China Glycine: Prelim AD Circumvention by 2 Indian Cos.

The International Trade Administration issued an affirmative preliminary determination that glycine processed by two Indian companies, Salvi Chemical Industries Limited and AICO Laboratories India Ltd., and exported to the U.S. is circumventing the antidumping duty order on glycine from China (A-570-836). The ITA also said the Indian company Paras Intermediates Pvt. Ltd. is not circumventing the order because it is producing glycine from raw materials of Indian origin and exporting such merchandise to the U.S. As a result of the comments made by the parties in the circumvention inquiry with respect to substantial transformation and country of origin, and as a result of its affirmative circumvention findings in light of prior scope determinations, the ITA is initiating a scope inquiry of Chinese-origin glycine processed into a purer grade glycine in India.

ITA Finds 2 Cos Circumventing AD Order on Glycine from China

The ITA made an affirmative preliminarily determination that two companies are circumventing the AD order on glycine from China, and a negative preliminary determination for another company, as follows:

Salvi. The ITA preliminary finds that Salvi has circumvented the AD order because: (1) the merchandise sold to the U.S. is within the same class or kind of merchandise subject to the AD order and was assembled or completed in a third country; (2) processing of the Chinese-origin glycine sold by Salvi is minor and insignificant; and (3) the value of the merchandise produced in China is a significant portion of the total value of the merchandise exported to the U.S..

AICO. With respect to AICO, the ITA preliminarily finds that, as a result of the ITA’s reliance on adverse facts available (AFA) due to AICO’s alleged lack of cooperation in this inquiry, all glycine produced by AICO, regardless of exporter or U.S. importer, should be included within the scope of the AD order.

Paras. With respect to Paras, the ITA preliminarily determines that Paras is not circumventing the AD order. According to the ITA, once Paras understood that its processing was deemed by the ITA to be not substantial to transform the product into Indian origin, it took steps to ensure that it would not continue to export Chinese-origin glycine to the U.S. The ITA said that, for about the past four years, Paras has only sold and/or exported to the U.S. glycine that it produced from Indian raw materials.

ITA Initiates Scope Inquiry on Substantial Transformation, Country of Origin Issues

The ITA said it previously determined that the type of processing described by Salvi does not change the country of origin of glycine and therefore the glycine remains within the scope of the AD order. However, the ITA recognizes that the scope determinations it references are company- and fact-specific. As a result of the comments made by the parties with respect to substantial transformation and country of origin, and as a result of its affirmative circumvention findings in light of prior scope determinations, the ITA said a broader scope inquiry in this case is warranted and is initiating a scope inquiry of Chinese-origin glycine processed into a purer grade glycine in India. Interested parties may submit comments by April 30, 2012.

Liquidation Suspended on Entries by Salvi & AICO on/after October 22, 2010

The ITA will direct U.S. Customs and Border Protection to suspend liquidation of all unliquidated entries of glycine produced by AICO or Salvi, regardless of exporter or U.S. importer, that were entered, or withdrawn from warehouse, for consumption on or after October 22, 2010, the date of initiation of the anti-circumvention inquiry. In light of its preliminary determination that Paras is not circumventing the AD order, the ITA will not instruct CBP to suspend liquidation for glycine produced by Paras for purposes of this preliminary determination.

China-Wide Cash Deposit Rate for Salvi & AICO on/after October 22, 2010

The ITA will also instruct CBP to require a cash deposit at the China-wise entity rate of 155.89% for all entries of glycine produced and/or exported by AICO and Salvi, unless AICO or Salvi can demonstrate to CBP that the Chinese glycine, which was processed by AICO or Salvi, was supplied by a Chinese manufacturer with its own rate. In that instance, the cash deposit rate will be the rate of the Chinese glycine manufacturer that has its own rate.

(The period of inquiry is the six years from 2005 through 2010. See notice for the scope of the order, reliance on AFA to determine AICO’s rate, etc. See ITT’s Online Archives 10102805 for summary of the initiation of this anti-circumvention inquiry.)

ITA Contact -- David Cordell (202) 482-0408