Draft goals of the USDA's Climate Change Strategic Plan for Research, Education, and Extension:

Goal 1: Understand the effects of climate change on natural and managed ecosystems.

USDA will promote an understanding of the impacts of climate change on ecosystems and managed lands, including forests, grazing lands and croplands, is needed to enable continued production of goods and services and stewardship of natural resources. Areas of emphasis include:

• Effects of changing precipitation, temperature and water availability on productivity and system services;

• Implications of enhanced atmospheric carbon dioxide concentrations on system productivity and services;

• Effects on invasive species, weeds, pathogens, insects and other factors limiting natural and managed systems productivity;

• Effects on natural disturbance regimes, including wildfires;

• Effects on production, processing, storage and delivery systems;

• Economic consequences of climate change on natural and managed ecosystems;

• Implications for water, soil and air systems needed for production and ecosystem sustainability;

• Indicators/metrics from earth observations for identifying, measuring and monitoring the effects of climate change;

• Measurement of changing carbon content of ecosystems, and of growth by species;

• Evaluation of social and economic indicators for impacts of climate change on production systems, rural communities, the agricultural workforce and other human dimensions;

• Incorporating climate change observations into USDA data systems.

Goal 2: Develop knowledge and tools to enable adaptation to climate change and improve the resilience of natural and managed ecosystems.

Mechanisms for adaptation to climate changes are critical for continued agricultural production and stewardship of natural resources. USDA activities under this goal will focus on the development of knowledge and technologies to address detrimental effects of climate change and to exploit elements of climate change that are potentially beneficial to agriculture and forestry. Risk management and adaptive management strategies are key elements of Goal 2. Elements of Goal 2 include:

• Sustainable practices for agricultural production in the context of climate change;

• Strategies to enable farmers and other landowners and managers to cope with challenges associated with drought, heat stress, moisture stress, and changes in disease and pest prevalence;

• Management actions to increase forest stress resilience focused on altering forest processes, composition and structure to better withstand the suite of environmental stresses from changing climate, pests, pollutants, and wildfire;

• Economic costs, benefits, and feasibility of adaptation at the producer through the macroeconomic scale;

• Estimation and measurement techniques and capabilities for assessing the effectiveness of adaptive practices;

• Strategies to enable farmers and other landowners to account for longer growing seasons, increases in carbon dioxide concentrations, and increases in precipitation where applicable;

• Management strategies for adapting to the effects of climate on forest health and ecosystem services;

• Knowledge and technology to enhance ecosystem adaptation and sustainability;

• Technologies for maintenance and enhancement of ecosystem services such as water supplies, wildlife, biodiversity, clean air, and recreation within the context of global change;

• Alternative strategies for increasing ecosystem resilience;

• Indicators/metrics for monitoring the progress of strategies for adapting to climate change;

• Life-cycle analysis and management strategy assessments.

Goal 3: Develop knowledge and tools to reduce the contributions of agriculture, forestry, and other land management practices to the build up of greenhouse gases in the atmosphere.

Agriculture, forests, and grazing lands activities can produce greenhouse gas (GHG) emissions to the atmosphere. Land uses can also reverse the buildup of greenhouse gases in the atmosphere by sequestering and storing carbon in biomass and soils. The dominant drivers of land use emissions of carbon are the conversion of forest and grassland to crop and pastureland and the depletion of soil carbon through agricultural and other land management practices. Practices such as livestock grazing, manure management, and fertilizer application also affect emissions of other GHGs such as methane (CH 4 ) and nitrous oxide (N 2 O). USDA research will identify opportunities to apply resource conserving management practices to reverse past carbon losses and to reduce greenhouse gas emissions. Areas of focus under Goal 3 include:

• Knowledge and technologies that will assist resource managers in enhancing carbon sequestration;

• Management options that increase forest carbon sequestration by increasing the carbon stored in forests and soils, in forest products, and used as biofuels to replace fossil fuels.

• Costs, benefits, and feasibility of mitigation options;

• Technologies and strategies for managing agricultural and forestry emissions of GHGs, including CO 2 , N 2 O, and CH 4 ;

• Mechanisms to facilitate the adoption and incorporation of GHG management technologies into agricultural and forestry production, processing, storage and delivery systems;

• Estimation and measurement capabilities for assessing the effectiveness of GHG emission management.

Goal 4: Deliver climate change science and technology to USDA agencies, stakeholders and collaborators for improved decision making. USDA maintains research, education, and extension capabilities which can be drawn on to meet the challenges of climate change. USDA seeks comments on how to best utilize resources to address questions relevant to stakeholders and decision makers at local, regional, national, and international scales. Goal 4 emphasizes the delivery and application of the latest scientific information, including:

• Education of USDA stakeholders, clients and customers including the general public, the scientific community, land managers, producers, and policy makers about climate change and agriculture and forestry;

• Scientific collaboration and technology transfer to integrate climate change into decision-making for management of natural and managed ecosystems using the products of research and development from the three previous goals;

• Distribution and dissemination of USDA climate change data, information, and technology to interested users;

• Decision support tools for policymakers, producers and land managers charged with implementing mechanisms for reducing GHG emissions and enhancing carbon sequestration, thereby increasing resilience of natural, agricultural, and forested ecosystems;

• Risk management paradigms to balance production, conservation and climate change, especially in light of uncertainty regarding the specifics of future climate and climate variability;

• Incorporation of GHG and carbon sequestration data into USDA data collection programs and data base systems.

The Department published the antidumping duty order on CPF from Thailand on July 18, 1995. See Notice of Antidumping Duty Order and Amended Final Determination: Canned Pineapple Fruit from Thailand , 60 FR 36775 (July 18, 1995) ( Antidumping Duty Order ). On July 3, 2007, the Department published in the Federal Register a notice of “Opportunity to Request Administrative Review” of the antidumping duty order on CPF from Thailand. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review , 72 FR 36420 (July 3, 2007). On April 21, 2008, the Department published a revocation of this order effective October 31, 2007. See Canned Pineapple Fruit from Thailand: Notice of Final Results of Changed Circumstances Review of the Antidumping Duty Order and Revocation of Antidumping Duty Order , 73 FR 21311 (April 21, 2008).

The Department received a request for review from Vita, by the July 31, 2007 deadline and therefore, on August 20, 2007, the Department published in the Federal Register the notice of initiation of the administrative review of the antidumping duty order on CPF from Thailand for Vita. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part , 72 FR 48613 (August 20, 2007).

On September 13, 2007, the Department issued sections A through E of the questionnaire to Vita. 1 Vita submitted its sections A through D responses on October 22, 2007. The Department issued a supplemental questionnaire on January 8, 2008, and Vita responded on January 18, 2008.

On March 30, 2008, the Department, in accordance with section 751(a)(3)(A) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.213(h)(2), extended the deadline for the preliminary results of this antidumping duty administrative review by 120 days from April 1, 2008 until no later than July 30, 2008. See Canned Pineapple Fruit from Thailand: Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review , 73 FR 12704 (March 10, 2008).

This review covers the period July 1, 2006 through June 30, 2007.

The product covered by this order is CPF, defined as pineapple processed and/or prepared into various product forms, including rings, pieces, chunks, tidbits, and crushed pineapple, that is packed and cooked in metal cans with either pineapple juice or sugar syrup added. CPF is currently classifiable under subheadings 2008.20.0010 and 2008.20.0090 of the Harmonized Tariff Schedule of the United States (HTSUS). HTSUS 2008.20.0010 covers CPF packed in a sugar-based syrup; HTSUS 2008.20.0090 covers CPF packed without added sugar ( i.e. , juice-packed). Although these HTSUS subheadings are provided for convenience and for customs purposes, the written description of the scope is dispositive. There have been no scope rulings for the subject order.

To determine whether sales of subject merchandise to the United States were made at less than NV, we compared the export price (EP) to NV, as described in the “U.S. Price” and “Normal Value” sections of this notice in accordance with section 777A(d)(2) of the Act.

