[Federal Register Volume 67, Number 95 (Thursday, May 16, 2002)]
[Notices]
[Pages 34899-34902]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-12295]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-824]


Notice of Final Determination of Sales at Less Than Fair Value: 
Polyethylene Terephthalate Film, Sheet, and Strip From India

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

EFFECTIVE DATE: May 16, 2002.

FOR FURTHER INFORMATION CONTACT: Timothy Finn, Zev Primor, or Howard 
Smith at (202) 482-0065, (202) 482-4114, and (202) 482-5193, 
respectively; AD/CVD Enforcement, Office 4, Group II, Import 
Administration, Room 1870, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The 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. In addition, unless otherwise 
indicated, all citations to Department of Commerce (the Department) 
regulations are to 19 CFR part 351 (April 2001).

Final Determination

    We determine that polyethylene terephthalate film, sheet, and strip 
(PET film) from India are being sold, or are likely to be sold, in the 
United States at less than fair value (LTFV), as provided in section 
735 of the Act. The estimated margin of sales at LTFV is shown in the 
Suspension of Liquidation section of this notice.

Case History

    On December 21, 2001, the Department published the preliminary 
determination of the antidumping duty investigation of PET film from 
India. See Polyethylene Terephthalate Film, Sheet, and Strip from 
India; Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination, 66 FR 65893 (December 
21, 2001) (Preliminary Determination). For the respondent, Polyplex 
Corporation Limited (Polyplex) we issued and received an additional 
supplemental questionnaire pertaining to further manufacturing in 
January. We conducted a verification of the questionnaire responses of 
the respondent, Ester Industries Limited (Ester) during the weeks of 
January 7, 2002 and January 14, 2002, and Polyplex during the weeks of 
February 11, 2002, and February 18, 2002. Further, we conducted a 
verification of the questionnaire responses of Ester's U.S. affiliate, 
Ester International (USA) Limited (EIUL), during the week of February 
25, 2002, and Polyplex's U.S. affiliates, Spectrum Marketing Company 
Incorporated (Spectrum) and Company A during the week of March 4, 2002. 
See Affiliation of Parties below. We gave interested parties an 
opportunity to comment on our Preliminary Determination and our 
findings at verification. On April 10, 2002, both respondents, and on 
April 11, 2002, the petitioners,\1\ submitted case briefs. On April 15, 
2002, all parties submitted rebuttal briefs. The Department received 
requests for a public hearing from both petitioners and respondents; 
and a public hearing was held on April 17, 2002.
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    \1\ The petitioners in this investigation are Dupont Teijin 
Films of Mitsubishi Polyester Film of America and Toray Plastics 
(America) (collectively the petitioners).
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    In addition, on December 28, 2001, respondents and two other Indian 
producers, Flex Industries Limited (Flex) and Jindal Polyester Ltd. 
(Jindal), submitted a proposal for a suspension agreement in this 
investigation. Subsequently, on January 22, 2002, we met with counsel 
for Ester, Flex, Jindal, and Polyplex to discuss this proposal, but no 
agreement resulted from this meeting. For further details, see 
Memorandum to the File dated May 6, 2002 on proposed suspension 
agreement.
    The Department has conducted this investigation in accordance with 
section 731 of the Act.

Scope of Investigation

    For purposes of these investigations, the products covered are all 
gauges of raw, pretreated, or primed PET film, whether extruded or 
coextruded. Excluded are metallized films and other finished films that 
have had at least one of their surfaces modified by the application of 
a performance-enhancing resinous or inorganic layer of more than 
0.00001 inches thick. Imports of PET film are classifiable in the 
Harmonized Tariff Schedule of the United States (HTSUS) under item 
number 3920.62.00. HTSUS subheadings are provided for convenience and 
Customs purposes. The written description of the scope of this 
proceeding is dispositive.

[[Page 34900]]

Period of Investigation

    The period of investigation (POI) is April 1, 2000, through March 
31, 2001.

