[Federal Register Volume 68, Number 154 (Monday, August 11, 2003)]
[Notices]
[Pages 47540-47543]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-20320]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-580-850]


Notice of Final Determination of Sales at Less Than Fair Value: 
Polyvinyl Alcohol From the Republic of Korea

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

EFFECTIVE DATE: August 11, 2003.

FOR FURTHER INFORMATION CONTACT: Irina Itkin or Jill Pollack at (202) 
482-0656 and (202) 482-4593, respectively, AD/CVD Enforcement, Office 
2, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

Final Determination

    We determine that polyvinyl alcohol (PVA) from the Republic of 
Korea (Korea) is being sold, or is likely to be sold, in the United 
States at less than fair value (LTFV), as provided in section 735 of 
the Tariff Act of 1930, as amended (the Act). The estimated margins of 
sales at LTFV are shown in the ``Suspension of Liquidation'' section of 
this notice.

Background

    The preliminary determination in this investigation was issued on 
March 14, 2003. See Notice of Preliminary Determination of Sales at 
Less Than Fair Value and Postponement of Final Determination: Polyvinyl 
Alcohol from the Republic of Korea, 68 FR 13681 (March 20, 2003) 
(Preliminary Determination).
    Since the preliminary determination, the following events have 
occurred. On March 3, 2003, the petitioners agreed to revise the scope 
of the companion case on PVA from Japan to exclude certain types of PVA 
covalently bonded with diacetoneacrylamide. The petitioners' submission 
was made in response to a request by Japan VAM and POVAL Co., Ltd., one 
of the mandatory respondents in the companion Japanese case.
    Because these comments relate to PVA in general, we find that they 
are applicable to this proceeding. Accordingly, as we did in the 
preliminary determination, we have modified the scope to conform to 
that set forth in the companion Japanese proceeding, as described 
below. See Notice of Final Determination of Sales at Less Than Fair 
Value: Polyvinyl Alcohol from Japan, 68 FR 19510 (April 21, 2003).
    On March 12, 2003, DC Chemical Company, Ltd. (DC CHEM), the 
mandatory respondent in this investigation, filed a request to exclude 
from the scope of this investigation certain grades of PVA in which the 
PVA is covalently bonded with itaconic acid.
    On March 27, 2003, DC CHEM notified the Department that it no 
longer intended to participate in this investigation. For further 
discussion, see the ``Facts Available (FA)'' section of this notice.
    On April 1, 2003, the petitioners commented on DC CHEM's exclusion 
request. For further discussion, see the ``Scope Comments'' section of 
this notice.

Scope of the Investigation

    The merchandise covered by this investigation is PVA. This product 
consists of all PVA hydrolyzed in excess of 80 percent, whether or not 
mixed or diluted with commercial levels of defoamer or boric acid, 
except as noted below.
    The following products are specifically excluded from the scope of 
this investigation:
    (1) PVA in fiber form.
    (2) PVA with hydrolysis less than 83 mole percent and certified not 
for use in the production of textiles.
    (3) PVA with hydrolysis greater than 85 percent and viscosity 
greater than or equal to 90 cps.
    (4) PVA with a hydrolysis greater than 85 percent, viscosity 
greater than or equal to 80 cps but less than 90 cps, certified for use 
in an ink jet application.
    (5) PVA for use in the manufacture of an excipient or as an 
excipient in the manufacture of film coating systems which are 
components of a drug or dietary supplement, and accompanied by an end-
use certification.
    (6) PVA covalently bonded with cationic monomer uniformly present 
on all polymer chains in a concentration equal to or greater than one 
mole percent.
    (7) PVA covalently bonded with carboxylic acid uniformly present on 
all polymer chains in a concentration equal to or greater than two mole 
percent, certified for use in a paper application.
    (8) PVA covalently bonded with thiol uniformly present on all 
polymer chains, certified for use in emulsion polymerization of non-
vinyl acetic material.
    (9) PVA covalently bonded with paraffin uniformly present on all 
polymer chains in a concentration equal to or greater than one mole 
percent.
    (10) PVA covalently bonded with silan uniformly present on all 
polymer chains certified for use in paper coating applications.
    (11) PVA covalently bonded with sulfonic acid uniformly present on 
all polymer chains in a concentration level equal to or greater than 
one mole percent.
    (12) PVA covalently bonded with acetoacetylate uniformly present on 
all polymer chains in a concentration level equal to or greater than 
one mole percent.
    (13) PVA covalently bonded with polyethylene oxide uniformly 
present on all polymer chains in a concentration level equal to or 
greater than one mole percent.
    (14) PVA covalently bonded with quaternary amine uniformly present 
on all polymer chains in a concentration level equal to or greater than 
one mole percent.
    (15) PVA covalently bonded with diacetoneacrylamide uniformly 
present on all polymer chains in a concentration level greater than 
three mole percent, certified for use in a paper application.

