Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Creatine Monohydrate From the People's Republic of China

[Federal Register Volume 64, Number 146 (Friday, July 30, 1999)]
[Notices]
[Pages 41375-41380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-19609]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-852]


Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Creatine Monohydrate From the 
People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: July 30, 1999.

FOR FURTHER INFORMATION CONTACT: Blanche Ziv, Rosa Jeong, Annika O'Hara 
or Marian Wells, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
4207, (202) 482-3853, (202) 482-3798, and (202) 482-6309, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department of Commerce 
(``Department'') regulations are to the regulations at 19 CFR Part 351 
(April 1, 1998).

Preliminary Determination

    We preliminarily determine that creatine monohydrate (``creatine'') 
from the People's Republic of China (``PRC'') is being, or is likely to 
be, sold in the United States at less than fair value (``LTFV''), as 
provided in section 733 of the Act. The estimated margins of sales at 
LTFV are shown in the ``Suspension of Liquidation'' section of this 
notice.

Case History

    Since the initiation of this investigation on March 10, 1999 (64 FR 
11835), the following events have occurred:
    On March 29, 1999, the United States International Trade Commission 
(``ITC'') notified the Department of its affirmative preliminary injury 
determination in this case.
    On March 30, 1999, the Department requested comments on the scope 
of this investigation from the petitioner, the respondents, the PRC's 
Embassy in Washington, D.C., and the PRC Ministry of Foreign Trade and 
Economic Cooperation (``MOFTEC''). On April 2, April 5, and April 19, 
1999, we received comments on the scope from the petitioner and the 
respondents. Based on the parties' comments, the Department has revised 
the description of the scope of this investigation. Specifically, the 
Department removed from the scope language the Chemical Abstracts 
Service (``CAS'') registry number for anhydrous creatine, which is 
chemically distinguishable from creatine monohydrate, the product 
produced and sold by the petitioner. As described in the June 25, 1999 
memorandum from the Team to Deputy Assistant Secretary Richard W. 
Moreland (``Comments on Scope'') which is on file in Import 
Administration's Central Records Unit, Room B-099, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230, this change clarifies that the relief requested by petitioner is 
only with

[[Page 41376]]

respect to creatine monohydrate. The revised scope appears in the 
``Scope of Investigation'' section, below.
    On April 7, 1999, the Department issued an antidumping 
questionnaire to MOFTEC with instructions to forward the questionnaire 
to all producers/exporters of the subject merchandise and that these 
companies must respond by the due dates.
    On April 28, 1999, the Department asked the China Chamber of 
Commerce of Medicines & Health Products Importers & Exporters (``the 
Chamber'') to identify any producers/exporters of the subject 
merchandise in addition to the producers/exporters who had contacted 
the Department and the producers/exporters identified by the 
petitioner. We received a response from the Chamber on May 11, 1999.
    On April 29, 1999, the Department invited interested parties to 
provide publicly available information for valuing the factors of 
production and for surrogate country selection. We received responses 
on June 7 and June 16, 1999, and additional comments on June 14 and 
June 22, 1999.
    On May 10, and June 1, 1999, the Department received questionnaire 
responses from (1) Tianjin Tiancheng Pharmaceutical Co., Ltd. 
(``Tiancheng''); (2) Suzhou Sanjian Fine Chemical Co., Ltd. 
(``Sanjian''); (3) Blue Science International Trading (Shanghai) Co., 
Ltd. and Technical Sourcing International (``Blue Science''); (4) 
Nantong Medicines and Health Products Import and Export Co., Ltd. d/b/a 
Nantong Foreign Trade Corporation Medicine and Health Products 
Department (``Nantong''); (5) Shanghai Freemen International Trading 
Co., Ltd. and Shanghai Greenmen International Trading Co., Ltd. 
(``Freemen''); and (6) Jiangsu Shuang Qiang Chemical Co. and Wuxian 
Agricultural Chemical Factory (``SQ''). Tiancheng and Sanjian both 
produce and export the subject merchandise to the United States, 
whereas Blue Science, Nantong, and Freemen are exporters and SQ is 
solely a producer. We issued supplemental questionnaires on June 15, 
June 16, June 21, and June 22, 1999, to which we received responses on 
June 22, June 28, and July 6, 1999.
    On May 20, 1999, Shanghai Desano International Trading Co., Ltd. 
(``Desano'') requested that it be considered a respondent in this 
investigation. On May 26, 1999, we sent an antidumping questionnaire to 
Desano to which we received a response on June 30, 1999. Desano is 
solely an exporter of the subject merchandise.
    On April 8, 1999, and May 12, 1999, pursuant to the allegation of 
critical circumstances contained in the petition, the Department 
requested information regarding shipments of creatine from all 
respondents participating in this investigation. We received the 
requested information on May 13 and May 14, 1999. The critical 
circumstances analysis for the preliminary determination is discussed 
below under ``Critical Circumstances.''