In accordance with section 771(16)(A) of the Act, we considered all products produced by respondents that are covered by the description in the “Scope of the Order” section, above, and that were sold in the comparison market during the POR, to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. In accordance with sections 771(16)(B) and (C) of the Act, where there were no sales of identical merchandise in the comparison market to compare to U.S. sales, we compared U.S. sales to the most similar foreign like product on the basis of the characteristics listed in Appendix V of the Department's antidumping questionnaires.

It is the Department's practice to use invoice date as the date of sale. However, 19 CFR 351.401(i) states that the Secretary may use a date other than the invoice date if the Secretary is satisfied that the material terms of the sale were established on some other date. See Allied Tube and Conduit Corp. v. United States , 127 F. Supp. 2d 207, 217-219 (CIT 2000). Vita reported invoice date as the date of sale for all sales in both the comparison and U.S. markets. After analyzing Vita's responses and the sample sales documents provided, we preliminarily determine that invoice date is the appropriate date of sale for all sales under review.

In accordance with section 772(a) of the Act, we use EP when the subject merchandise was first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States, and constructed export price (CEP) was not otherwise warranted by the facts on the record. As discussed below, we conclude that all of Vita's U.S. sales are EP sales.

Vita identified all of its U.S. sales as EP sales in its questionnaire responses. The Department based the price of each of Vita's U.S. sales of subject merchandise on EP, as defined in section 772(a) of the Act, because the merchandise was sold prior to importation, to unaffiliated purchasers in the United States, or to unaffiliated purchasers for exportation to the United States and the use of CEP was not otherwise warranted based on the facts on the record. In accordance with section 772 (a) and (c) of the Act, we calculated EP using the prices Vita charged for packed subject merchandise shipped FOB. We made deductions for movement expenses, including, where applicable, charges for transportation, terminal handling, container stuffing, bill of lading preparation, customs clearance, and legal and port fees documentation. See Analysis Memorandum for Vita Food Factory (1989) Co., Ltd. , ( Vita Preliminary Analysis Memorandum ) dated concurrently with this notice.

In accordance with section 773(a)(1)(B)(i) of the Act, we have based NV on the price at which the foreign like product was first sold for consumption in the comparison market, in the usual commercial quantities, in the ordinary course of trade, and, to the extent practicable, at the same level of trade (LOT) as the EP sale. See “Level of Trade” section below. After testing comparison market viability and whether comparison market sales were at below-cost prices, we calculated NV for Vita as discussed in the following sections.

In accordance with section 773(a)(1)(C) of the Act, in order to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV ( i.e. , the aggregate volume of home market sales of the foreign like product normally should be greater than or equal to five percent of the aggregate volume of U.S. sales), we compared the aggregate volume of home market sales of the foreign like product to the aggregate volume of its U.S. sales of subject merchandise. See also 19 CFR 351.404(b).

Because the aggregate volume of Vita's home market sales of foreign like product is less than five percent of the aggregate volume of its U.S. sales of subject merchandise, we based NV on sales of the foreign like product in a country other than Vita's home market. See section 773(a)(1)(B)(ii) of the Act. Specifically, we based NV for Vita on sales of the foreign like product in Germany due to the fact that Vita exported the largest amount of CPF (by quantity) to Germany during the POR, and did not sell merchandise more similar to that sold to the U.S. to any other third country market.

In the most recently completed administrative review of the antidumping duty order on CPF from Thailand, the Department determined that Vita sold foreign-like product in its comparison market at prices below the cost of producing the product and excluded such sales from the calculation of NV. See Canned Pineapple Fruit from Thailand: Preliminary Results of Antidumping Duty Administrative Review , 72 FR 44490 (August 8, 2007) ( 11 th Review Preliminary Results ) unchanged in Canned Pineapple Fruit from Thailand: Final Results of Antidumping Duty Administrative Review , 73 FR 5792 (January 31, 2008) ( 11 th Review Final Results ). Therefore, in accordance with section 773(b)(2)(A)(ii) of the Act, the Department determined that there are reasonable grounds to believe or suspect that during the current POR, Vita sold the foreign like product at prices below the cost of producing the product and instituted a below cost inquiry as to Vita's sales in the comparison market.

We compared sales of the foreign like product in the home market with model-specific COP values in the POR. In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of the costs of materials and fabrication employed in producing the foreign like product, plus selling, general and administrative (SG&A) expenses, and financial expenses and packing. In our sales-below-cost analysis, we used comparison market sales and COP information provided by Vita in its questionnaire responses. See Vita's October 22, 2007 section D questionnaire response.

We compared the weighted-average COPs to comparison market sales of the foreign like-product, consistent with section 773(b) of the Act, in order to determine whether these sales had been made at prices below the COP. See also 19 CFR 351.404(b). In determining whether to disregard comparison market sales made at prices below the COP, we examined whether such sales were made (1) within an extended period of time in substantial quantities, and (2) at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade, in accordance with sections 773(b)(1)(A) and (B) of the Act. On a product-specific basis, we compared the COP to comparison market prices, less any movement charges, discounts and rebates, and direct and indirect selling expenses. See Treatment of Adjustments and Selling Expenses in Calculating the Cost of Production (“COP”) and Constructed Value (“CV”) Import Policy Bulletin (March 25, 1994) on file in the CRU, which can also be accessed directly on the Web at http://ia.ita.doc.gov.

Pursuant to section 773(b)(2)(C) of the Act, where fewer than 20 percent of a respondent's sales of a given model were at prices less than the COP, we did not disregard any below-cost sales of that model because the below-cost sales were not made in substantial quantities within an extended period of time. 2 Where 20 percent or more of a respondent's sales of a given model were at prices less than the COP, we disregarded the below-cost sales when: (1) they were made in substantial quantities within an extended period of time, in accordance with sections 773(b)(2)(B) and (C) of the Act and; (2) based on our comparison of prices to average COPs in the POR, we determined that the below-cost prices would not permit the recovery of costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act.

For those product comparisons for which there were comparison market sales of like product in the ordinary course of trade, we based NV on comparison market prices to affiliated (when made at prices determined to be arms-length) or unaffiliated parties, in accordance with section 773(a)(1)(A) and (B) of the Act. We 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 CRF 351.411 as well as for differences in direct selling expenses, in accordance with 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We relied on our model match criteria in order to match U.S. sales of subject merchandise to comparison sales of the foreign like product based on the reported physical characteristics of the subject merchandise. Where there were no sales of identical merchandise in the comparison market 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 and reporting instructions listed in the Department's questionnaire. See section 771(16) of the Act.

When comparing Vita comparison market sales to its EP sales, the Department calculated Vita's NV (shipped FOB) based on its gross unit price to customers in Germany. Pursuant to section 773(a)(6)(B)(ii) of the Act, we made deductions for movement expenses ( i.e. , inland freight, ocean freight and warehousing), when appropriate. In accordance with sections 773(a)(6)(A) and (B) of the Act, we deducted comparison market packing costs and added U.S. packing costs. In accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c), we deducted comparison market direct selling expenses ( i.e. , credit, warranty) and added U.S. direct selling expenses. We made the appropriate adjustment for commissions paid in the home market pursuant to 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c). We made adjustments, in accordance with 19 CFR 351.410(e), for indirect selling expenses incurred on comparison market or U.S. sales where commissions were granted on sales in one market but not in the other, the “commission offset.” Specifically, where commissions are incurred in one market, but not in the other, we will limit the amount of such allowance to the amount of either the selling expenses incurred in the one market or the commissions allowed in the other market, whichever is less. We made the appropriate adjustment for commissions paid in the home market pursuant to 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c).

Vita reported that it paid its customer in the U.S. market a commission on sales to the United States during the POR. Based on the information on the record, specifically that the commissions were paid to the U.S. customer rather than to an agent asking on behalf of Vita, we have determined these payments to be reductions in price, and therefore, more appropriately considered them as discounts. Accordingly, we have treated them as discounts in our calculations. See Vita Preliminary Analysis Memorandum .

