[Federal Register Volume 63, Number 90 (Monday, May 11, 1998)]
[Notices]
[Pages 25826-25828]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12318]



[[Page 25826]]

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DEPARTMENT OF COMMERCE

International Trade Administration
[A-475-703]


Granular Polytetrafluoroethylene Resin From Italy; Preliminary 
Results of Antidumping Duty Administration Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: In response to a request by the petitioner, the Department of 
Commerce is conducting an administrative review of the antidumping duty 
order on gramdular polytetrafluoroethylene resin from Italy. This 
review covers Ausimont SpA. The period of review is August 1, 1996, 
through July 31, 1997.
    We have preliminary determined that sales of 
polytetrafluoroethylene resin from Italy have been at less then normal 
value. We invite interested parties to comment on these preliminary 
results. Parties who submit comments in this proceeding are requested 
to submit with each argument: (1) A statement of the issue, and (2) a 
brief summary of the argument.

EFFECTIVE DATES: May 11, 1998.

FOR FURTHER INFORMATION CONTACT: Magd Zalok or Kris Campbell, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC 
20230; telephone: (202) 482-4162 or (202) 482-3813, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the regulations provided in 19 CFR Part 351, as published in the 
Federal Register on May 19, 1997 (62 FR 27296).

Background

    On August 30, 1988, the Department published in the Federal 
Register the antidumping duty order on granular polytetrafluoroethylene 
resin (PTFE) from Italy (53 FR 33163). On August 4, 1997, the 
Department of published a notice of ``Opportunity to Request 
Administrative Review'' of this antidumping duty order for the period 
of August 1, 1996, through July 31, 1997 (62 FR 41925). On August 28, 
1997, we received a timely request for review from E.I. DuPont de 
Nemours & Company (the petitioner). The review request named one 
respondent, Ausimont SpA and Ausimont USA Inc. (collectively, 
Ausimont). On September 25, 1997, we published the notice of initiation 
of this review (62 FR 50292).
    We issued a questionnaire to Ausimont on September 24, 1997, 
followed by a supplemental questionnaire on February 23, 1998. On 
December 19, 1997, the petitioner submitted a timely request for 
verification of Ausimont's response.

Verification

    In accordance with section 782(i)(3) of the Act, we conducted a 
verification of Ausimont's response from April 6 through April 14, 
1998, in Bollate, Italy, and in Thorofare, New Jersey (see Verification 
of the Responses of Ausimont SpA and Ausimont U.S.A. in the 1996/97 
Administrative Review of Polytetrafluoroethylene (PTFE) Resin from 
Italy, May 4, 1998).

Scope of the Review

    The product covered by this review is granular PTFE resin, 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 of the United States 
(HTS). We are providing this HTS number for convenience and Customs 
purposes only. The written description of the scope remains 
dispositive.

Fair Value Comparisons

    We compared the constructed export price (CEP) to the normal value 
(NV), as described in the Constructed Export Price and Normal Value 
sections of this notice. Pursuant to section 777A(d)(2) of the Act, we 
compared the CEPs of individual transactions to contemporaneous monthly 
weighted-average prices of sales of the foreign like product.
    We first attempted to compare contemporaneous sales of products 
sold in the U.S. and the comparison market that were identical with 
respect to the following characteristics: type, filler, percentage of 
filler, and grade. Where we were unable to compare sales of identical 
merchandise, we compared U.S. sales with comparison market sales of the 
most similar merchandise based on the characteristics listed above, in 
that order of priority. With respect to U.S. sales of imported wet raw 
polymer that further manufactured into finished PTFE resin (see 
Constructed Export Price, below), we limited our price-based 
comparisons to comparison market sales of wet raw polymer.
    Where there were no appropriate comparison market sales of 
comparable merchandise, we compared the merchandise sold in the United 
States to constructed value (CV), in accordance with section 773(a)(4) 
of the Act.

Constructed Export Price

    For all sales to the United States, we calculated constructed 
export price (CEP) as defined in section 772(b) of the Act because all 
sales to unaffiliated parties were made after importation of the 
subject merchandise into the United States through Ausimont U.S.A., 
respondent's affiliate. We based CEP on the packed, delivered prices to 
unaffiliated purchasers in the United States (the starting price). We 
made deductions for movement expenses, in accordance with section 
772(c)(2)(A) of the Act, including international freight marine 
insurance, brokerage and handling, U.S. inland freight, other 
transportation expenses, and U.S. customs duties.
    In accordance with section 772(d)(1) of the Act, we deducted 
selling expenses incurred by the affiliated seller in connection with 
economic activity in the United States. These expenses include credit, 
warranty, technical service, inventory carrying costs, and indirect 
expenses incurred by Ausimont USA.
    With respect to sales involving imported wet raw polymer that was 
further manufactured into finished PTFE resin in the United States, we 
deducted the cost of such further manufacturing in accordance with 
section 772(d)(2) of the Act. We determined that the special rule for 
merchandise with value added after importation under section 772(e) of 
the Act did not apply to such sales because the value added in the 
United States by the affiliated person did not exceed substantially the 
value of the subject merchandise.
    Finally, we made an adjustment for the profit allocated to the 
above-referenced selling and further manufacturing expenses, in 
accordance with section 772(d)(3) of the Act.

