[Federal Register Volume 73, Number 93 (Tuesday, May 13, 2008)]
[Notices]
[Pages 27498-27504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-10659]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-428-840]


Lightweight Thermal Paper from Germany: Notice of Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The U.S. Department of Commerce (the Department) preliminarily 
determines that lightweight thermal paper (LWTP) from Germany is being, 
or is likely to be, sold in the United States at less than fair value 
(LTFV), as provided in section 733(b) of the Tariff Act of 1930, as 
amended (the Act). The estimated margins of sales at LTFV are listed in 
the ``Suspension of Liquidation'' section of this notice. Interested 
parties are invited to comment on this preliminary determination. 
Pursuant to requests from interested parties, we are postponing for 60 
days the final determination and extending the provisional measures 
from a four-month period to not more than six months. Accordingly, we 
will make our final determination not later than 135 days after 
publication of the preliminary determination.

EFFECTIVE DATE: May 13, 2008.

FOR FURTHER INFORMATION CONTACT: Cindy Robinson or George McMahon, AD/
CVD Operations, Office 3, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-3797 
or (202) 482-1167, respectively.

SUPPLEMENTARY INFORMATION:

[[Page 27499]]

Background

    On October 29, 2007, the Department initiated the antidumping duty 
investigations of LWTP from Germany, the Republic of Korea, and the 
People's Republic of China (PRC). See Notice of Initiation of 
Antidumping Duty Investigations: Lightweight Thermal Paper from 
Germany, the Republic of Korea, and the People's Republic of China, 72 
FR 62430 (November 5, 2007) (Initiation Notice). The petitioner in this 
investigation is Appleton Papers, Inc.
    The Department 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 Initiation Notice, 72 FR at 62431; see also Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 
1997). On November 19, 2007, the petitioner submitted scope comments in 
which it requested that the Department add several additional 
categories from the Harmonized Tariff Schedule of the United States 
(HTSUS) to the scope of the investigations. In response, on December 
18, 2007, the Department requested comments from interested parties 
regarding the petitioner's proposed scope modification. However, no 
reply comments were received in any of the aforementioned respective 
cases. See Scope Comments section, below.
    On November 14, 2007, the petitioner submitted comments on the 
proposed model-matching criteria. The Department requested comments on 
model-matching criteria in its letter to the interested parties, dated 
November 16, 2007. In response, the Department received several 
comments on model-matching criteria from certain interested parties. 
See Model Match section, below.
    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. The Department identified a large number of 
producers and exporters of LWTP in Germany and determined that it was 
not practicable to examine each known exporter/producer of the subject 
merchandise, as provided in section 777A(c)(1) of the Act. Thus, we 
selected for examination Papierfabrik August Koehler AG and Koehler 
America, Inc. (collectively, Koehler). This particular exporter/
producer accounts for the largest volume of subject merchandise 
exported to the United States from Germany during the period of 
investigation (POI). See section 777A(c)(2)(B) of the Act; See 
Memorandum from Melissa Skinner, Director, Office 3, to Deputy 
Assistant Secretary Stephen J. Claeys, entitled ``Selection of 
Respondent(s) for Individual Review,'' dated December 4, 2007, on file 
in the Central Records Unit (CRU), Room 1117 of the main Department 
building. We subsequently issued the antidumping duty questionnaire\1\ 
to Koehler on December 7, 2007.
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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 investigation 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. 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 
investigation. Section E requests information on further 
manufacturing.
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    On November 16, 2007, the United States International Trade 
Commission (ITC) preliminarily determined that there is a reasonable 
indication that an industry in the United States is materially injured 
or threatened with material injury by reason of imports of certain 
lightweight thermal paper from Germany and the PRC that are alleged to 
be sold in the United States at LTFV. The ITC also determined that 
imports of LTWP from the Republic of Korea were negligible, and 
therefore, terminated the investigation with regard to the Republic of 
Korea. See Certain Lightweight Thermal Paper from China, Germany, and 
Korea, Investigation Nos. 701-TA-451 and 731-TA-1126-1128 
(Preliminary), 72 FR 70343 (December 11, 2007). The ITC notified the 
Department of these findings.
    In the petition filed on September 19, 2007, the petitioner 
provided information demonstrating reasonable grounds to believe or 
suspect that sales of LWTP in the home market were made at prices below 
the fully absorbed COP, within the meaning of section 773(b) of the 
Act, and requested that the Department conduct a sales-below-cost 
investigation. See September 19, 2007, Petition, Volume III: Germany 
Dumping Allegation, at page 8. We found that the petitioner provided a 
reasonable basis to believe or suspect that German producers were 
selling LWTP in Germany at prices below the COP. See section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department initiated a 
country-wide sales-below-cost investigation and requested that Koehler 
respond to section D of the Department's questionnaire. See Initiation 
Notice; see also, the Department's questionnaire issued to Koehler on 
December 7, 2007.
    On January 14, 2008, the Department received the Section A 
questionnaire response from Koehler. On January 30, 2008, the 
Department received the Sections B, C and D responses from Koehler. On 
February 11, 2008, the Department received comments from the petitioner 
on the Sections A through D responses for Koehler. After reviewing the 
Sections A through D responses from Koehler, the Department issued 
supplemental questionnaires to Koehler. On March 27, 2008, the 
petitioner submitted additional comments on Koehler's questionnaire and 
supplemental questionnaire responses. The Department issued additional 
supplemental questions, after reviewing Koehler's supplemental 
questionnaire response.
    On February 6, 2008, the petitioner requested that the Department 
postpone the preliminary determination by 50 days and requested that 
the Department extend the deadline for filing a targeted dumping 
allegation for Germany. On February 25, 2008, the Department advised 
the petitioner that the deadline to file a targeted dumping allegation 
would be 30 days from any revised deadline for the preliminary 
determination. See Memorandum from George McMahon to the File, entitled 
``Extension of the Deadline to File a Targeted Dumping Allegation in 
the Antidumping Duty Investigations on Lightweight Thermal Paper from 
Germany and the People's Republic of China,'' dated February 25, 2008. 
On February 25, 2008, the Department postponed the preliminary 
determination by 50 days. See Lightweight Thermal Paper from Germany 
and the People's Republic of China: Postponement of Preliminary 
Determinations of Antidumping Duty Investigations, 73 FR 9997 (February 
25, 2008).

