[Federal Register Volume 72, Number 139 (Friday, July 20, 2007)]
[Notices]
[Pages 39790-39793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14087]


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DEPARTMENT OF COMMERCE

International Trade Administration

(A-475-703)


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Granular Polytetrafluoroethylene Resin From Italy

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

EFFECTIVE DATE: July 20, 2007.

FOR FURTHER INFORMATION CONTACT: Salim Bhabhrawala, at (202) 482-1784; 
AD/CVD Operations, Office 1, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street & Constitution 
Avenue, NW, Washington, DC 20230.

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on granular 
polytetrafluoroethylene resin (PTFE) from Italy, covering the period 
August 1, 2005, through July 31, 2006. We preliminarily determine that 
sales of subject merchandise by Solvay Solexis, Inc. and Solvay Solexis 
S.p.A (collectively, Solvay) have been made below normal value (NV). If 
these preliminary results are adopted in our final results, we will 
instruct U.S. Customs and Border Protection (CBP) to assess antidumping 
duties on appropriate entries based on the difference between the 
export price (EP) and the NV. Interested parties are invited to comment 
on these preliminary results.

SUPPLEMENTARY INFORMATION:

Background

    On August 30, 1988, the Department published in the Federal 
Register the antidumping duty order on granular PTFE resin from Italy. 
See Antidumping Duty Order; Granular Polytetrafluoroethylene Resin from 
Italy, 53 FR 33163 (August 30, 1988). On August 1, 2005, the Department 
issued a notice of opportunity to request an administrative review of 
this order. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity To Request Administrative Review, 
71 FR 43441-43443 (August 1, 2006). In accordance with 19 CFR 
351.213(b), Solvay requested an administrative review. On September 29, 
2006, the Department published the notice of initiation of this 
antidumping duty administrative review, covering the period August 1, 
2005, through July 31, 2006 (the period of review, or POR). See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews, 71 FR 57465 (September 29, 2006).
    On September 29, 2006, the Department issued its antidumping 
questionnaire to Solvay, specifying that the responses to Section A and 
Sections B-E would be due on October 20, 2006, and November 6, 2006, 
respectively.\1\ The Department received timely responses to Sections 
A-D of the initial antidumping questionnaire and associated 
supplemental questionnaires.
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    \1\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under review that it sells, and the manner in which 
it sells that merchandise in all of its markets. Section B requests 
a complete listing of all home market sales, or, if the home market 
is not viable, of sales 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 U.S. sales. Section 
D requests information on the cost of production of the foreign like 
product and the constructed value of the merchandise under review. 
Section E requests information on further manufacturing.
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    On May 1, 2007, the Department published a notice of a 71-day 
extension of the preliminary results of this administrative review. See 
Granular Polytetrafluoroethylene Resin From Italy: Notice of Extension 
of Time Limit for the Preliminary Results of Antidumping Duty 
Administrative Review, 72 FR 23802. This notice extended the deadline 
for the preliminary results to July 13, 2007.

Scope of the Order

    The product covered by this order is granular PTFE resin, filled or 
unfilled. This order also covers PTFE wet raw polymer exported from 
Italy to the United States. See Granular Polytetrafluoroethylene Resin 
From Italy; Final Affirmative Determination of Circumvention of 
Antidumping Duty Order, 58 FR 26100 (April 30, 1993). This order 
excludes PTFE dispersions in water and fine powders. During the period 
covered by this review, such merchandise was classified under item 
number 3904.61.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). We are providing this HTSUS number for convenience and 
CBP purposes only. The written description of the scope remains 
dispositive.

Fair Value Comparisons

    We compared the constructed export price (CEP) to the NV, as 
described in the Constructed Export Price and Normal Value sections of 
this notice. Pursuant to section 777A(d)(2) of the Tariff Act of 1930, 
as amended (the Act), we compared the CEPs of individual transactions 
to contemporaneous monthly weighted-average prices of sales of the 
foreign like product.
    We first attempted to compare contemporaneous sales of products 
sold in the United States and the comparison market that were identical 
with respect to the following characteristics: type, filler, percentage 
of filler, and grade. Where we were unable to compare sales of 
identical merchandise, we compared U.S. sales with comparison market 
sales of the most similar merchandise.

Constructed Export Price

    For all sales to the United States, we calculated CEP, as defined 
in section 772(b) of the Act, because all sales to unaffiliated parties 
were made after importation of the subject merchandise

[[Page 39791]]

into the United States through the respondent's affiliate, Solvay 
Solexis, Inc. We based CEP on the packed, delivered prices to 
unaffiliated purchasers in the United States, net of billing 
adjustments. We adjusted these prices for movement expenses, including 
international freight, marine insurance, brokerage and handling in the 
United States, U.S. inland freight, U.S. warehousing, and U.S. customs 
duties, in accordance with section 772(c)(2)(A) of the Act.
    In accordance with section 772(d)(1) of the Act, we deducted 
selling expenses incurred by the affiliated reseller. These expenses 
include credit, inventory carrying costs, and indirect selling expenses 
incurred by Solvay Solexis, Inc. See Memorandum from Salim Bhabhrawala, 
Senior International Trade Compliance Analyst, to Nancy Decker, Program 
Manager, Re: Preliminary Results Calculation Memorandum, dated July 13, 
2007 (Analysis Memo).

