[Federal Register Volume 69, Number 16 (Monday, January 26, 2004)]
[Notices]
[Pages 3552-3557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1575]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-821]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Polyethylene Retail 
Carrier Bags from Thailand

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

EFFECTIVE DATE: January 26, 2004.
SUMMARY: We preliminarily determine that polyethylene retail carrier 
bags from Thailand are being, or are likely to be, sold in the United 
States at less than fair value, as provided in section 733 of the 
Tariff Act of 1930, as amended. Interested parties are invited to 
comment on this preliminary determination. We will make our final 
determination not later than 135 days after the date of publication of 
this preliminary determination.

FOR FURTHER INFORMATION CONTACT: Lyn Johnson (Thai Plastic Bags) or 
Fred Aziz (Universal Polybag), Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4733.

SUPPLEMENTARY INFORMATION:

Preliminary Determination

    The Department of Commerce (the Department) has conducted this 
antidumping investigation in accordance with section 733 of the Tariff 
Act of 1930, as amended (the Act). We preliminarily determine that 
polyethylene retail carrier bags (PRCBs) from Thailand are being sold, 
or are likely to be sold, in the United States at less than fair value 
(LTFV), as provided in section 733 of the Act. The estimated margins of 
sales at LTFV are shown in the ``Suspension of Liquidation'' section of 
this notice.

Case History

    We initiated this investigation on July 10, 2003. See Initiation of 
Antidumping Duty Investigations: Polyethylene Retail Carrier Bags from 
The People's Republic of China, Malaysia, and Thailand, 68 FR 42002 
(July 16, 2003) (Initiation Notice). Since the initiation of this 
investigation the following events have occurred.
    On July 14, 2003, we issued a letter to interested parties in this 
investigation providing an opportunity to comment on the 
characteristics we should use in identifying the different models the 
respondents sold in the United States. The petitioners and both 
respondents submitted comments on July 28, 2003. No other party 
submitted comments. After reviewing the parties' comments, we have 
adopted the characteristics and hierarchy as explained in the ``Fair 
Value Comparisons'' section, below.
    On July 14, 2003, we sent a partial section A questionnaire to all 
of the producers and exporters named in the petition and to the 
producers/exporters who comprise the top 80 percent of producers and 
exporters in terms of quantity produced (in thousands of units) of the 
subject merchandise according to data from U.S. Customs and Border 
Protection (CBP). We requested information on the quantity and value of 
merchandise sold by these producers/exporters in order to identify 
potential respondents in the investigation. We received responses from 
eight firms which reported exports of subject merchandise during the 
period of investigation (POI). In addition, a number of firms indicated 
that they did not export subject merchandise to the United States 
during the POI. We did not receive responses from Champion Paper 
Polybags Ltd., TRC Polypack, and Zip-Pac Co., Ltd. The record indicates 
that these companies received our July 14, 2003, questionnaire. On 
August 1, 2003, we sent a letter to these firms to reiterate our 
request for a response to our July 14, 2001, questionnaire. We received 
no responses from these firms.
    On August 4, 2003, the United States International Trade Commission 
(ITC) issued its affirmative preliminary determination that there is a 
reasonable indication that an industry in the United States is 
materially injured by reason of imports of the subject merchandise from 
the PRC, Malaysia, and Thailand, which the ITC published in the Federal 
Register on August 11, 2003. See Polyethylene Retail Carrier Bags From 
China, Malaysia, and Thailand, 68 FR 47609 (August 11, 2003).
    On August 14, 2003, the Department selected Thai Plastic Bags 
Industries Co., Ltd. (Thai Plastic Bags), and Universal Polybag Co., 
Ltd. (Universal), as mandatory respondents. See Memorandum from Laurie 
Parkhill to Jeff May dated August 14, 2003.
    On August 14, 2003, the Department issued its antidumping 
questionnaire to the mandatory respondents. Both mandatory respondents 
responded to our questionnaire. We issued supplemental questionnaires 
to the mandatory respondents and received responses from both companies 
to our supplemental questionnaires. Because Thai Plastic Bags is 
comprised of three companies (Thai Plastic Bags Industries Co., Ltd., 
Winner's Pack Co., Ltd., and APEC Film Ltd.), it provided a unified 
response to our questionnaires with respect to the collapsed companies.
    On October 16, 2003, the petitioners requested that the Department 
postpone its preliminary determination by 50 days. In accordance with 
section 733(c)(1)(A) of the Act, we postponed our preliminary 
determination by 50 days. See Notice of Postponement of Preliminary 
Determinations in Antidumping Duty Investigations:

