[Federal Register Volume 68, Number 91 (Monday, May 12, 2003)]
[Notices]
[Pages 25327-25332]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11743]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-802]


Preliminary Results and Rescission in Part of Antidumping Duty 
Administrative Review: Gray Portland Cement and Clinker From Mexico

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

ACTION: Notice of preliminary results and rescission in part of 
antidumping duty administrative review.

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EFFECTIVE DATE: May 12, 2003.
SUMMARY: In response to requests from interested parties, the 
Department of Commerce is conducting an administrative review of the 
antidumping duty order on gray portland cement and clinker from Mexico. 
The review covers exports of subject merchandise to the United States 
during the period August 1, 2001, through July 31, 2002, and one firm, 
CEMEX, S.A. de C.V., and its affiliate, GCC Cemento, S.A. de C.V. We 
have preliminarily determined that sales were made below normal value 
during the period of review. With respect to Apasco, S.A. de C.V., we 
are rescinding the antidumping duty administrative review of this 
company.
    We invite interested parties to comment on these preliminary 
results. Parties who submit arguments in this proceeding are requested 
to submit with the argument (1) a statement of the issues, and (2) a 
brief summary of the argument.

FOR FURTHER INFORMATION CONTACT: Hermes Pinilla or Brian Ellman, Office 
of 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-
3477, (202) 482-4852, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 6, 2002, the Department published in the Federal Register 
the Notice of Opportunity to Request Administrative Review concerning 
the antidumping duty order on gray

[[Page 25328]]

portland cement and clinker from Mexico (67 FR 50856). In accordance 
with 19 CFR 351.213, the petitioner, the Southern Tier Cement Committee 
(STCC), requested a review of CEMEX, S.A. de C.V. (CEMEX), CEMEX's 
affiliate, GCC Cemento, S.A. de C.V. (GCCC), and Apasco, S.A. de C.V. 
(Apasco). In addition, CEMEX and GCCC requested reviews of their own 
sales during the period of review. On September 25, 2002, we published 
in the Federal Register the Notice of Initiation of Antidumping and 
Countervailing Duty Administrative Reviews (67 FR 60210). The period of 
review is August 1, 2001, through July 31, 2002. Our review of Customs 
Service import data indicates that there were no entries of subject 
merchandise produced by Apasco during the period of review. See 
Memorandum from Analyst to the File, dated March 4, 2003. Therefore, in 
accordance with 19 CFR 351.213(d)(3), we are rescinding the review with 
respect to this manufacturer/exporter. We are conducting a review of 
CEMEX and GCCC pursuant to section 751 of the Tariff Act of 1930, as 
amended (the Act).

Scope of Review

    The products covered by this review include gray portland cement 
and clinker. Gray portland cement is a hydraulic cement and the primary 
component of concrete. Clinker, an intermediate material product 
produced when manufacturing cement, has no use other than of being 
ground into finished cement. Gray portland cement is currently 
classifiable under Harmonized Tariff Schedule (HTS) item number 2523.29 
and cement clinker is currently classifiable under HTS item number 
2523.10. Gray portland cement has also been entered under HTS item 
number 2523.90 as ``other hydraulic cements.'' The HTS subheadings are 
provided for convenience and customs purposes only. Our written 
description of the scope of the proceeding is dispositive.

Verification

    As provided in section 782(i) of the Act, we verified U.S. sales 
information submitted by CEMEX and GCCC using standard verification 
procedures, including an examination of relevant sales and financial 
record and selection of original documentation containing relevant 
information. Our verification results are outlined in public versions 
of the verification reports.