In accordance with section 773(a)(4) of the Act, we used constructed value (CV) as the basis for NV when we could not determine NV because there were no above-cost contemporaneous sales of identical or similar merchandise in the comparison market. We calculated CV in accordance with section 773(e) of the Act, including the cost of materials and fabrication, SG&A expenses, and profit. In accordance with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit on the amounts incurred and realized by the respondent in connection with the production and sale of the foreign like product in the ordinary course of trade for consumption in the comparison market. Where NV is based on CV, we determine the NV LOT based on the LOT of the sales from which we derive selling expenses, SG&A expenses, and profit for CV, where possible.

We used CV as the basis for NV for sales for which there were no usable contemporaneous sales of the foreign like product in the comparison market, in accordance with section 773(a)(4) of the Act. We calculated CV in accordance with section 773(e) of the Act. We added reported materials, labor, and factory overhead costs to derive the cost of manufacture (COM), in accordance with section 773(e)(1) of the Act. We then added interest expenses, SG&A expenses, profit, and U.S. packing expenses to derive the CV (and added U.S. credit expenses for comparison to EP), in accordance with sections 773(e)(2) and (3) of the Act. We calculated profit based on the total value of sales and total COP reported by Vita in its questionnaire response, in accordance with section 773(e)(2)(A) of the Act. Finally, we deducted comparison market credit expenses from CV and added U.S. credit to calculate the foreign unit price in dollars (FUPDOL), pursuant to section 773(e)(2)(A) of the Act.

Section 773(a)(1)(B)(i) of the Act states that, to the extent practicable, the Department will calculate NV based on sales at the same LOT as the EP or CEP sale. Sales are made at different LOTs if they are made at different marketing stages (or their equivalent). See 19 CFR 351.412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient condition for determining that there is a difference in the stages of marketing. Id .; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa , 62 FR 61731, 61732 (November 19, 1997) ( South African Plate Final ). In order to determine whether the comparison sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market ( i.e. , the chain of distribution), 3 including selling functions, 4 class of customer (customer category), and the level of selling expenses for each type of sale.

Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying levels of trade for EP and comparison market sales ( i.e. , NV based on either home market or third-country prices), we consider the starting prices before any adjustments. With respect to CEP sales, the Department removes the selling activities set forth in section 772(d) of the Act from the CEP starting price prior to performing its LOT analysis. See Micron Technology, Inc. v. United States , 243 F.3d 1301, 1315 (Fed. Cir. 2001). As such, for CEP sales, the U.S. LOT is based on the starting price of the sales, as adjusted under section 772(d) of the Act.

When the Department is unable to match U.S. sales to sales of the foreign like product in the comparison market at the same LOT as the EP or CEP sale, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. Vita reported that the selling activities for its respective comparison market and U.S. market channels were made at the same level of trade. After conducting an analysis of Vita's sales channels and selling activities, the Department preliminarily determines that no level of trade adjustment is necessary for Vita, consistent with what Vita reported in its respective questionnaire responses. For further details on the Department's LOT analysis, see Vita Preliminary Analysis Memorandum .

In accordance with section 773A of the Act, we made currency conversions based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York. See also 19 CFR 351.415.

As a result of this review, we preliminarily find that the following weighted-average dumping margins exist:

Pursuant to section 751(d)(2) of the Act and 19 CFR 351.222(i)(2)(i), the Department revoked this order and notified U.S. Customs and Border Protection (CBP) to discontinue suspension of liquidation and collection of cash deposits on entries of the subject merchandise entered or withdrawn from warehouse on or after October 31, 2007, the effective date of revocation of this AD order. See Canned Pineapple Fruit from Thailand: Notice of Final Results of Changed Circumstances Review of the Antidumping Duty Order and Revocation of Antidumping Duty Order , 73 FR 21311 (April 21, 2008). Therefore, cash deposits of estimated antidumping duties are no longer required.

Upon publication of the final results of this review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), the Department calculates an assessment rate for each importer of the subject merchandise for each respondent. In accordance with 19 CFR 351.212(b)(1), we will calculate importer-specific assessment rates on the basis of the ratio of the total amount of antidumping duties calculated for the examined sales and the total entered value of the examined sales. These rates will be assessed uniformly on all entries of the respective importers made during the POR if these preliminary results are adopted in the final results of review. The Department intends to issue appropriate assessment instructions directly to CBP 15 days after the date of publication of the final results of this review.

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) ( Assessment Policy Notice ). This clarification will apply to entries of subject merchandise during the POR produced by companies included in the final results of review for which the reviewed companies did not know that the merchandise it sold to the intermediary (e.g., a reseller, trading company, or exporter) 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 intermediary involved in the transaction. See Assessment Policy Notice for a full discussion of this clarification.

Pursuant to 19 CFR 351.224(b), the Department will disclose to any party to the proceeding the calculations performed in connection with these preliminary results within five days after the date of public announcement of this notice. Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Unless extended by the Department, case briefs are to be submitted within 30 days after the date of publication of this notice. Rebuttal briefs, limited to arguments raised in case briefs, may be submitted no later than five days after the time limit for filing case briefs. Parties who submit arguments in this proceeding are requested to submit with the argument: 1) a statement of the issues; 2) a brief summary of the argument; and 3) a table of authorities. See 19 CFR 309(c)(2). Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f).

Also, pursuant to 19 CFR 351.310(c), 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 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 issues to be raised. Issues raised in the hearing will be limited to those raised in the respective case briefs. Unless the Secretary specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs. Parties will be notified of the time and location.

The Department will issue the final results of this administrative review within 120 days after the publication of this notice, unless extended. See section 751(a)(3)(A) of the Act; 19 CFR 351.213(h).

This notice also 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 entries 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.

The preliminary results of this administrative review and this notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

On July 1, 2002, the Department published in the Federal Register the antidumping duty order on PET Film from India. See Notice of Amended Final Antidumping Duty Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Polyethylene Terephthalate Film, Sheet, and Strip from India , 67 FR 44175 (July 1, 20002). On July 3, 2007, the Department published in the Federal Register a notice of “Opportunity to Request Administrative Review.” See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review , 72 FR 36420 (July 3, 2007). On July 30, 2007, the Department received timely requests for an administrative review from Jindal and MTZ Polyfilms, Ltd. (MTZ), manufacturers and exporters of PET film in India. On July 31, 2007, MTZ submitted a request for revocation of the antidumping duty order on certain PET Film produced and exported by MTZ. 1 The Department initiated an administrative review of the antidumping duty order on August 24, 2007 of Jindal and MTZ. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part , 72 FR 48613 (August 24, 2007). On September 14, 2007 the Department issued questionnaires to Jindal and MTZ. 2

On October 19, 2007, Jindal submitted its section A response. On October 30, 2007, MTZ withdrew its request for review. On November 6, 2007, Jindal submitted sections B and C responses to the Department's questionnaire. On November 20, 2007, Jindal submitted its section D response. In accordance with section 751(a)(3)(A) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.213(h)(2), on February 14, 2008, the Department extended the deadline for the completion of the preliminary results of this review. See Certain Polyethylene Terephthalate Film, Sheet, and Strip from India: Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review , 73 FR 9768 (February 22, 2008).

On February 28, 2008, the Department issued a section A supplemental questionnaire to Jindal. On April 14, 2008, Jindal timely responded to the Department's section A supplemental questionnaire. On April 18, 2008, the Department issued sections B and C supplemental questionnaires. We received Jindal's responses to these supplementals on May 1, 2008. On May 20, 2008, the Department issued its section D supplemental questionnaire. On June 30, 2008, we received Jindal's response to the section D supplemental questionnaire.