[[Page 3553]]

Polyethylene Retail Carrier Bags From the People's Republic of China, 
Malaysia, and Thailand, 68 FR 61656 (October 29, 2003).

Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise. In accordance with 19 CFR 
351.210(e)(2), the Department requires that exporters requesting 
postponement of the final determination must also request an extension 
of the provisional measures in section 733(d) of the Act from a four-
month period until not more than six months.
    We received a request to postpone the final determination from Thai 
Plastic Bags. In its request, Thai Plastic Bags consented to the 
extension of provisional measures to no longer than six months. Since 
this preliminary determination is affirmative, the request for 
postponement is made by an exporter that accounts for a significant 
proportion of exports of the subject merchandise, and there is no 
compelling reason to deny the respondent's request. Therefore, we have 
extended the deadline for issuance of the final determination until the 
135th day after the date of publication of this preliminary 
determination in the Federal Register and have extended provisional 
measures to no longer than six months.

Period of Investigation

    The POI corresponds to the four most recent fiscal quarters prior 
to the filing of the petition, i.e., April 1, 2002, through March 31, 
2003.

Scope Comments

    In accordance with the preamble to our regulations (see Antidumping 
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), we 
set aside a period of time for parties to raise issues regarding 
product coverage and encouraged all parties to submit comments within 
20 calendar days of publication of the Initiation Notice (see 66 FR 
42002). Interested parties submitted such comments by August 5, 2003.
    Pursuant to the Department's solicitation of scope comments in the 
Initiation Notice on August 4, 2003, Regal Import Packaging, an 
importer of PRCBs, requested that bags that are ``four dimensional'', 
bags with handles made of a material that differs from the bag itself, 
and custom-printed bags where the bag order is of 50,000 bags or less, 
be excluded from the scope of the investigation. The importer asserted 
that these types of bags were not manufactured in the United States and 
therefore should be excluded from the scope of the investigation. On 
August 12, 2003, the petitioners commented that the bags in question 
were manufactured in the United States and requested that the scope of 
the investigation not exclude these types of bags. We have not adopted 
the changes in the scope of the investigation requested by Regal Import 
Packaging because we find the petitioners have placed sufficient 
evidence on the record to show that the bags in question are 
manufactured in the United States and fall within the scope of the 
investigation.

