the Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 3802.10.00. Although HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive. Scope Comments

We have addressed comments to the Scope in our Issues and Decision Memorandum and have determined not to revise the scope of this investigation other than to clarify that the exclusion for certain blended activated carbon only applies to mixtures of steam and chemically activated carbons.

Facts Available

Section 776(a)(2) of the Act provides that if an interested party: (A) withholds information that has been requested by the Department; (B) fails to provide such information in a timely manner or in the form or manner requested, subject to subsections 782(c)(1) and (e) of the Act; (C) significantly impedes a determination under the antidumping statute; or (D) provides such information but the information cannot be verified, the Department shall, subject to subsection 782(d) of the Act, use facts otherwise available in reaching the applicable determination.

Section 776(b) of the Act states that if the administering authority finds that an interested party has not acted to the best of its ability to comply with a request for information, the administering authority may, in reaching its determination, use an inference that is adverse to that party. The adverse inference may be based upon: (1) the petition, (2) a final determination in the investigation under this title, (3) any previous review under section 751 or determination under section 753, or (4) any other information placed on the record.

CCT:

For this final determination, in accordance with section 776(a)(2) of the Act and 776(b) of the Act, we have determined that the use of adverse facts available (“AFA”) is appropriate for CCT's suppliers that have been deemed uncooperative. See Issues and Decision Memorandum at Comment 20. As partial AFA, we are applying the weighted-average of the two highest calculated CONNUM-specific NVs selected from all of the cooperating suppliers¹ of CCT andJacobi to all sales made by CCT of these suppliers products. See Memorandum to the File from Anya Naschak: Calculation of Adverse Facts Available Rate dated February 23, 2007.

Jacobi:

For this final determination, in accordance with section 776(a)(2) of the Act and 776(b) of the Act, we have determined that the use of adverse facts available (“AFA”) is appropriate for Jacobi's reported factors of production supplied by Ningxia Guanghua Activated Carbon Co., Ltd.'s (“NXGH”). See Issues and Decision Memorandum at Comment 7. As partial AFA, we are applying the weighted-average of the two highest calculated CONNUM-specific NVs selected from all of the cooperating suppliers² of CCT and Jacobi to all sales made by Jacobi of NXGH-produced products. See Memorandum to the File From Anya Naschak: Calculation of Adverse Facts Available Rate dated February 23, 2007.

Jilin Bright Future:

For the final determination, the Department is applying total adverse facts available to Jilin Bright Future. The Department is applying the facts otherwise available to Jilin Bright Future because it failed to provide verifiable factors of production data and misrepresented and misreported its production operations and factors of production, in accordance with sections 776(a)(2)(A), (C) & (D) of the Act. Furthermore, in accordance with section 776(b) of the Act, the Department found that Jilin Bright Future failed to cooperate to the best of its ability to comply with the Department's request for information, and, therefore, finds an adverse inference is warranted in determining the facts otherwise available. For a complete discussion of this matter, see Comment 27 of the Issues and Decision Memorandum.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by the respondents and one separate rate applicant for use in our final determination. See the Department's verification reports on the record of this investigation in the CRU with respect to CCT, Jacobi, Jilin Bright Future, and Ningxia Huahui Activated Carbon Co., Ltd. For all verified companies, we used standard verification procedures, including examination of relevant accounting and production records, as well as original source documents provided by respondents.

Surrogate Country

In the Preliminary Determination, we stated that we had selected India as the appropriate surrogate country to use in this investigation for the following reasons: (1) it is a significant producer of comparable merchandise; (2) it is at a similar level of economic development pursuant to 773(c)(4) of the Act; and (3) we have reliable data from India that we can use to value the factors of production. See Preliminary Determination. For the final determination, we received no comments and made no changes to our findings with respect to the selection of a surrogate country.

Separate Rates

In proceedings involving non-market-economy (“NME”) countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assigned a single antidumping duty deposit rate. It is the Department's policy to assign all exporters of merchandise subject to an investigation in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. See Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (“Sparklers”), as amplified by Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (“Silicon Carbide”), and Section 351.107(d) of the Department's regulations.

In the Preliminary Determination, we found that CCT, Jacobi and Jilin Bright Future, and the separate rate applicants who received a separate rate (“Separate Rate Applicants”) in the Preliminary Determination demonstrated their eligibility for separate-rate status. For the final determination, we continue to find that the evidence placed on the record of this investigation by CCT, Jacobi and Jilin Bright Future, and the Separate Rate Applicants demonstrate both a de jure and de facto absence of government control, with respect to their respective exports of the merchandise under investigation, and, thus are eligible for separate rate status. We determined in the Preliminary Determination that Panshan Import and Export Corporation is not entitled to a separate rate. We received no comments on this issue and we continue to find that Panshan Import and Export Corporation is not entitled to a separate rate.

The PRC-Wide Rate

In the Preliminary Determination, the Department found that certain companies and the PRC-wide entity did not respond to our requests information. In the Preliminary Determination we treated these PRC producers/exporters as part of the PRC-wide entity because they did not demonstrate that they operate free of government control. No additional information has been placed on the record with respect to these entities after the Preliminary Determination. The PRC-wide entity has not provided the Department with the requested information; therefore, pursuant to section 776(a)(2)(A) of the Act, the Department continues to find that the use of facts available is appropriate to determine the PRC-wide rate. Section 776(b) of the Act provides that, in selecting from among the facts otherwise available, the Department may employ an adverse inference if an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, 65 FR 5510, 5518 (February 4, 2000). See also, “Statement of Administrative Action” accompanying the URAA, H.R. Rep. No. 103-316, vol. 1, at 870 (1994) (“SAA”). We find that, because the PRC-wide entity did not respond to our request for information, it has failed to cooperate to the best of its ability. The PRC wide entity includes Datong Huibao Activated Carbon Co., Ltd and its affiliated company Beijing Hibridge Trading Co., Ltd., who we preliminary determined was part of the PRC-wide entity as it was selected as a mandatory respondent and then withdrew. Therefore, the Department finds that, in selecting from among the facts otherwise available, an adverse inference is appropriate for the PRC-wide entity.

