67 FR 10892, March 11, 2002 A-570-852 First Administrative Review POR: 07/30/99 - 01/31/01 Public Document shk x 3464 MEMORANDUM DATE: March 6, 2002 TO: Faryar Shirzad Assistant Secretary for Import Administration FROM: Richard W. Moreland Deputy Assistant Secretary, Group I Import Administration SUBJECT: Issues and Decision Memorandum for the Final Results of the Antidumping Duty Administrative Review of Creatine Monohydrate from the People's Republic of China ________________________________________________________________________ SUMMARY We have analyzed the comments in the case brief submitted by the respondent, Blue Science International Trading (Shanghai) Co., Ltd. in the antidumping duty administrative review of creatine monohydrate from the People's Republic of China ("PRC"). As a result of our analysis, we have made changes, including corrections of clerical errors, in the margin calculations. We recommend that you approve the positions we have developed in the Discussion of the Issues section of this memorandum. Below is the complete list of the issues in this review for which we received comments from the parties: Comment 1: Use of Import Prices v. Domestic Prices in India to Value Certain Inputs Comment 2: Adjusting CIF Import Values to Remove International Freight Comment 3: Correction of Ministerial Error BACKGROUND The merchandise covered by this order is creatine monohydrate, which is commonly referred to as "creatine." The chemical name for creatine monohydrate is N - (aminoiminomethyl) - N - methylglycine monohydrate. The Chemical Abstracts Service ("CAS") registry number for this product is 6020-87-7. Creatine monohydrate in its pure form is a white, tasteless, odorless powder, that is a naturally occurring metabolite found in muscle tissue. This administrative review was requested by Blue Science International Trading (Shanghai) Co., Ltd. ("Blue Science"). The period of review ("POR") is July 30, 1999 through January 31, 2001. In Creatine Monohydrate from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 66 FR 56054 (November 6, 2001) ("Preliminary Results"), we invited parties to submit case briefs. We received comments only from Blue Science. DISCUSSION OF ISSUES Comment 1: Use of Import Prices v. Domestic Prices in India to Value Certain Inputs In the Preliminary Results, the Department used import prices into India to value certain proprietary inputs. Blue Science argues that the Department should not use import values and instead should rely on domestic prices in India, as reported in Chemical Weekly to value these inputs. Citing to Pure Magnesium from the People's Republic of China: Final Results of Antidumping Duty New Shipper Administrative Review, 63 FR 3085, 3087 (January 21, 1998) ("Magnesium from the PRC"), Blue Science claims that the Department has stated a preference for using domestic prices over import prices. Although that preference is not unconditional, Blue Science notes that the Department provided no reasoning to support its rejection of the domestic prices Blue Science submitted in this review. Further, Blue Science points out that there is ample supply of these inputs in India, and that Blue Science sources these inputs domestically (in China). Presumably this occurs because domestic prices are lower than the import prices, as they are in India, according to Blue Science. Because domestic sourcing best reflects the actual experience of the respondent, Blue Science argues that it makes sense for the Department to use domestic Indian values for these inputs. Finally, Blue Science points to the requirement in 19 U.S.C. §1677b(c)(1)(B) that factors be valued using the "best available information." In this respect, the Department has stated that must make product- and case-specific decisions as to what the best information is for valuing an input. (See "Issues and Decision Memorandum for the Final Results of the Antidumping Duty Administrative Review of Potassium Permanganate from the People's republic of China - January 1, 1999 through December 31, 1999" (September 7, 2001) at Comment 13.) By failing to provide any reasoning for its decision to use import values, the Department cannot say that it has used the best available information. Department's Position: Blue Science correctly points out that the Department does not have an unconditional preference for using domestic prices over import prices to value factors of production. As the cited decision, Magnesium from the PRC, makes clear, we do not use domestic prices unless they are reported net of taxes (or the taxes can be removed). Similarly, where high tariffs are in place and domestic prices are distorted as a consequence, we have used import prices. (See, e.g., Notice of Final Determination of Sales at Less than Fair Value: Bulk Aspirin from the People's Republic of China, 65 FR 39598 (May 25, 2000) and accompanying "Issues and Decision Memorandum" at Comment 1.) We have reviewed the domestic and import prices that were on the record at the time of the Preliminary Results. Regarding the domestic prices submitted by Blue Science, while they were contemporaneous with the POR, they covered only certain months. Using data from Indian Chemical Weekly, we have added domestic prices to cover more of the POR. Based on the more complete data, we find that there is no consistent pattern of domestic prices being lower than the import prices. However, the domestic prices (net of taxes) are lower than or roughly equal to the import prices. Consequently, it is clear that the domestic prices are not distorted by reason of high tariffs. Thus, we have used the domestic prices (including the prices we added). Comment 2: Adjusting CIF Import Values to Remove International Freight Blue Science argues that if the Department continues to use import prices to value certain factors of production, then the Department should remove international freight from these CIF values to reflect that fact that Blue Sciences sources all of its inputs domestically. Department's Position: Because we have used domestic prices for the input values discussed in Comment 1, we do not need to address Blue Science's argument. Comment 3: Correction of Ministerial Error Blue Science requests that the Department correct a ministerial error made in calculating the surrogate value for one input (which is proprietary). Department's Position: We agree that the error identified by Blue Science is a ministerial error, and we have corrected the value for these final results. RECOMMENDATION Based on our analysis of the comments received, we recommend adopting all of the above positions and adjusting all related margin calculations accordingly. If these recommendations are accepted, we will publish the final results in the Federal Register. AGREE ____ DISAGREE ____ ______________________ Faryar Shirzad Assistant Secretary for Import Administration ______________________ (Date)