Scope of Investigation

    The merchandise subject to this investigation is polyethylene 
retail carrier bags, which also may be referred to as t-shirt sacks, 
merchandise bags, grocery bags, or checkout bags. The subject 
merchandise is defined as non-sealable sacks and bags with handles 
(including drawstrings), without zippers or integral extruded closures, 
with or without gussets, with or without printing, of polyethylene film 
having a thickness no greater than .035 inch (0.889 mm) and no less 
than .00035 inch (0.00889 mm), and with no length or width shorter than 
6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of 
the bag may be shorter than 6 inches but not longer than 40 inches 
(101.6 cm).
    PRCBs are typically provided without any consumer packaging and 
free of charge by retail establishments (e.g., grocery, drug, 
convenience, department, specialty retail, discount stores and 
restaurants) to their customers to package and carry their purchased 
products. The scope of the petition excludes (1) polyethylene bags that 
are not printed with logos or store names and that are closeable with 
drawstrings made of polyethylene film and (2) polyethylene bags that 
are packed in consumer packaging with printing that refers to specific 
end-uses other than packaging and carrying merchandise from retail 
establishments (e.g., garbage bags, lawn bags, trash-can liners).
    Imports of the subject merchandise are classified under statistical 
category 3923.21.0090 of the Harmonized Tariff Schedule of the United 
States. This subheading also covers products that are outside the scope 
of this investigation. Furthermore, although the HTSUS subheading is 
provided for convenience and customs purposes, our written description 
of the scope of this investigation is dispositive.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. Section 777A(c)(2) of the Act gives the Department 
discretion, when faced with a large number of exporters or producers, 
to limit its examination to a reasonable number of such companies if it 
is not practicable to examine all companies. There is no data on the 
record that indicates conclusively the number of producers or exporters 
from Thailand that exported the subject merchandise to the United 
States during the POI. We also determined that we only had the 
resources to investigate two companies.
    On July 14, 2003, the Department sent partial section A 
questionnaires addressed to all producers/exporters of the subject 
merchandise listed in the petition. As discussed above, we received 
responses from a number of firms in this investigation. Based on the 
responses we received to our July 14, 2003, questionnaire, we selected 
Thai Plastic Bags and Universal as mandatory respondents. We selected 
Thai Plastic Bags and Universal because these two firms account for 
85.2 percent of known U.S. imports of subject merchandise and we do not 
have the resources to investigate all potential respondents. See 
Memorandum from Laurie Parkhill to Jeff May dated August 14, 2003.

Use of Facts Otherwise Available

    Section 776(a)(2) of the Act provides that, if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form or manner 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides such information but the information cannot be 
verified, the Department shall, subject to sections 782(d) and (e) of 
the Act, use facts otherwise available in reaching the applicable 
determination.
    Section 776(a)(2)(B) of the Act requires the Department to use 
facts available when a party does not provide the Department with 
information by the established deadline or in the form and manner 
requested by the Department. In addition, 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

[[Page 3554]]

ability to comply with a request for information,'' the Department may 
use information that is adverse to the interests of that party as facts 
otherwise available.
    As explained above, Champion Paper Polybags Ltd., TRC Polypack, and 
Zip-Pac Co., Ltd., failed to respond to our July 14, 2003, request for 
information. Pursuant to section 776(a) of the Act, in reaching our 
preliminary determination, we have used total facts available for all 
three of these companies because these firms did not provide the data 
we needed to decide whether they should be selected as a mandatory 
respondent. Also, because these companies failed to respond to our 
requests for information, we have found that they failed to cooperate 
to the best of their ability. Therefore, pursuant to section 776(b) of 
the Act, we have used an adverse inference in selecting from the facts 
available for the margins for these companies. As adverse facts 
available, we used the margins that the petitioners alleged in their 
June 20, 2003, petition and selected the highest of the three margins 
which we calculated to be 122.88 percent.
    Section 776(c) of the Act provides that the Department shall, to 
the extent practicable, corroborate secondary information used for 
facts available by reviewing independent sources reasonably at its 
disposal. Information from the petitioners constitutes secondary 
information. The Statement of Administrative Action accompanying the 
Uruguay Round Agreements Act, H.R. Doc. 103-316, at 870 (1994) (SAA), 
provides that the word ``corroborate'' means that the Department will 
satisfy itself that the secondary information used has probative value. 
As explained 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 Review, 61 FR 57391, 57392 (November 6, 
1996) (Tapered Roller Bearings and Parts Thereof from Japan), in order 
to corroborate secondary information, the Department will examine, to 
the extent practicable, the reliability and relevance of the 
information used.
    The petitioners' methodology for calculating the export price (EP) 
and normal value in the petition is discussed in the initiation notice. 
See Initiation Notice, 68 FR at 42003-4. To corroborate the 
petitioners' EP and normal-value calculations, we compared the prices 
and expenses in the petition to the prices and expenses submitted by 
the responding companies for comparable products.
    As discussed in the memorandum to the file entitled Corroboration 
of Facts Available, dated January 16, 2004, we found that the EP and 
normal-value information in the petition were reasonable and, 
therefore, we preliminarily determine that the petition information has 
probative value. Accordingly, we find that the highest margin based on 
petition information and adjusted as described above, 122.88 percent, 
is corroborated within the meaning of section 776(c) of the Act.
    Furthermore, there is no information on the record that 
demonstrates that the rate we have selected is an inappropriate total 
adverse facts-available rate for the companies in question. On the 
contrary, our existing record supports the use of this rate as the best 
indication of the EP and dumping margin for these firms. Therefore, we 
consider the selected rate to have probative value with respect to the 
firms in question and to reflect the appropriate adverse inference.
    Accordingly, for the preliminary determination, the margin for 
Champion Paper Polybags Ltd., TRC Polypack, and Zip-Pac Co., Ltd., is 
122.88 percent. Because these are preliminary margins, the Department 
will consider all margins on the record at the time of the final 
determination for the purpose of determining the most appropriate final 
margins for these companies.