Targeted Dumping Allegation

    The petitioner submitted an allegation of targeted dumping with 
respect to Koehler on March 27, 2008. See section 777A(d)(1)(B) of the 
Act. In its allegation, the petitioner asserts that there are patterns 
of export prices (EPs), or constructed export prices (CEPs) for 
comparable merchandise that differ significantly among purchasers, 
regions, and time periods. Specifically, the petitioner based its 
allegation on four targeted purchasers, the west region as defined by 
the Census Bureau, and the last four months of the POI. The Department 
requested more information from the petitioner with respect to its 
targeted dumping allegation. See Letter from James Terpstra to the 
petitioner, dated April 8, 2008. On April 14, 2008,

[[Page 27500]]

the petitioner provided its response to the Department's request for 
additional information regarding its targeted dumping allegation.
    On April 16, 2008, the Department received comments from Koehler 
objecting to the targeted dumping allegation on the basis that it does 
not meet the statutory standard for targeted dumping. Specifically, 
Koehler argues that the petitioner failed to: 1) explain any 
statistical tests that should be applied, 2) demonstrate a pattern 
exists within the context of market conditions, 3) explain why a two-
percent threshold is significant for all three types of alleged 
targeting, 4) explain why differences cannot be taken into account 
using the average-to-average analysis, 5) explain why the Department 
should ignore the statutory application of the term ``or'' (instead 
filing allegations based on purchasers, regions, and time periods), and 
6) justify the counterintuitive conclusion that, when all three 
targeting allegations are considered together, over half of Koehler's 
sales are allegedly targeted. On April 23, 2008, the Department also 
received comments from Mitsubishi HiTec Paper Flensburg GmbH and 
Mitsubishi HiTec Paper Bielefeld GmbH, and Mitsubishi International 
Corporation (collectively, Mitsubishi) objecting to the targeted 
dumping allegation. First, Mitsubishi objects to the use of zeroing to 
calculate dumping margins in any situation. Second, Mitsubishi asserts 
that the threshold requirements advocated by the petitioner are 
unworkable. Finally, Mitsubishi argues that, should the Department find 
that Koehler targeted sales of LWTP during the POI, the Department may 
not apply any weighted-average margins calculated for sales within the 
targeted subset to Mitsubishi.