Collapsing

    Section 771(33) of the Act defines when two or more parties will be 
considered affiliated for purposes of an antidumping analysis. 
Moreover, the regulations describe when the Department will treat two 
or more affiliated producers as a single entity (i.e., ``collapse'' the 
firms) for purposes of calculating a dumping margin (see 19 CFR 
357.401(f)). In previous administrative reviews of this order, we 
analyzed the record evidence and collapsed CEMEX and GCCC in accordance 
with the regulations.\1\
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    \1\ See, e.g., Preliminary Results and Rescission in Part of 
Antidumping Duty Administrative Review: Gray Portland Cement and 
Clinker From Mexico, 67 FR 57379, 57380 (September 10, 2002). No 
changes were made in the final results of review (see Gray Portland 
Cement and Clinker From Mexico; Final Results of Antidumping Duty 
Review, 68 FR 1816 (January 14, 2003)).
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    The regulations state that we will treat two or more affiliated 
producers as a single entity where those producers have production 
facilities for similar or identical products that would not require 
substantial retooling of either facility in order to restructure 
manufacturing priorities and we conclude that there is a significant 
potential for the manipulation of price or production. In identifying a 
significant potential for the manipulation of price or production, the 
factors we may consider include the following: (i) the level of common 
ownership; (ii) the extent to which managerial employees or board 
members of one firm sit on the board of directors of an affiliated 
firm; and (iii) whether operations are intertwined, such as through the 
sharing of sales information, involvement in production and pricing 
decisions, the sharing of facilities or employees, or significant 
transactions between the affiliated producers. See 19 CFR 351.401(f).
    Having reviewed the current record, we find that the factual 
information underlying our decision to collapse these two entities has 
not changed from previous administrative reviews. CEMEX's indirect 
ownership of GCCC exceeds five percent; therefore, these two companies 
are affiliated pursuant to section 771(33)(E) of the Act. In addition, 
both CEMEX and GCCC satisfy the criteria for treatment of affiliated 
parties as a single entity described at 19 CFR 351.401(f)(1): both 
producers have production facilities for similar and identical products 
such that substantial retooling of their production facilities would 
not be necessary to restructure manufacturing priorities. Consequently, 
any minor retooling required could be accomplished swiftly and with 
relative ease.
    We also find that a significant potential for manipulation of 
prices and production exists as outlined under 19 CFR 351.401(f)(2). 
CEMEX indirectly owns a substantial percentage of GCCC. Also, CEMEX's 
managers or directors sit on the board of directors of GCCC and its 
affiliated companies. Accordingly, CEMEX's percentage ownership of GCCC 
and the interlocking boards of directors give rise to a significant 
potential for affecting GCCC's pricing and production decisions. See 
the Department's memorandum from Analyst to File, Collapsing CEMEX, 
S.A. de C.V. and GCC Cemento, S.A. de C.V. for the Current 
Administrative Review, dated January 14, 2003. Therefore, we have 
collapsed CEMEX and GCCC into one entity and calculated a single 
weighted-average margin using the information the firms provided in 
this review.

Constructed Export Price

    Both CEMEX and GCCC reported constructed export price (CEP) sales. 
We calculated CEP based on delivered prices to unaffiliated customers 
in accordance with section 772(b) of the Act. Where appropriate, we 
made adjustments to the starting price for discounts, rebates, and 
billing adjustments. In accordance with section 772(d) of the Act and 
19 CFR 351.402(b), we deducted those selling expenses, including 
inventory carrying costs, that were associated with commercial 
activities in the United States and related to the sale to an 
unaffiliated purchaser. We also made deductions for foreign brokerage 
and handling, foreign inland freight, U.S. inland freight and 
insurance, U.S. warehousing expenses, U.S. brokerage and handling, and 
U.S. duties, pursuant to section 772(c)(2)(A) of the Act. Finally, we 
made an adjustment for CEP profit in accordance with section 772(d)(3) 
of the Act. No other adjustments to CEP were claimed or allowed.
    With respect to subject merchandise to which value was added in the 
United States prior to sale to unaffiliated U.S. customers (i.e., 
cement that was imported and further-processed into finished concrete 
by U.S. affiliates of foreign exporters), we preliminarily determine 
that the special rule under section 772(e) of the Act for merchandise 
with value added after importation is applicable.
    Section 772(e) of the Act provides that, where the subject 
merchandise is imported by a person affiliated with the exporter or 
producer and the value added in the United States by the affiliated 
person is likely to exceed substantially the value of the subject 
merchandise, we will determine the CEP for such merchandise using the 
price of identical or other subject

[[Page 25329]]

