[Federal Register Volume 60, Number 200 (Tuesday, October 17, 1995)]
[Notices]
[Pages 53737-53739]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25754]



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DEPARTMENT OF COMMERCE
[A-475-703]


Granular Polytetrafluoroethylene Resin From Italy; Final Results 
of Antidumping Duty Administrative Review

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

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review.

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SUMMARY: On October 7, 1994, the Department of Commerce (the 
Department) issued the preliminary results of its 1992-93 
administrative review of the antidumping duty order on granular 
polytetrafluoroethylene (PTFE) resin from Italy (59 FR 51166; October 
7, 1994). The review covers one manufacturer/exporter for the period 
August 1, 1992, through July 31, 1993. We gave interested parties an 
opportunity to comment on our preliminary results. Based upon our 
analysis of the comments received, we have not changed the preliminary 
results. The final margin for Ausimont S.p.A. (Ausimont) is listed 
below in the section ``Final Results of Review.''

EFFECTIVE DATE: October 17, 1995.

FOR FURTHER INFORMATION CONTACT: Charles Riggle or Michael Rill, Office 
of Antidumping Compliance, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, DC 20230; telephone: (202) 482-
4733.

SUPPLEMENTARY INFORMATION:

Background

    On October 7, 1994, the Department published in the Federal 
Register the preliminary results of its 1992-93 administrative review 
of the antidumping duty order on granular PTFE resin from Italy (59 FR 
51166). There was no request for a hearing. The Department has now 
conducted this review in accordance with section 751 of the Tariff Act 
of 1930, as amended (the Tariff Act).

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.

Scope of the Review

    Imports covered by this review are shipments of granular PTFE 
resins, filled or unfilled, and shipments of wet raw polymer. The order 
explicitly excludes PTFE dispersions in water and PTFE fine powders. 
During the period covered by this review, such merchandise was 
classified under item number 3904.61.90 of the Harmonized Tariff 
Schedule (HTS). We are providing this HTS number for convenience and 
Customs purposes only. The written description of the scope remains 
dispositive.
    The review covers one manufacturer/exporter of granular PTFE resin, 
Ausimont. The review period is August 1, 1992, through July 31, 1993.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received a case brief from petitioner, E.I. Du 
Pont de Nemours & Company (Du Pont), and a rebuttal brief from 
Ausimont.
    Comment 1: Du Pont contends that the Department has artificially 
raised Ausimont's U.S. price by deducting losses attributable to the 
further manufacturing of wet raw polymer in the United States. 
According to Du Pont, Ausimont's losses relative to U.S. finishing 
costs are such that they create an unreliable measure of the 
``increased value'' of the U.S. further manufacturing that is to be 
deducted from the U.S. price.
    Du Pont argues that Ausimont's losses in this review present the 
same type of problem which the Department confronted in the 
circumvention inquiry of the antidumping duty order, at which time Du 
Pont argued that an allocation of losses would lower artificially the 
value of the imported wet raw polymer. See Granular 
Polytetrafluoroethylene Resin from Italy; Final Affirmative 
Determination of Circumvention of Antidumping Order, 58 FR 26100 (April 
30, 1993) (Determination of Circumvention).
    Furthermore, citing the Statement of Administrative Action 
implementing the Uruguay Round of the General Agreements on Tariffs and 
Trade (GATT), Du Pont points out that the Department recognizes it is 
directed not to deduct losses attributable to further manufacturing as 
an adjustment made to the U.S. price. While acknowledging that the 
Department is not bound by the GATT agreements for the purposes of this 
review, Du Pont claims that under present law the Department has the 
discretion to make sure that its assessment of the ``increased value'' 
of U.S. further manufacturing and its calculation of the U.S. price are 
reliable, and that it should exercise that discretion in this case by 
not deducting from the U.S. price Ausimont's losses attributable to 
finishing wet raw polymer into granular PTFE resin in the United 
States.
    In response, Ausimont cites Final Determination of Sales at Less 
Than Fair Value: New Minivans From Japan, 57 FR 21937, 21939 (May 26, 
1992), to argue that the Department has consistently interpreted 
section 772(e)(3) of the Tariff Act as requiring the allocation of 
profits and losses to the additional materials and labor added in the 
United States. Ausimont notes further that the Court of International 
Trade (CIT) has held that it would be ``patently unfair'' to allocate 
profits, but not losses, to the U.S. price in connection with further 
manufacturing. See Timken Co. v. United States (Timken), 14 CIT 753 
(1990).
    In addition, Ausimont argues that in the Determination of 
Circumvention (at 26107), the Department allocated both profits and 
losses ``in order to avoid making an inappropriate comparison (of 
value) to cost.'' Finally, Ausimont notes that by Du Pont's own 
admission, the Department is not bound by the Statement of 
Administrative Action implementing the Uruguay Round of the GATT in 
this review.
    Department's Position: We disagree with Du Pont. Du Pont's claim 
that the Department's calculation of Ausimont's further manufacturing 
costs in the context of determining ESP creates an unreliable measure 
of the value added by Ausimont in the United States is unfounded. Du 
Pont incorrectly relies 

