[Federal Register Volume 66, Number 174 (Friday, September 7, 2001)]
[Notices]
[Pages 46773-46775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-22557]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-427-009]


Industrial Nitrocellulose From France: 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 from the respondent, Bergerac, N.C., 
the Department of Commerce is conducting an administrative review of 
the antidumping duty order on industrial nitrocellulose from France. 
The review covers one manufacturers/exporter, Bergerac, N.C. The period 
of review is August 1, 1999, through July 31, 2000.
    We have preliminarily determined that sales by Bergerac, N.C. have 
been made below normal value. If these preliminary results are adopted 
in our final results of administrative review, we will instruct the 
Customs Service to assess antidumping duties on all appropriate 
entries.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments in these proceedings are requested 
to submit with each argument (1) a statement of the issue and (2) a 
brief summary of the argument.

EFFECTIVE DATE: September 7, 2001.

FOR FURTHER INFORMATION CONTACT: David Dirstine, AD/CVD Enforcement 3, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-4033.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    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 of Commerce's (the 
Department's) regulations are to 19 CFR part 351 (2000).

Background

    On August 10, 1983, the Department of Commerce (the Department) 
published in the Federal Register (48 FR 36303) the antidumping duty 
order on industrial nitrocellulose (INC) from France. On August 25, 
2000, the respondent requested a review of that order for respondent 
Bergerac, N.C. On October 2, 2000, in accordance with 19 CFR 
351.213(b), we published a notice of initiation of administrative 
review of this order for the period of review August 1, 1999, through 
July 31, 2000 (POR) (65 FR 58733). The Department is conducting this 
administrative review in accordance with section 751 of the Act.

Scope of Review

    The product covered by this review is INC containing between 10.8 
and 12.2 percent nitrogen. INC is a dry, white amorphous synthetic 
chemical produced by the action of nitric acid on cellulose. The 
product comes in serveral viscosities and is used to form films in 
lacquers, coatings, furniture finishes and printing inks. Imports of 
this product are classified under the Harmonized Tariff Schedule of the 
United States Annotated (HTSUS) subheadings 3912.20.00 and 3912.90.00. 
Although the HTSUS item numbers are provided for convenience and 
customs purposes, the written descriptions of the scope of this 
proceeding remain dispositive.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Bergerac, N.C. (BNC), using standard verification 
procedures, including on-site inspection of the manufacturer's 
facilities, the examination of relevant sales, financial, and cost 
records, and the selection of original documentation containing 
relevant information. Our verification results are outlined in the 
public versions of the verification reports, which are on file in the 
Central Records Unit (CRU), Main Commerce Building, Room B-099.

Constructed Export Price

    For the price to the United States, we used constructed export 
price (CEP) as defined in section 772(b) of the Act. We calculated CEP 
based on the packed F.O.B., C.I.F., or delivered price to unaffiliated 
purchasers in the United States. We made deductions, as appropriate, 
for discounts and rebates. We also made deductions for any movement 
expenses in accordance with section 772(c)(2)(A) of the Act.
    In accordance with section 772(d)(1) of the Act and the Statement 
of Administrative Action (SAA) (H.R. Doc. 103-316 (1994) at 823-824) to 
the URAA, we calculated the CEP by deducting selling expenses 
associated with economic activities occurring in the United States, 
including commissions, direct selling expenses, and indirect selling 
expenses in the United States. Finally, we made an adjustment for 
profit allocated to these expenses in accordance with section 772(d)(3) 
of the Act. No other adjustments to CEP were claimed or allowed.
    Tevco, Inc. (TEVCO), a U.S. affiliate of BNC, imported subject 
merchandise to which value was added in the United States prior to sale 
to unaffiliated U.S. customers. The further-manufactured products were 
then sold to unaffiliated parties. We preliminarily determine that the 
special rule under section 772(e) of the Act for merchandise with value 
added after importation applies to the sales made by TEVCO in the 
United States.
    Section 772(e) of the Act provides that, when the subject 
merchandise is imported by an affiliated person and the value added in 
the United States by the affiliated person is likely to exceed 
substantially the value of the subject merchandise, we shall determine 
the CEP for such merchandise using the price to an unaffiliated party 
of identical or other subject merchandise if there is a sufficient 
quantity of sales to provide a reasonable basis for comparison, and we 
determine that the use of such sales is appropriate. If there is not a 
sufficient quantity of such sales or if we determine that using the 
price to an unaffiliated party of identical or other subject 
merchandise is not appropriate, we may use any other reasonable basis 
to determine the CEP.
    To determine whether the value added is likely to exceed 
substantially the value of the subject merchandise, we estimated the 
value added based on the difference between the averages of the prices 
charged to the first unaffiliated