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. The regulations at 19 CFR 351.402(c)(2) provide 
that normally we will determine that the value added in the United 
States by the affiliated person is likely to exceed substantially the 
value of the subject merchandise if we estimate the value added to be 
at least 65 percent of the price charged to the first unaffiliated 
purchaser for the merchandise as sold in the United States. Normally we 
will estimate the value added based on the difference between the price 
charged to the first unaffiliated purchaser for the merchandise as sold 
in the United States and the price paid for the subject merchandise by 
the affiliated person. We will base this determination normally on 
averages of the prices and the value added to the subject merchandise. 
If there is not a sufficient quantity of such sales or if we determine 
that using the price of identical or other subject merchandise is not 
appropriate, we may use any other reasonable basis to determine the 
CEP. See section 772(e) of the Act.
    During the course of this administrative review, the respondent 
submitted information which allowed us to determine whether, in 
accordance with section 772(e) of the Act, the value added in the 
United States by its U.S. affiliates is likely to exceed substantially 
the value of the subject merchandise. 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 
purchaser for the merchandise as sold in the United States and the 
averages of the prices paid for subject merchandise by the affiliate. 
Based on this analysis, we estimate that the value added was at least 
65 percent of the price the respondent charged to the first 
unaffiliated purchaser for the merchandise as sold in the United 
States. Therefore, we preliminarily determine that the value added is 
likely to exceed substantially the value of the subject merchandise. 
Also, the record indicates that there is a sufficient quantity of 
subject merchandise to provide a reasonable and appropriate basis for 
comparison. Accordingly, for purposes of determining dumping margins 
for the further-manufactured sales, we have applied the preliminary 
weighted-average margin reflecting the rate calculated for sales of 
identical or other subject merchandise sold to unaffiliated purchasers.

Normal Value

A. Comparisons
    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating 
normal value, we compared the respondent'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)(1)(C) of the Act. Since 
the respondent's aggregate volume of home-market sales of the foreign 
like product was greater than five percent of its aggregate volume of 
U.S. sales for the subject merchandise, we determined that the home 
market was viable. Therefore, we have based normal value on home-market 
sales.
    During the period of review, the respondent sold Type II LA and 
Type V LA cement in the United States. The statute expresses a 
preference for matching U.S. sales to identical merchandise in the home 
market. The respondent sold cement produced as CPC 30 R, CPC 40, and 
CPO 40 cement in the home market. We have attempted to match the 
subject merchandise to identical merchandise sold in the home market. 
In situations where identical product types cannot be matched, we have 
attempted to match the subject merchandise to sales of similar 
merchandise in the home market. See sections 773(a)(1)(B) and 771(16) 
of the Act.
    We were able to find home-market sales of identical and similar 
merchandise to which we could match sales of Type II LA and Type V LA 
cement sold in the U.S. market. In the two most recent administrative 
reviews of this proceeding, we determined that CPO 40 cement produced 
and sold in the home market is the identical match to Type V LA cement 
sold in the United States. See, e.g., Gray Portland Cement and Clinker 
From Mexico; Final Results of Antidumping Duty Administrative Review, 
67 FR 12518 (March 19, 2002), and the accompanying Issues and Decision 
Memorandum at comment 7. We have reviewed the information on the record 
and have determined that CPO 40 cement produced and sold in the home 
market is the identical match to Type V LA cement sold in the United 
States during this review period.
    If we could not find an identical match to the cement types sold in 
the United States in the same month in which the U.S. sale was made or 
during the contemporaneous period, we based normal value on similar 
merchandise. During the review period, GCCC had sales of Type II LA in 
the United States but did not have any sales of this type in the home 
market. In the 2000/2001 administrative review of this proceeding, we 
determined that the chemical and physical characteristics of type CPO 
40 cement produced and sold in Mexico are most similar to Type II LA 
cement sold in the United States. We have reviewed the information on 
the record and have determined that it is appropriate to match sales of 
CPO 40 cement produced and sold in Mexico to all sales of Type II LA 
sold in the United States.
    Furthermore, in accordance with section 771(16)(B) of the Act, we 
find that both bulk and bagged cement are produced in the same country 
and by the same producer as the types sold
    in the United States, both bulk and bagged cement are like the 
types sold in the United States in component materials and in the 
purposes for which used, and both bulk and bagged cement are 
approximately equal in commercial value to the types sold in the United 
States. The questionnaire responses submitted by the respondent 
indicate that, with the exception of packaging, sales of cement in bulk 
and sales of cement in bags are physically identical and both are used 
in the production of concrete. Also, since there is no difference in 
the cost of production between cement sold in bulk or in bagged form, 
both are approximately equal in commercial value. See CEMEX's and 
GCCC's responses to the Department's original and supplemental 
questionnaires. Therefore, we find that matching the U.S. merchandise 
which is sold in both bulk and bag to the foreign like product sold in 
bulk is appropriate.
B. Arm's-Length Sales
    To test whether sales to affiliated customers were made at arm's 
length, we compared the prices of sales to affiliated and unaffiliated 
customers, net of all movement charges, direct selling expenses, 
discounts, and packing. Where the price to the affiliated party was on 
average 99.5 percent or more of the price to the unaffiliated parties, 
we determined that the sales made to the affiliated party were at arm's 
length. Consistent with 19 CFR 351.403, we included these sales in our 
analysis.
C. Cost of Production
    The petitioner alleged on December 12, 2002, that the respondent 
sold gray portland cement and clinker in the home market at prices 
below the cost of production (COP). Because CPO 40 cement sold in the 
home market is the identical and similar match to sales of

