Glycine From The People's Republic of China: Rescission of Antidumping Duty New Shipper Review of Hebei New Donghua Amino Acid Co., Ltd.

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On May 6, 2003, the Department published the notice of initiation of the new shipper review of the antidumping duty order on glycine from The People's Republic of China (PRC) covering the period March 1, 2002, through February 28, 2003. The new shipper review covered exports by Hebei New Donghua Amino Acid Co., Ltd. (New Donghua). See Glycine from The People's Republic of China: Initiation of Antidumping New Shipper Review, 68 FR 23962 (May 6, 2003) (New Shipper Initiation). For the reasons discussed below, we are rescinding the review of New Donghua.

EFFECTIVE DATE:

August 5, 2004.

FOR FURTHER INFORMATION CONTACT:

Scot Fullerton or Matthew Renkey at (202) 482-1386 and (202) 482-2312, respectively; Office of AD/CVD Enforcement VII, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

Background

We issued the preliminary results of this new shipper review on February 24, 2004. See Notice of Preliminary Results of Antidumping Duty New Shipper Review: Glycine from The People's Republic of China, 69 FR 9804 (March 2, 2004) (Preliminary Results). Previously, on February 5, 2004, we sent New Donghua a third supplemental questionnaire, which also included a request for information from its U.S. importer. We received the response to the supplemental questionnaire on February 12, 2004. In the Preliminary Results, we noted that the response to the third supplemental questionnaire would be evaluated for the purposes of the final results of this review. In the memorandum entitled Bona Fide Nature of the Sale in the New Shipper Review of Hebei New Donghua Amino Acid Co., Ltd., dated February 24, 2004, and accompanying the Preliminary Results, we stated that, although questions remained about New Donghua's sale, we preliminarily concluded that its sale was bona fide, and that we would continue to examine the issue.

On May 3, 2004, we sent New Donghua a fourth supplemental questionnaire, which again included a request for information from its U.S. importer. We received New Donghua's response to this supplemental questionnaire in two submissions, one dated May 13, 2004, and the other dated May 20, 2004. On May 20, 2004, the Department extended the due date for the final results to July 23, 2004. See Notice of Extension of Time Limit of Final Results of New Shipper Review: Glycine from The People's Republic of China, 69 FR 29922 (May 26, 2004) (Final Extension Notice). In the Final Extension Notice, one of the reasons stated for extending the final results was the issue of the bona fide nature of New Donghua's sale.

We received case briefs from petitions (Dow Chemical Company and Chattem Chemicals, Inc.) and New Donghua on June 17, 2004, and on June 22, 2004, both parties filed rebuttal briefs. On June 30, 2004, we sent a letter to New Donghua stating that we were rejecting its case brief on the basis that is contained new factual information. On July 16, 2004, after evaluating comments from New Donghua and petitioners on the rejection issue, we confirmed our decision to reject New Donghua's case brief. New Donghua re-filed its case brief, minus the new factual information, on July 19, 2004.

In addition to commenting on the bona fide nature of New Donghua's U.S. sale, parties' briefs also addressed several other issues: (1) Whether the Department should continue to apply partial adverse facts available (AFA) to New Donghua as it did in the Preliminary Results, (2) whether the Department should apply total AFA to New Donghua, (3) what the Department should use as the surrogate value for monochloroacetic acid, (4) what the Department should use as the surrogate for the financial ratios, and (5) whether or not to include foremen in New Donghua's labor factor calculation. Since, as discussed below, we are rescinding this review, we need not address the parties' comments on these issues.

Scope of the Antidumping Duty Order

The product covered by this antidumping duty order is glycine, which is a free-flowing crystalline material, like salt or sugar. Glycine is produced at varying levels of purity and is used as a sweetener/taste enhancer, a buffering agent, reabsorbable amino acid, chemical intermediate, and a metal complexing agent. Glycine is currently classifiable under subheading 2922.49.4020 of the Harmonized Tariff Schedule of the United States (HTSUS). This order covers glycine of all purity levels. Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

Rescission of Review

The Department takes its responsibility to review the bona fides of new shipper sales very seriously. Therefore, we examine a number of factors, all of which may speak to the commercial realities surrounding the sale of subject merchandise. Our analysis of the bona fides of New Donghua's U.S. sale and our decision to rescind the new shipper review are based on the totality of the circumstances surrounding this single sale. Because much of the information necessary to our analysis of bona fides is business proprietary, we have addressed the bona fide issue and all of the parties' comments on bona fides in the Memorandum from Gary Taverman to James J. Jochum; The Bona Fides Analysis for Hebei New Donghua Amino Acid Co., Ltd.'s Sale in the New Shipper Review of Glycine from The People's Republic of China (Rescission Memo), issued concurrently with this notice. The Department has determined that the new shipper sale made by New Donghua was not bona fide because (1) the price for New Donghua's sale of glycine was not commercially reasonable when compared to the prices of other imports of glycine from the PRC and global market prices, (2) the quantity of New Donghua's glycine sale is low in comparison with other U.S. glycine imports from the PRC, and (3) the sale was not consistent with the normal business practices between a buyer and seller and was otherwise not commercially reasonable. Id. at 20-21. Taken as a whole, these facts lead the Department to conclude that the sale was not commercially reasonable or bona fide. As a result, we are rescinding this new shipper review.

Call Deposit Requirements

The Department will notify U.S. Customs and Border Protection (CBP) that bonding is no longer permitted to fulfill security requirements for shipments from New Donghua of glycine from the PRC entered, or withdrawn from warehouse, for consumption in the United States on or after the publication of this notice of rescission of antidumping duty new shipper review in the Federal Register. Further, effective upon publication of this notice for all shipments of the subject merchandise exported by New Donghua and entered, or withdrawn from warehouse, for consumption, the cash deposit rate will be the PRC-wide rate of 155.89 percent ad valorem.

Assessment of Antidumping Duties

The Department shall instruct CBP to assess antidumping duties on all appropriate entries. Since we are rescinding this antidumping duty new shipper review with respect to New Donghua, the PRC-wise rate of 155.89 percent in effect at the time of entry applies to all exports of glycine from the PRC by New Donghua entered or withdrawn from warehouse for consumption during the period of review (March 1, 2002, through February 28, 2003). The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of this notice of rescission of antidumping duty new shipper review.

Notification to Importers

This notice also serves as a reminder to importers of their responsibility under § 351.402(f) of the Department regulations 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 notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with section 351.305(a)(3) of the Department regulations. Timely written notification of the return/destruction of APO material 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 sanctions.

We are issuing and publishing this determination and notice in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Tariff Act of 1930, as amended.