[[Page 53738]]
upon the Department's circumvention determination earlier in this 
proceeding. In so doing, Du Pont fails to acknowledge that the purpose 
of the circumvention provision of the statute, section 781(a), is 
fundamentally different from that of the ESP provision, section 
772(e)(3). Hence, as demonstrated below, what constitutes a reliable 
measure of the increased value in the ESP context differs from the 
determination of the difference in value between the finished product 
and the imported product in a circumvention inquiry.
    In making adjustments to ESP for further manufacturing pursuant to 
section 772(e)(3), we deduct from the selling price manufacturing 
expenses incurred in the United States, as well as a portion of the 
profit or loss incurred on the U.S. sale of the finished product. The 
purpose of this analysis is to obtain a reliable calculation of the 
respondent's pricing behavior in the United States. Therefore, we have 
found it appropriate to use the respondent's actual expenses incurred 
in the United States. We also allocate actual profits or losses 
associated with each sale. See, e.g., Final Results of the Antidumping 
Duty Administrative Reviews; Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from Japan and Tapered Roller Bearings, Four 
Inches or Less in Outside Diameter, and Components Thereof, from Japan, 
58 FR 64720, 64729 (December 9, 1993); Final Results of Antidumping 
Administrative Review; Color Picture Tubes From Japan, 55 FR 37915 
(1990); and Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From Japan; Final Results of Antidumping Duty 
Administrative Review, 56 FR 41508, 41516 (August 21, 1991). As noted 
by Ausimont, the Department's approach has been upheld by the CIT. See 
Timken, 14 CIT at 756.
    By contrast, in conducting inquiries pursuant to section 781(a) to 
determine whether circumvention is occurring, the Department's chief 
concern is with evaluating the further manufacturing necessary to 
transform the imported parts or components into the finished 
merchandise sold in the United States. Under the statute, the 
Department is required to determine whether the difference in value 
between the two is ``small.'' The Department has determined that in 
order to better insure the reliability of this calculation, it is 
sometimes appropriate to disregard the actual costs associated with 
producing the product in the United States (as well as any profits or 
losses associated with those costs) in favor of costs incurred in the 
home market for a similar manufacturing operation. Determination of 
Circumvention, 58 FR at 26107. The CIT has now upheld this 
interpretation of the statute, as well. See Ausimont v. United States, 
Slip Op. 95-15 (CIT February 1, 1995).
    We also reject Du Pont's argument that a different result is 
warranted in this review because a different approach may be applied 
under the statute as amended by the Uruguay Round Agreements Act, which 
became effective January 1, 1995. The Department is conducting reviews 
initiated prior to January 1, 1995, as here, in accordance with the 
statute and regulations as they existed on December 31, 1994.
    For these reasons, we have continued to allocate Ausimont's losses 
to the U.S. further manufacturing for purposes of calculating ESP in 
this administrative review.
    Comment 2: Du Pont argues that the Department should follow its 
normal preference for price-to-price comparisons over constructed value 
(CV) in establishing foreign market value (FMV). In order to avoid 
using CV as the basis for FMV, Du Pont argues that the Department's 
hierarchy for establishing FMV in this case should be extended to 
include: (1) An expanded window for identical, similar or second-choice 
merchandise up to and including a period of review (POR)-based home 
market average price, and (2) the use of finished resin as similar 
merchandise, with difference-in-merchandise (difmer) adjustments, for 
calculating the FMV for purposes of comparison to the imported wet raw 
polymer.
    With respect to its contention that wet raw polymer should be 
compared to finished resin, Du Pont contends that the ratio of the 
difmer to total cost of manufacturing (COM) of the U.S. merchandise 
would be very close to the Department's 20-percent limit and that in 
this instance a modest relaxation of the Department's 20-percent limit 
would allow the use of price-to-price comparisons, which Du Pont 
asserts is the Department's preferred basis for establishing FMV. Du 
Pont claims that, while Ausimont reported the variable cost of 
manufacturing (VCOM) for wet raw polymer in the home market sales 
listing, Ausimont did not report VCOM for imported wet raw polymer in 
its U.S. sales listing. Du Pont contends that if the U.S. VCOM is no 
greater than that for wet raw polymer sold in the home market, the 
difmer adjustment would be near the 20-percent limit, but that the 
Department cannot know whether the actual ratio is within 20 percent 
because neither the VCOM nor the total COM of the imported product was 
reported.
    With respect to the first point, Ausimont argues, for reasons that 
it claims are business proprietary, that using POR-based average home 
market prices in place of monthly average prices would not be 
appropriate in this instance.
    Ausimont contends that the Department properly used CV as the basis 
for FMV when the difmer between sales of PTFE reactor bead (wet raw 
polymer) and finished granular PTFE resin exceeded the Department's 
established limit. Ausimont notes that Du Pont acknowledges by its own 
calculation that the difmer in this instance exceeds the Department's 
established limit of 20 percent. Ausimont also argues that Du Pont's 
calculation is erroneous, because Du Pont compared the difmer 
adjustment to the total cost of production of PTFE reactor bead, rather 
than the total COM. When calculated using total COM, Ausimont claims 
that the ratio is not as close to the 20-percent limit as claimed by Du 
Pont.
    Department's Position: We disagree with Du Pont on both points. 
With regard to the use of POR-based home market prices, section 
773(a)(1) of the Tariff Act requires that FMV ``shall be the price, at 
the time such merchandise is first sold in the United States.'' We 
normally fulfill this requirement by comparing U.S. prices to FMV based 
on home market or third country sales which occurred in the same month 
as the U.S. sale, or in a single month not more than three months 
before nor two months after the month of the U.S. sale. Only in rare 
cases, such as when there is a significant volume of home market sales, 
do we consider using POR weighted-average home market prices as a means 
of simplifying the analysis. In those instances we apply a test to 
determine whether using a POR weighted-average price would be 
representative of the transactions under consideration. See Tapered 
Roller Bearings, Four Inches or Less in Outside Diameter, and 
Components Thereof, From Japan; Final Results of Antidumping Duty 
Administrative Review, 57 FR 4975, 4977 (February 11, 1992); 
Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts 
Thereof From France; Preliminary Results of Antidumping Duty 
Administrative Review, 58 FR 25606, 25608 (1993). In this instance, 
however, the volume of home market sales is not so large as to warrant 
using POR weighted-average home market prices. Therefore, we have 
continued to use monthly weighted-average prices for these final 
results. 