Normal Value

A. Selection of Comparison Markets

    In order to determine whether there was a sufficient volume of 
sales of granular PTFE resin in the home market to serve as a viable 
basis for calculating NV, we compared Solvay'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 aggregate volume of home market sales of the foreign 
like product was greater than five percent of the respective aggregate 
volume of U.S. sales for the subject merchandise, we determined that 
the home market provided a viable basis for calculating NV. Therefore, 
in accordance with section 773(a)(1)(B)(i) of the Act, we based NV 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.

B. Cost of Production Analysis

    Because we disregarded below-cost sales in the calculation of the 
final results of the 2000-2001 administrative review, the most recently 
completed review of PTFE at the time of initiation of this review, with 
respect to Solvay, we had reasonable grounds to believe or suspect that 
home market sales of the foreign like product by Solvay had been made 
at prices below the cost of production (COP) during the period of this 
review. See section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to 
section 773(b)(1) of the Act, we initiated a COP investigation 
regarding home market sales. Solvay calculated its model-specific costs 
of production on a POR basis.

1. Calculation of COP

    In accordance with section 773(b)(3) of the Act, we calculated the 
model-specific, weighted-average COP based on the sum of the cost of 
materials and fabrication for the foreign like product, plus amounts 
for general and administrative expenses, interest expenses, selling 
expenses, and packing costs.

2. Test of Home Market Sales Prices

    We compared the weighted-average COP to the home market sales of 
the foreign like product, as required under section 773(b) of the Act, 
in order to determine whether these sales had been made at prices below 
the COP within an extended period of time (i.e., a period of one year) 
in substantial quantities and whether such prices were sufficient to 
permit the recovery of all costs within a reasonable period of time.
    On a model-specific basis, we compared the COP to home market 
prices, less any rebates, discounts, applicable movement charges, and 
direct and indirect selling expenses.

3. Adjustments to Respondent's Data

    We relied on the COP data submitted by Solvay in its cost 
questionnaire response except for general and administrative (G&A) 
expenses. We adjusted Solvay's G&A expenses to be based on its normal 
books and records, in accordance with Italian Generally Accepted 
Accounting Principles. See Analysis Memo.

4. Results of the COP Test

    We disregarded below-cost sales where: (1) 20 percent or more of 
Solvay's sales of a given product during the POR were made at prices 
below the COP, because such sales were made within an extended period 
of time in substantial quantities in accordance with sections 
773(b)(2)(B) and (C) of the Act; and (2) based on comparisons of price 
to weighted-average COPs for the POR, we determined that the below-cost 
sales of the product were at prices which would not permit recovery of 
all costs within a reasonable time period, in accordance with section 
773(b)(2)(D) of the Act. We found that Solvay made sales below cost, 
and we disregarded such sales where appropriate.

C. Calculation of Normal Value Based on Comparison-Market Prices

    We determined home market prices net of price adjustments (e.g., 
early payment discounts and rebates). Where applicable, we made 
adjustments for packing and movement expenses, in accordance with 
sections 773(a)(6)(A) and (B) of the Act. In order to adjust for 
differences in packing between the two markets, we deducted home market 
packing costs from NV and added U.S. packing costs. We also made 
adjustments for differences in costs attributable to differences in 
physical characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act, and for other differences in the 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Act (i.e., differences in credit expenses). 
Finally, we made a CEP-offset adjustment to the NV for indirect selling 
expenses pursuant to section 773(a)(7)(B) of the Act, as discussed in 
the Level of Trade/CEP Offset section below.

D. Level of Trade/CEP Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales at the same level of trade 
in the comparison market as the level of trade of the U.S. sales. The 
comparison market level of trade is that of the starting-price sales in 
the comparison market. For CEP sales, such as those made by Solvay in 
this review, the U.S. level of trade is the level of the constructed 
sale from the exporter to the importer.
    To determine whether comparison market sales are at a different 
level of trade than that of the U.S. sales, we examine 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 are at a different level of trade and the difference 
affects price comparability, as manifested in a pattern of consistent 
price differences between the sales on which NV is based and 
comparison-market sales at the level of trade of the export 
transaction, we make a level-of-trade adjustment under section 
773(a)(7)(A) of the Act. Finally, if the NV level is more remote from 
the factory than the CEP level and there is no basis for determining 
whether the difference in the levels between NV and CEP affects price 
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the 
CEP-offset provision). See, e.g., Industrial Nitrocellulose From the 
United Kingdom; Notice of Final Results of Antidumping Duty 
Administrative Review, 65 FR 6148, 6151 (February 8, 2000) (Industrial 
Nitrocellulose).
    For purpose of this review, we obtained information from Solvay 
about