Fair Value Comparisons

    To determine whether sales of PRCBs to the United States by Thai 
Plastic Bags and Universal in this investigation were made at less than 
fair value, we compare EP or constructed export price (CEP) to normal 
value, as described in the ``U.S. Price'' and ``Normal Value'' sections 
of this notice. In accordance with section 777A(d)(1)(A)(i) of the Act, 
we calculated weighted-average EPs and CEPs.
    In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by the respondents in 
the following order of importance: 1) quality, 2) bag type, 3) length, 
4) width, 5) gusset, 6) thickness, 7) percent of high density 
polyethylene resin, 8) percent of low density polyethylene resin, 9) 
percent of low linear density polyethylene resin, 10) percent of color 
concentrate, 11) percent of ink coverage, 12) number of ink colors, 13) 
number of sides printed.

U.S. Price

    In accordance with section 772(a) of the Act, we used EP for Thai 
Plastic Bags because the subject merchandise was sold directly to 
unaffiliated customers in the United States prior to importation. In 
accordance with section 772(b) of the Act, we also used CEP for Thai 
Plastic Bags and for Universal because the subject merchandise was sold 
in the United States after the date of importation by a U.S. seller 
affiliated with the producer. In accordance with section 
777A(d)(1)(A)(I) of the Act, we compared POI-wide weighted-average EPs 
and CEPs to the normal values.
    We calculated EP and CEP based on the packed F.O.B., C.I.F., or 
delivered price to unaffiliated purchasers in, or for exportation to, 
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. With respect to Thai 
Plastic Bags, we did not allow its claim of a duty drawback on U.S. 
sales since it has not provided sufficient or legible documentation to 
support its claim. In addition, it is not clear from Thai Plastic Bag's 
responses how it determined which of the three duty-drawback schemes to 
apply to each transaction it reported in its sales listing. See the 
Thai Plastic Bags Analysis Memorandum from the case analyst to the file 
dated January 16, 2004, for additional information. We will review this 
issue further during our verification of Thai Plastic Bag's home-market 
sales.
    In accordance with section 772(d)(1) of the Act and the SAA at 823-
824, we calculated the CEP by deducting selling expenses associated 
with economic activities occurring in the United States, which includes 
commissions, direct selling expenses, indirect selling expenses, and 
U.S. repacking expenses. Finally, we made an adjustment for profit 
allocated to these expenses in accordance with section 772(d)(3) of the 
Act.
    The petitioners have identified an issue with respect to Universal 
in a number of comments submitted on the record in this investigation. 
Because of the business proprietary nature of this issue, please see 
the decision memorandum from Laurie Parkhill to Jeffrey May dated 
January 16, 2004, for a discussion of the issue.