The merchandise under investigation is currently classifiable under 
subheading 3905.30.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). Although the HTSUS subheading is provided for 
convenience and customs

[[Page 47541]]

purposes, the written description of the merchandise under 
investigation is dispositive.

Scope Comments

    On March 12, 2003, DC CHEM filed a request to exclude from the 
scope of this investigation certain grades of a copolymer of PVA in 
which the PVA is covalently bonded with itaconic acid. On April 1, 
2003, the petitioners commented on DC CHEM's exclusion request. In 
their comments, the petitioners state that three of the five grades of 
PVA listed in DC CHEM's exclusion request (i.e., CL-05, CL-05A, and CL-
05S) are not subject to this investigation because their level of 
hydrolysis is less than 80 percent. Regarding the remaining grades, the 
petitioners comment that PVA covalently bonded with itaconic acid (a 
type of carboxylic acid) for use in paper applications is also outside 
the scope of this investigation. See item 7 in the ``Scope of the 
Investigation'' section of this notice, above. However, the petitioners 
do not agree to exclude PVA covalently bonded with itaconic acid for 
non-paper applications because, they assert, these products are 
directly competitive with products produced by the domestic industry.
    We have analyzed DC CHEM's request and the petitioners' objections 
and we find no modifications to the scope are warranted. Because PVA 
covalently bonded with itaconic acid for non-paper applications is 
clearly within the scope of the investigation, we find no basis on 
which to exclude these products.

Period of Investigation

    The period of investigation (POI) is July 1, 2001, through June 30, 
2002. This period corresponds to the four most recent fiscal quarters 
prior to the month of the filing of the petition (i.e., September 
2002).

Analysis of Comments Received

    On April 11, 2003, we received comments from the petitioners in 
response to the preliminary determination. Parties can find a complete 
discussion of all issues raised in this investigation and the 
corresponding recommendations in the Decision Memo, which is on file in 
the Central Records Unit, room B-099, of the main Department building. 
In addition, a complete version of the Decision Memo can be accessed 
directly on the Web at http://ia.ita.doc.gov. The paper copy and 
electronic version of the Decision Memo are identical in content.

Facts Available (FA)

    The mandatory respondent in this case, DC CHEM, notified the 
Department on March 27, 2003, that it no longer intended to participate 
in the investigation. Section 776(a)(2) of the Act provides that, if an 
interested party: (A) Withholds information requested by the 
Department, (B) fails to provide such information by the deadline, or 
in the form or manner requested, (C) significantly impedes a 
proceeding, or (D) provides information that cannot be verified, the 
Department shall use, subject to sections 782(d) and (e) of the Act, 
facts otherwise available in reaching the applicable determination.
    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to use an adverse inference 
if the Department finds that an interested party failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information. See, e.g., Notice of Final Determination of Sales of Less 
Than Fair Value and Final Negative Critical Circumstances: Carbon and 
Certain Alloy Steel Wire Rod from Brazil, 67 FR 55792, 55794-96 (August 
30, 2002). To examine whether the respondent cooperated by acting to 
the best of its ability under section 776(b) of the Act, the Department 
considers, inter alia, the accuracy and completeness of submitted 
information and whether the respondent has hindered the calculation of 
accurate dumping margins. See, e.g., Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon 
Quality Steel Products From Brazil, 65 FR 5554, 5567 (February 4, 
2000).
    In the instant investigation, the accuracy and completeness of the 
submitted information has not been established because the respondent 
did not agree to verification of all of its responses. Without verified 
data on the record, the Department cannot calculate accurate margins. 
Therefore, the respondent's refusal to allow a complete verification 
has hindered the calculation of accurate dumping margins and impeded 
the proceeding within the meaning of section 776(a)(2)(C) of the Act. 
As a result, application of facts available is appropriate. Moreover, 
by refusing to allow the Department to verify all of its responses, the 
respondent did not act to the best of its ability as required by 
section 776(b) of the Act. Consequently, we have determined to make an 
adverse inference in determining an antidumping duty margin for DC 
CHEM.