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on July 19 and July 21, 
1999, several respondents requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination after the date of the 
publication of an affirmative preliminary determination in the Federal 
Register. In accordance with 19 CFR 351.210(b), because (1) our 
preliminary determination is affirmative, (2) the requesting exporters 
account for a significant proportion of exports of the subject 
merchandise, and (3) no compelling reasons for denial exist, we are 
granting the respondents' request and are postponing the final 
determination until no later than 135 days after the publication of 
this notice in the Federal Register. Suspension of liquidation will be 
extended accordingly.

Scope of Investigation

    For purposes of this investigation, the product covered is creatine 
monohydrate, which is commonly referred to as ``creatine.'' The 
chemical name for creatine monohydrate is N-(aminoiminomethyl)-N-
methylgycine monohydrate. The Chemical Abstracts Service 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. Creatine monohydrate is 
provided for in subheading 2925.20.90 of the Harmonized Tariff Schedule 
of the United States (``HTSUS''). Although the HTSUS subheading and CAS 
registry number are provided for convenience and customs purposes, the 
written description of the merchandise under investigation is 
dispositive.

Period of Investigation

    The period of this investigation (``POI'') comprises each 
exporter's two most recent fiscal quarters prior to the filing of the 
petition, i.e., July 1 through December 31, 1998.

Nonmarket Economy Country and Market Oriented Industry Status

    The Department has treated the PRC as a nonmarket economy (``NME'') 
country in all past antidumping investigations (see, e.g., Final 
Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255 (December 
31, 1998) (``Mushrooms'')). A designation as an NME remains in effect 
until it is revoked by the Department (see section 771(18)(C) of the 
Act).
    The respondents in this investigation have not requested a 
revocation of the PRC's NME status. We have, therefore, preliminarily 
determined to continue to treat the PRC as an NME.

Separate Rates

    All the respondents, except SQ (which is not an exporter), have 
requested a separate company-specific rate. Blue Science has stated 
that it is a trading company which is wholly-owned by persons in Hong 
Kong. Therefore, in accordance with our past practice, we preliminarily 
determine that this exporter qualifies for a separate rate and that no 
separate rates analysis is required for Blue Science (see, e.g., Final 
Determination of Sales at Less Than Fair Value: Bicycles from the 
People's Republic of China, 61 FR 19026 (April 30, 1996) (``Bicycles 
from the PRC'')). The other respondents which have requested a separate 
rate have stated that they are privately owned companies with no 
element of government ownership or control.
    The Department's separate rate test is not concerned, in general, 
with macroeconomic/border-type controls, e.g., export licenses, quotas, 
and minimum export prices, particularly if these controls are imposed 
to prevent dumping. The test focuses, rather, on controls over the 
investment, pricing, and output decision-making process at the 
individual firm level. See Certain Cut-to-Length Carbon Steel Plate 
from Ukraine: Final Determination of Sales at Less than Fair Value, 62 
FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 
61279 (November 17, 1997); and Honey from the People's Republic of 
China: Preliminary Determination of Sales at Less than Fair Value, 60 
FR 14725, 14726 (March 20, 1995) (``Honey'').
    To establish whether a firm is sufficiently independent from 
government control to be entitled to a

