[Federal Register Volume 60, Number 195 (Tuesday, October 10, 1995)]
[Notices]
[Pages 52651-52653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25061]



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DEPARTMENT OF COMMERCE
[A-583-824]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Polyvinyl Alcohol From Taiwan

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

EFFECTIVE DATE: October 10, 1995.

FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Barbara Wojcik-
Betancourt, Office of Antidumping Investigations, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230; telephone: (202) 482-4136 or (202) 482-0629, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA).

Preliminary Determination

    We preliminarily determine that polyvinyl alcohol from Taiwan 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 Tariff Act of 1930, as 
amended (the Act). The estimated margins are shown in the ``Suspension 
of Liquidation'' section of this notice.

Case History

    Since the initiation of this investigation on March 29, 1995, (60 
FR 17053, April 4, 1995), the following events have occurred:
    On April 24, 1995, the U.S. International Trade Commission (ITC) 
notified the Department of Commerce (the Department) of its affirmative 
preliminary determination.
    In May 1995, the Department presented an antidumping duty 
questionnaire to Chang Chun Petrochemical Co., Ltd. (Chang Chun), the 
sole Taiwan producer of the subject merchandise. Chang Chun submitted 
its questionnaire responses in June and July 1995. The Department 
issued supplemental questionnaires, and Chang Chun responded to them, 
in August 1995. During September 1995, the Department requested and 
received additional information from Chang Chun. In addition, both 
petitioner and Chang Chun submitted comments regarding treatment of 
various issues for the preliminary determination.
    Pursuant to section 733(c)(1)(B) of the Act, as amended, the 
Department determined that this investigation is extraordinarily 
complicated and additional time is necessary to make the preliminary 
determination. Accordingly, we postponed the preliminary determination 
until October 2, 1995 (60 FR 35899, July 12, 1995).
    On September 19, 1995, petitioner amended the petition to exclude 
from the scope of this investigation polyvinyl alcohols covalently 
bonded with acetoacetylate, carboxylic acid, or sulfonic acid uniformly 
present on all polymer chains in a concentration equal to or greater 
than two mole percent, or polyvinyl alcohols covalently bonded with 
silane uniformly present on all polymer chains in a concentration equal 
to or greater than one-tenth of one mole percent. We have revised the 
scope of this investigation to reflect petitioner's amendment (see the 
``Scope of Investigation'' section of this notice, below).

Scope of Investigation

    The merchandise under investigation is polyvinyl alcohol. Polyvinyl 
alcohol is a dry, white to cream-colored, water-soluble synthetic 
polymer, usually prepared by hydrolysis of polyvinyl acetate. This 
product includes polyvinyl alcohols hydrolyzed in excess of 85 percent, 
whether or not mixed or diluted with defoamer or boric acid, except for 
polyvinyl alcohols covalently bonded with acetoacetylate, carboxylic 

[[Page 52652]]
acid, or sulfonic acid uniformly present on all polymer chains in a 
concentration equal to or greater than two mole percent, or polyvinyl 
alcohols covalently bonded with silane uniformly present on all polymer 
chains in a concentration equal to or greater than one-tenth of one 
mole percent, which are excluded.
    The merchandise under investigation is currently classifiable under 
subheading 3905.20.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). Although the HTSUS subheading is provided for 
convenience and customs purposes, the written description of the 
merchandise under investigation is dispositive.

Period of Investigation

    The period of investigation (POI) is April 1, 1994, through March 
31, 1995.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products in the home market to be foreign like products for purposes of 
determining appropriate product comparisons to U.S. sales. Where there 
were no sales of identical merchandise in the home market to compare to 
U.S. sales, we made comparisons on the basis of the characteristics 
listed in the Department's antidumping questionnaire.
    Chang Chun reported that it sells to customers at three levels of 
trade in the home market: distributor, retailer, and end-user; and to 
two levels of trade in the U.S. market: distributor and end-user. It 
has requested that we make comparisons at the same level of trade, in 
accordance with section 773(a)(1)(B) of the Act.
    Under this section of the Act, the Department will compare 
products, to the extent practicable, at the same level of trade. 
Section 773(a)(7)(A)(i) specifies that the difference in level of trade 
must involve the performance of different selling activities by the 
seller (i.e. the responding exporter).
    While Chang Chun has identified different functions performed by 
its customers at the alleged levels of trade, it has failed to 
demonstrate that Chang Chun itself engages in different selling 
activities among end-users, distributors, and retailers. Chang Chun 
states that it ``treats end-users and distributors the same as far as 
the handling of the transactions.'' Apart from a quantity rebate 
offered only to home market distributors, and a commission paid on some 
end-user U.S. sales, it has not reported any other selling activities 
that differ among the alleged levels of trade. Because Chang Chun 
reports performing no other selling activities and reports incurring no 
expenses for technical service, warranty or advertising, it has failed 
to demonstrate that it performs different selling activities dependent 
on the customer.
    Based on this analysis, we have determined that Chang Chun has 
failed to support its contention that it sells to different levels of 
trade. In making our comparisons, we therefore, made no distinctions 
between levels of trade.

Fair Value Comparisons

    To determine whether Chang Chun's sales of PVA to the United States 
were made at less than fair value, we compared Export Price (EP) to the 
Normal Value (NV), as specified below.

Export Price

    We calculated EP, in accordance with section 772(a) of the Act, 
because the subject merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation, and Constructed 
Export Price (CEP) under section 772(b) is not otherwise warranted 
based on the facts of this investigation.
    We calculated EP based on packed, FOB factory, C&F or CIF prices to 
unaffiliated customers in the United States. We made deductions from 
the starting price (gross unit price), where appropriate, for the 
following charges: inland freight in Taiwan; freight and marine 
insurance; brokerage and handling; ocean freight, ocean freight fees; 
and harbor construction tax.