The products covered by the order are all gauges of raw, pretreated or primed PET film, whether extruded or coextruded. Excluded are metalized films and other finished films that have had at least one of their surfaces modified by the application of a performance-enhancing resinous or inorganic layer of more than 0.00001 inches thick. Imports of PET Film are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under item number 3920.62.90. Although the HTSUS subheadings are provided for the convenience and customs purposes, the written description of the scope of the order is dispositive.

Pursuant to 19 CFR 351.213(d)(1), the Department will rescind an administrative review, in whole or in part, if a party that requested a review withdraws its request within 90 days of the date of publication of the notice of initiation of the requested administrative review. MTZ withdrew its request to be reviewed by the Department before the 90-day time period expired. MTZ was the only party to request an administrative review of its sales. Therefore, the Department is rescinding this administrative review with respect to MTZ.

The Department's regulations at 19 CFR 351.401(i) state that “{i}n identifying the date of sale of the subject merchandise or foreign like product, the Secretary normally will use the date of invoice, as recorded in the exporter or producer's records kept in the ordinary course of business. However, the Secretary 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 exporter or producer establishes the material terms of sale.” Jindal reported invoice date as the date of sale for sales in the home market and U.S. market. We examined Jindal's responses to the Department's questionnaire and preliminarily determine that invoice date is the appropriate date of Jindal's sales under review.

To determine whether Jindal's sales of subject merchandise to the U.S. were made at less than normal value (NV), we compared the export price (EP) of individual U.S. sales to the weighted average NV of sales of the foreign like product, as described in the “Export Price” and “Normal Value” sections of this notice in accordance with section 777A(d)(2) of the Tariff Act of 1930 (“the Act”).

In accordance with section 771(16) of the Act, we considered all products produced by Jindal that are covered by the description in the “Scope of the Order” section above, and that were sold in the home market during the POR, to be foreign like products for the purposes of determining appropriate product comparison to U.S. sales. Pursuant to 19 CFR 351.414(e)(2), we compared U.S. sales made by Jindal to sales made in the home market within the contemporaneous window period. Where there were no sales of identical merchandise in the comparison market made in the ordinary course of trade to compare to U.S. sales, the Department compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade. In making the product comparison, the Department used the physical characteristics of the subject merchandise to match foreign like products to U.S. sales, according to specification (type/grade), thickness, microns, and surface. See Analysis Memorandum for Jindal Poly Film Limited for Preliminary Results of the Antidumping Duty Administrative Review of Polyethylene Terephthalate Film Sheet and Strip from India ; 2006-2007 (Analysis's Memorandum), concurrently with this notice and on file in the Central Records Unit (CRU), room 1117, of the main Commerce building.

In accordance with section 772(a) of the Act, we used export price (EP) in this review because the subject merchandise was sold prior to importation to unaffiliated purchasers in the United States, and constructed export price (CEP) methodology was not warranted based on the facts on the record. Jindal reported its U.S. sales on a Cost, Insurance, and Freight (CIF) basis. As such, in accordance with sections 772(a) and 772(c) of the Act, we calculated EP by using the prices that Jindal sold to its unaffiliated purchaser in the United States. We made deductions from the starting price, where appropriate, for foreign movement expenses, brokerage and handling, insurance, international freight, and marine insurance under section 772(c) of the Act. In accordance with section 772(c)(1)(C) of the Act, we have increased EP to account for countervailing duties attributable to export subsidies.

In accordance with section 773(a)(1)(B)(i) of the Act, we have based NV on the price at which the foreign like product was first sold for consumption in the comparison market, in the usual commercial quantities, in the ordinary course of trade, and, to the extent practicable, at the same level of trade (LOT) as the EP sale. See “Level of Trade” section below. After testing comparison market viability and whether comparison market sales were at below-cost prices, we calculated NV for Jindal as discussed in the following sections.

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 (NV) ( i.e. , the aggregate volume of home market sales of the foreign like product is five percent or more of the aggregate volume of U.S. sales), we compared the volume of Jindal's home market sales of the foreign like product during the POR to the volume of U.S. sales of subject merchandise during the POR. See section 773(a)(1)(C) of the Act. Based on this comparison, we determined that Jindal's quantity of sales in the home market exceeded five percent of its sales of PET Film to the United States. Thus, in accordance with 19 CFR 351.404(b), Jindal's volume of sales in the home market during the POR was sufficient to serve as a viable basis for calculating NV.

In the most recently completed administrative review of PET Film from India, the Department determined that Jindal sold certain foreign like product at prices below the cost of production and the Department excluded such sales from the calculation of NV. See Certain Polyethylene Terephthalate Film, Sheet and Strip from India: Final Results of Antidumping Duty Administrative Review , 70 FR 8072 (February 17, 2005). As a result, in accordance with section 773(b)(2)(A)(ii) of the Act, the Department determined that there are reasonable grounds to believe or suspect that Jindal sold foreign like product at prices below the cost of production during the instant POR. We have relied upon Jindal's cost of production (COP) and constructed value (CV) information from Jindal's submissions, except in the instances where the data presented was not appropriately quantified or valued. See Analysis's Memorandum . Accordingly, the Department required that Jindal provide a response to section D of the questionnaire. Thus, in accordance with section 773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or suspect that during the POR, Jindal sold foreign like product at prices below the cost of production of the subject merchandise.

We have revised Jindal's consolidated financial expense rate to exclude interest income related to sales, dividends from investments, and profit on sales of investments. As a result, the financial expense rate was adjusted. See Calculation Memorandum for Jindal Poly Film Limited for Preliminary Results of the Antidumping Duty Administrative Review of Polyethylene Terephthalate Film Sheet and Strip from India; 2006-2007.

To determine whether sales were made at prices below the COP, on a product-specific basis, the Department compared Jindal's adjusted weighted-average COP to the prices of its home market sales of the foreign like product, as required under section 773(b)(3) of the Act. In accordance with sections 773(b)(1)(A) and (B) of the Act, in determining whether to disregard home market sales made at prices less than the COP, we examined whether such sales were made (1) within an extended period of time in substantial quantities, and (2) were not at prices which permit recovery of all costs within a reasonable period of time. The prices, here, were inclusive of billing adjustments and exclusive of any applicable movement charges, discounts and rebates, direct and indirect selling expenses, and packing expenses, revised where appropriate.

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of a respondent's home market sales of a given product are at prices below the COP, the Department does not disregard any below cost of sales of that product, because the Department determines that in such instances the below cost of sales were not made and in “substantial quantities.” Where 20 percent or more of a respondent's sales of a given product are at prices below the COP, the Department disregards the below cost sales because they: (1) were in “substantial quantities,” in accordance with sections 773(b)(2)(B) and (C) of the Act; and (2) based on our comparison of home market prices to the weighted-average COPs for the POR, the below cost sales were at prices which would not permit the recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. Based on the results of our test, we found that, for certain products, more than 20 percent of Jindal's home market sales were at prices less than the COP. In addition, such sales did not provide for the recovery of costs within a reasonable period of time. We therefore excluded these sales and used the remaining sales of the foreign like product in the ordinary course of trade as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

In accordance with section 773(a)(1)(B)(i) of the Act, we based NV on the price at which the foreign like product was first sold for consumption in the home market, in the usual commercial quantities, in the ordinary course of trade, and, to the extent practicable, at the same level of trade as the export price or constructed export price. Pursuant to section 773(a)(6)(B)(ii) of the Act, we made deductions from normal value for movement expenses, including domestic inland freight, and domestic brokerage, as appropriate. In accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c) and 19 CFR 351.410(d), we deducted home market credit and added U.S. credit. Jindal reported that it did not pay commissions on U.S. sales, and that it paid commissions in the home market. Therefore, we made the appropriate adjustment for commissions paid in the comparison market pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c). In accordance with 19 CFR 351.410(e), we made adjustments for indirect selling expenses incurred on comparison market or U.S. sales where commissions were granted on sales in one market but not in the other, the commission offset. Specifically, where commissions are incurred in one market, but not in the other, we will limit the amount of such allowance to the amount of either the selling expenses incurred in the one market or the commissions allowed in the other market, whichever is less. In accordance with sections 773(a)(6)(A) and (B)(i) of the Act, we deducted home market packing and added U.S. packing costs. We made an adjustment for other direct selling expenses, such as bank charges, because Jindal's supplemental responses demonstrate that these expenses consist of additional direct selling expenses that have not already been accounted for elsewhere.