[[Page 25827]]

    No other adjustments were claimed or allowed.

Normal Value

    In order to determine whether there was a sufficient volume of 
sales of granular PTFE resin in the home market to serve as a viable 
basis for calculating normal value (NV), we compared Ausimont's volume 
of home market sales of the foreign like product to the volume of U.S. 
sales of the subject merchandise, in accordance with section 773(a) of 
the Act. Because the aggregate volume of home market sales of the 
foreign like product was greater than five percent of the respective 
aggregate volume of U.S. sales for the subject merchandise, we 
determined that the home market provides a viable basis for calculating 
NV. Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, 
we based NV on the prices at which the foreign like product was first 
sold for consumption in the exporting country, in the usual commercial 
quantities and in the ordinary course of trade.
    We determined home prices net of price adjustments (early payment 
discounts and rebates). Where applicable, we made adjustments for 
packing and movement expenses, in accordance with sections 773(a)(6) 
(A) and (B) of the Act. In order to adjust for differences in packing 
between the two markets, we deducted home market packing costs from NV 
and added U.S. packing costs. We also made adjustments for differences 
in costs attributable to differences in physical characteristics of the 
merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act, and for 
other differences in the circumstances of sale (COS) in accordance with 
section 773(a)(6)(C)(iii) of the Act. We made a COS adjustment for home 
market credit expense.
    As noted above, we determined normal value based on CV where there 
were no appropriate home market sales for comparison with the U.S. 
sale. We calculated CV in accordance with section 773(e) of the Act. We 
included the cost of materials and fabrication, selling, general and 
administrative (SG&A) expenses, and profit. In accordance with section 
773(e)(2)(A) of the Act, we based SG&A expenses and profit on the 
amounts incurred and realized by Ausimont in connection with the 
production and sale of the foreign like product in the ordinary course 
of trade for consumption in Italy. For selling expenses, we used the 
weighted-average home market selling expenses. We included U.S. packing 
pursuant to section 773(e)(3) of the Act. Where appropriate, we made 
adjustments to CV, in accordance with section 773(a)(8) of the Act, for 
differences in the COS. Specifically, we made a COS adjustment by 
deducting home market credit. We also made a CEP-offset adjustment to 
NV for indirect selling expenses pursuant to section 773(a)(7)(B) of 
the Act as discussed below.

Level of Trade/CEP Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales at the same level of trade 
in the comparison market as the level of trade of the U.S. sales. The 
NV level of trade is that of the starting-price sales in the comparison 
market. For CEP sales, such as those made by Ausimont in this review, 
the U.S. level of trade is the level of the constructed sale from the 
exporter to the importer.
    To determine whether NV sales are at a different level of trade 
than that of the U.S. sales, we examine stages in the marketing process 
and selling functions along the chain of distribution between the 
producer and the unaffiliated customer. If the comparison-market sales 
are at a different level of trade and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act. 
Finally, if the NV level is more remote from the factory than the CEP 
level and there is no basis for determining whether the difference in 
the levels between NV and CEP affects price comparability, we adjust NV 
under section 773(a)(7)(B) of the Act (the CEP-offset provision). See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732 
(November 19, 1997).
    In implementing these principles in this review, we obtained 
information from Ausimont about the marketing stage involved in the 
reported U.S. sales and the home market sales, including a description 
of the selling activities performed by Ausimont for each channel of 
distribution. In identifying levels of trade for CEP and for home 
market sales, we considered the selling functions reflected in the CEP, 
after the deduction of expenses and profit under section 772(d) of the 
Act, and those reflected in the home market starting price before 
making any adjustments. We expect that, if claimed levels of trade are 
the same, the functions and activities of the seller should be similar. 
Conversely, if a party claims that levels of trade are different for 
different groups of sales, the functions and activities of the seller 
should be dissimilar.
    The record evidence before us in this review indicates that the 
home market and the CEP levels of trade have not changed from the 1995-
96 review.\1\ As in prior segments of the proceeding, we determined 
that for Ausimont there was one home market level of trade and one U.S. 
level of trade (i.e., the CEP level of trade). In the home market, 
Ausimont sold directly to fabricators. These sales primarily entailed 
selling activities such as inventory maintenance, technical services, 
strategic and economic planning, market research, computer assistance 
and business system development assistance, personnel training, 
engineering services, and delivery services.
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    \1\ See 62 FR 48592, September 16, 1997 (final results) and 62 
FR 26283, May 13, 1997 (preliminary results).
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    In determining the level of trade for the U.S. sales, we only 
considered the selling activities reflected in the price after making 
the appropriate adjustments under section 772(d) of the Act. (See, e.g. 
Certain Stainless Wire Rods From France: Final Results of Antidumping 
Administrative Review, 61 FR 47874, 47879-80 (Sept. 11, 1996). The CEP 
level of trade involves minimal selling functions (e.g., invoicing). 
Based on a comparison of the home market level of trade and this CEP 
level of trade, we find the home market sales to be at a different 
level of trade from, and more remote from the factory than, the CEP 
sales.
    As noted above, all of the Ausimont's home market sales were at a 
single level of trade which is different from the CEP level of trade. 
Section 773(a)(7)(A) of the Act directs us to make an adjustment for 
difference in levels of trade where such differences affect price 
comparability. However, we were unable to quantify such price 
differences from information on the record. Because we have determined 
that the home-market level of trade is more remote from the factory 
than the CEP level of trade but the data necessary to calculate a 
level-of-trade adjustment are unavailable, we made a CEP-offset 
adjustment to NV pursuant to section 773(a)(7)(B) of the Act.