Normal Value

1. Home-Market Viability
    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

[[Page 3555]]

exporting country did not permit a proper comparison, we determined 
that the quantity of foreign like product sold by Thai Plastic Bags in 
the exporting country 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. This company'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.
    The Department determined, based on Universal's response, that its 
home market was not viable. Furthermore, Universal's sole third-country 
market was also not viable. Therefore, in accordance with section 
773(a)(4) of the Act, we based normal value on constructed value for 
Universal.
2. Affiliated-Party Transactions and Arm's-Length Test
    The Department may calculate normal value based on a sale to an 
affiliated party only if it is satisfied that the price to the 
affiliated party is comparable to the price at which sales are made to 
parties not affiliated with the exporter or producer, i.e., sales at 
arm's-length prices. See 19 CFR 351.403(c). Sales to affiliated 
customers for consumption in the home market that were determined not 
to be at arm's-length prices were excluded from our analysis. Thai 
Plastic Bags reported sales of the foreign like product to affiliated 
end-users and resellers. To test whether these sales were made at 
arm's-length prices, the Department compared the prices of sales of 
comparable merchandise to affiliated and unaffiliated customers, net of 
all rebates, movement charges, direct selling expenses, and packing. 
Pursuant to 19 CFR 351.403(c) and in accordance with the Department's 
practice, when the prices charged to an affiliated party were, on 
average, between 98 and 102 percent of the prices charged to 
unaffiliated parties for merchandise comparable to that sold to the 
affiliated party, we determined that the sales to the affiliated party 
were at arm's length. See Antidumping Proceedings: Affiliated Party 
Sales in the Ordinary Course of Trade, 67 FR 69186, 69187 (November 15, 
2002). We included in our normal-value calculations those sales to 
affiliated parties that were made at arm's-length prices.
3. Cost-of-Production Analysis
    The petitioners submitted evidence on October 16, 2003, that 
suggested that Thai Plastic Bags sold the foreign like product at 
prices that may have been below the cost of production (COP) as 
provided by section 773(b)(2)(A)(I) of the Act. Based on this evidence, 
we determined that we had reasonable grounds to believe or suspect that 
sales of the foreign like product under consideration for the 
determination of normal value in this investigation may have been made 
at prices below the COP. Accordingly, pursuant to section 773(b)(1) of 
the Act, we conducted a COP investigation of sales by Thai Plastic Bags 
in the home market.
    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 the foreign like product, the selling, general, and 
administrative (SG&A) expenses, and all costs and expenses incidental 
to packing the merchandise. In our COP analysis, we relied upon the COP 
information provided by Thai Plastic Bags in its questionnaire response 
except for the following adjustments:
    1. We adjusted the reported cost database for one of the three 
combined companies for an unreconciled difference shown in the 
reconciliation of the financial statements to the POI reported costs.
    2. We adjusted the cost of inputs purchased from affiliates to the 
higher of transfer price, market price, or the affiliate's COP in 
accordance with section 773(f)(3) of the Act.
    3. We adjusted the general and administrative (G&A) and financial-
expense rates for mathematical errors.
    After calculating the COP, in accordance with section 773(b)(1) of 
the Act, we tested whether home-market sales of the foreign like 
product were made at prices below the COP within an extended period of 
time in substantial quantities and whether such prices permitted the 
recovery of all costs within a reasonable period of time. We compared 
model-specific COPs to the reported home-market prices less any 
applicable movement charges, discounts, and rebates. See Import 
Administration Policy Bulletin, Number 94.1 of March 25, 1994, for 
further information on this test.
    Pursuant to section 773(b)(2)(C) of the Act, when less than 20 
percent of the respondent's sales of a given product 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 the respondent's sales of a given product during the POI were at 
prices less than the COP, we disregarded the 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 and because, 
based on comparisons of prices to weighted-average COPs for the POI, we 
determined that these sales 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 below-cost sales with respect to Thai Plastic Bags. See the 
Thai Plastic Bags Analysis Memorandum from the case analyst to the file 
dated January 16, 2004, for additional information.
4. Calculation of Normal Value
    We compared U.S. sales with sales of the foreign like product in 
the home market on the basis of the physical characteristics described 
under Fair Value Comparisons above. Wherever we were unable to match a 
U.S. model to identical merchandise sold in the home market, we 
selected the most similar model of subject merchandise in the home 
market as the foreign like product.
    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 in accordance with section 773(a)(6)(C)(iii) of 
the Act and 19 CFR 351.410. For comparisons to EP, we made 
circumstances-of-sale adjustments by deducting home-market direct 
selling expenses from and adding U.S. direct selling expenses to normal 
value. For comparisons to CEP, we made circumstances-of-sale 
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 in EP and 
CEP calculations.
    In accordance with section 773(a)(1)(B)(I) of the Act, we based 
normal value, to the extent practicable, on sales at the same level of 
trade as the EP or CEP. If normal value was calculated at a different 
level of trade, we made an adjustment, if appropriate and if possible, 
in accordance with section 773(a)(7) of the Act. See the Level of Trade 
section below.
    In accordance with section 773(a)(4) of the Act, we used 
constructed value as the basis for normal value when there