Affiliation of Parties

    Pursuant to section 771(33)(F) of the Act, the Department 
preliminarily determined that two customers to whom Polyplex sold PET 
film during the POI and whom Polyplex identified as unaffiliated 
parties are, in fact, affiliated with Polyplex. Specifically, the 
Department has determined that one U.S. customer and one home market 
customer (hereinafter referred to as Company A and Company B, 
respectively) are part of a corporate grouping which, together with 
Polyplex, controls another person. According to section 771(33)(F) of 
the Act, two or more persons directly or indirectly controlling any 
other person shall be considered affiliated. Thus, we preliminarily 
found the corporate grouping, including companies A and B, to be 
affiliated with Polyplex. The parties did not contest this 
determination and we have continued to treat Company A and Company B as 
affiliated parties for purposes of the final determination.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this proceeding and to which we have responded are listed in the 
Appendix to this notice and addressed in the ``Issues and Decision 
Memorandum'' (Decision Memorandum), dated May 6, 2002, which is hereby 
adopted by this notice. Parties can find a complete discussion of the 
issues raised in this investigation and the corresponding 
recommendations in this public memorandum which is on file in the 
Central Records Unit, room B-099 (B-099) of the main Department 
building. In addition, a complete version of the Decision Memorandum 
can be accessed directly on the Web at http://ia.ita.doc.gov. The paper 
copy and electronic version of the Decision Memorandum are identical in 
content.

Changes Since the Preliminary Determination

    Based on our findings at verification, and analysis of comments 
received, we have made adjustments to the preliminary determination 
calculation methodologies in calculating the final dumping margins in 
this proceeding. These adjustments are discussed in detail in the 
Decision Memorandum and are listed below:

Ester

    (1) We recalculated imputed credit expenses for constructed export 
price (CEP) sales using short-term borrowing costs Ester experienced 
during the POI. See Calculation Memorandum of the Final Determination 
of the Investigation of Ester Industries Ltd., dated May 6, 2002 (Ester 
Calculation Memorandum) and the Decision Memorandum at comment 8.
    (2) We recalculated U.S. inventory carrying costs for CEP sales 
using short-term borrowing costs Ester experienced during the POI. 
Additionally, during the POI, Ester's wholly owned U.S. sales 
affiliate, EIUL incurred interest expenses on factored receivables in 
the currency of the EP transactions. Consequently, for the final 
determination, we have used EIUL's interest rate to calculate credit 
expenses on Ester's EP sales. See Ester Calculation Memorandum and the 
Decision Memorandum at comment 8.
    (3) We adjusted Ester's reported raw material cost to allow only 
the amount of export incentive benefits used to offset import duties on 
purchased inputs. See Ester Calculation Memorandum and Decision 
Memorandum at comment 3.
    (4) In the model match methodology, we modified our selection of 
certain most similar products. See Ester Calculation Memorandum.
    (5) We made minor corrections pursuant to the verification. See 
Ester Calculation Memorandum.
    (6) Consistent with our practice, we adjusted the antidumping duty 
cash deposits for the export subsidies found in the companion 
countervailing investigation rather than adjusting net U.S. price. See 
Decision Memorandum at comment 2.