[[Page 41377]]

separate rate, the Department analyzes each exporting entity under a 
test arising out of the Final Determination of Sales at Less Than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991) and Mushrooms. Under the separate rates criteria, the 
Department assigns separate rates in NME cases only if the respondents 
can demonstrate the absence of both de jure and de facto governmental 
control over export activities.
1. Absence of De Jure Control
    The respondents have placed on the record a number of documents to 
demonstrate absence of de jure government control, including the 
``Foreign Trade Law of the People's Republic of China'' (``Foreign 
Trade Law'') and the ``Company Law of the People's Republic of China'' 
(``Company Law'').
    In prior cases, the Department has analyzed the Foreign Trade Law 
and found that it establishes an absence of de jure control. (See, 
e.g., Final Determination of Sales at Less Than Fair Value: Certain 
Partial-Extension Steel Drawer Slides with Rollers from the People's 
Republic of China, 60 FR 54472 (October 24, 1995); see also Mushrooms.) 
We have no new information in this proceeding which would cause us to 
reconsider this determination. For the purposes of this investigation 
and in prior cases, the Department has also analyzed the Company Law 
and found that this law establishes mechanisms for private control of 
companies which indicate an absence of de jure control. See Notice of 
Preliminary Results of New Shipper Review: Freshwater Crawfish Tail 
Meat from the People's Republic of China, 64 FR 8543, 8544 (February 
22, 1999).
    According to the respondents, creatine exports are not affected by 
quota allocations or export license requirements. The producers/
exporters claim to have the autonomy to set the price at whatever level 
they wish through independent price negotiations with their foreign 
customers without government interference.
    Accordingly, we preliminarily determine that, within the creatine 
industry, there is an absence of de jure government control over export 
pricing and marketing decisions of firms.
2. Absence of De Facto Control
    As stated in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. (See 
Mushrooms.) Therefore, the Department has determined that an analysis 
of de facto control is critical in determining whether respondents are, 
in fact, subject to a degree of governmental control which would 
preclude the Department from assigning separate rates.
    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) whether the export prices are set by, or 
subject to, the approval of a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of its management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses (see Mushrooms).
    Tiancheng, Sanjian, Nantong, Freemen, and Desano have each asserted 
the following: (1) they establish their own export prices; (2) they 
negotiate contracts without guidance from any governmental entities or 
organizations; (3) they make their own personnel decisions; and (4) 
they retain the proceeds of their export sales and use profits 
according to their business needs without any restrictions. 
Additionally, these five respondents have stated that they do not 
coordinate or consult with other exporters regarding their pricing. 
This information supports a preliminary finding that there is an 
absence of de facto governmental control of the export functions of 
these companies. Consequently, we preliminarily determine that all 
responding exporters have met the criteria for the application of 
separate rates.

