[Federal Register Volume 72, Number 132 (Wednesday, July 11, 2007)]
[Notices]
[Pages 37711-37713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-13483]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-802]


Preliminary Results of Antidumping Duty Changed-Circumstances 
Review: Gray Portland Cement and Clinker From Mexico

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from an interested party and pursuant 
to Section II. B.6 of the Agreement between the Office of the United 
States Trade Representative, the United States Department of Commerce, 
and Secretaria de Economia on Trade in Mexican Cement (the Agreement) 
dated March 6, 2006, the Department of Commerce is conducting a 
changed- circumstances review of the antidumping duty order on gray 
portland cement and clinker from Mexico. The changed-circumstances 
review covers exports of subject merchandise to the United States 
during the period October 1, 2006, through December 31, 2006, from one 
firm, Holcim Apasco, S.A. de C.V. We have preliminarily determined that 
sales were made below normal value during the changed-circumstances 
period of review.
    We invite interested parties to comment on these preliminary 
results. Parties who submit arguments in this proceeding are requested 
to submit with the argument (1) a statement of the issues, and (2) a 
brief summary of the argument.

EFFECTIVE DATE: July 11, 2007.

FOR FURTHER INFORMATION CONTACT: Hermes Pinilla or Minoo Hatten, AD/CVD 
Operations, Office 5, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
3477 and (202) 482-1690, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On January 4, 2007, the Department of Commerce (the Department) 
initiated a changed-circumstances review of the antidumping duty order 
on gray portland cement and clinker (cement) from Mexico. See Gray 
Portland Cement and Clinker From Mexico: Initiation of an Antidumping 
Duty Changed-Circumstances Review, 72 FR 328 (January 4, 2007). 
According to the Agreement, upon request, the Department shall conduct 
an expedited changed-circumstances review to establish a new estimated 
duty deposit rate for any Mexican Cement exporter (and its affiliated 
parties) that meet the following criteria: (a) Had an estimated duty 
deposit rate under the order on cement; (b) did not receive the new 
estimated duty deposit rate of three U.S. dollars ($3.00) per metric 
ton referenced in Section II.A.4.b of the Agreement; and (c) exported 
Mexican cement to the United States in the year preceding the effective 
date or exports Mexican cement to the United States while the Agreement 
remains in force.
    On December 14, 2006, pursuant to section II.B.6 of the Agreement, 
Holcim Apasco, S.A. de C.V. (Apasco), requested that the Department 
conduct a changed-circumstances review of certain export sales of the 
subject merchandise to the United States made by Apasco during the 
period October through December 2006.

Scope of the Order

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

Verification

    As provided in section 782(i) of the Tariff Act of 1930, as 
amended, (the Act), we will verify certain information submitted by 
Apasco using standard verification procedures, including an examination 
of relevant sales and financial records and the selection of original 
documentation containing relevant information. Upon completion of 
verification, we will place on the record a copy of our verification 
report in the Central Records Unit (CRU), Room B-099 of the main 
Department building. Verification is currently scheduled to begin July 
23, 2007.

Export Price

    Apasco reported export-price (EP) sales. We calculated EP based on 
the packed, 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.

Normal Value

A. Comparisons

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating 
normal value, we compared the respondent's volume of home-market sales 
of the foreign like product to the volume of U.S. sales of the subject 
merchandise in accordance with section 773(a)(1)(C) of the Act. Because 
the respondent's aggregate volume of home-market sales of the foreign 
like product was greater than five percent of its aggregate volume of 
U.S. sales of the subject merchandise, we determined that the home 
market was viable. Therefore, we have based normal value on home-market 
sales.
    During the period October through December 2006, the respondent 
sold Type II LA cement in the United States. The statute expresses a 
preference for matching U.S. sales to identical merchandise in the home 
market. See section 771(16) of the Act. The respondent sold cement 
produced as Type II, Type II/III/V, and Type III cement in the home 
market. We have attempted to match the subject merchandise to identical 
merchandise sold in the home market. In situations where identical 
product types cannot be matched, we have attempted to match the subject 
merchandise to sales of similar merchandise in the home market. See 
sections 773(a)(1)(B) and 771(16) of the Act.
    We were able to find home-market sales of identical and similar 
merchandise to which we could match sales of Type II LA cement sold in 
the U.S. market.
    We have reviewed the information on the record and have determined 
that Type II cement produced and sold in the home market is the 
identical match

