[Federal Register Volume 72, Number 90 (Thursday, May 10, 2007)]
[Notices]
[Pages 26600-26603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-9036]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-557-813]


Polyethylene Retail Carrier Bags from Malaysia: Preliminary 
Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from an interested party, the 
Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty order on polyethylene retail carrier 
bags (PRCBs) from Malaysia. The review covers one manufacturer/
exporter. The period of review is August 1, 2005, through July 31, 
2006. We have preliminarily determined that sales have not been made 
below normal value by the company subject to this review. We invite 
interested parties to comment on these preliminary results. Parties who 
submit comments in this review are requested to submit with each 
argument a statement of each issue and a brief summary of the argument.

EFFECTIVE DATE: May 10, 2007.

FOR FURTHER INFORMATION CONTACT: Yang Jin Chun or Richard Rimlinger, 
AD/CVD Operations, Office 5, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14\th\ Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
5760 and (202) 482-4477, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 9, 2004, we published in the Federal Register the 
antidumping duty order on PRCBs from Malaysia. See Antidumping Duty 
Order: Polyethylene Retail Carrier Bags From Malaysia, 69 FR 48203 
(August 9, 2004). On August 1, 2006, we published in the Federal 
Register a notice of opportunity to request an administrative review of 
the antidumping duty order on PRCBs from Malaysia. See Antidumping or 
Countervailing Duty Order, Findings, or Suspended Investigation; 
Opportunity to Request Administrative Review, 71 FR 43441 (August 1, 
2006). Pursuant to section 751(a) of the Tariff Act of 1930, as amended 
(the Act), and 19 CFR 351.213(b), Euro Plastics Malaysia Sdn. Bhd. 
(Euro Plastics) requested an administrative review of the antidumping 
duty order on PRCBs from Malaysia on August 8, 2006. On September 29, 
2006, in accordance with section 751(a) of the Act and 19 CFR 
351.221(c)(1)(i), we published a notice of initiation of administrative 
review of this order. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews, 71 FR 57465 (September 29, 2006). We are 
conducting an administrative review of the order on PRCBs from Malaysia 
for Euro Plastics for the period August 1, 2005, through July 31, 2006.

Scope of Order

    The merchandise subject to this antidumping duty order is PRCBs 
which 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 0.035 inch (0.889 mm) and no less than 0.00035 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 order 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.

[[Page 26601]]

    Imports of the subject merchandise are currently classifiable under 
statistical category 3923.21.0085 of the Harmonized Tariff Schedule of 
the United States (HTSUS). This subheading also covers products that 
are outside the scope of the order. Furthermore, although the HTSUS 
subheading is provided for convenience and customs purposes, the 
written description of the scope of this order is dispositive.

Verification

    As provided in section 782(i) of the Act, we have verified Euro 
Plastics's home-market and U.S. sales information using standard 
verification procedures, including on-site inspection of the 
manufacturer's facilities, the examination of relevant sales and 
financial records, and the selection of original documentation 
containing relevant information. Our verification results are outlined 
in the public version of the verification report dated May 2, 2007, 
which is on file in the Central Records Unit (CRU), room B-099 of the 
main Department of Commerce building.

Duty-Absorption Determination

    On October 30, 2006, the petitioners\1\ in this proceeding 
requested that the Department determine whether antidumping duties have 
been absorbed by Euro Plastics, pursuant to 19 CFR 351.213(j). In 
making a duty-absorption determination, the Department will determine 
whether antidumping duties have been absorbed by a producer or exporter 
subject to the review if the subject merchandise is sold in the United 
States through an importer that is affiliated with such producer or 
exporter. See section 751(a)(4) of the Act and 19 CFR 351.213(j). Euro 
Plastics made export-price sales only to the United States during the 
period of review and the company did not make any of its U.S. sales 
through an affiliated importer. Therefore, a duty-absorption 
determination is not relevant for Euro Plastics for this review and we 
will not make such a determination in this review.
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    \1\ The Polyethylene Retail Carrier Bag Committee and its 
individual members, Hilex Poly Co., LLC, and Superbag Corporation.
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Export Price

    To determine whether sales of PRCBs from Malaysia to the United 
States were made at prices less than normal value, we compared the U.S. 
price to the normal value. For the price of sales by Euro Plastics to 
the United States, we used export price as defined in section 772(a) of 
the Act because the subject merchandise was first sold to an 
unaffiliated purchaser in the United States. We calculated Euro 
Plastics's export price based on the prices of the subject merchandise 
sold to unaffiliated customers in, or for exportation to, the United 
States. See section 772(c) of the Act. We made deductions for domestic 
movement expenses incurred in Malaysia and domestic and international 
movement expenses incurred for sales to the United States in accordance 
with section 772(c)(2)(A) of the Act.