[[Page 39792]]

the marketing involved in the reported U.S. sales and in the home 
market sales, including a description of the selling activities 
performed by Solvay for each channel of distribution. In identifying 
levels of trade for CEP and for home market sales, we considered the 
selling functions reflected in the CEP, after the deduction of expenses 
and profit under section 772(d) of the Act, and those reflected in the 
home market starting price before making any adjustments. We expect 
that, if claimed levels of trade are the same, the functions and 
activities of the seller should be similar. Conversely, if a party 
claims that levels of trade are different for different groups of 
sales, the functions and activities of the seller should be dissimilar.
    The record evidence in this review indicates that the home market 
and the CEP levels of trade for Solvay have not changed from the 2004-
2005 review,\2\ the most recently completed review in this case. As 
explained below, we determined in this review that, as in the prior 
2004-2005 administrative review, there was one home market level of 
trade and one U.S. level of trade (i.e., the CEP level of trade).
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    \2\ See Notice of Final Results of Antidumping Duty 
Administrative Review: Granular Polytetrafluoroethylene Resin from 
Italy, 72 FR 1980 (January 17, 2007).
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    In the home market, Solvay sold directly to fabricators. These 
sales primarily entailed selling activities such as technical 
assistance, engineering services, research and development, technical 
programs, and delivery services. Given this fact pattern, we found that 
all home market sales were made at a single level of trade. In 
determining the level of trade for the U.S. sales, we only considered 
the selling activities reflected in the price after making the 
appropriate adjustments under section 772(d) of the Act. See, e.g., 
Industrial Nitrocellulose, 65 FR at 6150. The CEP level of trade 
involves minimal selling functions such as invoicing and the occasional 
exchange of personnel between Solvay and its U.S. affiliate. Given this 
fact pattern, we found that all U.S. sales were made at a single level 
of trade.
    Based on a comparison of the home market level of trade and this 
CEP level of trade, we find the home market sales to be at a different 
level of trade from, and more remote from the factory than, the CEP 
sales. Section 773(a)(7)(A) of the Act directs us to make an adjustment 
for difference in levels of trade where such differences affect price 
comparability. However, we were unable to quantify such price 
differences from information on the record. Because we have determined 
that the home-market level of trade is more remote from the factory 
than the CEP level of trade, and because the data necessary to 
calculate a level-of-trade adjustment are unavailable, we made a CEP-
offset adjustment to NV pursuant to section 773(a)(7)(B) of the Act.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act, based on exchange rates in effect on the date 
of the U.S. sale, as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average margin exists for the period August 1, 2005, 
through July 31, 2006:

------------------------------------------------------------------------
                                                            Weighted-
                        Producer                          Average Margin
                                                           (Percentage)
------------------------------------------------------------------------
Solvay Solexis, Inc. and Solvay Solexis S.p.A                  35.35
 (collectively, Solvay)................................
------------------------------------------------------------------------

    In accordance with 19 CFR 351.224(b), the Department will disclose 
its weighted average antidumping margin calculations within 10 days of 
public announcement of these preliminary results. An interested party 
may request a hearing within 30 days of publication of these 
preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, 
will be held 44 days after the date of publication, or the first 
working day thereafter. Interested parties may submit case briefs and/
or written comments no later than 30 days after the date of publication 
of these preliminary results. See 19 CFR 351.309(c). Rebuttal briefs 
and rebuttals to written comments, limited to issues raised in such 
briefs or comments, may be filed no later than 37 days after the date 
of publication. See 19 CFR 351.309(d). Parties who submit arguments are 
requested to submit with the argument: (1) a statement of the issue; 
(2) a brief summary of the argument; and (3) a table of authorities. 
Further, the parties submitting written comments should provide the 
Department with an additional copy of the public version of any such 
comments on diskette.
    The Department will issue the final results of this administrative 
review, which will include the results of its analysis of issues raised 
in any such comments, within 120 days of publication of these 
preliminary results.

Assessment

    Upon completion of this administrative review, pursuant to 19 CFR 
351.212(b), the Department will calculate an assessment rate on all 
appropriate entries. We will calculate importer-specific duty 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total quantity of the 
sales for that importer. Where the assessment rate is above de minimis, 
we will instruct CBP to assess duties on all entries of subject 
merchandise by that importer.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This 
clarification will apply to entries of subject merchandise during the 
POR produced by the company included in these preliminary results for 
which the reviewed company did not know their 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 or companies involved in the transaction.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
PTFE from Italy entered, or withdrawn from warehouse, for consumption 
on or after the publication date, as provided by section 751(a)(1) of 
the Act: (1) the cash deposit rate listed above for Solvay will be the 
rate established in the final results of this review, except if a rate 
is less than 0.5 percent, and therefore de minimis, the cash deposit 
rate will be zero; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior review, or 
the less-than-fair-value (LTFV) 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; and (4) if neither the 
exporter nor the manufacturer is a firm covered in this or any previous 
review conducted by the Department, the cash deposit rate will be 46.46 
percent, the ``all others'' rate established in the LTFV investigation. 
See 53 FR 26096 (July 11, 1988). These cash deposit requirements,

[[Page 39793]]

when imposed, shall remain in effect until further notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entities during this review period. 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.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: June 13, 2007.
Joseph A. Spetrini,
Deputy Assistant Secretary for Import Administration.
[FR Doc. E7-14087 Filed 7-19-07; 8:45 am]
BILLING CODE 3510-DS-S