NOTICES
DEPARTMENT OF COMMERCE
International Trade Administration
(C-533-807)
Preliminary Affirmative Countervailing Duty Determination: Sulfanilic Acid From
India
Tuesday, August 11, 1992
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AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: August 11, 1992.
FOR FURTHER INFORMATION CONTACT:Rick Herring or Magd Zalok, Office of
Countervailing Investigations, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue,
NW., Washington, DC 20230; telephone: (202) 377-3530 or (202) 377-4162, respectively.
PRELIMINARY DETERMINATION:
Case History
On June 3, 1992, the Department published its notice of initiation of the countervailing
duty investigation on sulfanilic acid from India (57 FR 23384). Since initiation of this
investigation, the following events have occurred. On June 9, 1992, we presented
questionnaires to the Government of India. On June 22, 1992, the United States
International Trade Commission (ITC) issued its preliminary determination that imports of
sulfanilic acid from India threaten material injury to a U.S. industry. On July 20, 1992, we
received a response to our questionnaire from the Government of India. On July 29, 1992,
we received a response from one Indian producer/exporter of sulfanilic acid.
Scope of Investigation
The products covered by this investigation are all grades of sulfanilic acid, which includes
technical (or crude) sulfanilic acid, refined (or purified) sulfanilic acid, and refined sodium
salt or sulfanilic acid (sodium sulfanilate).
Sulfanilic acid is a synthetic organic chemical produced from the direct sulfonation of
aniline with 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 relate to the amount of undesirable, residual aniline and
alkali insoluble materials that are present in the sulfanilic acid. All grades are available as
dry, free flowing powders.
Technical sulfanilic acid, classified under the subheading 2921.42.20 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
classified under HTS subheading 2921.42.24.20 contains 98 percent minimum sulfanilic
acid, 0.5 percent maximum aniline, and 0.25 percent maximum alkali insoluble materials.
Refined sodium salt or sulfanilic acid (sodium sulfanilate), classified under HTS subheading
2921.42.70, is a granular or crystalline material containing 75 percent minimum
equivalent sulfanilic acid, 0.5 percent maximum aniline, 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, our
written description of the merchandise subject to this investigation is dispositive.
Analysis of the Programs
We did not receive responses to our questionnaire from any producer or exporter of
sulfanilic acid from India until July 29, 1992, when we received one response. Due to the
lateness of the questionnaire response, we are unable to analyze and use it for purposes of
this preliminary determination. Therefore, in accordance with 19 CFR 355.37, best
information available was used to calculate the estimated net subsidy conferred upon the
production and exportation of sulfanilic acid from India.
We used information provided by the petitioner in its petition as best information available.
Petitioner estimated that the net subsidy conferred on the production and exportation of
sulfanilic acid was 43.71 percent ad valorem. Petitioner based this estimation on the
Preliminary Affirmative Countervailing Duty Determination: Bulk Ibuprofen From
India (Ibuprofen) (56 FR 66432, December 23, 1991). In support of this estimation,
petitioner stated that "ibuprofen and sulfanilic acid are similar in that they are both organic
chemicals requiring similar manufacturing facilities and chemical synthesis steps to arrive
at the finished product." Petitioner further stated that it is "reasonable to expect that if these
subsidies are available to ibuprofen production and exportation in India that the same
subsidies are available to the production and exportation of sulfanilic acid."
Although the petitioner's estimation of the subsidy was based on a preliminary
determination, the Department believes that the Ibuprofen determination constitutes the
best information available to determine the estimated net subsidy conferred upon the
production and exportation of Indian sulfanilic acid. Both products, ibuprofen and
sulfanilic acid, are part of the chemicals industry, while other recently completed
Department investigations and administrative reviews focused on products which are part
of the steel and metals industry. The major subsidy program in those investigations was the
"International Price Reimbursement Scheme (IPRS)," which provided Indian companies
with rebates based on the difference between higher domestic and lower international
prices for steel inputs. Clearly, this program is not applicable to the chemicals industry.