Comparison-Market Sales

    In order to determine whether there was a sufficient volume of 
sales in the comparison market to serve as a viable basis for 
calculating the normal value, we compared the volume of home-market 
sales of the foreign like product to the volume of the U.S. sales of 
the subject merchandise in accordance with section 773(a) of the Act. 
Based on this comparison of the aggregate quantities of the comparison-
market (i.e., Malaysia) and U.S. sales and absent any information that 
a particular market situation in the exporting country did not permit a 
proper comparison, we determined that the quantity of the foreign like 
product sold by the respondent 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)(1) of the Act. Thus, 
we determined that Euro Plastics's home market was viable during the 
period of review. See section 773(a)(1) of the Act. Therefore, in 
accordance with section 773(a)(1)(B)(i) of the Act, we based normal 
value for the respondent on the prices at which the foreign like 
product was first sold for consumption in the exporting country in the 
usual commercial quantities and in the ordinary course of trade and, to 
the extent practicable, at the same level of trade as the comparison-
market sales.

Cost of Production

    The petitioners in this proceeding filed an allegation that Euro 
Plastics made sales below its cost of production (COP) in the 
comparison market pursuant to section 773(b) of the Act. Based on the 
information in the responses, we found that we had reasonable grounds 
to believe or suspect that Euro Plastics's sales of the foreign like 
product were made at prices less than the COP. See section 773(b)(2) of 
the Act. Therefore, pursuant to section 773(b)(1) of the Act, we 
conducted a COP investigation to determine whether Euro Plastics's 
sales were made at prices below their COP. See the COP Investigation 
Memo dated January 12, 2007, for a full discussion of the decision to 
initiate a COP investigation.
    In accordance with section 773(b)(3) of the Act, we calculated Euro 
Plastics's 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 
used the comparison-market sales and COP information provided by the 
respondent in its questionnaire responses.
    After calculating the COP, we tested whether comparison-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. See section 773(b)(2) of the Act. In order to determine 
whether the sales were made at below-cost prices, we compared model-
specific COP to the reported comparison-market prices less any 
applicable movement charges, discounts, and rebates. See section 773(b) 
of the Act.
    Pursuant to section 773(b)(2)(C) of the Act, where 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 we determined preliminarily that the below-cost sales 
were not made in substantial quantities. Where 20 percent or more of 
the respondent's sales of a given product during the period of review 
were at prices less than the COP, we disregarded the below-cost sales 
because we determined preliminarily that they 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 prices to 
weighted-average COP for the period of review, we determined 
preliminarily 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. See Euro Plastics Preliminary 
Analysis Memorandum dated May 3, 2007. Based on this test, we 
disregarded Euro Plastics's below-cost sales and used the remaining 
sales as the basis for determining normal value, in accordance with 
section 773(b)(1) of the Act.
    Euro Plastics relied on its audited 2005 financial statement to 
calculate the COP because its audited 2006 financial

[[Page 26602]]

statement was not yet available. Because the period of review covers 
five months in 2005 and seven months in 2006, we requested that Euro 
Plastics recalculate its general and administrative expenses and net 
interest rates using the audited 2006 financial statement. We also 
requested that Euro Plastics provide cost reconciliations using the 
audited 2006 financial statements and supporting documents. Euro 
Plastics stated that its audited 2006 financial statement will be 
available at the end of April 2007 and, once the audited 2006 financial 
statement becomes available, it will resubmit its cost data. For the 
final results, we intend to use Euro Plastics's cost data based on its 
audited 2006 financial statement.

Model-Matching Methodology

    We compared U.S. sales with sales of the foreign like product in 
the home market. Specifically, in making our comparisons, we used the 
following methodology. If an identical comparison-market model was 
reported, we made comparisons to weighted-average comparison-market 
prices that were based on all sales which passed the COP test of the 
identical product during the relevant or contemporary month. If there 
were no contemporaneous sales of an identical model, we identified the 
most similar comparison-market model. To determine the most similar 
model, we matched the foreign like product based on the physical 
characteristics reported by the respondent in the following order of 
importance: (1) quality, (2) bag type, (3) length, (4) width, (5) 
gusset, (6) thickness, (7) percentage of high-density polyethylene 
resin, (8) percentage of low-density polyethylene resin, (9) percentage 
of low linear-density polyethylene resin, (10) percentage of color 
concentrate, (11) percentage of ink coverage, (12) number of ink 
colors, (13) number of sides printed.

Normal Value

    We based normal value for Euro Plastics on the prices of the 
foreign like products sold to its comparison-market customers. When 
applicable, we made adjustments for differences in packing and 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 19 CFR 351.411. In addition, we 
made adjustments 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 export price, we made circumstance-of-sale adjustments 
by deducting home-market direct selling expenses incurred on home-
market sales from, and adding U.S. direct selling expenses to, normal 
value. In accordance with section 773(a)(1)(B)(i) of the Act, we based 
normal value on sales at the same level of trade as the export price. 
See the ``Level of Trade'' section below.