[[Page 37712]]

to Type II LA cement sold in the United States during this review 
period. If we could not find an identical match to the cement types 
sold in the United States in the same month in which the U.S. sale was 
made or during the contemporaneous period, we based normal value on 
sales of similar merchandise.
    Further, in accordance with section 771(16)(B) of the Act, we find 
that both bulk and bagged cement are produced in the same country and 
by the same producer as the types sold in the United States, both bulk 
and bagged cement are like the types sold in the United States in 
component materials and in the purposes for which used, and both bulk 
and bagged cement are approximately equal in commercial value to the 
types sold in the United States. The questionnaire responses submitted 
by the respondent indicate that, with the exception of packaging, sales 
of cement in bulk and sales of cement in bags are physically identical 
and both are used in the production of concrete. Also, because there is 
no difference in the cost of production between cement sold in bulk or 
in bagged form, both are approximately equal in commercial value. See 
Apasco's responses to the Department's original and supplemental 
questionnaires dated January 4, 2007, April 4, 2007, and May 30, 2007. 
Therefore, we find that matching the U.S. merchandise which is sold in 
both bulk and bag to the foreign like product sold in either bulk or 
bag is appropriate.

B. Arm's-Length Sales

    To test whether home-market sales to affiliated customers were made 
at arm's length, we compared the prices of sales to affiliated and 
unaffiliated customers, net of all movement charges, direct selling 
expenses, discounts, and packing. Where the price to the affiliated 
party was, on average, within a range of 98 to 102 percent of the price 
of the same or comparable merchandise to the unaffiliated parties, we 
determined that the sales made to the affiliated party were at arm's 
length. See Modification Concerning Affiliated Party Sales in the 
Comparison Market, 67 FR 69186 (November 15, 2002). Consistent with 19 
CFR 351.403, we only included in our margin analysis those sales to 
affiliated parties that were made at arm's length.

C. Cost of Production

    The petitioner, the Southern Tier Cement Committee (STCC), alleged 
on March 26, 2007, that the respondent sold cement in the home market 
at prices below the cost of production (COP). After examining the 
allegation, we determined that the petitioner had provided a reasonable 
basis to believe or suspect that Apasco sold cement in Mexico at prices 
below the COP. Therefore, pursuant to section 773(b)(1) of the Act, we 
initiated a COP investigation to determine whether Apasco made home-
market sales of cement during the review period at below-cost prices. 
See the memorandum from Minoo Hatten to Laurie Parkhill entitled ``Gray 
Portland Cement and Clinker from Mexico: Request to Initiate Cost 
Investigation in the Changed-Circumstances Review,'' dated April 18, 
2007.
    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 cement plus amounts for home-market selling, general, and 
administrative (SG&A) expenses. We used the home-market sales data and 
COP information provided by Apasco in its questionnaire responses.
    After calculating the weighted-average COP and in accordance with 
section 773(b)(3) of the Act, we tested whether Apasco's home-market 
sales were made at prices below the COP within an extended period of 
time in substantial quantities and whether such prices permitted 
recovery of all costs within a reasonable period of time. We compared 
the COP appropriate to the home-market prices less any applicable 
direct selling expenses, movement charges, discounts and rebates, and 
indirect selling expenses.
    Pursuant to section 773(b)(2)(C) of the Act, if less than 20 
percent of a respondent's sales of a product were at prices less than 
the COP, we do not disregard any below-cost sales of that product 
because the below-cost sales were not made in substantial quantities 
within an extended period of time. If 20 percent or more of a 
respondent's sales of a product during the period were at prices less 
than the COP, such below-cost sales were made in substantial quantities 
within an extended period of time pursuant to sections 773(b)(2)(B) and 
(C) of the Act.
    Based on comparisons of home-market prices to the appropriate 
weighted-average COP for the changed-circumstances review, we 
determined that below-cost sales were not made in substantial 
quantities within an extended period of time, and, therefore, we did 
not disregard any below-cost sales.