Use of Facts Available

PRC-Wide Rate

    Information on the record of this investigation indicates that 
there may be producers/exporters of the subject merchandise in the PRC 
in addition to the companies participating in this investigation. Also, 
U.S. import statistics indicate that the total quantity of U.S. imports 
of creatine from the PRC is greater than the total quantity of creatine 
exported to the U.S. as reported by all PRC creatine exporters that 
submitted responses in this investigation. Given this discrepancy, it 
appears that not all PRC exporters of creatine responded to our 
questionnaire. Accordingly, we are applying a single antidumping 
deposit rate--the PRC-wide rate--to all exporters in the PRC, other 
than those specifically identified below under ``Suspension of 
Liquidation,'' based on our presumption that the export activities of 
the companies that failed to respond to the Department's questionnaire 
are controlled by the PRC government (see, e.g., Bicycles from the 
PRC).
    As explained below, this PRC-wide antidumping rate is based on 
adverse facts available. Section 776(a)(2) of the Act provides that 
``if an interested party or any other person--(A) withholds information 
that has been requested by the administering authority or the 
Commission under this title, (B) fails to provide such information by 
the deadlines for submission of the information or in the form and 
manner requested, subject to subsections (c)(1) and (e) of section 782, 
(C) significantly impedes a proceeding under this title, or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority and the 
Commission shall, subject to section 782(d), use the facts otherwise 
available in reaching the applicable determination under this title.''
    Section 776(b) of the Act provides that adverse inferences may be 
used when a party has failed to cooperate by not acting to the best of 
its ability to comply with a request for information. The exporters 
that decided not to respond in any form to the Department's 
questionnaire failed to act to the best of their ability in this 
investigation. Further, absent a response, we must presume government 
control of these and all other PRC companies for which we cannot make a 
separate rates determination. Thus, the Department has determined that, 
in selecting from among the facts otherwise available, an adverse 
inference is warranted.
    As adverse facts available, we are assigning the highest margin in 
the petition, 153.7 percent, which is higher than any of the calculated 
margins.
    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' such as the petition, the Department shall, 
to the extent practicable, corroborate that information from 
independent sources reasonably at the Department's disposal. The 
Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 
103-316 (1994) (SAA), states that ``corroborate'' means to determine 
that the information used has probative value. See SAA at 870.
    The petitioner's methodology for calculating export price (``EP'') 
and normal value (``NV'') is discussed in the

[[Page 41378]]

Notice of Initiation. To corroborate the petitioner's EP calculations, 
we compared the prices in the petition for the product to the prices 
submitted by respondents for the same product in similar volumes. To 
corroborate the petitioner's NV calculations, we compared the 
petitioner's factor consumption and surrogate value data for the 
product to the data reported by the respondents for the most 
significant factors--chemical inputs, factory overhead, and selling, 
general, and administrative expenses--and the surrogate values for 
these factors in the petition to the values selected for the 
preliminary determination, as discussed below. Our analysis showed 
that, in general, the petitioner's data was reasonably close to the 
data submitted by the respondents or to the surrogate values chosen by 
the Department. (See memorandum to the file dated July 22, 1999 
(``Corroboration Memo'').) Based on our analysis, we find that the 
calculations set forth in the petition have probative value.

Company-Specific Rates--Partial Facts Available

    Freemen claims that despite its repeated demands, one of its 
suppliers has refused to provide factors of production data to Freemen. 
According to Freemen, this supplier, who supplied a relatively small 
percentage of creatine sold by Freemen, has indicated that it will not 
participate in any way in this investigation. Freemen has provided all 
factors of production data from its other suppliers. Similarly, Blue 
Science asserts that one of its suppliers, which accounts for a small 
percentage of creatine sold by Blue Science, only produced the subject 
merchandise on a trial basis and has since terminated production. As 
such, the supplier was not able to provide complete factors of 
production data to Blue Science.
    We preliminarily determine that the use of adverse facts available 
is warranted where the factors of production are missing or unusable. 
Because certain producers of the subject merchandise neither provided 
complete and accurate factors of production information nor 
demonstrated satisfactorily why this is not possible, we find that 
these interested parties have not cooperated to the best of their 
abilities. Accordingly, as adverse facts available, we have applied a 
margin of 153.70 percent, the highest margin from the petition, to 
those sales for which we did not have complete factors of production.

Fair Value Comparisons

    To determine whether sales of the subject merchandise by Tiancheng, 
Sanjian, Blue Science, Nantong, Freemen, and Desano to the United 
States were made at LTFV, we compared the EP to the NV, as described in 
the ``Export Price'' and ``Normal Value'' sections of this notice, 
below. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
compared POI-wide weighted-average EPs to weighted-average NVs.

Export Price

    We used EP methodology in accordance with section 772(a) of the 
Act, because the subject merchandise was sold directly to unaffiliated 
customers in the United States prior to importation and CEP methodology 
was not otherwise appropriate. We calculated EP based on packed CIF or 
C&F prices to the first unaffiliated purchaser in the United States. 
Where appropriate, we made deductions from the starting price (gross 
unit price) for billing adjustments, inland freight from the plant/
warehouse to port of exit, brokerage and handling in the PRC, marine 
insurance and ocean freight. Because certain domestic brokerage and 
handling, marine insurance, and inland freight were provided by NME 
companies, we based those charges on surrogate rates from India. (See 
``Normal Value'' section for further discussion.)

