[Federal Register Volume 62, Number 25 (Thursday, February 6, 1997)]
[Notices]
[Pages 5590-5592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2881]


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DEPARTMENT OF COMMERCE
International Trade Administration
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 1, 1996, the Department of Commerce (the 
Department) published the preliminary results of its 1994-95 
administrative review of the antidumping duty order on granular 
polytetrafluoroethylene (PTFE) resin from Italy. The review covers one 
manufacturer/exporter, Ausimont S.p.A. (Ausimont), for the period 
August 1, 1994, through July 31, 1995. We gave interested parties an 
opportunity to comment on our preliminary results. We received comments 
from E. I. DuPont de Nemours & Company (DuPont), the petitioner in this 
proceeding, and we received a rebuttal from Ausimont. We have changed 
our preliminary results as explained below. The final margin for 
Ausimont is listed below in the section ``Final Results of Review.''

EFFECTIVE DATE: February 6, 1997.

FOR FURTHER INFORMATION CONTACT: Chip Hayes or Richard Rimlinger, 
Office of AD/CVD Enforcement, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
4733.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Tariff Act), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Tariff Act by the Uruguay Round Agreements Act (URAA). In addition, 
unless otherwise indicated, all citations to the Department's 
regulations are to the current regulations, as amended by the interim 
regulations published in the Federal Register on May 11, 1995 (60 FR 
25130).

Background

    On October 1, 1996, the Department published in the Federal 
Register the preliminary results of its 1994-95 administrative review 
of the antidumping duty order on granular PTFE resin from Italy (61 FR 
51266). We gave interested parties an opportunity to comment on the 
preliminary results. There was no request for a hearing. The Department 
has now conducted this review in accordance with section 751 of the 
Tariff Act.

Scope of the Review

    The product covered by this review is granular PTFE resins, filled 
or unfilled. This order also covers PTFE wet raw polymer exported from 
Italy to the United States. See Granular Polytetrafluoroethylene Resin 
from Italy; Final Determination of Circumvention of Antidumping Duty 
Order, 58 FR 26100 (April 30, 1993). This order excludes PTFE 
dispersions in water and fine powders. During the period covered by 
this review, such merchandise was classified under item number 
3904.61.00 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 Italian manufacturer/exporter of granular 
PTFE resin, Ausimont, and the period August 1, 1994 through July 31, 
1995.

Use of Facts Available

    In our initial questionnaire, we requested that Ausimont provide 
value-added data for all models which are further manufactured in the 
United States. Ausimont did not provide this information. In a 
supplemental questionnaire dated May 26, 1996, we again requested that 
Ausimont report the cost of further manufacturing performed in the 
United States. In responding, Ausimont still failed to provide this 
information for certain models.
    Section 776(a) of the Tariff Act provides that, if necessary 
information is not available on the record, or an interested party or 
any other person fails to provide such information by the deadlines for 
submission of the information or in the form and manner requested, the 
Department shall use the facts otherwise available. In addition, 
section 776(b) of the Tariff Act provides that, if an interested party 
has failed to cooperate to the best of its ability, the Department may 
use an inference that is adverse to the interests of that party in 
selecting from among the facts otherwise available.
    Ausimont's failure to provide further-manufacturing data for 
certain models renders it necessary that we rely upon the facts 
otherwise available. Ausimont offered no explanation for this failure 
on its part, despite the Department's repeated requests for this 
information. On this basis, we determined in our preliminary results 
that Ausimont failed to cooperate to the best of its ability. 
Therefore, we determined it was appropriate to use an inference that is 
adverse to Ausimont's interests, pursuant to section 776(b) of the 
Tariff Act. Section 776(b) authorizes the Department to use as facts 
otherwise available information derived from the petition, the final 
determination, a previous administrative review, or any other 
information placed on the record. For our final results, we have 
determined that the number of models for which Ausimont failed to 
provide further-manufacturing data are relatively few in number. 
Moreover, the absence of this information has no impact upon the 
remainder of Ausimont's database. For these reasons, we are not 
resorting to total facts available under section 776(a). As facts 
available, we have selected Ausimont's highest reported cost of further 
manufacturing and have used it in our analysis of sales of those models 
for which Ausimont failed to report the cost of further manufacturing.