[[Page 3556]]

were no usable sales of the foreign like product in the comparison 
market. We calculated constructed value in accordance with section 
773(e) of the Act, which states that constructed value shall be based 
on the sum of each respondent's cost of materials and fabrication for 
the subject merchandise, plus amounts for SG&A, profit, and U.S. 
packing costs. For Thai Plastic Bags and Universal, we relied on the 
submitted constructed-value information except for the following 
adjustments:

Thai Plastic Bags

    See adjustments in COP section above.

Universal

    1. We imputed an interest expense amount for a certain loan. For 
the preliminary determination, we used an interest rate in Thailand, as 
published by the International Monetary Fund, to calculate the imputed 
interest expense. For further information, see Memorandum from Nancy 
Decker through Theresa Caherty to Neal Halper, ``Universal Polybag Co., 
Ltd. Constructed Value Calculation Adjustments for the Preliminary 
Determination'' dated January 16, 2004 (Universal Preliminary Cost 
Memorandum).
    2. We increased the reported costs to include unreconciled 
differences in the reconciliations of the financial statements to 
financial accounting system and of the financial accounting system to 
the reported costs for the POI.
    In accordance with section 773(e)(2)(A) of the Act, for Thai 
Plastic Bags, we based SG&A expenses and profit on the amounts incurred 
and realized by Thai Plastic Bags in connection with the production and 
sale of the foreign like product in the ordinary course of trade for 
consumption in the home market.
    Because Universal had no viable home or third-country market during 
the POI, the Department could not determine selling expenses and profit 
under section 773(e)(2)(A) of the Act, which requires sales by the 
respondent in question in the ordinary course of trade in a comparison 
market. In situations where we cannot calculate selling expenses and 
profit under section 773(e)(2)(A), section 773(e)(2)(B) of the Act sets 
forth three alternatives. The SAA states at 840 that ``section 
773(e)(2)(B) does not establish a hierarchy or preference among these 
alternative methods.'' Section 773(e)(2)(B)(i) of the Act specifies 
that SG&A and profit may be calculated based on ``actual amounts 
incurred by the specific exporter or producer . . . on merchandise in 
the same general category'' as subject merchandise. Universal does not 
produce any products other than the subject merchandise. Alternative 
(ii) of section 773(e)(2)(B) provides that SG&A and profit may be 
calculated based on ``the weighted average of the actual amounts 
incurred and realized by {other{time}  exporters or producers that are 
subject to the investigation.'' Because there is only one other 
respondent in this case, however, the Department cannot calculate 
selling expenses, G&A expenses, and profit based on section 
773(e)(2)(B)(ii) of the Act because it would reveal the business 
proprietary information of the other respondent, Thai Plastic Bags. 
While Universal has suggested that the Department can use the combined 
data of the three companies that form the respondent Thai Plastic Bags, 
the Department considers Thai Plastic Bags to be one entity for 
purposes of this investigation and, therefore, to use the information 
of the three combined companies is to reveal that respondent's 
proprietary information.
    Therefore, the only statutory option available to the Department to 
calculate the selling expenses, G&A expenses, and profit for 