New Targeted Dumping Test applied in Steel Nails

    The statute allows the Department to employ the average-to-
transaction methodology in its margin calculations if: 1) there is a 
pattern of EPs that differ significantly among purchasers, regions, or 
periods of time; and 2) the Department explains why such differences 
cannot be taken into account using the average-to-average or 
transaction-to-transaction methodology. See section 777A(d)(1)(B) of 
the Act. The Department has developed a new test to determine whether 
targeted dumping has occurred. This new test is a two-stage test: the 
first test to address the pattern requirement and the second test to 
address the significant difference requirement. For additional detail, 
see the memorandum entitled ``Antidumping Duty Investigations of 
Certain Steel Nails from the Peoples Republic of China (PRC) and the 
United Arab Emirates (UAE): Post-Preliminary Determinations on Targeted 
Dumping (Steel Nails Targeted Dumping Determination), dated April 21, 
2008, and placed on the record of this investigation on April 30, 2008.

Results of the Application of the New Targeted Dumping Test

    For purposes of this preliminary determination on targeted dumping, 
we have applied the above test to the U.S. sales data reported by the 
respondent, Koehler. In applying the Steel Nails test, we clarified 
various aspects of the test, applied the Steel Nails methodology to 
multiple allegations in this investigation (customer, region, and time 
period), and made certain corrections to the underlying programming 
applied in Steel Nails. We clarified the price gap test described in 
Steel Nails as involving only average prices to non-targets that are 
above the average price charged to the alleged target. That is, the 
price gap test only ``looks up'' when calculating price gaps for non-
targets. We also made corrections to the SAS code underlying the price 
gap test. Our observations and results are discussed in more detail in 
a separate memorandum placed on the record of this investigation. See 
``Calculation Memorandum for the Preliminary Determination - Koehler,'' 
dated May 6, 2008, on file in the CRU.
    As outlined in the separate memorandum, we did not find a pattern 
of EPs for comparable merchandise that differ significantly among 
customers, regions or by time period. As a result, we applied the 
average-to-average methodology to the EPs of all of Koehler's sales to 
the United States during the POI.

Comments by Interested Parties

    Although the Department has not yet established explicit criteria 
or standards for defining ``region'' in the targeted dumping context, 
we have accepted the petitioner's use of U.S. Census-based regions for 
purposes of our targeted dumping analysis for the preliminary 
determination in this investigation. As we did in the investigations 
covering Steel Nails, the Department invites comments on standards and 
criteria for definitions of ``region'' that are reflective of the 
industry and commercial market in the United States. See Steel Nails 
Targeted Dumping Determination at 9.
    Parties may also comment on the Department's overall preliminary 
determination application of the new targeted dumping test in this 
proceeding. Consistent with 19 CFR 351.309(c)(2), all comments should 
be filed in the context of the case and rebuttal briefs. See the 
``Public Comment'' section below for details regarding the briefing 
schedule for this investigation.

Period of Investigation

    The POI is July 1, 2006, to June 30, 2007. This period corresponds 
to the four most recent fiscal quarters prior to the month of the 
filing of the petition.

Scope of the Investigation

    The merchandise covered by this investigation includes certain 
lightweight thermal paper, which is thermal paper with a basis weight 
of 70 grams per square meter (g/m\2\) (with a tolerance of  
4.0 g/m\2\) or less; irrespective of dimensions;\2\ with or without a 
base coat\3\ on one or both sides; with thermal active coating(s)\4\ on 
one or both sides that is a mixture of the dye and the developer that 
react and form an image when heat is applied; with or without a top 
coat;\5\ and without an adhesive backing. Certain lightweight thermal 
paper is typically (but not exclusively) used in point-of-sale 
applications such as ATM receipts, credit card receipts, gas pump 
receipts, and retail store receipts. The merchandise subject to this 
investigation may be classified in the HTSUS under subheadings 
4811.90.8040 and 4811.90.9090.\6\ As discussed below, we added to the 
scope of the investigation the following HTSUS subheadings: 3703.10.60, 
4811.59.20, 4820.10.20, and 4823.40.00.

