[Federal Register Volume 69, Number 247 (Monday, December 27, 2004)]
[Notices]
[Pages 77201-77205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28117]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-834]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Purified
Carboxymethylcellulose From Mexico
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATES: December 27, 2004.
FOR FURTHER INFORMATION CONTACT: Mark Flessner at (202) 482-6312 or
Robert James at (202) 482-0649, AD/CVD Operations, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC
20230.
Preliminary Determination
We preliminarily determine that certain purified
carboxymethylcellulose (CMC) from Mexico is being sold, or is likely to
be sold, in the United States at less than fair value (LTFV), as
provided in section 733 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.
Case History
On June 9, 2004, the Department of Commerce (the Department)
received a petition for the imposition of antidumping duties on
purified CMC from Finland, Mexico, the Netherlands, and Sweden, filed
in the proper form by Aqualon Company (Aqualon or petitioner), a
division of Hercules Incorporated. See Petition for the Imposition of
Antidumping Duties on Imports of Purified Carboxymethylcellulose (CMC)
from Finland, Mexico, the Netherlands, and Sweden (Petition). The
Department initiated the antidumping investigation of purified CMC from
Finland, Mexico,
[[Page 77202]]
the Netherlands, and Sweden on June 29, 2004. See Notice of Initiation
of Antidumping Investigations: Purified Carboxymethylcellulose (CMC)
from Finland, Mexico, the Netherlands, and Sweden, 69 FR 40617 (July 6,
2004) (Initiation Notice). Since the initiation of this investigation,
the following events have occurred.
On July 23, 2004, the International Trade Commission (the
Commission) preliminarily determined that there is a reasonable
indication that an industry in the United States is materially injured
by reason of imports of purified CMC from Finland, Mexico, the
Netherlands, and Sweden that are alleged to be sold in the United
States at LTFV. See Purified Caarboxymethylcellulose from Finland,
Mexico, the Netherlands, and Sweden, 69 FR 45851 (July 30, 2004).
On July 29, 2004, the Department issued sections A, B, and C of the
antidumping questionnaire \1\ to Quimica Amtex S.A. de C.V. of Mexico
(Amtex), noting that appendix V concerning model match criteria was not
enclosed. The Department stated that it would serve all parties with a
copy of the proposed model match criteria in the near future. We did so
on August 18, 2004.
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\1\ Section A of the questionnaire requests information
concerning a company's corporate structure and business practices,
the merchandise under investigation, and the manner in which it
sells that merchandise in all of its markets. Section B requests a
complete listing of all of the company's home market sales of
foreign like product or, if the home market is not viable, of sales
of the foreign like product in the most appropriate third-country
market (this section is not applicable to respondents in non-market
economy cases). Section C requests a complete listing of the
company's U.S. sales of subject merchandise. Section D requests
information on the cost of production of the foreign like product
and the constructed value of the merchandise under investigation.
Section E requests information on further manufacturing.
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Petitioner filed comments on the Department's proposed model match
criteria on August 19, 2004.\2\ The Department issued appendix V to the
questionnaire on August 30, 2004.
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\2\ Comments were also received from Noviant OY, Noviant BV,
Noviant AB, and Noviant Inc., respondents in the companion
investigations involving Finland, the Netherlands, and Sweden, on
August 25, 2004.
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On September 1, 2004, the Department received the section A
questionnaire response from Amtex). Responses to sections B and C were
received on September 22, 2004.
On September 21, 2004, the Department issued a supplemental section
A questionnaire. A response was received on September 29, 2004.
On October 8, 2004, the Department issued a supplemental
questionnaire; this questionnaire contained a second set of questions
concerning the section A response and a set of questions concerning the
section B and C responses. Responses were received on October 21, 2004.
On October 25, 2004, petitioner requested a 30-day postponement of
the preliminary determination. In response to petitioner's request and
pursuant to section 733(c)(1)(B) of the Act, on October 28, 2004, the
Department postponed the preliminary determination of the antidumping
duty investigation on purified CMC from Mexico until not later than
December 16, 2004. See Postponement of Preliminary Determinations of
Anitdumping Duty Investigations: Purified Carboxymethylcellulose from
Finland, Mexico, the Netherlands and Sweden, 69 FR 64030 (November 3,
2004).
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, or in the event of a negative
preliminary determination, a request for such postponement is made by
petitioner. 19 CFR 351.210(e)(2) requires that requests by exporters
for postponement of a final determination be accompanied by a request
for an extension of the provisional measures from a four-month period
to not more than six months.