Polyplex

    (1) We recalculated U.S. inventory carrying costs and U.S. imputed 
credit expenses for CEP sales using the average short-term interest 
rate, as published by the Federal Reserve. See Calculation Memorandum 
of the Final Determination of the Investigation of Polyplex Corporation 
Limited dated May 6, 2002 (Polyplex Calculation Memorandum) and 
Decision Memorandum at comment 16.
    (2) We recalculated U.S. warehousing costs and U.S. indirect 
selling expenses for CEP sales in order to reflect arm's-length costs.
    (3) We adjusted Polyplex's reported raw material cost to allow only 
the amount of export incentive benefits used to offset import duties on 
purchased inputs. See Polyplex Calculation Memorandum and Decision 
Memorandum at comment 3.
    (4) We revised several U.S. selling expenses to reflect findings 
from verification. See Polyplex Calculation Memorandum.
    (5) We modified the calculation of imputed credit in the home 
market and U.S. market to include the variables for recovered interest 
payments and interest revenue earned. See Polyplex Calculation 
Memorandum.
    (6) In the model match methodology, we modified our selection of 
certain most similar products. See Polyplex Calculation Memorandum.
    (7) We made minor corrections pursuant to the verification. See 
Polyplex Calculation Memorandum.
    (8) Consistent with our practice, we adjusted the antidumping duty 
cash deposits for the export subsidies found in the companion 
countervailing investigation rather than adjusting net U.S. price. See 
Decision Memorandum at comment 2.

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by the respondents for use in our final 
determination. We used standard verification procedures including 
examination of relevant accounting and production records, and original 
source documents provided by the respondent.

Suspension of Liquidation

    Pursuant to section 735(c)(1)(B) of the Act, we are instructing the 
U.S. Customs Service (Customs Service) to continue to suspend 
liquidation of all entries of PET Film from India that are entered, or 
withdrawn from warehouse, for consumption on or after December 21, 2001 
(the date of publication of the Preliminary Determination in the 
Federal Register) for Ester, and those companies which received the 
``all others'' rate.
    In the companion countervailing duty investigation we have found 
the existence of export subsidies with respect to both Polyplex and 
Ester. Section 772(c)(1)(C) of the Act directs the Department to 
increase EP or CEP by the amount of the countervailing duty ``imposed'' 
on the subject merchandise ``to offset an export subsidy'' in an 
administrative review. The basic economic theory underlying this 
provision is that in parallel antidumping and countervailing duty 
investigations, if the Department finds that a respondent received the 
benefits of an export subsidy program, it is presumed the subsidy 
contributed to lower-priced sales of subject

[[Page 34901]]