[[Page 27501]]

Although HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the scope of the investigation is 
dispositive.
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    \2\ LWTP is typically produced in jumbo rolls that are slit to 
the specifications of the converting equipment and then converted 
into finished slit rolls. Both jumbo rolls and converted rolls (as 
well as LWTP in any other forms, presentations, or dimensions) are 
covered by the scope of these investigations.
    \3\ A base coat, when applied, is typically made of clay and/or 
latex and like materials and is intended to cover the rough surface 
of the paper substrate and to provide insulating value.
    \4\ A thermal active coating is typically made of sensitizer, 
dye, and co-reactant.
    \5\ A top coat, when applied, is typically made of polyvinyl 
acetone, polyvinyl alcohol, and/or like materials and is intended to 
provide environmental protection, an improved surface for press 
printing, and/or wear protection for the thermal print head.
    \6\ HTSUS subheading 4811.90.8000 was a classification used for 
LWTP until January 1, 2007. Effective that date, subheading 
4811.90.8000 was replaced with 4811.90.8020 (for gift wrap, a non-
subject product) and 4811.90.8040 (for ``other,'' including LWTP). 
HTSUS subheading 4811.90.9000 was a classification for LWTP until 
July 1, 2005. Effective that date, subheading 4811.90.9000 was 
replaced with 4811.90.9010 (for tissue paper, a non-subject product) 
and 4811.90.9090 (for ``other,'' including LWTP).
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Scope Comments

    In our Initiation Notice, 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.
    On November 19, 2007, the petitioner submitted scope comments in 
which it requested that the Department add the following additional 
HTSUS subheadings to the scope of the investigations: HTSUS subheading 
3703.10.60, 4811.59, 4820.10, and 4823.40 based on the claim that 
subject merchandise may also enter under these HTSUS subheadings. On 
December 18, 2007, the Department requested comments from interested 
parties regarding the petitioner's proposed scope modification. 
However, no reply comments were received in this, or any of the 
aforementioned simultaneous investigations. On April 11, 2008, and 
April 16, 2008, the Department received letters from the National 
Import Specialists at U.S. Customs and Border Protection (CBP) 
requesting that HTSUS subheadings 3703.10.60, 4811.59.20, 4820.10.20, 
and 4823.40.00 be added to the scope of the antidumping duty 
investigations of LWTP from Germany and the PRC, and the countervailing 
duty investigation of LWTP from the PRC on the basis that entries of 
subject merchandise could be classified therein. See Memorandum to the 
File from the Team to the File through James Terpstra, entitled 
``Request from Customs and Border Protection to update AD /CVD 
Module,'' dated April 17, 2008. The Department has added these 
additional subheadings to the scope of this investigation.

Model Match

    In accordance with section 771(16) of the Act, all products 
produced by the respondent covered by the description in the Scope of 
the Investigation section, above, and sold in Germany during the POI 
are considered to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We have relied on 12 
criteria to match U.S. sales of subject merchandise to comparison 
market sales of the foreign like product: 1) form, 2) thermal active 
coating, 3) top coating, 4) basis weight, 5) maximum optical density 
units, 6) static sensitivity, 7) dynamic sensitivity, 8) coating color, 
9) printing, 10) width, 11) length, and 12) core material. Where there 
were no sales of identical merchandise in the home market made in the 
ordinary course of trade to compare to U.S. sales, we compared U.S. 
sales to the next most similar foreign like product on the basis of the 
characteristics listed above.
    On November 14, 2007, and November 21, 2007, the petitioner filed 
proposed model-matching criteria to use in the Department's 
questionnaire. On November 23, 2007, and November 28, 2007, Koehler 
submitted comments on the proposed model-matching criteria. On November 
26, 2007, and November 28, 2007, Mitsubishi also submitted comments on 
the proposed model-matching criteria. On December 3, 2007, the 
petitioner filed comments in response to the model-matching criteria 
comments submitted by Koehler and Mitsubishi. On December 4, 2007, 
Koehler submitted additional comments challenging the petitioner's 
proposed ranges of the dynamic sensitivity model-match criterion as 
overly broad. On December 7, 2007, the Department issued the 
questionnaire containing the criteria identified above. See the 
Department's antidumping duty questionnaire issued to Koehler on 
December 7, 2007, at pages B-8 through B-14.