On November 23, 2004, amtex requested that, in the event of an
affirmative preliminary determination in this investigation, the
Department postpone its final determination until a date not later than
135 days after the date on which the Department publishes its notice of
preliminary determination. amtex also included a request to extend the
provisional measures by an additional 60 days. Such extension is
permitted by section 733(d) of the Act. In addition, on November 19,
2004, petitioner requested that, in the event of a negative preliminary
determination, the Department postpone the deadline for its final
determination until a date not later than 135 days after the date on
which the Department publishes its notice of preliminary determination.
Accordingly, because we have made an affirmative preliminary
determination in this case, the request for postponement was made by an
exporter that accounts for a significant portion of exports of the
subject merchandise, and there is no compelling reason to deny the
respondent's request, we are postponing the final determination until
not later than 135 days after the date of publication of this notice
and are extending the provisional measures six months.
Period of Investigation (POI)
The POI is April 1, 2003, through March 31, 2004. This period
corresponds to the four most recent fiscal quarters prior to the month
of the filing of the petition, i.e., June 2004.
Scope of Investigation
For purposes of this investigation, the products covered are all
purified CMC, sometimes also referred to as purified sodium CMC,
polyanionic cellulose, or cellulose gum, which is a white to off-white,
non-toxic, odorless, biodegradable power, comprising sodium
carboxymethylcellulose that has been refined and purified to a minimum
assay of 90 percent. Purified CMC does not include unpurified or crude
CMC, CMC Fluidized Polymer Suspensions, and CMC that is cross-linked
through heat treatment. Purified CMC is CMC that has undergone one or
more purification operations which, at a minimum, reduce the remaining
salt and other by-product portion of the product to less than ten
percent.
The merchandise subject to this investigation is classified in the
Harmonized Schedule of the United States (HTSUS) at subheading
3912.31.00. This tariff classification is provided for convenience and
customs purposes; however, the written description of the scope of this
investigation is dispositive.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
CMC produced and sold by the respondent in Mexico during the POI
fitting the description in the ``Scope of Investigations'' section of
this notice to be foreign like product for purposes of determining
appropriate product comparisons to U.S. sales. We compared U.S. sales
to sales made in the home market. Where there were no sales of
identical merchandise in the home market in the ordinary course of
trade to compare to U.S. sales, we compared U.S. sales to sales of the
most similar foreign like product made in the ordinary course of trade.
In making the product comparisons, we matched foreign like products
based on the physical characteristics reported by the respondent in the
following order
[[Page 77203]]
of importance: grade, viscosity, degree of substitution, particle size,
and solution characteristics. Petitioner's model match comments listed
the criteria in descending order of importance: grade, viscosity,
degree of substitution, particle size, and solution characteristics,
and provided subfields for each criterion. Petitioner agreed that the
addition of one subfield for oil drilling and an extra viscosity range
to reflect more meaningful distinctions in the market was justified.
Fair Value Comparisons
To determine whether sales of purified CMC from Mexico to the
United States were made at LTFV, we compared the export price (EP) to
Normal Value (NV), as described in the ``Export Price'' and ``Normal
Value'' sections of this notice. In accordance with section
777A(d)(1)(A)(i) of the Act, we compared POI weighted-average EPs to
NVs.
As discussed below under ``Home Market Viability and Comparison
Market Selection,'' we determined that Amtex had a viable home market
during the POI.
Export Price
Section 772(a) of the Act defines EP as the price at which the
subject merchandise is first sold (or agreed to be sold) before the
date of importation by the producer or exporter outside of the United
States to an unaffiliated purchaser in the United States or to an
unaffiliated purchaser for exportation to the United States, as
adjusted under subsection 772(c) of the Act.
We used EP methodology for Amtex, in accordance with section 772(c)
of the Act, because the subject merchandise was sold directly to the
first unaffiliated purchaser in the United States before importation.
We based EP on the packed price to unaffiliated purchasers in the
United States. In accordance with section 772(c)(2)(A) of the Act, we
made deductions for movement expenses, where appropriate, for foreign
inland freight from the plant to the distribution warehouse,
warehousing, foreign inland freight from the plant/warehouse to the
port of exportation, foreign inland insurance, foreign brokerage and
handling, U.S. brokerage and handling, international freight, and U.S.
inland freight from the port to the warehouse. In addition, we deducted
billing adjustments and other discounts from EP, where appropriate.
Normal Value
A. Home Market Viability and Comparison Market Selection
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV (i.e.,
the aggregate volume of home market sales of the foreign like product
is equal to or greater than five percent of the aggregate volume of
U.S. sales), we compared 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.