Because we begin with the presumption that all companies within a NME country are subject to government control and because only the companies listed under the “Final Determination Margins” section below have overcome that presumption, we are applying a single antidumping rate - the PRC-wide rate - to all other exporters of subject merchandise from the PRC. Such companies did not demonstrate entitlement to a separate rate. See, e.g., Synthetic Indigo from the People's Republic of China: Notice of Final Determination of Sales at Less Than Fair Value, 65 FR 25706 (May 3, 2000). The PRC-wide rate applies to all entries of subject merchandise except for entries from the respondents which are listed in the “Final Determination Margins” section below (except as noted).

Corroboration

At the Preliminary Determination, in accordance with section 776(c) of the Act, we corroborated our adverse facts available (“AFA”) margin using information submitted by certain respondents. To assess the probative value of the total AFA rate it has chosen for the PRC-wide entity, the Department compared the final margin calculations of certain respondents in this investigation with the rate of 228.11 percent from the petition, as used in the Preliminary Determination. We continue to find that the rate is within the range of the highest margins we have determined in this investigation. See Memorandum to the File: Corroboration of the PRC-Wide Facts Available Rate for the Final Determination in the Antidumping Duty Investigation of Certain Activated Carbon from the People's Republic of China, dated February 23, 2007 (“Final Corroboration Memo”). Since the record of this investigation contains margins within the range of 228.11 percent, the margin selected from the petition, we determine that the rate used in the Preliminary Determination continues to be relevant for use in this investigation. As discussed therein, we found that the margin of 228.11 percent has probative value. See Final Corroboration Memo. Accordingly, we find that the rate of 228.11 percent is corroborated within the meaning of section 776(c) of the Act.

Combination Rates

In its initiation notice, the Department stated that it would calculate combination rates for certain respondents that are eligible for a separate rate in this investigation. See Initiation of Antidumping Duty Investigation: Certain Activated Carbon From the People's Republic of China, 71 FR 16757 (April 4, 2006) (“Initiation Notice”). Therefore, for the final determination, we have assigned a combination rate to respondents that are eligible for a separate rate.

Final Determination Margins

We determine that the following percentage weighted-average margins exist for the POI:

Disclosure

We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).

Continuation of Suspension of Liquidation

Pursuant to section 735(c)(1)(B) of the Act, we will instruct U.S. Customs and Border Protection (“CBP”) to continue to suspend liquidation of all entries of subject merchandise from the PRC entered, or withdrawn from warehouse, for consumption on or after October 11, 2006, the date of publication of the Preliminary Determination. CBP shall continue to require a cash deposit or the posting of a bond equal to the estimated amount by which the normal value exceeds the U.S. price as shown above. These instructions suspending liquidation will remain in effect until further notice.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our final determination of sales at LTFV. As our final determination is affirmative, in accordance with section 735(b)(2) of the Act, within 45 days the ITC will determine whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports or sales (or the likelihood of sales) for importation of the subject merchandise. If the ITC determines that material injury or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing CBP to assess antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.

Notification Regarding APO

This notice also serves as a reminder to the parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation. This determination and notice are issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

This determination and notice are issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Appendix I

Changes from the

General Issues

Comment 1: Whether to Clarify the Scope With Respect to Blended Products

Comment 2: Whether to Exclude Carbochem Products from the Scope

Comment 3: Whether to Correct Freight Ministerial Error

Comment 4: Whether to Change the Department's Zeroing Methodology

Comment 5: Whether to Grant a By-Product Offset for Activated Carbon Products

Comment 6: Treatment of Non-Production Electricity and Labor

Company-Specific Issues

Jacobi Issues

Comment 7: Whether to Apply Total Adverse Facts Available to Jacobi

Comment 8: Treatment of Powdered Activated Carbon Sold to the United States

Comment 9: Whether to Recalculate Jacobi's FOPs to Include By-products in the Denominator

Comment 10: Whether to Apply Adverse Facts Available for DTFH

Comment 11: Whether to Apply Adverse Facts Available to Jacobi's Electricity and Labor

Comment 12: Treatment of Impregnated Material at NXGH for which No Data Were Reported

Comment 13: Whether to Impute Verification Findings of NXGH and DTHB to Jacobi's Other Suppliers

Comment 14: Treatment of Water

Comment 15: Treatment of Packing and Factory Labor

Comment 16: Valuation of Carbonized Material

Comment 17: Valuation of Coal

Comment 18: Valuation of Chemical Inputs

Comment 19: Calculation of Indirect Selling Expense

CCT Issues

Comment 20: Whether to Continue to Apply Adverse Facts Available to Certain CCT Suppliers

Comment 21: PXZ's Pressroom Product

Comment 22: Whether to Impute the Verification Findings of NXGH to CCT

Comment 23: Production Denominator

Comment 24: Calculation of Indirect Selling Expense

Comment 25: U.S. Warehousing Expense

Comment 26: Marine Insurance

Jilin Issues

Comment 27: Whether to Apply Adverse Facts Available to Jilin Bright Future