Normal Value

1. Surrogate Country
    Section 773(c)(4) of the Act requires the Department to value the 
NME producer's factors of production, to the extent possible, in one or 
more market economy countries that: (1) are at a level of economic 
development comparable to that of the NME, and (2) are significant 
producers of comparable merchandise. The Department has determined that 
India, Pakistan, Sri Lanka, Egypt, Indonesia, and the Philippines are 
countries comparable to the PRC in terms of overall economic 
development (see memorandum from Jeff May, Director, Office of Policy, 
to Susan Kuhbach, Senior Director, AD/CVD Enforcement, Office 1, March 
26, 1999). According to the available information on the record, we 
have determined that both India and Indonesia are significant producers 
of comparable merchandise. Although we have no information to indicate 
that India and Indonesia produce creatine, they do produce other 
products within the same customs heading and produce other fine 
chemicals with nutritional characteristics. Of these two countries, 
India produces and exports more merchandise than Indonesia under United 
National Standard International Trade Classification Revised number 
514.82, ``carboxyamide-function compounds (including saccharin and its 
salts) and imine-function compounds,'' the heading which includes 
creatine. Accordingly, we have calculated NV using mainly Indian 
values, and in some cases Indonesian values, for the PRC producers' 
factors of production. We have obtained and relied upon publicly 
available information wherever possible.
2. Factors of Production
    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by the companies in the PRC 
which produced creatine for the exporters that sold creatine to the 
United States during the POI. To calculate NV, the reported unit factor 
quantities were multiplied by publicly available Indian and Indonesian 
values.
    In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data. As appropriate, we 
adjusted input prices to make them delivered prices. Where a producer 
did not report the distance between the material supplier and the 
factory, as facts available, we used either the distance to the nearest 
seaport (if an import value was used as the surrogate value for the 
factor) or the farthest distance reported for a supplier. Where 
distances were reported, we added to Indian CIF surrogate values a 
surrogate freight cost using the shorter of the reported distances from 
either the closest PRC port to the PRC factory, or from the domestic 
supplier to the factory. This adjustment is in accordance with the 
CAFC's decision in Sigma Corp. v. United States, 117 F. 3d 1401 
(Fed.Cir. 1997). For those values not contemporaneous with the POI and 
quoted in a foreign currency, we adjusted for inflation using wholesale 
price indices published in the International Monetary Fund's 
International Financial Statistics.
    Many of the inputs in the production and packing of creatine are 
considered business proprietary data by the respondents. Due to the 
proprietary nature of this data, we are unable to discuss many of the 
inputs in this preliminary determination notice. For a complete 
analysis of surrogate values, see the memorandum from the Team to the 
file (``Factors of Production Memorandum''), dated July 22, 1999.
    We valued labor using the method described in 19 CFR 351.408(c)(3).

[[Page 41379]]

    To value electricity, we used the 1995 electricity rates reported 
in the publication Energy Prices and Taxes, 4th quarter 
1998. We based the value of coal on prices reported in Energy Prices 
and Taxes, 2nd quarter 1998.
    We based our calculation of factory overhead, SG&A, and profit on 
1992-93 data from the ``Expenditures and Appropriations'' section of 
the accounts of ``Processing and Manufacturing, Chemicals and products 
thereof'' from the Reserve Bank of India Bulletin, January 1997.
    To value truck freight rates, we used a 1994 rate from The Times of 
India. For inland water transportation, we valued boat and barge 
transportation using the surrogate values found in an August 1993 cable 
from the US Embassy Bombay. With regard to rail freight, we based our 
calculation on information from the Indian Railway Conference 
Association.
    For packing materials we used import values from the Monthly 
Foreign Trade Statistics of India; Volume II Imports.