In this investigation, we determined Amtex's aggregate volume of
home market sales of the foreign like product was greater than five
percent of the aggregate volume of U.S. sales of the subject
merchandise. Therefore, we used home market sales as the basis for NV
in accordance with section 773(a)(1)(B) of the Act.
B. Level of Trade
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we determine NV based on sales in the comparison
market at the same level of trade (LOT) as the EP transaction. See also
19 CFR 351.412. The NV LOT is the level of the starting-price sales in
the comparison market. For EP sales, the U.S. LOT is the level of the
starting-price sale, which is usually from the exporter to the
importer.
To determine whether NV sales are at a different LOT than EP, we
examine stages in the marketing process and selling functions along the
chain of distribution between the producer and the unaffiliated
customer. In analyzing differences in selling functions, we determine
whether the LOTs identified by the respondent are meaningful. See
Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296,
27371 (May 19, 1997). If the claimed LOTs are the same, we expect the
functions and activities of the seller should be similar. Conversely,
if a party claims that LOTs are different for different groups of
sales, the functions and activities of the seller should be dissimilar.
See Porcelain-on-Steel Cookware from Mexico: Final Results of
Administrative Review, 65 FR 30068 (May 10, 2000). If the NV
transactions are at a different LOT than EP transactions, and the
difference affects price comparability, as manifested in a pattern of
consistent price differences between the sales on which NV is based and
the U.S. sales at the LOT of the export transactions, we make an LOT
adjustment under section 773(a)(7)(A) of the Act.
In this investigation, we obtained information from Amtex regarding
the marketing stages involved in its selling activities for its
reported home market and U.S. sales, including a description of the
selling activities performed by the respondent for each channel of
distribution it claimed (see Amtex Section B & C Response, September
22, 2004, at page C-15).
Analysis
Amtex provided a Selling Functions Chart (see Amtex's Section A
Response, September 1, 2004, at Exhibit A-14) in which there is a
division between four categories: (1) Home market sales to end-users;
(2) Home market sales to distributors; (3) U.S. sales to end-users; and
(4) U.S. sales to distributors. None of the selling activity entries
under any of these four categories are properly quantified; they are
only reported as ``performed'' or ``not performed.'' No distinctions
such as ``heavy'' or ``medium'' or ``slight'' are attributed to any
function. Further, the Selling Functions Chart lists several functions
as not being performed when the narrative descriptions would indicate
otherwise. One example would be the selling activity ``pay
commissions,'' which Amtex clearly states occurs in the home market
(see Amtex's Section B Response, September 22, 2004, at B-20). Another
example would be the selling activity ``order input/processing,'' which
Amtex states occurs in the U.S. market (see Amtex's Section A Response,
September 1, 2004, at A-12). Since these selling activities are not
properly quantified or analyzed, the Department has no means of
comparison.
Level of Trade in the Home Market
Amtex reported on LOT in the Mexican market with one channel of
distribution to two classes of customers: (1) Direct sales from the
mill to end-users, and (2) direct sales from the mill to
distributors.\3\ Generally, Amtex
[[Page 77204]]
claims a higher number of selling activities performed for sales to
end-users than for sales to distributors. As discussed above, whoever,
the selling functions are not properly quantified or analyzed in
Amtex's response. Therefore, based on our review of evidence on the
record, we find home market sales to both customer categories were
substantially similar with respect to selling functions and stages of
marketing. Accordingly, we preliminarily find that Amtex had only one
LOT for its home market sales.
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\3\ In addition, Amtex reported a subset of this channel of
distribution for the local market in which a pro forma invoice was
issued by Amtex's wholly owned affiliate, Aquasol S.A. de C.V.
(Aquasol), via a tolling arrangement; Aquasol has no production
facility of its own and all functions of Aquasol are performed by
Amtex personnel. This arrangement is a book-keeping expediency not
rising to the level of a separate channel of distribution (see
Amtex's Section A Response, September 1, 2004, at Exhibits A-2 and
A-3). Nothing indicates the two classes of customers, end-users and
distributors, are different for Aquasol transactions; the only
difference appears to be geographical. We conclude that this is not
a different channel of distribution and its activities are included
in the considerations below.
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Level of Trade in the U.S. Market
We also reviewed the selling functions and services performed by
Amtex in the U.S. market for EP sales. Amtex reported one LOT in the
U.S. market with one channel of distribution to two classes of
customers: (1) Direct sales from the mill to end-users, and (2) direct
sales from the mill to distributors (see Amtex's Section A Response,
September 1, 2004, at Exhibit A-3). Amtex's Selling Function Chart
indicated the same three selling activities for both categories of
sales: (1) Inventory Maintenance; (2) Warranty Services; and (3)
Freight and Delivery. Therefore, there is no difference between these
two classes of customers in the U.S. market. As with the home market
sales, some functions are reported as not having any activity when the
narrative descriptions would indicate otherwise; an example would be
the selling activity ``order input/processing,'' which Amtex states
occurs in the U.S. market (see Amtex's Section A Response, September 1,
2004, at A-12). Also, as with the home market entries, Amtex did not
quantify the extent to which it performs these functions. Accordingly,
we preliminarily determine there is one EP LOT in the U.S. market.