[[Page 25330]]

Type V LA and Type II LA cement sold in the United States, sales of CPO 
40 cement provide the basis for determining normal value and, as such, 
we determined that there is no reasonable grounds to initiate a sales-
below-cost investigation on other cement models produced during this 
review. Upon examining the allegation, we determined that the 
petitioner had provided a reasonable basis to believe or suspect that 
CEMEX was selling CPO 40 cement in Mexico at prices below the COP. 
Therefore, pursuant to section 773(b)(1) of the Act, we initiated a 
model-specific COP investigation to determine whether the respondent 
made home-market sales of CPO 40 cement during the period of review at 
below-cost prices. See the memorandum from Laurie Parkhill to Susan 
Kuhbach entitled Gray Portland Cement and Clinker from Mexico: Request 
to Initiate Cost Investigation in the 2001/2002 Review (February 3, 
2003).
    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of the costs of materials and fabrication employed 
in producing CPO 40 cement, plus amounts for home-market selling, 
general, and administrative (SG&A) expenses. We used the home-market 
sales data and COP information pertaining to CPO 40 cement provided by 
CEMEX in its questionnaire response.
    After calculating a weighted-average COP, in accordance with 
section 773(b)(3) of the Act, we tested whether CEMEX's home-market 
sales of CPO 40 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 
the COP of CPO 40 cement to the reported home-market prices less any 
applicable direct selling expenses, movement charges, discounts and 
rebates, indirect selling expenses, and commissions.
    Pursuant to section 773(b)(2)(C) of the Act, if less than 20 
percent of the respondent's sales of a certain type were at prices less 
than the COP, we do 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. If 20 percent or more of the 
respondent's sales of a certain type during the period of review were 
at prices less than the COP, such below-cost sales 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 of CPO 40 cement to weighted-average COP for the period 
of review, we determined that below-cost sales of CPO 40 cement were 
not made in substantial quantities within an extended period of time, 
and, therefore, we did not disregard any below-cost sales.
D. Adjustments to Normal Value
    Where appropriate, we adjusted home-market prices for discounts, 
rebates, packing, handling, interest revenue, and billing adjustments 
to the invoice price. In addition, we adjusted the starting price for 
inland freight, inland insurance, and warehousing expenses. We also 
deducted home-market direct selling expenses from the home-market price 
and home-market indirect selling expenses as a CEP-offset adjustment 
(see Level of Trade/CEP Offset section below). In addition, in 
accordance with section 773(a)(6) of the Act, we deducted home-market 
packing costs and added U.S. packing costs.
    Section 773(a)(6)(C)(ii) of the Act directs us to make an 
adjustment to normal value to account for differences in the physical 
characteristics of merchandise where similar products are compared. The 
regulations at 19 CFR 351.411(b) direct us to consider differences in 
variable costs associated with the physical differences in the 
merchandise. Where we matched U.S. sales of subject merchandise to 
similar models in the home market, we adjusted for differences in 
merchandise.
E. Level of Trade/CEP Offset
    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine normal value based on sales in the home 
market at the same level of trade as the CEP. The home-market level of 
trade is that of the starting-price sales in the home market or, when 
normal value is based on constructed value (CV), that of sales from 
which we derive SG&A expenses and profit. For CEP, it is the level of 
the constructed sale from the exporter to an affiliated importer after 
the deductions required under section 772(d) of the Act.
    To determine whether home-market sales are at a different level of 
trade than CEP, 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 normal value 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, for CEP sales, if the normal value 
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 
normal value and CEP affects price comparability, we adjust normal 
value under section 773(a)(7)(B) of the Act (the CEP-offset provision). 
See Final Determination of Sales at Less Than Fair Value: Certain Cut-
to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 
(November 19, 1997).
    With respect to U.S. sales, we conclude that CEMEX's and GCCC's 
sales constituted two separate levels of trade, one CEMEX U.S. level of 
trade and one GCCC U.S. level of trade. We based our conclusion on our 
analysis of each company's reported selling functions and sales 
channels after making deductions for selling expenses under section 
772(d) of the Act. We found that CEMEX and GCCC performed different 
sales functions for sales to their respective U.S. affiliates. For 
instance, CEMEX reported that it performed technical advice, 
solicitation of orders/customer visits, account receivable management, 
warehousing, and communication activities whereas GCCC reported that it 
did not perform any of these activities.
    Based on our analysis of the respondent's reported selling 
functions and sales channels, we conclude that the respondent's home-
market sales to various classes of customers which purchase both bulk 
and bagged cement constitute one level of trade. We found that, with 
some minor exceptions, CEMEX and GCCC performed the same selling 
functions to varying degrees in similar channels of distribution. We 
also concluded that the variations in the intensities of selling 
functions performed were not substantial when all selling expenses were 
considered as a whole. See the memorandum entitled Gray Portland Cement 
and Clinker from Mexico: Level-of-Trade Analysis for the 01/02 
Administrative Review, dated April 11, 2003 (Level-of-Trade Analysis 
memorandum).
    Furthermore, the respondent's home-market sales occur at a 
different and more advanced stage of distribution than its sales to the 
United States. For example, the CEMEX U.S. level of trade does not 
include activities such as market research, after-sales service/
warranties, advertising, and packing, whereas the home-market level of 
trade includes these activities. Similarly, the GCCC U.S. level of 
trade does not include activities such as market research, technical 
advice, advertising,