Analysis of Comments Received

    We invited interested parties to comment on our preliminary 
results. We received comments from DuPont and rebuttal comments from 
Ausimont.
    Comment 1: DuPont contends that the Department erred in using a 
negative profit amount in the calculation of constructed export price 
(CEP) for further-manufactured transactions. Petitioner points out that 
section 772(d)(3) of the statute directs the Department to make an 
adjustment to CEP for profit allocable to the selling, distribution, 
and further-manufacturing expenses incurred in the United States. 
However, petitioner asserts that the Statement of Administrative Action 
(SAA) to the new law states, at 825, that ``if there is no profit to be 
allocated (because the affiliated entity is operating at a loss in the 
United States * * *) Commerce will make no adjustment under section 
772(d)(3).'' DuPont therefore contends that, under the new law, the 
Department cannot use a profit amount of less than zero in adjusting 
CEP on sales of further-manufactured products. DuPont argues further 
that the

[[Page 5591]]

Department should revise its calculations to limit any allocated profit 
figure to an amount that is no less than zero.
    Ausimont responds that DuPont has misinterpreted the SAA, in that 
the SAA clearly intends that the Department use total profit for an 
affiliated entity in the United States and foreign markets to adjust 
CEP, rather than test the profitability of each U.S. transaction. 
Furthermore, respondent asserts that the affiliated U.S. entity, 
Ausimont U.S.A., did not operate at a loss during the period of review 
(POR) and that petitioner's argument does not fit the facts of the 
present case and should be rejected.
    Department's Position: We agree with DuPont that the allocated 
profit which we deduct in calculating CEP should not be a negative 
amount. In our calculations for the preliminary results we made two 
deductions from CEP for allocated profit. This was an error. Section 
772(d)(3) of the Act directs us to allocate profit to the expenses and 
further-manufacturing costs identified in sections 772(d) (1) and (2). 
This is a change from the pre-URAA statute, which directed us to make a 
deduction for ``any increased value'' (see 772(e)(3) (1994)), which we 
interpreted as requiring allocations of selling, general, and 
administrative (SG&A) expenses and profit associated with further-
manufacturing activities in the United States. The language in section 
772(d)(3) of the 1995 Act in effect for this review requires us to 
allocate profit to the expenses associated with selling the subject 
merchandise in the United States and the cost of any further 
manufacture. The additional transaction-specific allocation of profit 
to reflect ``any increased value'' is not appropriate. Therefore, for 
these final results, we have changed our calculations such that we have 
not made two deductions from CEP for profit on further-manufactured 
sales.
    We do not agree, however, that, when calculating the CEP-profit 
deduction, we should set the profit on each transaction we use to 
calculate total actual profit to be no less than zero. The 
determination of the amount of profit to deduct from CEP transactions 
is essentially a two-step process. We first calculate the total actual 
profit for all sales of the subject merchandise and the foreign like 
product. We then allocate the total profit to individual CEP 
transactions based on the applicable percentage. In the first step, 
i.e., determining total actual profit, we use all sales of the subject 
merchandise in the United States and the foreign like product in the 
foreign market, including sales made at a loss. ``Total actual profit'' 
means that losses in one market may offset profits in another. In the 
second step, i.e., allocation, if there is no total actual profit to 
allocate (i.e., the losses in both markets outweigh profits), we will 
make no CEP-profit deduction. DuPont relies incorrectly on the section 
of the SAA which identifies this latter situation (SAA at 825 (``(i)f 
there is no profit to be allocated (because the affiliated entity is 
operating at a loss in the United States and foreign markets) Commerce 
will make no adjustment under section 772(d)(3)''); see also Proposed 
Regulations (61 FR 7308, February 27, 1996) (comments on section 
351.402) at 7331).
    Comment 2: DuPont asserts that the Department incorrectly 
transcribed the profit ratio for calculating the CEP profit adjustment 
from its preliminary analysis memorandum to the program it used to 
calculate the dumping margins. Ausimont agrees that the Department 
transcribed the ratio incorrectly.
    Department's Position: We agree with the parties. We have corrected 
the profit ratio for the final results.
    Comment 3: DuPont contends that, in assigning a value of zero for 
variable costs of manufacturing as facts otherwise available to 
categories of U.S. merchandise for which Ausimont did not submit 
variable costs of manufacturing, the Department rewarded respondent for 
failing to provide data required to calculate a difference-in-
merchandise adjustment. Petitioner claims that setting the value to 
zero distorts the difference-in-merchandise adjustment and eliminates 
potential margins. Petitioner contends that a more appropriate choice 
for facts available is the highest variable cost of manufacturing for 
any U.S. product code.
    Ausimont rejoins that the inadvertent omission of variable cost of 
manufacturing was for only one U.S. product code and affected a 
negligible number of U.S. transactions. Therefore, Ausimont states that 
the use of facts available is unnecessary and unwarranted.
    Department's Position: We agree with DuPont that designating a 
value of zero for variable costs of manufacturing that Ausimont did not 
submit is not appropriate. However, we disagree that using the highest 
variable cost of manufacturing is appropriate in this case. In light of 
the nature and the extent of the deficiency, we have determined to use 
the average of Ausimont's submitted variable costs of manufacture in 
our calculation of the difference-in-merchandise adjustment for these 
transactions.
    Comment 4: DuPont claims that, in calculating further-manufacturing 
costs, the Department relied upon the amount in Ausimont's computer 
tape for determining the cost of further manufacturing and omitted a 
component for total general expense Ausimont reported in its February 
21, 1996 questionnaire response. Petitioner believes the Department 
should add the reported amount to the further-manufacturing costs.
    Ausimont answers that the amount it reported in an exhibit of its 
response is simply the sum of three expense items that it reported in 
the same exhibit and that it included these expense items in its 
submission of total costs of further manufacturing.
    Department's Position: We disagree with petitioner that we omitted 
an element of further-manufacturing costs in our calculation of total 
costs. Including the amount DuPont cites would cause us to double-count 
Ausimont's reported expenses because that amount is a sum of specific 
expenses submitted by Ausimont. Therefore, we have not changed our 
calculation for the final results.
    Comment 5: DuPont avers that the Department must review Ausimont's 
reported data to identify all instances where it omitted required data 
from the questionnaire and supplemental responses and to apply facts 
otherwise available where any such omission occurs.
    Ausimont counters that, other than the omission mentioned in 
Comment 3, no required data were unreported and that the use of facts 
otherwise available is unwarranted.
    Department's Position: We agree with petitioner that it is proper 
to apply facts otherwise available in any instance where Ausimont did 
not submit required data. In our analysis, we conduct various checks of 
the transaction-specific data to determine where data are missing. 
Other than the missing data discussed in the Fact Available section and 
in Comment 3 above, we found no indication that Ausimont neglected to 
report requested data.