Critical Circumstances

    In the February 12, 1999 petition, the petitioner alleged that 
there is a reasonable basis to believe or suspect that critical 
circumstances exist with respect to imports of creatine from the PRC. 
In addition, the petitioner requested that the Department issue its 
preliminary critical circumstances finding on an expedited basis 
because importers, exporters and producers had an early warning of the 
proceeding prior to the filing of the petition. The basis for 
petitioner's contention was that PRC parties had advance knowledge of 
the petition through a press release dated January 25, 1999, from a 
public relations firm's website. The press report stated that the 
petitioner would be filing an antidumping petition with the Department 
and the ITC in order to seek the imposition of substantial, triple 
digit dumping duties on all importers of creatine from China.
    We examined whether conditions in the industry and published 
reports and statements provided a basis for inferring knowledge that a 
proceeding was likely. We preliminarily determine that the January 25, 
1999 press report cited by the petitioner is insufficient to show that 
such information was widely available. Our research of Lexis-Nexis and 
Internet inquiries revealed nothing to indicate that the press release 
was reported by any publication. Moreover, the petitioner did not 
provide the Department with further documentation to support its 
allegation. Therefore, because there is insufficient evidence on the 
record indicating the likelihood of a proceeding concerning imports of 
creatine from the PRC, we have not made an expedited critical 
circumstances determination.
    On April 8, 1999, the Department requested information regarding 
shipments of creatine for the period September 1998 to June 1999 from 
all respondents participating in this investigation. On May 13, May 14, 
May 20 and July 6, 1999, we received the requested information from 
Tiancheng, Sanjian, Blue Science, Nantong, Freemen and Desano. The 
information submitted by Desano was limited to shipment data for the 
period August 1998 to December 1998. Despite our subsequent request for 
shipment data for the remaining time period (i.e., January 1999 to June 
1999), Desano did not provide any additional information. On May 25, 
1999, the petitioner argued that, based on the information submitted, 
critical circumstances existed with respect to imports by Freemen.
    Section 733(e)(1) of the Act provides that the Department will 
determine that critical circumstances exist if there is a reasonable 
basis to believe or suspect that: (A)(i) there is a history of dumping 
and material injury by reason of dumped imports in the United States or 
elsewhere of the subject merchandise, or (ii) the person by whom, or 
for whose account, the merchandise was imported knew or should have 
known that the exporter was selling the subject merchandise at less 
than its fair value and that there was likely to be material injury by 
reason of such sales, and (B) there have been massive imports of the 
subject merchandise over a relatively short period.
    With respect to the first criterion, we are not aware of any 
antidumping order in any country on creatine from the PRC. Therefore, 
we examined whether there was importer knowledge. In determining 
whether there is a reasonable basis to believe or suspect that an 
importer knew or should have known that the exporter was selling 
creatine at less than fair value and thereby causing material injury, 
the Department must rely on the facts before it at the time the 
determination is made. The Department normally considers margins of 25 
percent or more and a preliminary ITC determination of material injury 
sufficient to impute knowledge of dumping and the likelihood of 
resultant material injury.
    On April 7, 1999, the ITC preliminary determination found that 
there was a reasonable indication that the U.S. industry is materially 
injured. See, Creatine Monohydrate from the People's Republic of China, 
64 FR 16998 (April 7, 1999). Therefore, with respect to the PRC, we 
preliminarily determine that there is a reasonable basis to believe or 
suspect that importers knew or should have known that material injury 
from the dumped merchandise was likely.
    In determining whether there are ``massive imports'' over a 
``relatively short time period'', the Department ordinarily bases its 
analysis on import data for at least the three months preceding (the 
``base period'') and following (the ``comparison period'') the filing 
of the petition. Imports normally will be considered massive when 
imports during the comparison period have increased by 15 percent or 
more compared to imports during the base period. The Department 
examines respondent-specific shipment information or aggregate import 
statistics when respondent-specific shipment information is not 
available.
    To determine whether imports of subject merchandise have been 
massive over a relatively short period, we compared each respondent's 
export volume for five months prior to the filing of the petition 
(September 1998 to January 1999) to that during the five months 
subsequent to the filing of the petition (February 1999 to June 1999). 
These periods were selected based on the Department's practice of using 
the longest period for which information is available from the month 
that the petition was submitted through the date of the preliminary 
determination. For all other exporters, we performed the analysis using 
import statistics.
    Based on our analysis, we preliminarily determine that the increase 
in imports was greater than 15 percent for Freemen and for all 
producers/exporters of subject merchandise who were not analyzed or who 
failed to submit a response. As explained above, one respondent--
Desano--did not comply with our request for shipment data for the 
period January 1999 to June 1999. Accordingly, we find that the 
information Desano submitted is so incomplete that it cannot serve as a 
reliable basis for reaching a determination regarding massive imports 
in this investigation. Therefore, pursuant to section 782(e) of the 
Act, we preliminarily determine that there were massive imports with 
respect to Desano based on adverse facts available. With regard to the 
other four respondents, Tiancheng, Nantong, San Jian, and Blue Science, 
we find that the increase in imports was not greater than 15 percent. 
See Memorandum from Team to Richard W. Moreland, Deputy Assistant 
Secretary, AD/CVD Enforcement Group I (``Critical