Corroboration of Information

    Section 776(b) of the Act authorizes the Department to use as 
adverse facts available (AFA) information derived from the petition, 
the final determination from the LTFV investigation, a previous 
administrative review, or any other information placed on the record.
    Section 776(c) of the Act requires the Department to corroborate, 
to the extent practicable, secondary information used as FA. Secondary 
information is defined as ``{i{time} nformation derived from the 
petition that gave rise to the investigation or review, the final 
determination concerning the subject merchandise, or any previous 
review under section 751 concerning the subject merchandise.'' See 19 
CFR 351.308 (c) and (d); see also the Statement of Administrative 
Action (SAA) accompanying the Uruguay Round Agreements Act, H.R. Doc. 
No. 103-316 at 870 (1994).
    The SAA clarifies that ``corroborate'' means that the Department 
will satisfy itself that the secondary information to be used has 
probative value. See the SAA at 870. The SAA also states that 
independent sources used to corroborate such evidence may include, for 
example, published price lists, official import statistics and customs 
data, and information obtained from interested parties during the 
particular investigation. Id.
    In order to determine the probative value of the margins in the 
petition for use as AFA for purposes of this final determination, we 
used information submitted by DC CHEM on the record of this 
investigation. We reviewed the adequacy and accuracy of the information 
in the petition during our pre-initiation analysis of the petition, to 
the extent appropriate information was available for this purpose (see 
the September 25, 2002, Initiation Checklist, on file in the Central 
Records Unit, Room B-099, of the Main Commerce Department building, for 
a discussion of the margin calculations in the petition). In accordance 
with section 776(c) of the Act, to the extent practicable, we examined 
the key elements of the export price (EP) and normal value (NV) 
calculations on which the margins in the petition were based. See the 
August 4, 2003, memorandum to the file from the team entitled 
``Corroboration of Data Contained in the Petition for Assigning Facts 
Available Rates'' (Corroboration Memo).

[[Page 47542]]

Export Price

    With respect to the margins in the petition, EP was based on POI 
price quotes for the sale of fully-hydrolyzed PVA produced by DC CHEM 
to customers in the United States. The petitioners calculated net U.S. 
prices for PVA by deducting certain movement charges and a distributor 
mark-up, where applicable.
    We corroborated the U.S. prices from the petition by comparing them 
to prices of comparable products reported by DC CHEM. We found that the 
petitioners' price quotes were comparable to the price information 
submitted by DC CHEM. Therefore, we find that the petitioners' 
information for U.S. price has probative value. For further discussion, 
see the Corroboration Memo.