[[Page 53739]]

    Du Pont's argument that we should depart from the 20 percent rule 
is flawed in several respects. First, Du Pont calculated the ratio of 
the difmer adjustment to the total cost of production rather than to 
the total COM, thereby miscalculating the ratio. Second, we disagree 
with Du Pont's suggestion that we depart from our normal practice 
because the calculation is imprecise as a result of certain data 
allegedly missing from the U.S. sales listing. Ausimont provided the 
VCOM and COM of its wet raw polymer for the home market, and the market 
in which the product is sold does not change the VCOM or COM of the 
product. Therefore, although this information did not appear on 
Ausimont's U.S. sales listing, it was provided elsewhere in the 
questionnaire response.
    Finally, when selecting similar merchandise sold in the home market 
we normally reject any comparisons in which the difference between the 
variable manufacturing costs of the U.S. and home market products 
exceeds 20 percent of the total manufacturing cost of the U.S. product. 
In such cases, as here, we normally use CV as the basis for FMV. We do 
not consider merchandise to be reasonably similar if the difmer 
adjustment is greater than 20 percent unless there is evidence 
indicating that it is appropriate to do so, and that there will not be 
unreasonable distortions if the comparisons are made. See Certain 
Stainless Steel Cooking Ware From the Republic of Korea; Final Results 
of the Antidumping Duty Administrative Review, 58 FR 9560, 9561 
(February 22, 1993); Porcelain-on-Steel Cooking Ware From Mexico; Final 
Results of Antidumping Administrative Review, 58 FR 43327, 43328 
(August 16, 1993); and Tapered Roller Bearings Four Inches or Less in 
Outside Diameter and Certain Components Thereof From Japan; Final 
Results of Antidumping Duty Order Administrative Review, 55 FR 38720, 
38725 (September 20, 1990). In this case, petitioner has not provided 
evidence that would lead us to conclude that there would not be 
unreasonable distortions if we used price-based FMVs with difmer 
adjustments exceeding 20 percent. Accordingly, we did not make price to 
price comparisons where the difmer exceeded 20 percent.
    While we found price-based FMVs for all U.S. sales of non-further 
manufactured resins, we compared U.S. sales of further manufactured 
resins to CV when there were no contemporaneous home market sales of 
PTFE reactor bead, the imported product from which granular PTFE resin 
is processed in the United States.

Final Results of the Review

    We determine the following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                                 Margin 
              Manufacturer/exporter                  Period    (percent)
------------------------------------------------------------------------
Ausimont S.p.A..................................    08/01/92-           
                                                     07/31/93       2.26
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between U.S. price and FMV may vary from the percentage 
stated above. The Department will issue appraisement instructions on 
each exporter directly to the Customs Service.
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of these 
final results of administrative review, as provided by section 
751(a)(1) of the Tariff Act: (1) The cash deposit rate for Ausimont 
will be 2.26 percent; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior review, or 
the original less than fair value investigation, but the manufacturer 
is, the cash deposit rate will be the rate established for the most 
recent period for the manufacturer of the merchandise; (4) the cash 
deposit rate for all other manufacturers or exporters will be 46.46 
percent for the reasons explained in Granular Polytetrafluoroethylene 
Resin From Italy; Preliminary Results of Antidumping Duty 
Administrative Review, 59 FR 51166 (October 7, 1994).
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d)(1). Timely written notification 
of the return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 USC 1675(a)(1)) and 19 CFR 
353.22.

    Dated: September 29, 1995.
Paul L. Joffe,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 95-25754 Filed 10-16-95; 8:45 am]
BILLING CODE 3510-DS-P