[[Page 41380]]

Circumstances Determination''), dated July 22, 1999.
    On this basis, we preliminarily determine that critical 
circumstances exist for Freemen, Desano and all other PRC exporters 
except Tiancheng, Nantong, San Jian, and Blue Science.
    We will make a final determination concerning critical 
circumstances when we make our final determination of this 
investigation.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all imports of subject 
merchandise from the PRC entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of this notice in the 
Federal Register. In addition, for Desano and Freemen, as well as for 
companies subject to the PRC-wide rate, we are directing Customs to 
suspend liquidation of any unliquidated entries of subject merchandise 
entered, or withdrawn from warehouse, for consumption on or after the 
date 90 days prior to the date of publication of this notice in the 
Federal Register. We will instruct the Customs Service to require a 
cash deposit or the posting of a bond equal to the weighted-average 
amount by which the NV exceeds the EP, as indicated in the chart below. 
These suspension of liquidation instructions will remain in effect 
until further notice.

------------------------------------------------------------------------
                                        Weighted-
       Exporter/manufacturer         average margin        Critical
                                       percentage       circumstances
------------------------------------------------------------------------
Blue Science International Trading           121.36  No.
 (Shanghai) Co., Ltd.
Nantong Medicines and Health                   1.63  No.
 Products Import and Export Co.,
 Ltd.
Shanghai Desano International                 58.82  Yes.
 Trading Co., Ltd.
Shanghai Freemen International               139.15  Yes.
 Trading Co., Ltd., and Shanghai
 Greenmen International Trading
 Co., Ltd.
Suzhou Sanjian Fine Chemical Co.,            152.67  No.
 Ltd.
Tianjin Tiancheng Pharmaceutical               3.54  No.
 Co., Ltd.
PRC-wide Rate......................          153.70  Yes.
------------------------------------------------------------------------

    The PRC-wide rate applies to all entries of the subject merchandise 
except for entries from exporters/factories that are identified 
individually above.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry.

Public Comment

    Case briefs or other written comments in six copies must be 
submitted to the Assistant Secretary for Import Administration no later 
than November 17, 1999, and rebuttal briefs no later than November 22, 
1999. A list of authorities used and an executive summary of issues 
should accompany any briefs submitted to the Department. Such summary 
should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, the hearing 
will be held on November 29, 1999 at the U.S. Department of Commerce, 
14th Street and Constitution Avenue, N.W., Washington, D.C. 20230. 
Parties should confirm by telephone the time, date, and place of the 
hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs. If 
this investigation proceeds normally, we will make our final 
determination not later then 135 days after the publication of this 
notice in the Federal Register.
    This determination is issued and published in accordance with 
sections 733(d) and 777(i)(1) of the Act.

    Dated: July 22, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-19609 Filed 7-29-99; 8:45 am]
BILLING CODE 3510-DS-P