constructed value for Universal is under section 773(e)(2)(B)(iii). 
This section allows the Department to use ``any other reasonable 
method'' to calculate selling expenses, G&A expenses, and profit for 
constructed value, provided that the amount for profit does not 
``exceed the amount normally realized by exporters or producers . . . 
in connection with the sale, for consumption in the foreign country, of 
merchandise that is in the same general category of products as the 
subject merchandise.'' On January 6, 2004, the petitioners provided 
2001 financial-statement information on another Thai producer, 
Thantawan Industry Public Co. Ltd. (TIPC), of plastic products 
including PRCBs. This information provides expense and profit data for 
TIPC. Lacking more suitable information, we calculated constructed 
value selling expenses for Universal based on TIPC's reported selling 
and administrative expenses. Selling expenses are not separated in 
TIPC's financial statement. Therefore, we deducted Universal's reported 
G&A rate from TIPC's SG&A rate because we have no reason to believe 
that Universal's reported G&A expenses are unreliable.
    We calculated amounts for constructed-value profit based on the 
profit earned by TIPC. While TIPC produces other merchandise in 
addition to the subject merchandise, its financial information shows 
that more than 70 percent of its revenue comes from subject 
merchandise. Because we do not have any further information regarding 
profit on the same general category of merchandise other than that of 
the one other respondent in this case, we are not able to quantify the 
``profit cap'' described in section 773(e)(2)(B)(iii) of the Act 
without revealing proprietary information of Thai Plastic Bags, as 
discussed above. The SAA anticipates such situations and directs that, 
where the Department cannot calculate a profit cap, the Department may 
apply section 773(e)(2)(B)(iii) of the Act on the basis of the facts 
available. Therefore, we have not calculated a ``profit cap'' for the 
instant determination. As neutral facts available, we have used TIPC's 
profit rate of 10.43 percent in calculating constructed value as a 
reasonable surrogate for Universal's home-market profit. See Universal 
Preliminary Cost Memorandum.
    When appropriate, we made adjustments to constructed value in 
accordance with section 773(a)(8) of the Act and 19 CFR 351.410 for 
circumstances-of-sale differences and level-of-trade differences. For 
comparisons to EP, we made circumstances-of-sale adjustments by 
deducting home-market direct selling expenses from and adding U.S. 
direct selling expenses to normal value. For comparisons to CEP, we 
made circumstances-of-sale 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 in EP and CEP comparisons.

Level of Trade

    To the extent practicable, we determined normal value for sales at 
the same level of trade as the U.S. sales (either EP or CEP). When 
there were no sales at the same level of trade, we compared U.S. sales 
to home-market sales at a different level of trade. The normal-value 
level of trade is that of the starting-price sales in the home market. 
When normal value is based on constructed value, the level of trade is 
that of the sales from which we derived SG&A and profit. To determine 
whether home-market sales are at a different level of trade than U.S. 
sales, we examined 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 were at a 
different level of trade from that of a U.S. sale and the difference 
affected

[[Page 3557]]