More importantly, there are similarities in the manufacturing facilities and processes for
ibuprofen and sulfanilic acid which suggest that the level of subsidization found in
Ibuprofen is the most appropriate source of best information available. The major subsidy
program found in Ibuprofen was the "Import Duty Exemptions Available Through Advance
Licenses," a program also alleged in the present investigation. Under this program, advance
licenses are available to exporters to enable them to import raw material inputs used in the
production of exports duty-free. In Ibuprofen, we found that some of the chemicals
imported duty-free by producers or ibuprofen were not physically incorporated into the
product. We calculated the subsidy for this program to be 33.72 percent. Information on
the record of this investigation indicates that producers of sulfanilic acid use this program
to import an input, aniline, duty-free. In addition,
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information on the record of this
investigation indicates that aniline is not physically incorporated into sulfanilic acid for
purposes of the countervailing duty law. Therefore, the program used in Ibuprofen
which accounted for approximately 80 percent of the duty deposit rate appears also to be
providing a similar benefit to Indian producers of sulfanilic acid.
For these reasons, we believe that the estimated net subsidy calculated in Ibuprofen
constitutes best information available. Therefore, we determine an estimated net subsidy of
43.71 percent ad valorem for all producers and exporters in India of sulfanilic acid.
Suspension of Liquidation
In accordance with section 703(d) of the Tariff Act of 1930, as amended (the Act), we are
directing the U.S. Customs Service to suspend liquidation of all entries of sulfanilic acid
from India which are entered, or withdrawn from warehouse, for consumption, on or after
the date of publication of this notice in the Federal Register, and to require a cash deposit or
bond for all entries of this merchandise equal to 43.71 percent ad valorem for sulfanilic acid
from all producers and exporters in India.
ITC Notification
In accordance with section 703(f) of the Act, we will notify the ITC of our determination. In
addition, we are making available to the ITC all nonprivileged and nonproprietary
information relating to this investigation. We will allow the ITC access to all privileged and
business proprietary information in our files provided that the ITC confirms that it will not
disclose such information, either publicly or under an administrative protective order,
without the written consent of the Deputy Assistant Secretary for Investigations, Import
Administration.
Our final determination is scheduled for October 15, 1992. If our final determination is
affirmative, the ITC will make its final determination within 45 days after the Department's
final determination.
Public Comment
In accordance with 19 CFR 355.38, we will hold a public hearing, if requested, on September
24, 1992, at 10:30 p.m. in Room 1617M-4, to afford interested parties the opportunity to
comment on this preliminary determination. Interested parties who wish to request or to
participate in the hearing must submit a request within ten days of the publication of this
notice in the Federal Register to the Assistant Secretary for Import Administration, U.S.
Department of Commerce, room B-099, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230. Requests should contain: (1) The party's name, address, and
telephone number; (2) the number of participants; (3) the reason for attending; and (4) a list
of issues to be discussed. Parties should confirm by telephone the time, date, and place of
the hearing 48 hours before the scheduled time.
In addition, ten copies of the business proprietary version and five copies of the
non-proprietary version of the case briefs must be submitted to the Assistant Secretary no
later than September 14, 1992. Ten copies of the business proprietary version and five
copies of the non-proprietary version of rebuttal briefs must be submitted to the Assistant
Secretary no later than September 21, 1992. An interested party may make an affirmative
presentation only on arguments included in that party's case or rebuttal brief. If no hearing
is requested, interested parties still may comment on these preliminary results in the form
of case and rebuttal brief. Written arguments should be submitted in accordance with
355.38 of the Commerce Department's regulations and will be considered if received within
the time limits specified above.
This determination is published pursuant to section 703(f) of the Act (19 U.S.C. 1671b(f))
and 19 CFR 355.15.
Dated: July 31, 1992.
Alan M. Dunn,
Assistant Secretary for Import Administration.
(FR Doc. 92-18960 Filed 8-10-92; 8:45 am)
BILLING CODE 3510-DS-M