Normal Value

    The petitioners based NV on a home-market price quote from DC CHEM 
for fully-hydrolyzed PVA of a comparable grade to the products exported 
to the United States during the POI. This price quote was 
contemporaneous with the U.S. price quotes used as the basis for EP. We 
corroborated the home-market price from the petition by comparing it to 
prices of comparable products sold by DC CHEM. We found that the 
petitioners' price quote was comparable to the price information 
submitted by DC CHEM. Therefore, we find that the petitioners' 
information for home-market price has probative value. See the 
Corroboration Memo.
    In addition, the petitioners alleged that sales of PVA in the home 
market were made at prices below the fully-absorbed cost of production 
(COP), within the meaning of section 773(b) of the Act, and requested 
that the Department conduct a country-wide sales-below-cost 
investigation. Based upon a comparison of the prices of the foreign 
like product in the home market to the calculated COP of the product, 
we found reasonable grounds to believe or suspect that sales of the 
foreign like product were made below the COP, within the meaning of 
section 773(b)(2)(A)(i) of the Act. See Notice of Initiation of 
Antidumping Duty Investigations: Polyvinyl Alcohol From Germany, Japan, 
the People's Republic of China, the Republic of Korea, and Singapore, 
67 FR 61591, 61594 (October 1, 2002) (Initiation Notice). Accordingly, 
the Department initiated a country-wide cost investigation. Pursuant to 
section 773(b)(3) of the Act, COP consisted of the cost of manufacture 
(COM), selling, general and administrative (SG&A) expenses, and packing 
expenses. The petitioners calculated COP based on their own production 
experience, adjusted for known differences between costs incurred to 
manufacture PVA in the United States and Korea. We corroborated the COP 
from the petition by comparing it to the COP of comparable products 
sold by DC CHEM. We found that the petitioners' calculated COP was 
comparable to DC CHEM's COP. Therefore, we find that the petitioners' 
calculated COP has probative value. See the Corroboration Memo.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners based NV for sales in Korea on constructed value (CV). The 
petitioners calculated CV using the same COM, SG&A, and financial 
expense figures they used to compute the COP. Consistent with section 
773(e)(2) of the Act, the petitioners included in CV an amount for 
profit based on DC CHEM's 2001 financial statements. The petitioners' 
calculation of profit was based on operating profit rather than the net 
income of the producer. Therefore, we recalculated the CV profit rate 
to include non-operating items. Because this calculation resulted in a 
loss, we used a profit rate of zero for purposes of initiation.
    For purposes of the AFA rate we have calculated for this final 
determination, however, we do not believe it is appropriate to exclude 
profit from the margin calculations because to do so would not be an 
adverse inference. Consequently, we have revised our calculation of the 
profit rate to use a rate derived from the publicly available 2001 
financial statements of another Korean petrochemical company, LG 
Petrochemical. For further discussion, see the Decision Memo at Comment 
1.
    Therefore, based on our efforts described above to corroborate 
information contained in the petition and in accordance with 776(c) of 
the Act, we consider the margins in the notice of initiation, as 
adjusted, to be corroborated to the extent practicable for purposes of 
this final determination. See the Corroboration Memo.
    Accordingly, in selecting AFA with respect to DC CHEM, we have 
applied the margin rate of 38.74 percent, which is the highest 
estimated dumping margin submitted in the petition, used in the notice 
of initiation, and subsequently adjusted as explained above. See the 
Initiation Notice, 67 FR at 61593, and the Decision Memo at Comment 1.

All Others

    Section 735(c)(5)(B) of the Act provides that, where the estimated 
weighted-average dumping margins established for all exporters and 
producers individually investigated are zero or de minimis or are 
determined entirely under section 776 of the Act, the Department may 
use any reasonable method to establish the estimated ``All Others'' 
rate for exporters and producers not individually investigated. This 
provision contemplates that we weight-average margins other than zero, 
de minimis, and FA margins to establish the ``All Others'' rate. Where 
the data do not permit weight-averaging such rates, the SAA provides 
that we may use other reasonable methods. See the SAA at 873. Because 
the petition contained two estimated dumping margins, we have used 
these two estimated dumping margins, as adjusted for the notices of 
initiation and final determination, to create an ``All Others'' rate 
based on a simple average. Therefore, we have calculated the margin of 
32.08 percent as the ``All Others'' rate. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value and Final Affirmative 
Finding of Critical Circumstances: Elastic Rubber Tape from India, 64 
FR 19123, 19124 (April 19, 1999).

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing the U.S. Bureau of Customs and Border Protection (BCBP) to 
continue to suspend all entries of PVA from Korea that are entered, or 
withdrawn from warehouse, for consumption on or after March 20, 2003, 
the date of publication of the preliminary determination. The BCBP 
shall continue to require a cash deposit or the posting of a bond equal 
to the estimated amount by which the normal value exceeds the U.S. 
price as shown below. These instructions suspending liquidation will 
remain in effect until further notice.
    The dumping margins are provided below:

------------------------------------------------------------------------
                                                                 Margin
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
DC Chemical Company, Ltd.....................................      38.74
All Others...................................................      32.08
------------------------------------------------------------------------

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, within 45 days, determine 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry. If the ITC determines that material 
injury or threat of material

[[Page 47543]]

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 
duty order directing the BCBP 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.

Notification Regarding APO

    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. Timely notification of 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 pursuant to sections 
735(d) and 777(i)(1) of the Act.

    Dated: August 4, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Grant Aldonas, Under Secretary.
[FR Doc. 03-20320 Filed 8-8-03; 8:45 am]
BILLING CODE 3510-DS-P