merchandise in the United States market by the amount of any such 
export subsidy. Thus, the subsidy and dumping are presumed to be 
related, and the assessment of duties against both would in effect be 
``double-application'' or imposing two duties against the same 
situation. Therefore, Congress, through section 772(c)(1)(C) of the 
Act, indicated that the Department should factor the subsidy into the 
antidumping calculations to prevent this ``double-application'' of 
duties.
    We believe the economic theory implicit in section 772(c)(1)(C) of 
the Act should also generally apply to our cash deposit calculations in 
an investigation. The calculations underlying cash deposit rates 
resulting from an initial investigation are essentially equivalent to 
those determined in administrative reviews leading to the assessment of 
antidumping duties. Congress has indicated, in effect, that no dumping 
exists if the export subsidies calculated in a countervailing duty 
proceeding are equal to or greater than the calculated dumping margin. 
The Department believes that this is true regardless if such a result 
appears in an administrative review or in an investigation. Therefore, 
an affirmative dumping determination accompanied by Customs 
instructions which call for the suspension of liquidation and the 
collection of zero cash deposit rates would be inconsistent with the 
logic and intent of the law. If the Department's calculations in an 
investigation result in a zero cash deposit rate, then in reality, 
there exists no dumping upon which an affirmative determination could 
be based as to that particular respondent.
    The Department has determined in its Final Affirmative 
Countervailing Duty Determination: Polyethylene Terephthalate Film, 
Sheet, and Strip from India (issued concurrently) that the product 
under investigation benefitted from export subsidies. Consistent with 
our longstanding practice, where the product under investigation is 
also subject to a concurrent countervailing duty investigation, we 
instruct the Customs Service to require a cash deposit or posting of a 
bond equal to the weighted-average amount by which the normal value 
exceeds the export price, as indicated below, minus the amount of the 
countervailing duty determined to offset an export subsidy. See, e.g., 
Notice of Antidumping Duty Order: Stainless Steel Wire Rod From Italy, 
63 FR 49327 (September 15, 1998). Accordingly, for cash deposit 
purposes we are subtracting from Ester's and Polyplex's cash deposit 
rates that portion of the rate attributable to the export subsidies 
found in the affirmative countervailing duty determination for both 
respondents (i.e., 18.43 percent and 18.66 percent, respectively). 
After the adjustment for the cash deposit rate attributed to export 
subsidies, the resulting cash deposit rate for Polyplex is zero while 
the rate for Ester is 5.68 percent.
    In accordance with section 735(c)(1)(B) of the Act, we are 
directing the Customs Service to continue to suspend liquidation of all 
entries of subject merchandise (except for merchandise produced and 
exported by Polyplex) entered, or withdrawn from warehouse, for 
consumption on or after December 21, 2001, the date of publication of 
the preliminary determination in the Federal Register. We will instruct 
the Customs Service to continue to require a cash deposit or the 
posting of a bond for each entry equal to the weighted-average amount 
by which the normal value exceeds the export price, adjusted for the 
export subsidy rate, as indicated below, except for Polyplex. Because 
the estimated cash deposit rate for Polyplex is zero, we are directing 
the Customs Service not to suspend liquidation of entries of this 
merchandise produced and exported by this company. These suspension of 
liquidation instructions will remain in effect until further notice. We 
determine that the following weighted-average dumping margins exist for 
the period April 1, 2000 through March 31, 2001:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Ester Industries Limited...................................        24.11
Polyplex Corporation Limited...............................        (\2\)
All Others.................................................       24.11
------------------------------------------------------------------------
\2\ The Department calculated a weighted-average dumping margin of 10.34
  percent for Polyplex before adjusting the margin for export subsidies
  for which the Department determined to impose countervailing duties,
  if a CVD order is issued. However, as discussed above, because the
  rate for Polyplex is zero after adjusting the dumping margin for the
  export subsidies in the companion affirmative countervailing duty
  investigation, Polyplex will be excluded from the antidumping duty
  order, if an order is issued in this proceeding.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (ITC) of our determination. As our final 
determination is affirmative, the ITC will determine, within 45 days, 
whether these imports are causing material injury, or threat of 
material injury, to an industry in the United States. If the ITC 
determines that material injury, or threat of injury does not exist, 
the proceeding will be terminated and all securities posted will be 
refunded or canceled. If the ITC determines that such injury does 
exist, the Department will issue an antidumping order directing Customs 
officials to assess antidumping duties on all imports of the subject 
merchandise entered or withdrawn from warehouse for consumption on or 
after the effective date of the suspension of liquidation.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305(a)(3). 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 determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: May 6, 2002.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.

Appendix--Issues in Decision Memorandum

Common Issues

1. Adjustment to U.S. Price for Countervailing Duties
2. Antidumping Duty Order with No Cash Deposit, Bond or Security
3. Adjustment to Cost of Production (COP) for Duty Entitlement 
Passbook Scheme (DEPB) Benefits
4. Negative Dumping Margins
5. Model Matching Similar Films

Company-Specific

Ester Industries Limited

6. Failure to Provide Product-Specific Costs
7. General and Administrative Expense and Interest Expense
8. Interest Rates Used to Calculate Imputed Credit Expenses for 
Constructed Export Price (CEP) Transactions
9. Interest Rates used to Calculate Imputed Credit Expenses for 
Export Price (EP) Transactions
10. Unreconciled Quantities Classified As Slitting Loss
11. Verification Corrections

Polyplex Corporation Limited

12. Whether to Apply Adverse Facts Available (AFA) for Polyplex's 
Sales to US1/US2
13. Application of the Special Rule
14. Whether to Apply AFA for CEP Expenses and Sales
15. Failure to Provide Product Specific Costs
16. Credit Expenses and Inventory Carrying Costs for CEP Sales

[[Page 34902]]

17. Verification Corrections

[FR Doc. 02-12295 Filed 5-15-02; 8:45 am]
BILLING CODE 3510-DS-P