In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, the Department determines NV based on sales in the comparison market at the same level of trade (LOT) as the EP or CEP sales in the U.S. market (Jindal had only EP sales in the U.S. market). The NV LOT is based on the starting price of the sales in the comparison market. Where NV is based on constructed value (CV), the Department determines the NV LOT based on the LOT of the sales from which the Department derives selling, general, and administrative expenses, and profit for CV, where possible. See Notice of Preliminary Determination of Sales at Less than Fair Value and Postponement of Final Determination: Fresh Atlantic Salmon From Chile , 63 FR 2664-2670 (January 16, 1998)(unchanged in final determination). For EP sales, the U.S LOT is based on the starting price of the sales to the U.S. market.

To determine whether NV sales are at a different LOT than EP sales, the Department examines stages in the marketing process and level of selling function along the chain of distribution between the producer and the unaffiliated customer. See 19 CFR 412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. See id .; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa , 62 FR 61731, 61732 (November 19, 1997). When the Department is unable to match U.S. sales to foreign like product sales in the comparison market at the same LOT as the EP sale, the Department may compare the U.S. sales to sales at a different LOT in the comparison market. In comparing EP sales at a different LOT in the comparison market, where the differences affect price comparability, as manifested by a pattern of consistent price differences between comparison market sales at the NV LOT and comparison market at the LOT of the export transaction, the Department makes an LOT adjustment under section 773(a)(7)(A) of the Act. Because Jindal had only EP sales in the U.S. market, it is not necessary to apply the CEP methodology.

Because Jindal's U.S. sales during this POR are made through one single distribution channel, Jindal to an unaffiliated trading company, we preliminarily determine that one LOT exists in the U.S. market. For home market sales, Jindal reported two categories of customers through two channels of distribution, end users and trading companies. We reviewed information from Jindal's questionnaire responses regarding the marketing stages for the reported U.S. and home market sales, including a description of the selling activities performed for each channel of distribution. See Exhibit A-Questionnaire Response. We compared the selling functions performed by Jindal for the two home market distribution channels and found that Jindal performed similar selling activities in the home market for its customers in both channels of distribution. See Jindal's Analysis Memorandum dated July 30, 2008. We preliminarily determined that Jindal sold foreign like product in the home market at one LOT. We noted that the record of this review indicates that Jindal performs essentially the same sales functions for all its home market and U.S. sales. Thus, we determine that Jindal's home market sales were made at the same LOT as its U.S. sales. See Jindal's Analysis Memorandum dated July 30, 2008. Therefore, the Department preliminarily determines that no level of trade adjustment is necessary for Jindal.

In accordance with section 773A(a) of the Act, we made currency conversions based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York.

As a result of this review, we preliminarily find that the following weighted-average dumping margin exists for the period July 1, 2006 through June 30, 2007:

The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) the cash deposit rate for the company listed above will be that established in the final results of this review, except if the rate is less than 0.50 percent, and therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in which case the cash deposit rate will be zero; (2) for previously reviewed or investigated companies not participating in this review, 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, or the original 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) the cash deposit rate for all other manufacturers or exporters will continue to be 5.71 percent, the all-others rate made effective by the LTFV investigation, adjusted for the export subsidy rate found in the companion countervailing duty investigation. These cash deposit requirements, when imposed, shall remain in effect until further notice.

Upon publication of the final results of this review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), the Department calculates an assessment rate for each importer of the subject merchandise for each respondent. In accordance with 19 CFR 351.212(b)(1), we will calculate importer-specific assessment rates on the basis of the ratio of the total amount of antidumping duties calculated for the examined sales and the total entered value of the examined sales. For the period July 1, 2006 through June 30, 2007, we preliminarily determine the antidumping duty margin to be 0.47 percent ad valorem . This rate is less than 0.5 percent. Consequently, if these preliminary results are adopted in our final results of this review, the Department will instruct CBP to liquidate shipments of PET Film by Jindal entered or withdrawn from warehouse, for consumption from July 1, 2006 through June 30, 2007, without regard to antidumping duties. See 19 CFR 351.106(c)(2). The Department intends to issue appropriate assessment instructions directly to CBP 15 days after the date of publication of the final results of this review.

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) ( Assessment Policy Notice ). This clarification applies to entries of subject merchandise during the POR produced by any company included in the final results of review for which the reviewed company did not know that the merchandise it sold to the intermediary ( e.g. , a reseller, trading company, or exporter) was destined for the United States. In such instances, the Department will instruct CBP to liquidate un-reviewed entries at the all others rate if there is no rate for the intermediary involved in the transaction. See Assessment Policy Notice for a full discussion of this clarification.

For MTZ, for which this administrative review is rescinded, antidumping duties shall be assessed at rates equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(I). The Department will issue appropriate assessment instructions to CBP 15 days after the publication of this notice.

We will disclose the calculations used in our analysis to parties to this segment of the proceeding within five days of the public announcement of this notice. See 19 CFR 351.224(b). 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, Room 1117, within 30 days of the date of 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 issues to be discussed. See 19 CFR 351.310(c).

Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Unless the time period is extended by the Department, case briefs are to be submitted within 30 days after the date of publication of this notice in the Federal Register . See 19 CFR 351.309(c). Rebuttal briefs, which must be limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. See 19 CFR 351.309(d). Parties who submit arguments in this proceeding are requested to submit with the argument: (1) a statement of the issues; (2) a brief summary of the argument; and (3) a table of authorities cited. Further, we request that parties submitting written comments provide the Department with a diskette containing an electronic copy of the public version of such comments.

Case and rebuttal briefs must be served on interested parties, in accordance with 19 CFR 351.303(f).

Unless extended, the Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any written briefs, not later than 120 days after the date of publication of this notice, pursuant to section 751(a)(3)(A) of the Act.

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 entries 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.

The preliminary results of this administrative review and this notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

On July 11, 2005, the Department published in the Federal Register the antidumping duty order on CMC from Sweden. See Notice of Antidumping Duty Orders: Purified Carboxymethylcellulose from Finland, Mexico, the Netherlands and Sweden , 70 FR 39734 (July 11, 2005) ( Order ). On July 3, 2007, we published in the Federal Register a notice of opportunity to request an administrative review of, inter alia , the antidumping duty order on CMC from Sweden. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review , 72 FR 36420 (July 3, 2007). Pursuant to section 751(a)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.213(b), Aqualon timely requested an administrative review of the antidumping duty order on CMC from Sweden for CP Kelco on July 25, 2007. On July 27, 2007, CP Kelco entered its appearance and also requested that the Department conduct an administrative review of the antidumping duty order on CMC from Sweden. On August 24, 2007, in accordance with section 751(a) of the Act and 19 C.F.R. 351.221(c)(1)(i), the Department published a notice of initiation of the administrative review of this order. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part , 72 FR 48613, 48614 (August 24, 2007). We are conducting an administrative review of the order on CMC from Sweden for CP Kelco for the period July 1, 2006, through June 30, 2007.