[[Page 46774]]

purchaser for the merchandise as sold in the United States and the 
averages of the prices paid for the subject merchandise by the 
affiliated purchaser, TEVCO. Based on this analysis, we determined that 
the estimated value added in the United States by TEVCO accounted for 
at least 65 percent of the price charged to the first unaffiliated 
customer for the merchandise as sold in the United States. See 19 CFR 
351.402(c) for an explanation of our practice on this issue; see also 
Antifriction Bearings (other than Tapered Roller Bearings) and Parts 
Thereof from France, Germany, Italy, Japan, Sweden, and the United 
Kingdom: Final Results of Antidumping Duty Administrative Reviews and 
Revocation of Orders in Part, 66 FR 36551, 36555, Decision Memorandum 
at Comment 28 (July 12, 2001) (AFBs). Therefore, we determine 
preliminarily that the value added is likely to exceed substantially 
the value of the subject merchandise.
    For BNC, we determine preliminarily that there was a remaining 
sufficient quantity of sales of identical or other subject merchandise 
to unaffiliated persons to provide a reasonable basis for comparison 
and that the use of these sales is appropriate as a basis for 
calculating margins of dumping on the value-added merchandise. See 
AFBs. Accordingly, for purposes of determining dumping margins for the 
sales subject to the special rule, we have used the weighted-average 
dumping margins calculated on sales of identical or other subject 
merchandise sold to unaffiliated persons. See the Analysis Methodology 
memorandum from J. David Dirstine to the file dated August 30, 2001.

Normal Value

    Based on a comparison of the aggregate quantity of home-market and 
U.S. sales and absent any information that a particular market 
situation in the exporting country did not permit a proper comparison, 
we determined that the quantity of foreign like product sold by BNC in 
France was sufficient to permit a proper comparison with the sales of 
the subject merchandise to the United States, pursuant to section 
773(a) of the Act. BNC's quantity of sales in its home market was 
greater than five percent of its sales to the U.S. market. Therefore, 
in accordance with section 773(a)(1)(B)(i) of the Act, we based normal 
value on the prices at which the foreign like products were first sold 
for consumption in the exporting country.
    We used sales to affiliated customers only where we determined such 
sales were made at arm's-length prices, i.e., at prices comparable to 
prices at which the firm sold identical merchandise to unaffiliated 
customers.
    On November 29, 2000, the Department received a below-cost 
allegation from the petitioner, Green Tree Chemical Technologies, Inc. 
The petitioner's below-cost allegation made use of BNC's data on the 
record, employed a reasonable methodology, and provided evidence that 
alleged below-cost sales are representative of a broader range of 
models that may be used as a basis for normal value. Therefore, 
pursuant to section 773(b)(1)(A) and (B), on December 20, 2000, we 
initiated a below-cost investigation of sales by BNC in its home 
market. For a further discussion of this below-cost investigation, see 
Memorandum to Richard W. Moreland from Laurie Parkhill, dated December 
20, 2000, on file in the CRU, Room B-099.
    In accordance with section 773(b)(3) of the Act, we calculated the 
cost of production (COP) based on the sum of the costs of materials and 
fabrication employed in producing the foreign like product, plus 
amounts for home-market selling, general and administrative (SG&A) 
expenses, and all costs and expenses incidental to packing the 
merchandise. We used the home-market sales data and COP information 
provided by BNC in its questionnaire response.
    After calculating a weighted-average COP, in accordance with 
section 773(b)(3) of the Act, we tested whether the home-market sales 
of INC were made at prices below COP within an extended period of time 
in substantial quantities, and whether such prices permitted recovery 
of all costs within a reasonable period of time. We compared grade-
specific COP's to the reported home-market prices less any applicable 
movement charges, discounts and rebates, indirect selling expenses, 
commissions, and packing.
    Pursuant to section 773(b)(2)(C) of the Act, when less than 20 
percent of BNC's sales of a grade of INC were at prices less than the 
COP, we did not disregard any below-cost sales of that product because 
the below-cost sales were not made in substantial quantities within an 
extended period of time. When 20 percent or more of BNC's sales of a 
grade of INC during the period of review were at prices less than the 
COP, we disregarded such below-cost sales because they were made in 
substantial quantities within an extended period of time pursuant to 
sections 773(b)(2)(B) and (C) of the Act. Based on comparisons of home-
market prices to weighted-average COPs for the period of review, we 
determined that below-cost sales of INC were at prices which would not 
permit recovery of all costs within a reasonable period of time in 
accordance with section 773(b)(2)(D) of the Act. Based on this test, we 
disregarded certain below-cost sales with respect to BNC.
    We compared U.S. sales with sales of the foreign like product in 
the home market.
    Home-market prices were based on the packed, ex-factory or 
delivered prices to affiliated or unaffiliated purchasers. When 
applicable, we made adjustments for differences in packing and for 
movement expenses in accordance with sections 773(a)(6)(A) and (B) of 
the Act. We also made adjustments for differences in cost attributable 
to differences in physical characteristics of the merchandise pursuant 
to section 773(a)(6)(C)(ii) of the Act and for differences in 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. For comparisons to 
CEP, we made COS adjustments by deducting home-market direct selling 
expenses from normal value. We also made adjustments, when applicable, 
for home-market indirect selling expenses to offset U.S. commissions 
deducted from CEP.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, we base 
normal value, to the extent practicable, on sales at the same level of 
trade as the CEP. If normal value is calculated at a different level of 
trade, we make an adjustment, if appropriate and if possible, in 
accordance with section 773(a)(7) of the Act. We determined that there 
was one level of trade in the home market. We were unable to match CEP 
sales at the same level of trade in the home market or to make a level-
of-trade adjustment, because the differences in price between the CEP 
level of trade and the home-market level of trade are not quantifiable 
due to the lack of an equivalent CEP level of trade in the home market. 
Section 773(a)(7)(B) of the Act provides for an adjustment to normal 
value if normal value is established at a level of trade that is a more 
advanced stage of distribution than the level of trade of the CEP sale 
and the information on the record does not provide a basis for 
determining a level-of-trade adjustment. Therefore, we have made a CEP 
offset for all such sales as requested by the respondent. (See the 
Level of Trade section of our analysis memorandum to the file, dated 
August 30, 2001, on file in the CRU, Room B-099.)