Final Results of the Review

    We determine the following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                                Margin  
          Manufacturer/exporter                  Period        (percent)
------------------------------------------------------------------------
Ausimont S.p.A...........................  08/01/94-07/31/95       17.73
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess,

[[Page 5592]]

antidumping duties on all appropriate entries. Individual differences 
between U.S. price and normal value (NV) may vary from the percentage 
stated above. The Department will issue appraisement instructions 
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 17.73 percent; (2) for merchandise exported by manufacturers or 
exporters not covered in this review but covered in the original less 
than fair value (LTFV) investigation or a previous review, the cash 
deposit will continue to be the most recent rate published in the final 
determination or final results for which the manufacturer or exporter 
received a company-specific rate; (3) if the exporter is not a firm 
covered in this review, a previous review, or the original 
investigation, but the manufacturer is, the cash deposit rate will be 
that established for the manufacturer of the merchandise in the final 
results of this review or the LTFV investigation; and (4) if neither 
the exporter nor the manufacturer is a firm covered in this or any 
previous review, the cash deposit rate will be 46.46 percent, the ``all 
others'' rate established in the LTFV investigation (50 FR 26019, June 
24, 1985).
    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 the only 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 U.S.C. 1675(a)(1)) and section 
353.22 of the Department's regulations (19 CFR 353.22 (1996)).

    Dated: January 27, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-2881 Filed 2-5-97; 8:45 am]
BILLING CODE 3510-DS-P