On September 6, 2007, the Department issued its antidumping duty questionnaire to CP Kelco. On October 12, 2007, we received the section A response from CP Kelco (SQA). On October 26, 2007, CP Kelco filed its sections B and C questionnaire responses (SQBC). On November 14, 2007, Aqualon alleged that CP Kelco made home market sales of CMC at prices below the cost of production (COP) during the period of review (POR). On December 19, 2007, based on the information contained in the petitioner's allegation and after conducting our own analysis, we initiated a sales-below-cost investigation of home market sales made by CP Kelco. See Memorandum to Richard Weible, Director, Office 7, from Patrick Edwards, Case Analyst and Angelica Mendoza, Program Manager, Office 7, entitled “Petitioner's Allegation of Sales Below the Cost of Production for CP Kelco AB,” dated December 19, 2007 (Cost Initiation Memorandum). As a result, on December 20, 2007, the Department requested that CP Kelco respond to section D of the Department's questionnaire. CP Kelco submitted its section D response on January 10, 2008 (SQD), including its cost reconciliation. On January 16, 2008, petitioner filed comments regarding the shutdown of CP Kelco's plant and operations, as disclosed in its questionnaire responses.

On February 1, 2008, the Department issued its first supplemental questionnaire regarding CP Kelco's responses to sections A through C of the Department's antidumping duty questionnaire. CP Kelco submitted its response on February 26, 2008 (Supplemental Response). On March 18, 2008, due to the complexity of several issues in this case, and pursuant to section 751(a)(3)(A) of the Act, the Department extended the deadline for the preliminary results by 120 days from April 1, 2008, until July 30, 2008. See Purified Carboxymethylcellulose from Sweden: Extension of Time Limits for Preliminary Results of Antidumping Duty Administrative Review , 73 FR 14436 (March 18, 2008). The Department issued its first supplemental questionnaire concerning CP Kelco's section D cost response on April 11, 2008, and CP Kelco submitted its supplemental response on April 28, 2008 (Supplemental Cost Response). On May 2, 2008, the Department issued to CP Kelco a second supplemental questionnaire concerning its sales responses regarding sections A through C of the questionnaire, and on May 15, 2008, CP Kelco submitted its response (Second Supplemental Response). On June 17, 2008, the Department issued a second supplemental questionnaire concerning CP Kelco's cost responses, and CP Kelco submitted its response on June 25, 2008 (Second Supplemental Cost Response). On July 2, 2008, Aqualon submitted additional comments regarding the shutdown of operations at the CP Kelco plant in Sweden.

The POR is July 1, 2006, through June 30, 2007.

The merchandise covered by this order is purified CMC, sometimes also referred to as purified sodium CMC, polyanionic cellulose, or cellulose gum, which is a white to off-white, non-toxic, odorless, biodegradable powder, comprising sodium CMC that has been refined and purified to a minimum assay of 90 percent. Purified CMC does not include unpurified or crude CMC, CMC Fluidized Polymer Suspensions, and CMC that is cross-linked through heat treatment. Purified CMC is CMC that has undergone one or more purification operations, which, at a minimum, reduce the remaining salt and other by-product portion of the product to less than ten percent. The merchandise subject to this order is currently classified in the Harmonized Tariff Schedule of the United States at subheading 3912.31.00. This tariff classification is provided for convenience and customs purposes; however, the written description of the scope of this order is dispositive.

CP Kelco reported the invoice date as the date of sale for its U.S. sales. The Department considers invoice date to be the presumptive date of sale ( see 19 CFR 351.401(i)). For purposes of this review, we examined whether invoice date or another date better represents the date on which the material terms of sale were established. The Department, in reviewing CP Kelco's questionnaire responses, found that the material terms of sale are set on the date on which the invoice is issued. CP Kelco reported that, following the receipt of purchase orders, the terms of sale are susceptible and subject to changes in price and quantity until issuance of the sales invoice. See SQA at A-31; see also , SQBC at C-12. Therefore, we preliminarily determine that invoice date is the appropriate date of sale for U.S. sales in this administrative review because it represents the date upon which the material terms of sale were established. This is consistent with the most recently completed administrative reviews of this order. However, for instances where the date of shipment preceded the date of invoice, we have preliminary determined to use the date of shipment for those sales.

Similarly, based on our review of CP Kelco's questionnaire responses, we preliminary find that the date of invoice constitutes the date on which the material terms of sale are established in the comparison market ( i.e. , Sweden). See SQBC at B-12. CP Kelco reported that the terms of sale recorded on purchase orders in the comparison market are also subject to change, typically in the form of packing and product grade (which can affect price). Therefore, we are using the invoice date as the date of sale for comparison market sales. For a further discussion of our date of sale analysis, see Memorandum to the File through Angelica L. Mendoza, Program Manager, Office 7, from Patrick Edwards, Senior Case Analyst, titled “Analysis of Data Submitted by CP Kelco AB in the Preliminary Results of the Antidumping Duty Administrative Review of Purified Carboxymethylcellulose (CMC) from Sweden,” dated July 30, 2008 (Analysis Memorandum).

To determine whether sales of CMC from Sweden to the United States were made at less than fair value, we compared the EP or CEP to the NV, as described in the “Export Price and Constructed Export Price” and “Normal Value” sections of this notice, below. In accordance with section 777A(d)(2) of the Act, we compared the EPs and CEPs of individual U.S. transactions to monthly weighted-average NVs.

We compared U.S. sales with sales of the foreign like product in the comparison 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. See sections 771(16) and (35), 773(a)(1) of the Act; 19 CFR 351.414(b)-(c). If there were no contemporaneous sales of an identical model, we identified the most similar comparison-market model. See id . 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) grade, (2) viscosity, (3) degree of substitution, (4) particle size, and (5) solution characteristics.

In accordance with section 772 of the Act, we calculate either an EP or a CEP, depending on the nature of each sale. Section 772(a) of the Act defines EP as the price at which the subject merchandise is first sold by the foreign exporter or producer before the date of importation to an unaffiliated purchaser in the United States, or to an unaffiliated purchaser for exportation to the United States. Section 772(b) of the Act defines CEP as the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. CP Kelco classified two types of sales to the United States: 1) direct sales to end-user customers (EP); and 2) sales via its U.S. affiliate, CP Kelco U.S., to end-users and distributors (CEP). For purposes of these preliminary results, we have accepted CP Kelco's classifications.

We calculated EP based on prices charged to the first unaffiliated U.S. customer. We used the sale invoice date as the date of sale. 1 We based EP on the packed, delivered prices to the first unaffiliated purchasers outside Sweden. We made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Act, which included foreign inland freight, international freight, marine insurance, U.S. inland freight, inland insurance, U.S. warehousing, U.S. brokerage and handling, and U.S. customs duties, while adding freight revenue, in accordance with section 772(c)(1) of the Act and section 351.401(e) of the Department's regulations. We made further adjustments for direct expenses (credit expenses) in accordance with section 772(c)(2)(A) of the Act. Additionally, and consistent with the prior administrative review of this antidumping duty order, we made a deduction from EP for the factoring charges incurred by CP Kelco on its U.S. account receivables.

We calculated CEP based on prices charged to the first unaffiliated U.S. customer after importation. We used the sale invoice date as the date of sale. We based CEP on the gross unit price from CP Kelco U.S. to its unaffiliated U.S. customers, making adjustments where necessary for billing adjustments and other discounts. Where applicable and pursuant to sections 772(c)(2)(A) and (d)(1) of the Act, the Department made deductions for movement expenses (foreign inland freight, international freight, marine insurance, U.S. inland freight, inland insurance, U.S. warehousing, U.S. brokerage and handling, and U.S. customs duties), while adding freight revenue, where applicable, in accordance with section 772(c)(1) of the Act and section 351.401(e) of the Department's regulations. In accordance with section 772(d)(1) of the Act, we also deducted, where applicable, U.S. direct selling expenses, including credit expenses, U.S. indirect selling expenses, and U.S. inventory carrying costs incurred in the United States and Sweden associated with economic activities in the United States. We also deducted CEP profit in accordance with section 772(d)(3) of the Act. We also made a deduction from CEP for factoring charges incurred by CP Kelco U.S. on its U.S. account receivables. See section 772(d)(1) of the Act.