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 made a level-of-trade adjustment under section 
773(a)(7)(A) of the Act. See, e.g., Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate 
from South Africa, 62 FR 61731 (November 19, 1997).
    For Universal, because there was no viable home or third market and 
all sales in the United States were CEP sales, no level-of-trade 
comparison was necessary. For Thai Plastic Bags, with respect to EP, we 
found the EP level of trade to be the same as the home-market level of 
trade and, consequently, were able to match sales at the same level of 
trade. With respect to Thai Plastic Bags' CEP sales, because we deduct 
the expense of the selling activities performed by the U.S. affiliate 
under section 772(d) of the Act, we have concluded that CEP sales 
constitute a different level of trade from the home-market level of 
trade. Consequently, we could not match to sales at the same level of 
trade in the home market nor could we determine a level-of-trade 
adjustment based on Thai Plastic Bags' home-market sales of the foreign 
like product. Furthermore, we have no other information that provides 
an appropriate basis for determining a level-of-trade adjustment. 
Therefore, we have granted a CEP offset for all such sales. The CEP 
offset is the sum of indirect selling expenses incurred on the home-
market sale up to the amount of indirect selling expenses incurred on 
the U.S. sale. See the Thai Plastic Bags Analysis Memorandum from the 
case analyst to the file dated January 16, 2004, for more information 
on the level-of-trade decision.

Currency Conversion

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

Verification

    As provided in section 782(i) of the Act, we will verify the 
information upon which we will rely in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d)(2)(A) of the Act, we are 
directing CBP to suspend liquidation of all imports of subject 
merchandise from Thailand that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. We will instruct CBP to require a cash 
deposit or the posting of a bond equal to the weighted-average amount 
by which the normal value exceeds the EP or CEP, as indicated in the 
chart below. These suspension-of-liquidation instructions will remain 
in effect until further notice. The weighted-average dumping margins 
are as follows:

------------------------------------------------------------------------
                                                             Weighted-
                  Exporter/manufacturer                       average
                                                          percent margin
------------------------------------------------------------------------
Thai Plastic Bags.......................................            2.84
Universal...............................................           34.76
Champion Paper Polybags Ltd.............................          122.88
TRC Polypack............................................          122.88
Zip-Pac Co., Ltd........................................          122.88
All Others..............................................           11.54
------------------------------------------------------------------------

    Pursuant to section 735(c)(5)(A) of the Act, we have excluded from 
the calculation of the all-others rate margins which are zero or de 
mimimis or determined entirely on facts available.
    The Department will disclose calculations performed within five 
days of publication of this notice to parties in this proceeding in 
accordance with 19 CFR 351.224(b).

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination of sales at LTFV. Section 735(b)(2) requires 
that the ITC make a final determination before the later of 120 days 
after the date of the Department's preliminary determination or 45 days 
after the Department's final determination whether the domestic 
industry in the United States is materially injured, or threatened with 
material injury, by reason of imports, or sales (or the likelihood of 
sales) for importation, of the subject merchandise. Because we have 
postponed the deadline for our final determination to 135 days from the 
date of the publication of this preliminary determination, the ITC will 
make its final determination within 45 days of our final determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date of the final verification report issued in this 
proceeding and rebuttal briefs, limited to issues raised in case 
briefs, no later than five days after the deadline date for case 
briefs. A list of authorities used and an executive summary of issues 
should accompany any briefs submitted to the Department. This summary 
should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, any hearing 
will be held three days after the deadline for submission of the 
rebuttal briefs at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230, at a time and location 
to be determined. Parties should confirm by telephone the date, time, 
and location of the hearing two days before the scheduled date. 
Interested parties who wish to request a hearing, or to participate if 
one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the date of publication of this notice. See 19 
CFR 351.310(c). Requests should contain (1) the party's name, address, 
and telephone number, (2) the number of participants, and (3) a list of 
the issues to be discussed. At the hearing, each party may make an 
affirmative presentation only on issues raised in that party's case 
brief and may make rebuttal presentations only on arguments included in 
that party's rebuttal brief. See 19 CFR 351.310(c).
    We will make our final determination no later than 135 days after 
the date of publication of the preliminary determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: January 16, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-1575 Filed 1-23-04; 8:45 am]
BILLING CODE 3510-DS-S