Normal Value

    In accordance with section 773(a)(1)(B) of the Act, we have based 
NV on sales in Taiwan, the home market. We compared all home market 
sales to the cost of production (COP), as described below. In every 
instance, home market prices were above COP, and we calculated NV based 
on FOB factory or delivered prices to unaffiliated customers, and made 
deductions from the starting price for freight, discounts, and rebates 
(reported also as a discounts by Chang Chun), and post-sale billing 
corrections. In accordance with section 773(a)(6) of the Act, we 
deducted home market packing costs and added U.S. packing costs. In 
addition, we adjusted for differences in the circumstances of sale, in 
accordance with section 773(a)(6)(C)(iii). These circumstances included 
differences in imputed credit expenses and commissions. Chang Chun paid 
commissions on some U.S. sales, but paid no commissions on any home 
market sales. Thus, we deducted the lesser of either (1) the amount of 
the weighted-average commission paid on the U.S. sales of a product; or 
(2) the sum of the weighted average indirect selling expenses paid on 
the home market sales, and then added the weighted-averaged amount of 
the commission paid on the U.S. sales to NV in accordance with 19 CFR 
353.56(a)(2).
    Petitioner claims that Chang Chun's sales to its major distributors 
in the home market should be considered sales to affiliated parties 
under section 771(33) because suppliers are so reliant on Chang Chun 
that Chang Chun is in a position to legally or operationally exercise 
restraint or direction over these suppliers. Chang Chun responds that 
it has no ownership, overlapping management, or financial arrangements 
with these customers and is in no position to control its distributors. 
For the preliminary determination, we have considered these customers 
to be unaffiliated, but will examine this issue further at verification 
prior to the final determination.

Cost of Production Analysis

    Pursuant to an allegation made by the petitioner, we initiated a 
cost of production investigation in our notice of initiation ( 60 FR 
17053, April 4, 1995). To determine whether the home market prices were 
above COP, pursuant to section 773(b), we calculated COP based on the 
sum of Chang Chun's reported cost of materials, fabrication, general 
expenses, and packing. We made no adjustment to Chang Chun's submitted 
cost data for purposes of the preliminary determination.
    Petitioner claims that Chang Chun has incorrectly treated acetic 
acid as a co-product of PVA production rather than a by-product in its 
cost allocation methodology. We have preliminarily treated acetic acid 
as a co-product, but will examine this issue further at verification 
for the final determination.

Results of COP Analysis

    In accordance with section 773(b)(1) of the Act, we compared home 
market sales to the weighted-average cost of production, by product, to 
determine whether sales were made below the COP within an extended 
period of time in substantial quantities at prices that do not permit 
the recovery of all costs within a reasonable period of time.
    Based on our preliminary analysis, none of Chang Chun's sales were 
found to be below cost. Accordingly, we calculated NV for all U.S. 
sales based on price to price comparisons. 

[[Page 52653]]


Comparison Methodology

    In accordance with section 777A(d)(1)(A)(i), we calculated 
weighted-average EPs for comparisons to weighted average NVs. The 
weighted-averages were calculated and compared by product 
characteristics.
    Petitioner argues that monthly average home market and U.S. prices 
should be used in calculating the dumping margin due to alleged 
differences in the time, volume, and distribution of sales during the 
POI. Petitioner contends that the use of monthly averages is 
appropriate in order to avoid understating a margin calculated using 
yearly POI averages.
    The Department's standard practice in past antidumping 
investigations involving weighted-average foreign market values (now 
NV) was to calculate a single weighted-average price for each product 
during the 6-month POI. The Department intends to extend this practice 
to the calculation of POI average prices in both markets under the new 
section 777A of the Act. At this point, the available information on 
the record does not establish a sufficient basis to use monthly average 
prices instead of POI average prices.

Currency Conversion

    For the purpose of the preliminary determination, we made currency 
conversions into U.S. dollars based on the official exchange rates in 
effect on the dates of the U.S. sales as certified by the Federal 
Reserve Bank of Chicago, in accordance with section 773A(a) of the Act.

Verification

    As provided in section 788(i) of the Act, we will verify all 
information determined to be acceptable for use 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 entries of polyvinyl 
alcohol from Taiwan, that are entered, or withdrawn from warehouse for 
consumption, on or after the date of publication of this notice in the 
Federal Register. The Customs Service will require a cash deposit or 
posting of a bond equal to the estimated amount by which the normal 
value exceeds the export price as shown below. These suspension of 
liquidation instructions will remain in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted- 
                                                               average  
                   Exporter/manufacturer                        margin  
                                                              percentage
------------------------------------------------------------------------
Chang Chun Petrochemical Co., Ltd..........................         4.03
All others.................................................         4.03
------------------------------------------------------------------------

    The all others rate applies to all entries of subject merchandise 
except for entries of merchandise produced by Chang Chun.

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

    In accordance with 19 CFR 353.38, case briefs or other written 
comments in at least ten copies must be submitted to the Assistant 
Secretary for Import Administration no later than November 17, 1995, 
and rebuttal briefs, no later than November 20, 1995. 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 19 CFR 
353.38, 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 22, 1995, time and place to be determined, 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 
B-099, within ten 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. In accordance with 19 CFR 353.38(b), oral presentations will 
be limited to issues raised in the briefs. If this investigation 
proceeds normally, we will make our final determination by December 18, 
1995.
    This determination is published pursuant to section 733(f) of the 
Act.

    Dated: October 3, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-25061 Filed 10-6-95; 8:45 am]
BILLING CODE 3510-DS-P