[Federal Register Volume 65, Number 91 (Wednesday, May 10, 2000)]
[Notices]
[Pages 30064-30067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11598]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-475-703]


Granular Polytetrafluoroethylene Resin From Italy; Preliminary 
Results of Antidumping Duty Administrative 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 respondent, Ausimont S.p.A. 
(Ausimont), the Department of Commerce is conducting an administrative 
review of the antidumping duty order on granular 
polytetrafluoroethylene (PTFE) resin from Italy. The period of review 
is August 1, 1998, through July 31, 1999.
    We preliminarily find that sales have not been made below normal 
value (NV). If these preliminary results are adopted in our final 
results of administrative review, we will instruct the Customs Service 
to assess no antidumping duties on the subject merchandise exported by 
Ausimont. 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 DATE: May 10, 2000.

FOR FURTHER INFORMATION CONTACT: Magd Zalok or Charles Riggle, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-4162 or (202) 482-0650, 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 (1999).

Background

    On August 30, 1988, the Department of Commerce (the Department) 
published in the Federal Register the antidumping duty order on 
granular PTFE resin from Italy (53 FR 33163). On August 27, 1999, we 
received a timely request for review from Ausimont and its U.S. 
affiliated company, Ausimont USA, the only respondent in this 
administrative review. On November 4, 1999, the Department published in 
the Federal Register a list of antidumping and countervailing duty 
cases with September anniversary dates for which we were initiating 
reviews. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 64 FR 60161. 
This initiation notice also included the initiation of this review of 
the antidumping duty order on granular PTFE resin from Italy because we 
inadvertently omitted this review from the previous initiation notice 
for antidumping cases with August anniversary dates.
    We issued a questionnaire to Ausimont on October 8, 1999, followed 
by a supplemental questionnaire on February 8, 2000, and received

[[Page 30065]]

responses on November 5, November 19, November 29, December 17, 1999, 
and February 29, 2000.
    On October 22, 1999, Ausimont requested that the Department apply 
the ``special rule'' in accordance with section 772(e) of the Act and 
exclude sales of further-manufactured wet raw polymer from the analysis 
in this review on the grounds that the value added to the imported wet 
raw polymer in the United States is at least 65 percent of the price 
charged to the first unaffiliated U.S. customer. On December 9, 1999, 
we rejected Ausimont's request to exclude the sales of further-
manufactured wet raw polymer because the burden of using the 
Department's standard methodology is relatively low and the proportion 
of further-manufactured sales is sufficiently high as to raise concerns 
about the accuracy of the antidumping duty margin. See the December 9, 
1999, memorandum, Application of the Special Rule to Ausimont's 
Further-Manufactured Sales of Imported Wet Raw Polymer in the 1998-99 
Administrative Review of the Antidumping Duty Order on Granular 
Polytetrafluoroethylene Resin from Italy, which is on file in the 
Central Records Unit (CRU) (room B-099 of the main Commerce Building).

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, the subject 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 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 United States 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.
    Since there were appropriate comparison market sales of comparable 
merchandise, we did not need to compare 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 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 USA, the respondent's affiliate. We based the 
starting price for the calculation of CEP on the packed, delivered 
prices to unaffiliated purchasers in the United States. We adjusted the 
starting price, net of billing credit, for movement expenses, in 
accordance with section 772(c)(2)(A) of the Act, including domestic 
inland freight, international freight, marine insurance, brokerage and 
handling, U.S. inland freight, and U.S. customs duties.
    In accordance with section 772(d)(1) of the Act, we deducted 
selling expenses incurred in connection with economic activity in the 
United States. These expenses include credit, 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.
    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.
    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 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 5 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 market 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. Also, we made a CEP-offset adjustment to the NV for 
indirect selling expenses pursuant to section 773(a)(7)(B) of the Act 
as discussed in the Level of Trade/CEP Offset section 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

[[Page 30066]]

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 e.g., Industrial Nitrocellulose 
From the United Kingdom; Notice of Final Results of Antidumping Duty 
Administrative Review, 65 FR 6148, 6151 (February 8, 2000) (Industrial 
Nitrocellulose).
    In implementing these principles in this review, we obtained 
information from Ausimont about the marketing stage involved in the 
reported U.S. sales and in 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 1996-
97 review,\1\ the most recently completed review in this case. 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 
technical assistance, engineering services, research and development, 
technical programs, and delivery services.
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    \1\ See Notice of Final Results of Antidumping Duty 
Administrative Review: Granular Polytetrafluoroethylene Resin From 
Italy, FR 63, 49080, 49083 (September 14, 1998), and Notice of 
Preliminary Results of Antidumping Duty Administrative Review: 
Polytetrafluoroethylene Resin from Italy, 63 FR 25826, 25827 (May 
11, 1998).
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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., 
Industrial Nitrocellulose, 65 FR 6148, 6149-6150 (February 8, 2000). 
The CEP level of trade involves minimal selling functions such as 
invoicing and the occasional exchange of personnel between Ausimont 
S.p.A. and its U.S. affiliate. 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.
    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 
currencies into U.S. dollars, unless the daily rate involves a 
``fluctuation.''

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)
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Ausimont S.p.A...................  08/01/98-07/31/99.......        0.34
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    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding within five days after the date of 
publication of this notice any calculations performed in connection 
with these preliminary results. An interested party may request a 
hearing within 30 days of publication of this notice. 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 the Customs Service shall 
assess, antidumping duties on all appropriate entries. Upon completion 
of this review, the Department will issue appraisement instructions 
directly to the Customs Service. If the final margin is above de 
minimis, for duty assessment purposes, we will calculate an importer-
specific ad valorem duty assessment rate 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. However, if 
these preliminary results are adopted in our final results, we will 
instruct the Customs Service to assess no antidumping duties on the 
merchandise subject to review pursuant to 19 CFR 351.106(c)(2).
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of granular 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) 
investigation or a previous review, the cash deposit will continue

[[Page 30067]]

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 the rate established for 
the most recent period for the manufacturer of the merchandise; 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 this 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 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 2, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-11598 Filed 5-9-00; 8:45 am]
BILLING CODE 3510-DS-P