D. Adjustments to Normal Value

    Where appropriate, we adjusted home-market prices for discounts, 
rebates, packing, and freight surcharge to the invoice price. In 
addition, we adjusted the starting price for inland freight, inland 
insurance, and warehousing expenses. We also made circumstance-of-sale 
adjustments by deducting comparison-market direct selling expenses from 
normal value and adding U.S. direct selling expenses to normal value.
    Section 773(a)(6)(C)(ii) of the Act directs us to make an 
adjustment to normal value to account for differences in the physical 
characteristics of merchandise where similar products are compared. The 
regulations at 19 CFR 351.411(b) direct us to consider differences in 
variable costs associated with the physical differences in the 
merchandise. Where we matched U.S. sales of subject merchandise to 
similar models in the home market, we adjusted for differences in 
merchandise.

E. Level of Trade

    We determined that all comparison-market sales by Apasco were made 
at the same level of trade as the EP customer. To determine whether 
comparison-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. Apasco did not report any significant 
differences in selling functions between different channels of 
distribution or customer type in either the comparison or U.S. markets. 
Therefore, we determined that all comparison-market and EP sales were 
made at the same level of trade.

Currency Conversion

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

Preliminary Results of Review

    As a result of our changed-circumstances review, we preliminarily 
determine the dumping margin for Apasco for the period October 1, 2006, 
through December 31, 2006, to be 29.77 percent.
    Case briefs or other written comments in at least six copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than one week after the issuance of the Department's verification 
report in this changed-circumstances review. Pursuant to 19 CFR 
351.309(d)(2), rebuttal briefs are due no later than five days after 
the submission of case briefs. A list of authorities used, a table of 
contents, and an executive summary of issues should

[[Page 37713]]

accompany any briefs submitted to the Department. Executive summaries 
should be limited to five pages total, including footnotes. In 
accordance with 19 CFR 351.310, we 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 we receive a request for a hearing, we plan to 
hold the hearing 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. 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, no later than 
21 days after the date of publication of the preliminary results of 
this changed-circumstances review in the Federal Register. Requests 
should contain the following information: (1) the party's name, 
address, and telephone number; (2) the number of participants; (3) a 
list of the issues to be discussed. Oral presentations will be limited 
to issues raised in the briefs.
    In accordance with 19 CFR 351.221(b)(5) the Department will issue 
the final results of this changed-circumstances review, including the 
results of its analysis of issues raised in any case or rebuttal 
briefs, by October 25, 2007.

Assessment Rates

    Upon completion of this review, the Department will determine, and 
U.S. Customs and Border Protection (CBP) shall assess, antidumping 
duties on all appropriate entries. In accordance with 19 CFR 
351.212(b)(1), we have calculated an importer-specific assessment rate 
for merchandise subject to this review. Because Apasco reported the 
entered value for its EP sales, we divided the total dumping margins 
for the reviewed sales by the total entered value of those reviewed 
sales for importer of record. If these preliminary results are adopted 
in the final results of review, we will direct CBP to assess the 
resulting assessment rates against the entered customs values for the 
subject merchandise on the importer's entries during the changed-
circumstances review period. We will issue instructions to CBP 41 days 
after publication of the final results of this changed-circumstances 
review.

Cash-Deposit Requirements

    As provided by section 751(a)(1) of the Act, the cash-deposit rate 
for all shipments from Apasco of the subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date of the final results of changed-circumstances review will be the 
rate established in the final results of changed-circumstances review. 
The deposit requirements, when imposed, shall remain in effect until 
further notice.

Notification to Interested Parties

    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 changed-circumstances review. 
Failure to comply with this requirement could result in the Secretary's 
presumption that reimbursement of antidumping duties occurred and the 
subsequent assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(b)(1) and 777(i)(1) of the Act.

    Dated: July 2, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-13483 Filed 7-10-07; 8:45 am]
BILLING CODE 3510-DS-P