In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV ( i.e. , whether the aggregate volume of home market sales of the foreign like product is equal to or greater than five percent of the aggregate volume of U.S. sales), we compared respondent's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(C) of the Act. Pursuant to section 773(a)(1)(B)(ii)(II) of the Act, because CP Kelco'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 for comparison. Therefore, we have based NV on home market sales in the usual commercial quantities and in the ordinary course of trade.

On December 19, 2007, based on an allegation from Aqualon, the Department initiated a sales-below-cost investigation of CP Kelco because Aqualon provided a reasonable basis to believe or suspect that CP Kelco is selling CMC in the home market at prices below its COP. See Cost Initiation Memorandum. Based on the Department's findings, there is a reasonable basis to believe or suspect that CP Kelco is selling CMC in Sweden at prices below COP. Therefore, pursuant to section 773(b)(1) of the Act, we examined whether CP Kelco's sales in Sweden were made at prices below the COP. See Cost Initiation Memorandum.

In accordance with section 773(b)(3) of the Act, we calculated the weighted-average COP for each model based on the sum of CP Kelco's materials and fabrication costs for the foreign like product, plus an amount for home market selling expenses, general and administrative (G&A) expenses, financial expenses, and packing costs. We relied on the COP data submitted by CP Kelco.

We compared the weighted-average COP of CP Kelco's home market sales to home market sales prices (net of billing adjustments, any applicable movement expenses, direct and indirect selling expenses, and packing) 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 COP. In determining whether to disregard home market sales made at prices below COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether such sales were made in substantial quantities within an extended period of time, and whether such sales were made at prices which would permit recovery of all costs within a reasonable period of time.

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of CP Kelco's sales of a given model were at prices less than the COP, we did not disregard any below-cost sales of that model because these below-cost sales were not made in substantial quantities. Where 20 percent or more of CP Kelco's home market sales of a given model were at prices less than the COP, we disregarded the below-cost sales because such sales were made: (1) in substantial quantities within the POR ( i.e. , within an extended period of time) in accordance with section 773(b)(2)(B) of the Act, and (2) 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 ( i.e. , the sales were made at prices below the weighted-average per-unit COP for the POR). We used the remaining sales as the basis for determining NV, if such sales existed, in accordance with section 773(b)(1) of the Act. In this review, we found sales below the COP and have, as described above, disregarded such sales from our margin calculations. See Analysis Memorandum.

We calculated NV based on prices to unaffiliated customers or prices to affiliated customers that we determined to be at arm's length. See 19 CFR 351.404(c). We used the sale invoice date as the date of sale. See 19 CFR 351.401(i). We increased price for certain billing adjustments where appropriate. We made deductions, where appropriate, for foreign inland freight and inland insurance incurred in the comparison market, pursuant to section 773(a)(6)(B) of the Act. In addition, when comparing sales of similar merchandise, we made adjustments for differences in cost attributable to differences in physical characteristics of the merchandise ( i.e. , DIFMER) pursuant to section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We also made adjustments for differences in circumstances of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We made COS adjustments for imputed credit expenses. We also made an adjustment, where appropriate, for the CEP offset in accordance with section 773(a)(7)(B) of the Act. See “Level of Trade” section below. Additionally, we deducted home market packing costs and added U.S. packing costs in accordance with sections 773(a)(6)(A) and (B) of the Act. We also made a deduction from NV for factoring charges incurred by CP Kelco on its home market account receivables.

In accordance with section 773(a)(4) of the Act, we base NV on constructed value (CV) if we are unable to find a contemporaneous comparison market match of identical or similar merchandise for the U.S. sale. Section 773(e) of the Act provides that CV shall be based on the sum of the cost of materials and fabrication employed in making the subject merchandise, selling, general and administrative (SG&A) expenses, financial expenses, profit, and U.S. packing costs. We calculated the cost of materials and fabrication for CP Kelco based on the methodology described in the COP section of this notice. In accordance with section 773(e)(2)(A) of the Act, we based SG&A expenses, financial expense, and profit on the amounts CP Kelco incurred and realized in connection with the production and sale of the foreign like product in the ordinary course of trade, for consumption in the foreign country. Accordingly, for sales of CMC for which we could not determine the NV based on comparison market sales, either because there were no useable sales of a comparable product or all sales of the comparable products failed the sales-below-cost test, we based NV on CV.

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the home market at the same level of trade (LOT) as the EP or CEP transaction. The LOT in the home market is the LOT of the starting-price sales in the home market or, when NV is based on CV, the LOT of the sales from which we derive SG&A expenses and profit. With respect to U.S. price for EP transactions, the LOT is also that of the starting-price sale, which is usually from the exporter to the importer. For CEP, the LOT is that of the constructed sale from the exporter to the importer.

To determine whether home market sales are at a different LOT from 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. If the home market sales are at different LOTs, and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and home market sales at the LOT of the export transaction, the Department makes an LOT adjustment in accordance with section 773(a)(7)(A) of the Act. For CEP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the customer. We analyze whether different selling activities are performed, and whether any price differences (other than those for which other allowances are made under the Act) are shown to be wholly or partly due to a difference in LOT between the CEP and NV. Under section 773(a)(7)(A) of the Act, we make an upward or downward adjustment to NV for LOT if the difference in LOT involves the performance of different selling activities and is demonstrated to affect price comparability, based on a pattern of consistent price differences between sales at different LOTs in the country in which NV is determined. Finally, if the NV LOT is at a more advanced stage of distribution than the LOT of the CEP, but the data available do not provide an appropriate basis to determine an LOT adjustment, we reduce NV by the amount of indirect selling expenses incurred in the foreign home market on sales of the foreign like product, but by no more than the amount of the indirect selling expenses incurred for CEP sales. See section 773(a)(7)(B) of the Act (the CEP offset provision).

In analyzing differences in selling functions, we determine whether the LOTs identified by the respondent are meaningful. See Antidumping Duties; Countervailing Duties , 62 FR 27296, 27371 (May 19, 1997). If the claimed LOTs are the same, we expect that the functions and activities of the seller should be similar. Conversely, if a party claims that LOTs are different for different groups of sales, the functions and activities of the seller should be dissimilar. See Porcelain-on-Steel Cookware from Mexico: Final Results of Antidumping Duty Administrative Review , 65 FR 30068 (May 10, 2000) and accompanying Issues and Decision Memorandum at Comment 6. In the present review, CP Kelco did not claim a LOT adjustment. See CP Kelco's SQBC at pages B-18 and C-18. In order to determine whether the home market sales were at different stages in the marketing process than the U.S. sales, we reviewed the distribution system in each market ( i.e. , the “chain of distribution”), 2 including selling functions, class of customer (customer category), and the level of selling expenses for each type of sale.

CP Kelco reported one LOT in the home market, Sweden, with two channels of distribution to two classes of customers: (1) direct sales from the plant to end users, and (2) direct sales from the plant to distributors. Based on our review of evidence on the record, we find that home market sales to both customer categories and through both channels of distribution were substantially similar with respect to selling functions and stages of marketing. CP Kelco performed the same selling functions for sales in both home market channels of distribution, including sales negotiations, customer care, credit risk management, logistics, inventory maintenance, packing, freight and delivery services, collection, sales promotion, and guarantees, etc . See CP Kelco's SQA at page A-25. Each of these selling functions were identical in the intensity of their provision or only differed in that some were provided with “low-moderate” frequency for direct sales to end users, while those same functions were provided with “moderate” intensity for direct sales to distributors. After considering all of the above, we preliminarily find that CP Kelco had only one LOT for its home market sales.

CP Kelco reported one EP LOT and one CEP LOT, each with two separate channels of distribution in the United States. EP sales were made to end users and distributors either from inventory or made to order, and CEP sales were also made to end users and distributors and were either made from inventory or made to order. Therefore, we preliminarily find that CP Kelco has two channels of distribution for EP sales, and two channels of distribution for CEP sales. See CP Kelco's SQA at pages A-13 through A-15.