Currency Conversion

    We made currency conversions based on the official exchange rates 
in effect on the dates of the U.S. sales as certified by the Federal 
Reserve Bank of New York. Section 773A(a) of the Act directs the 
Department to use a daily exchange rate in order to convert foreign

[[Page 25828]]

currencies into U.S. dollars, unless the daily rate involves a 
fluctuation. In accordance with our practice, we have determined as a 
general matter that a fluctuation exists when the daily exchange rate 
differs from a benchmark by 2.25 percent. The benchmark is defined as 
the rolling average of rates for the past 40 business days. When we 
determine a fluctuation exists, we substitute the benchmark for the 
daily rate. See Policy Bulletin 96-1 Currency Conversions, 61 FR 9434 
(March 8, 1996).

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                                Margin  
         Manufacturer/exporter                 Period         (percent) 
------------------------------------------------------------------------
Ausimont S.p.A........................    08/01/96-07/31/97        40.90
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    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 30 days of publication. Any hearing, if 
requested, will be held 44 days after the date of publication, or the 
first workday thereafter. Case briefs and/or written comments from 
interested parties may be submitted not later than 30 days after the 
date of publication. Rebuttal briefs and rebuttals to written comments, 
limited to issues raised in the case briefs and comments, may be filed 
not later than 37 days after the date of publication. Parties who 
submit arguments in this proceeding are requested to submit with each 
argument: (1) A statement of the issue and (2) a brief summary of the 
argument. The Department will issue the final results of the 
administrative review, including the results of its analysis of issues 
raised in any such written comments or at a hearing, within 120 days of 
issuance of these preliminary results.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Because the inability to 
link sales with specific entries prevents calculation of duties on an 
entry-by-entry basis, we have calculated an importer-specific ad 
valorem duty assessment rate for the merchandise based on the ratio of 
the total amount of antidumping duties calculated for the examined 
sales made during the POR to the total customs value of the sales used 
to calculate these duties. This rate will be assessed uniformly on all 
entries of that particular importer made during the POR. (This is 
equivalent to dividing the total amount of antidumping duties, which 
are calculated by taking the difference between NV and CEP, by the 
total CEP value of the sales compared, and adjusting the result by the 
average difference between CEP and customs value for all merchandise 
examined during the POR.) Individual differences between CEP and NV may 
vary from the percentage stated above. Upon completion of this review, 
the Department will issue appraisement instructions directly to 
Customs. The final results of this review shall be the basis for the 
assessment of antidumping dumping duties on entries of merchandise 
covered by the determination and for future deposits of estimated 
duties.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of PTFE resin from Italy entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rate for Ausimont will be 
the rate established in the final results of administrative review; (2) 
for merchandise exported by manufacturers or exporters not covered in 
this review but covered in the original less than fair value (LTFV) 
investigations 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 also serves as a preliminary reminder to importers of 
their responsibility 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 the requirement could 
result in the Secretary's presumption that reimbursement of antidumping 
duties occurred and the subsequent assessment of double antidumping 
duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1) and 19 CFR 
353.22(1996).

    Dated: May 4, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-12318 Filed 5-8-98; 8:45 am]
BILLING CODE 3510-DS-M