[[Page 25331]]

customer approval, solicitation of orders, computer/legal/accounting/
business systems, sales promotion, sales forecasting, strategic and 
economic planning, personnel training/exchange, and procurement and 
sourcing services whereas the home-market level of trade includes these 
activities.
    As a result of our level-of-trade analysis, we could not match U.S. 
sales at either of the two U.S. levels of trade to sales at the same 
level of trade in the home market because there are no home-market 
sales at the same level of trade. In addition, because we found only 
one home-market level of trade, there is no basis for the calculation 
of a level-of-trade adjustment based on the collapsed entity's home-
market sales of merchandise under review. Therefore, we have determined 
that the data available do not provide an appropriate basis on which to 
calculate a level-of-trade adjustment. We determined, however, that the 
level of trade of the home-market sales is more advanced than the 
levels of the U.S. sales. Thus, we made a CEP-offset adjustment to 
normal value in accordance with section 773(a)(7)(B) of the Act. In 
accordance with section 773(a)(7) of the Act, we calculated the CEP 
offset as the smaller of the following: (1) the indirect selling 
expenses on the home-market sale, or (2) the indirect selling expenses 
deducted from the starting price in calculating CEP. See the Level-of-
Trade Analysis memorandum.

Adverse Facts Available

    Section 776(a)(2) of the Act, provides that, if, in the course of 
an antidumping review, an interested party (A) withholds information 
that has been requested by the Department, (B) fails to provide such 
information in a timely manner or in the form or manner requested, (C) 
significantly impedes a proceeding under the antidumping statute, or 
(D) provides such information but the information cannot be verified, 
then the Department shall, subject to section 782(d) of the Act, use 
the facts otherwise available in reaching the applicable determination.
    Section 782(e) of the Act provides that the Department ``shall not 
decline to consider information that is submitted by an interested 
party and is necessary to the determination but does not meet all the 
applicable requirements established by the administering authority'' if 
(1) the information is submitted by the deadline established for its 
submission, (2) the information can be verified, (3) the information is 
not so incomplete that it cannot serve as a reliable basis for reaching 
the applicable determination, (4) the interested party has demonstrated 
that it acted to the best of its ability in providing the information 
and meeting the requirements established by the Department with respect 
to the information, and (5) the information can be used without undue 
difficulties. Where these conditions are met, the statute requires the 
Department to use the information.
    The Department determines that, in accordance with section 
776(a)(2)(D) of the Act, the use of facts available is an appropriate 
basis for the calculation of a dumping margin on sales made by GCCC's 
U.S. affiliate, Rio Grande Materials (RGM).
    On March 24, 2003, through March 26, 2003, the Department conducted 
a verification of the U.S. sales information submitted by GCCC. As 
discussed in detail in the verification report dated April 24, 2003, 
the Department was unable to obtain detailed source documentation 
supporting the quantity and value (Q&V) of RGM's reported sales and 
expenses. Furthermore, at the onset of the Department's verification, 