Level of Trade

    Section 773(a)(1)(B)(i) of the Act provides that, to the extent 
practicable, the Department will calculate normal value based on sales 
at the same level of trade as the export price. The normal-value level 
of trade is that of the starting-price sales in the comparison market 
before any adjustments. See section 773(a)(1)(B)(i) of the Act. Euro 
Plastics reported identical selling functions along the chain of 
distribution between the producer and the unaffiliated customer in the 
comparison and U.S. markets. We have reviewed the selling functions 
Euro Plastics reported including sales forecasting, order input/
processing, direct sales personnel, sales/marketing support, freight 
and delivery, and packing. We examined them in relation to a number of 
expenses Euro Plastics reported in its responses and found no 
discrepancies. Therefore, we determined that Euro Plastics made all 
comparison-market sales at one level of trade, all U.S. sales at one 
level of trade, and all comparison-market sales at the same level of 
trade as the export-price sales. See sections 773(a)(1)(B)(i) and 
773(a)(7) of the Act. See Euro Plastics Preliminary Analysis Memorandum 
dated May 3, 2007, for more analysis.

Preliminary Results of the Review

    As a result of our review, we preliminarily determine that the 
weighted-average dumping margin on polyethylene retail carrier bags 
from Malaysia for the period August 1, 2005, through July 31, 2006, for 
Euro Plastics is 0.00 percent.

Comments

    We will disclose the calculations used in our analysis to parties 
to this review within five days of the date of publication of this 
notice. See 19 CFR 351.224(b). Any interested party may request a 
hearing within 30 days of the date of publication of this notice. See 
19 CFR 351.310. Interested parties who wish to request a hearing or to 
participate in a hearing if a hearing is requested must submit a 
written request to the Assistant Secretary for Import Administration 
within 30 days of the date of publication of this notice. Requests 
should contain the following: (1) the party's name, address, and 
telephone number; (2) the number of participants; (3) a list of issues 
to be discussed. See 19 CFR 351.310(c).
    Issues raised in the hearing will be limited to those raised in the 
case and rebuttal briefs. See 19 CFR 351.310(c). Case briefs from 
interested parties may be submitted not later than 30 days after the 
date of publication of this notice of preliminary results of review. 
See 19 CFR 351.309(c)(1)(ii). Rebuttal briefs from interested parties, 
limited to the issues raised in the case briefs, may be submitted not 
later than five days after the time limit for filing the case briefs or 
comments. See 19 CFR 351.309(d)(1) and 19 CFR 351.310(c). Any hearing, 
if requested, will be held two days after the scheduled date for 
submission of rebuttal briefs. See 19 CFR 351.310(d). Parties who 
submit case briefs or rebuttal briefs in this proceeding are requested 
to submit with each argument a statement of the issue, a summary of the 
arguments not exceeding five pages, and a table of statutes, 
regulations, and cases cited. See 19 CFR 351.309(c)(2). The Department 
will issue the final results of this administrative review, including 
the results of its analysis of issues raised in any such written briefs 
or at the hearing, if held, not later than 120 days after the date of 
publication of this notice. See section 751(a)(3)(A) of the Act.

Assessment Rates

    The Department will determine, and U.S. Customs and Border 
Protection (CBP) shall assess, antidumping duties on all appropriate 
entries. We intend to issue appropriate assessment instructions 
directly to CBP 15 days after publication of the final results of 
review. In accordance with 19 CFR 351.212(b)(1), we have calculated an 
importer-specific assessment amount of 0.00. If these preliminary 
results are adopted in our final results, we will direct CBP to 
liquidate the appropriate entries at this rate. See 19 CFR 
351.212(b)(1).
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003 (68 FR 23954). This clarification will apply to entries of 
subject merchandise during the period of review produced by Euro 
Plastics for which it did not know its merchandise was destined for the 
United States. In such instances, we will instruct CBP to liquidate 
unreviewed entries at the all-others rate if there is no rate for the 
intermediate company(ies) involved in the transaction. For a full 
discussion of this clarification, see Antidumping and Countervailing 
Duty Proceedings:

[[Page 26603]]

Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

Cash-Deposit Requirements

    The following deposit requirements will be effective upon 
publication of the notice of final results of administrative review for 
all shipments of PRCBs from Malaysia entered, or withdrawn from 
warehouse, for consumption on or after the date of publication, as 
provided by section 751(a)(2)(C) of the Act: (1) The cash-deposit rate 
for Euro Plastics will be the rate established in the final results of 
review; (2) for previously investigated companies not listed above, the 
cash-deposit rate will continue to be the company-specific rate 
published in the Notice of Final Determination of Sales at Less Than 
Fair Value: Polyethylene Retail Carrier Bags From Malaysia, 69 FR 
34128, 34129 (June 18, 2004); (3) if the exporter is not a firm covered 
in this review or the less-than-fair-value 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; (4) if 
neither the exporter nor the manufacturer has its own rate, the cash-
deposit rate will be 84.94 percent, the ``all others'' rate for this 
proceeding. These deposit requirements, when imposed, shall remain in 
effect until further notice.

Notification to Importer

    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 Department's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of doubled antidumping duties.
    These preliminary results of administrative review are issued and 
published in accordance with sections 751(a)(1) and 777(i)(1) of the 
Act.

    Dated: May 3, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-9036 Filed 5-9-07; 8:45 am]
BILLING CODE 3510-DS-S