Date of Sale

    Section 351.401(i) of the Department's regulations states that the 
Department normally will use the date of invoice, as recorded in the 
producer's or exporter's records kept in the ordinary course of 
business, as the date of sale. The regulations further provide that the 
Department may use a date other than the date of invoice if the 
Secretary is satisfied that a different date better reflects the date 
on which the material terms of sale are established. The Department has 
a long-standing practice of finding that, where shipment date precedes 
invoice date, shipment date better reflects the date on which the 
material terms of sale are established. See 19 CFR 351.401(i); see also 
Notice of Final Determination of Sales at Less Than Fair Value and 
Negative Final Determination of Critical Circumstances: Certain Frozen 
and Canned Warmwater Shrimp from Thailand, 69 FR 76918 (December 23, 
2004), and accompanying Issues and Decision Memorandum at Comment 10; 
and Notice of Final Determination of Sales at Less Than Fair Value: 
Structural Steel Beams from Germany, 67 FR 35497 (May 20, 2002), and 
accompanying Issues and Decision Memorandum at Comment 2. Therefore, we 
used the earlier of shipment date or invoice date as the date of sale 
in accordance with our practice.

Fair Value Comparisons

    To determine whether sales of LWTP from Germany were made in the 
United States at less than normal value (NV), we compared the EP or CEP 
to the NV, as described in the Export Price and Constructed Export 
Price and Normal Value sections below. In accordance with section 
777A(d)(1) of the Act, we calculated the weighted-average prices for NV 
and compared these to the weighted average of EP (and CEP).

Export Price and Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP, in accordance with sections 772(a) and (b) of the Act. Pursuant to 
section 772(a) of the Act, we used the EP methodology when the 
merchandise was first sold by the producer or exporter outside the 
United States directly to the unaffiliated purchaser in the United 
States prior to importation and when CEP was not otherwise warranted 
based on the facts on the record. We calculated CEP for those sales 
where a person in the United States, affiliated with the foreign 
exporter or acting for the account of the exporter, made the first sale 
to the unaffiliated purchaser in the United States of the subject 
merchandise. See section 772(b) of the Act. We based EP and CEP on the 
packed prices charged to the first unaffiliated customer in the United 
States and the applicable terms of sale. When appropriate, we adjusted 
prices to reflect billing adjustments, rebates, and early payment 
discounts, and commissions.
    In accordance with section 772(c)(2) of the Act, we made 
deductions, where appropriate, for movement expenses including U.S. 
warehouse expense, inland freight, inland insurance, brokerage & 
handling, international freight, marine insurance, and U.S. customs 
duties.
    For CEP, in accordance with section 772(d)(1) of the Act, when 
appropriate, we deducted from the starting price those selling expenses 
that were incurred in selling the subject merchandise in the United 
States, including direct selling expenses (cost of credit, warranty, 
and other direct selling expenses). These expenses include certain 
indirect selling expenses incurred by affiliated U.S. distributors. See 
``Calculation Memorandum for the Preliminary Determination - Koehler.'' 
We also deducted from CEP an amount for profit in accordance with 
sections 772(d)(3) and (f) of the Act. We made additions, where 
appropriate, for freight rebate revenue and other transportation 
revenue.

[[Page 27502]]

Normal Value

A. Home Market Viability and Comparison Market Selection

    To determine whether there was a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV, we compared 
the respondents' volume of home market sales of the foreign like 
product to the volume of its U.S. sales of the subject merchandise. 
Pursuant to section 773(a)(1)(B)(i) of the Act, because Koehler had an 
aggregate volume of home market sales of the foreign like product that 
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.

B. Arm's-Length Test

    Koehler reported that its sales of the foreign like product were 
made to unaffiliated customers. Therefore, the arm's-length test is not 
applicable to Koehler's sales of the foreign like product.

C. Cost of Production Analysis

    Based on our analysis of the petitioner's allegation stated in the 
petition, we initiated a sales-below-cost investigation to determine 
whether Koehler had sales that were made at prices below their COP 
pursuant to section 773(b) of the Act. See Petition at page 8. See 
also; Initiation Notice at page 62432.

1. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated 
Koehler's COP based on the sum of its costs of materials and conversion 
for the foreign like product, plus amounts for general and 
administrative (G&A) expenses and interest expenses (see the Test of 
Comparison Market Sales Prices section below for the treatment of home 
market selling expenses).
    The Department relied on the COP data submitted by Koehler and its 
supplemental section D questionnaire responses for the COP calculation, 
except for the following instances where the information was not 
appropriately quantified or valued:
    a. We adjusted the denominator of Koehler's reported G&A expense 
ratio to reflect Koehler's 2006 cost of goods sold.
    b. We adjusted Koehler's reported financial expense ratio to 
include the total foreign exchange gains and losses reported in Koehler 
Holding's 2006 consolidated financial statements. We adjusted the 
denominator of the financial expense ratio to reflect Koehler Holding's 
2006 consolidated cost of goods sold.
    Our revisions to Koehler's COP data are discussed in the Memorandum 
from Robert Greger, Senior Accountant, to Neal Halper, Director, Office 
of Accounting, entitled ``Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Determination - Koehler,'' 
dated May 6, 2008.

2. Test of Comparison Market Sales Prices

    On a product-specific basis, we compared the adjusted 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 
the sales prices were below the COP. For purposes of this comparison, 
we used the COP exclusive of selling and packing expenses. The prices 
were exclusive of any applicable movement charges, direct and indirect 
selling expenses, and packing expenses. In addition, we included an 
amount for freight rebate revenue and other transportation revenue.

3. Results of the COP Test

    Pursuant to section 773(b)(2)(C)(i) 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 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 POI were at prices 
less than COP, we determined that such sales have been made in 
``substantial quantities.'' See section 773(b)(2)(C) of the Act. 
Further, the sales were made within an extended period of time, in 
accordance with section 773(b)(2)(B) of the Act, because we examined 
below-cost sales occurring during the entire POI. In such cases, 
because we compared prices to POI-average costs, we also determined 
that such sales were not made at prices which would permit recovery of 
all costs within a reasonable period of time, in accordance with 
section 773(b)(2)(D) of the Act.
    Our preliminary findings show that we did not find that more than 
20 percent of Koehler's sales were at prices less than the COP. The 
Department excluded certain sales transactions reported as samples by 
Koehler. However, we did not exclude any additional sales as a result 
of the COP test. Therefore, we used all of Koehler's home market sales 
as the basis for determining NV.

D. Calculation of Normal Value Based on Comparison Market Prices

    We based home market prices on packed prices to unaffiliated 
purchasers in Germany. We adjusted the starting price for billing 
adjustments, early payment discounts, rebates, warehouse expense, and 
inland freight where appropriate, pursuant to section 773(a)(6)(B)(ii) 
of the Act. In addition, for comparisons made to EP sales, we made 
adjustments for differences in circumstances of sale (COS) pursuant to 
section 773(a)(6)(C)(iii) of the Act. We made COS adjustments by 
deducting direct selling expenses incurred for home market sales 
(credit expense, warranty directly linked to sales transactions, and 
other direct selling expenses) and adding U.S. direct selling expenses 
(credit, commissions, warranty directly linked to sales transactions, 
and other direct selling expenses), where appropriate. See 19 CFR 
351.410.
    When comparing U.S. sales with comparison market sales of similar, 
but not identical, merchandise, we also made adjustments for physical 
differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We based this 
adjustment on the difference in the variable cost of manufacturing for 
the foreign like product and subject merchandise. See 19 CFR 
351.411(b).

E. Level of Trade/Constructed Export Price Offset

    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 or CEP transaction. 
In identifying LOTs for EP and comparison market sales (i.e., NV based 
on home market), we consider the starting prices before any 
adjustments. For CEP sales, we consider only the selling activities 
reflected in the price after the deduction of expenses and profit under 
section 772(d) of the Act. See Micron Technology, Inc. v. United 
States, 243 F.3d 1301, 1314 (Fed. Cir. 2001).
    To determine whether NV sales are at a different LOT than EP or CEP 
transactions, 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 LOT 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