[[Page 46775]]

Preliminary Results of Reviews

    As a result of our review, we preliminarily determine the weighted-
average dumping margins of 3.26 percent for the period August 1, 1999, 
through July 31, 2000.
    Any interested party may request a hearing within 30 days of the 
date of publication of this notice. A hearing, if requested, will be 
held at the main Commerce Department building three days after 
submission of rebuttal briefs.
    Issues raised in hearings will be limited to those raised in the 
respective case and rebuttal briefs. Case briefs from interested 
parties may be filed no later than 30 days after publication of this 
notice. Rebuttal briefs, limited to the issues raised in case briefs, 
may be submitted no later than five days after the deadline for filing 
case briefs.
    Parties who submit case or rebuttal briefs in this proceeding are 
requested to submit with each argument (1) a statement of the issue, 
and (2) a brief summary of the argument with an electronic version 
included.
    The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written briefs. The Department will issue final 
results of this review within 120 days of publication of these 
preliminary results.

Assessment Rates

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. We have 
calculated importer-specific ad valorem duty-assessment rates based on 
the ratio of the total amount of antidumping duties calculated for the 
examined CEP sales made during the POR to the total customs entered 
value of the sales used to calculate these duties. We will direct the 
Customs Service to assess the resulting percentage margin for the 
reviewed CEP sales uniformly on all entries of that particular importer 
during the POR as well as on those entries of subject merchandise for 
which we determined that the special rule for merchandise with value 
added after importation applied under section 772(e) of the Act. See 19 
CFR 351.212(a).

Cash-Deposit Requirements

    The following deposit requirements will be effective upon 
publication of the notice of final results of administrative review for 
all shipments of subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the date of publication, as 
provided by section 751(a)(1) of the Act: (1) The cash-deposit rate for 
Bergerac, N.C. will be the rate established in the final results of 
review; (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 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; and (4) the cash-deposit rate for all 
other manufacturers or exporters will 1.38 percent. This is the ``All 
Others'' rate from the less-than-fair-value investigation.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) 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 Department's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of doubled antidumping duties.
    We are issuing and publishing these determinations in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: August 31, 2001.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-22557 Filed 9-6-01; 8:45 am]
BILLING CODE 3510-DS-P