Comparison of Levels of Trade Between Markets
Amtex states that due to the smaller type of customer in the home
market and the greater need of support there, there is greater activity
in the home market (see Amtex's Section A Response, September 1, 2004,
at page A-9). We find the selling functions and services performed by
Amtex on direct sales for the one U.S. channel of distribution relating
to the EP LOT (i.e., sales of merchandise produced to order for
unaffiliated end-users or distributors and sales or merchandise from
stock to unaffiliated end-users and distributors) have not been shown
to be substantially different from those provided for home market
sales. As discussed above, none of the selling activity entries are
properly quantified, nor is the Selling Function Chart consistent with
the narrative descriptions. Since the selling activities are not
properly quantified or analyzed, the Department has no means of
comparison. Therefore, we preliminarily determine the EP LOT is the
same as the LOT in the home market.
C. Calculation of Normal Value Based on Home Market Prices
We calculated Amtex's NV based on delivered prices to unaffiliated
customers. We made deductions for movement expenses, including inland
freight from the plant to the distribution warehouse, warehousing,
inland freight from the plant/warehouse to the customer, and inland
insurance, under section 773(a)(6)(B)(ii) of the Act. In addition, we
made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410 for differences in circumstances of sale for direct selling
expenses, including commissions and inventory carrying costs. We also
deducted home market packing costs and added U.S. packing costs to the
starting price in accordance with section 773(a)(6)(A) and (B) of the
Act. Furthermore, we made an adjustment for differences in costs
attributable to differences in the physical characteristics of the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and
19 CFR 351.411.
Currency Conversion
We made currency conversions into U.S. dollars, in accordance with
section 773A(a) of the Act, based on 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 relied upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, we are directing
U.S. Customs and Border Protection (CBP) to suspend liquidation of all
imports of subject merchandise 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 NV exceeds EP, 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:
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Weighted-
average
Manufacturer/exporter margin
(percent)
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Quimica Amtex, S.A. de C.V................................. 12.18
All Others................................................. 12.18
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See Memorandum to the File, ``Preliminary Determination Analysis
for Amtex,'' December 16, 2004. Public versions of our analysis
memoranda are on file in the Central Records Unit (CRU), room B-099 of
the Herbert C. Hoover Department of Commerce building, 14th Street and
Pennsylvania Avenue, NW., Washington, DC.
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
Commission of our preliminary affirmative determination. If our final
determination is affirmative, the Commission will determine before the
later of 120 days after the date of this preliminary determination or
45 days after our final determination whether these imports are
materially injuring, or threaten material injury to, the U.S. industry.
Because we have postponed the deadline for our final determination to
135 days from the date of the publication of this preliminary
determination, the Commission will make its final determination within
45 days of our final determination.
Disclosure
We will disclose the calculations used in our analysis to parties
in this proceeding in accordance with 19 CFR 351.224(b).
Public Comment
Case briefs for this investigation must be submitted to the
Department by the later of 30 days after publication of this
preliminary determination or seven days after the date the final
verification report is issued in this proceeding. Rebuttal briefs must
be filed five days from the deadline date for case briefs. A list of
authorities used, a table of contents, and an executive summary of
issues should accompany any briefs submitted to the Department.
Executive summaries should be limited to five pages total, including
footnotes. Section 774 of the Act provides that the Department will
hold a public hearing to afford interested parties an opportunity to
comment on arguments raised in case or rebuttal briefs, provided that
such a hearing is requested by an interested party. If a
[[Page 77205]]
request for a hearing is made in this investigation, the hearing will
tentatively be held two days after the rebuttal brief deadline date at
the U.S. Department of Commerce, 14th Street and Pennsylvania Avenue,
NW., Washington, DC. Parties should confirm by telephone the time,
date, and place of the hearing 48 hours before the scheduled time.
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 publication of this notice. 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.
Oral presentations will be limited to issues raised in the briefs.
We will make our final determination not later than 135 days after
the publication of this notice in the Federal Register.
This determination is published pursuant to sections 733(f) and
777(i) of the Act.
Dated: December 16, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-28117 Filed 12-23-04; 8:45 am]
BILLING CODE 3510-DS-M