GCCC submitted numerous pre-verification corrections that, among other 
things, made substantial changes to the expenses GCCC had reported on 
sales by RGM.
    As detailed in the verification report, without the necessary 
supporting documentation, the Department was unable to verify the 
information that was reported and/or corrected concerning RGM's sales 
of subject merchandise during the POR, as required under section 782(i) 
of the Act. This information is essential to the Department's dumping 
analysis. Thus, the sales information submitted on behalf of RGM does 
not comply with section 782(e) of the Act. Therefore, because we could 
not verify this information, we must resort to facts available.

Use of an Adverse Inference

    Section 776(b) of the Act provides that, if the Department finds 
that an interested party has failed to cooperate by not acting to the 
best of its ability in complying with a request for information, the 
Department may use an inference that is adverse to the interests of 
that party in selecting from among the facts otherwise available. In 
addition, the Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act, H. Doc. 103-316 (1994) (SAA), establishes 
that the Department may employ an adverse inference ``* * * to ensure 
that the party does not obtain a more favorable result by failing to 
cooperate than if it had cooperated fully.'' See SAA at 870. It also 
instructs the Department, in employing adverse inferences, to consider 
``* * * the extent to which a party may benefit from its own lack of 
cooperation.'' Id.
    The Department determines that, in accordance with section 776(b) 
of the Act, an adverse inference is appropriate in selecting from among 
the facts otherwise available for RGM sales. With respect to sales made 
by RGM, the main difficulty encountered by the Department at 
verification was the lack of availability of and access to the original 
source documentation supporting the information supplied to the 
Department. The other difficulty stemmed from RGM's unpreparedness to 
meet the specific requirements that were described in the Department's 
verification outline.
    First, GCCC has been involved in numerous prior reviews of this 
order which indicates that it has experience with an antidumping 
proceeding. Second, pursuant to section 782(i)(3)(B) of the Act, the 
Department was required to verify the information provided by GCCC in 
this POR, as GCCC had not been verified during the two immediately 
preceding reviews. Thus, GCCC was aware that all documentation 
supporting the information it reported for this POR was subject to 
Departmental verification. Finally, although RGM was sold subsequent to 
the instant POR, GCCC was in control of the source documentation 
because it was stored in one of its facilities. Therefore, we have 
concluded that GCCC did not cooperate to the best of its ability.
    In accordance with section 776(b) of the Act, we are making an 
adverse inference in our application of the facts available. As adverse 
facts available we have applied the highest published rate we have 
calculated for companies under review for any segment of this 
proceeding. Consequently, we preliminarily determine to apply the 73.74 
percent rate that we calculated in the final results of the 2000/2001 
administrative review to RGM's sales of subject merchandise in the 
United States during the POR. See Gray Portland Cement and Clinker From 
Mexico; Final Results of Antidumping Duty Administrative Review, 68 FR 
1816-1817 (January 14, 2003). We discuss the corroboration of this rate 
below.