[[Page 27503]]

market sales at the LOT of the export transaction, we make an LOT 
adjustment under section 773(a)(7)(A) of the Act. For CEP sales, 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).
    Koehler reported its sales in the home market and the U.S. market 
at the same single LOT. In the home market, Koehler reported that its 
sales were made through two channels of distribution: (1) direct sales 
and (2) consignment sales. In the U.S. market, Koehler reported that 
its sales were made through four channels of distribution: (1) direct 
sales through its U.S. affiliate (i.e., CEP sales) (2) consignment 
sales, (3) warehouse sales, and (4) direct sales from Koehler AG (i.e., 
EP sales). Based on our analysis, we found that Koehler's sales to the 
U.S. and home market were made at the same LOT, and as a result, no LOT 
adjustment was warranted. Furthermore, our analysis shows that 
Koehler's home market sales were not made at a more advanced LOT than 
Koehler's U.S. sales. Accordingly, we have not made a CEP offset to NV. 
See 773(a)(7)(B) of the Act.
    For a detailed description of our LOT methodology and a summary of 
company-specific LOT findings for these preliminary results, see our 
analysis contained in the ``Calculation Memorandum for the Preliminary 
Determination - Koehler.''

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.

All-Others Rate

    Pursuant to section 735(c)(5)(A) of the Act, the all-others rate is 
equal to the weighted average of the estimated weighted-average dumping 
margins of all respondents investigated, excluding zero or de minimis 
margins or margins determined entirely using facts available. Koehler 
is the only respondent in this investigation for which the Department 
has calculated a company-specific rate and it is not zero, de minimis 
or based entirely upon facts available. Therefore, for purposes of 
determining the all-others rate and pursuant to section 735(c)(5)(A) of 
the Act, we are using the weighted-average dumping margin calculated 
for Koehler for the all- others rate, as referenced in the Suspension 
of Liquidation section, below.

Verification

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

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
CBP to suspend liquidation of all entries of LWTP from Germany that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. We are also 
instructing CBP to require a cash deposit or the posting of a bond 
equal to the weighted-average dumping margin, 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-
                 Manufacturer/Exporter                    Average Margin
                                                            (percent)
------------------------------------------------------------------------
Papierfabrik August Koehler AG and Koehler America,               6.49
 Inc...................................................
All Others.............................................           6.49
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of the Department's preliminary affirmative determination. If the 
Department's final determination is affirmative, the ITC will determine 
before the later of 120 days after the date of this preliminary 
determination or 45 days after our final determination whether imports 
of LWTP from Germany are materially injuring, or threaten material 
injury to, a 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 ITC will make its final 
determination within 45 days of our final determination.

Public Comment

    Interested parties are invited to comment on the preliminary 
determination. Interested parties may submit case briefs to the 
Department no later than seven days after the date of the issuance of 
the final verification report in this proceeding. See 19 CFR 
351.309(c)(1)(i). Rebuttal briefs, the content of which is limited to 
the issues raised in the case briefs, must be filed within five days 
from the deadline date for the submission of case briefs. See 19 CFR 
351.309(d)(1) and (2). 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. Further, we request that parties 
submitting briefs and rebuttal briefs provide the Department with a 
copy of the public version of such briefs on diskette. In accordance 
with section 774 of the Act, the Department will hold a public hearing, 
if requested, 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 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 Constitution Avenue, NW, Washington, DC 
20230, at a time and in a room to be determined. Parties should confirm 
by telephone, the date, time, and location of the hearing 48 hours 
before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
in a hearing 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. See 19 CFR 351.310(c). At the hearing, oral presentations 
will be limited to issues raised in the briefs.

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on February 19, 2008, 
Koehler, which accounts for a significant proportion of exports of LWTP 
from Germany, requested that in the event of an affirmative preliminary 
determination in this investigation, the Department fully extend the 
final determination (i.e., postpone its final determination by 60 
days). In its February 19, 2008, letter, Koehler also requested, 
pursuant to section 733(d) of the Act, that in the event of an 
affirmative preliminary determination in this investigation, the 
Department extend the maximum duration of provisional measures from 
four months

[[Page 27504]]

to six months from the date of implementation. See section 735(a)(2) of 
the Act and 19 CFR 351.210(e)(2). In accordance with section 733(d) of 
the Act and 19 CFR 351.210(b)(2)(ii), because (1) our preliminary 
determination is affirmative, (2) the requesting exporter accounts for 
a significant proportion of exports of the subject merchandise, and (3) 
no compelling reasons for denial exist, we are granting its request and 
are postponing the final determination until no later than 135 days 
after the publication of this notice in the Federal Register. 
Suspension of liquidation will be extended accordingly.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: May 6, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-10659 Filed 5-12-08; 8:45 am]
BILLING CODE 3510-DS-S