Corroboration of Secondary Information

    An adverse inference may include reliance on information derived 
from the petition, the final determination in the investigation, any 
previous review, or any other information placed on the

[[Page 25332]]

record. See section 776(b) of the Act. Section 776(c) provides, 
however, that, when the Department relies on secondary information 
rather than on information obtained in the course of a review, the 
Department shall, to the extent practicable, corroborate that 
information from independent sources that are reasonably at its 
disposal. The SAA states that the independent sources may include 
published price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation or review. See SAA at 870. The SAA clarifies that 
``corroborate'' means that the Department will satisfy itself that the 
secondary information to be used has probative value. Id. As discussed 
in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside 
Diameter, and Components Thereof, from Japan; Preliminary Results of 
Antidumping Duty Administrative Reviews and Partial Termination of 
Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996), to 
corroborate secondary information, the Department will, to the extent 
practicable, examine the reliability and relevance of the information 
used. In the preliminary margin calculation, numerous sales by CEMEX 
had margins greater than 73.74 percent. Therefore, we find that the 
adverse facts-available rate is relevant to this POR. Unlike other 
types of information, such as input costs or selling expenses, there 
are no independent sources from which the Department can calculate 
dumping margins. The only source for margins is administrative 
determinations. Thus, with respect to an administrative review, if the 
Department chooses as facts available a calculated dumping margin from 
a prior segment of the proceeding, it is not necessary to question the 
reliability of the margin for that time period. Thus, the Department 
finds that the information is reliable. See Freshwater Crawfish Tail 
Meat from the People's Republic of China; Final Results of Antidumping 
Duty Administrative Review, 68 FR 19504 (April 21, 2003).

Currency Conversion

    Pursuant to section 773A(a) of the Act, we made currency 
conversions into U.S. dollars based on the exchange rates in effect on 
the dates of U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the dumping 
margin for the collapsed parties, CEMEX and GCCC, for the period August 
1, 2001, through July 31, 2002, to be 71.77 percent.
    We will disclose calculations performed in connection with these 
preliminary results to parties within five days of the date of 
publication of this notice. See 19 CFR 351.224(b). Interested parties 
may request a hearing within 30 days of publication of this notice. A 
hearing, if requested, will be held at the main Commerce Department 
building three business days after submission of rebuttal briefs.
    Issues raised in the hearing 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.
    Upon completion of this review, the Department will determine, and 
the U.S. Bureau of Customs and Border Protection (BCBP) shall assess, 
antidumping duties on all appropriate entries. In accordance with 19 
CFR 351.212(b)(1), we have calculated an importer-specific assessment 
rate for merchandise subject to this review. If these preliminary 
results are adopted in the final results of review, we will direct the 
BCBP to assess the resulting assessment rates against the entered 
customs values for the subject merchandise on each of the importer's 
entries during the review period.
    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 the 
final results of review, as provided by section 751(a)(1) of the Act:
    (1) The cash-deposit rate for the respondent will be the rate 
determined in the final results of review; (2) for previously reviewed 
or investigated companies not mentioned 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 in the original less-than-fair-value (LTFV) 
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 be 61.35 percent, the all-others rate 
from the LTFV investigation. These deposit requirements, when imposed, 
shall remain in effect until publication of the final results of the 
next administrative review.
    In conducting recent reviews of CEMEX/GCCC, the Department has 
observed a pattern of significant differences between the weighted-
average margins and the assessment rates it has determined for this 
respondent in those reviews. This pattern of differences suggests that 
the collection of a cash deposit for estimating antidumping duty based 
on net U.S. price may result in the undercollection of estimated 
antidumping duties at the time of entry. We are considering whether it 
would be appropriate in this case to establish a per-unit cash-deposit 
requirement for CEMEX/GCCC. See preliminary analysis memo dated May 5, 
2003. The Department invites interested parties to comment on this 
issue.
    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 Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 5, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-11743 Filed 5-9-02; 8:45 am]
BILLING CODE 3510-DS-S