We reviewed the selling functions and services performed by CP Kelco in the U.S. market for EP sales, as described by CP Kelco in its questionnaire responses. CP Kelco reported that for sales produced to order and pulled from stock, the customer care unit of CP Kelco's U.S. affiliate (CP Kelco U.S.) handles the initial order processing for CP Kelco's EP sales, which are entered into the affiliate's operating system. However, all logistics and invoicing functions are coordinated by CP Kelco in Sweden. These functions include the retrieval of merchandise from warehouse or the scheduling of production to complete orders, arranging for shipment, and issuance of sales invoices directly to the customer. The logistics department of CP Kelco in Sweden arranges for freight and delivery to CP Kelco's unaffiliated U.S. customers. See CP Kelco's SQA at page A-17 through A-18 and A-25.

For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and CEP profit under section 772(d) of the Act. See Micron Tech. Inc. v. United States , 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). We reviewed the selling functions and services performed by CP Kelco on CEP sales as described in its questionnaire responses, after these deductions. We found that CP Kelco provides almost no selling functions to its U.S. affiliate in support of the CEP LOT. CP Kelco reported that the only services it provided for the CEP sales were logistics for freight and delivery, and very limited customer care and inventory maintenance. See CP Kelco's SQA at page A-13 through A-25.

We then examined the selling functions performed by CP Kelco on its EP sales in comparison with the selling functions performed on CEP sales (after deductions). We found that CP Kelco performs an additional layer of selling functions at a greater frequency on its direct sales to unaffiliated U.S. customers which are not performed on its sales to its affiliate ( e.g. , sales negotiating, credit risk management, collection, sales promotion, direct sales personnel, technical support, guarantees, etc.). See CP Kelco's AQR at page A-29. Because these additional selling functions are significant, we find that CP Kelco's direct sales to unaffiliated U.S. customers (EP sales) are at a different LOT than its CEP sales.

Next, we compared the home market and EP sales. CP Kelco's home market and EP sales were both made to end users and distributors. In both cases, the selling functions performed by CP Kelco were almost identical for both markets. In both markets CP Kelco provided the following services: sales negotiating, credit risk management, customer care, logistics, inventory maintenance, packing, freight/delivery, collection, sales promotion, direct sales personnel, technical support, guarantees and discounts. See CP Kelco's SQA at page A-25. Because the selling functions and channels of distribution are substantially similar, we preliminarily determine that the home market LOT is the same as the EP LOT. It was, therefore, unnecessary to make an LOT adjustment for comparison of CP Kelco's home market and EP prices.

According to section 773(a)(7)(B) of the Act, a CEP offset is appropriate when the LOT in the home market is at a more advanced stage than the LOT of the CEP sales and there is no basis for determining whether the difference in LOTs between NV and CEP affects price comparability. CP Kelco reported that it provided minimal selling functions and services for the CEP LOT and that, therefore, the home market LOT is more advanced than the CEP LOT. Based on our analysis of the channels of distribution and selling functions performed by CP Kelco for sales in the home market and CEP sales in the U.S. market ( i.e. , sales support and activities provided by CP Kelco on sales to its U.S. affiliate), we preliminarily find that the home market LOT is at a more advanced stage of distribution when compared to CEP sales because CP Kelco provides many selling functions in the home market at a higher level of service ( i.e. , sales negotiations, customer care, collection, direct sales personnel, technical support, etc .) as compared to selling functions performed for its CEP sales ( i.e. , CP Kelco reported that the only services it provided for the CEP sales were logistics, packing, freight and delivery services, and very limited inventory maintenance and customer care). See CP Kelco's SQA at page A-25. Thus, we find that CP Kelco's home market sales are at a more advanced LOT than its CEP sales. As there was only one LOT in the home market, there were no data available to determine the existence of a pattern of price differences, and we do not have any other information that provides an appropriate basis for determining a LOT adjustment; therefore, we applied a CEP offset to NV for CEP comparisons.

To calculate the CEP offset, we deducted the home market indirect selling expenses from NV for home market sales that were compared to U.S. CEP sales. As such, we limited the home market indirect selling expense deduction by the amount of the indirect selling expenses deducted in calculating the CEP as required under section 772(d)(1)(D) of the Act. See section 773(a)(7)(B) of the Act.

We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act and 19 CFR 351.415 based on exchange rates in effect on the dates of the U.S. sales, as certified by the Federal Reserve Bank. See Import Administration website at: http://ia.ita.doc.gov/exchange/index.html.

We preliminarily determine that for the period July 1, 2006, through June 30, 2007, the following dumping margin exists:

The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries in accordance with 19 CFR 351.212. The Department intends to issue assessment instructions for CP Kelco directly to CBP 15 days after the date of publication of the final results of this administrative review.

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 POR produced by companies included in these final results of review for which the reviewed companies 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 any intermediate company involved in the transaction. For a full discussion of this clarification, see Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties , 68 FR 23954 (May 6, 2003).

The following cash-deposit rates will be effective upon publication of the final results of this review for all shipments of CMC from Sweden entered, or withdrawn from warehouse, for consumption on or after publication date, as provided for by section 751(a)(2)(C) of the Act: (1) for subject merchandise produced by CP Kelco, the cash-deposit rate will be the rate established in the final results of this review, except if the rate is less than 0.50 percent and, therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in which case the cash deposit rate will be zero; 2) if the exporter is not a firm covered in this 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 3) 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 the all-others rate of 25.29 percent from the LTFV investigation. See Order , 70 FR at 39735.

These deposit requirements, when imposed, shall remain in effect until further notice.

Pursuant to section 351.224(b) of the Department's regulations, the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within five days after the date of publication of this notice. Pursuant to section 351.309 of the Department's regulations, interested parties may submit written comments in response to these preliminary results. Unless extended by the Department, case briefs are to be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. See 19 CFR 351.309(c)(1)(ii) and (d)(1). 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. See 19 CFR 351.309. Case and rebuttal briefs must be served on interested parties in accordance with section 351.303(f) of the Department's regulations. 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.

Also, pursuant to section 351.310(c) of the Department's regulations, within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments raised in the case and rebuttal briefs. Unless the Secretary specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs. See 19 CFR 351.310(d)(1). Parties will be notified of the time and location.

The Department will publish the final results of the administrative review, including the results of its analysis of issues raised in any case or rebuttal brief, no later than 120 days after publication of the preliminary results, unless extended. See section 751(a)(3)(A) of the Act; 19 CFR 351.213(h).

This notice serves as a preliminary reminder to importers of their responsibility under section 351.402(f) of the Department's regulations 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 Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

This administrative review and notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

On July 27, 1999, the Department published in the Federal Register the Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order; Stainless Steel Sheet and Strip in Coils from Mexico , 64 FR 40560 (July 27, 1999). On July 3, 2007, the Department published a notice entitled Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review , 72 FR 36420 (July 3, 2007), covering, inter alia, S4 in coils from Mexico for the period July 1, 2006 through June 30, 2007.

In accordance with 19 CFR 351.213(b)(1), Mexinox and petitioners requested that the Department conduct an administrative review. On August 24, 2007, we published in the Federal Register a notice of initiation of this antidumping duty administrative review covering the period July 1, 2006 through June 30, 2007. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part , 72 FR 48613 (August 24, 2007).

On September 11, 2007, the Department issued an antidumping duty questionnaire to Mexinox. Mexinox submitted its response to section A of the questionnaire on October 3, 2007, and its response to sections B through E of the questionnaire on October 29, 2007. On January 9, 2008, the Department issued its supplemental questionnaire for section A. Mexinox responded to this supplemental questionnaire on February 1, 2008. On March 5, 2008, the Department issued another supplemental questionnaire which covered sections A through C. Mexinox filed its response to this questionnaire on April 7, 2008. The Department also issued a supplemental questionnaire for section D on April 11, 2008, to which Mexinox responded on May 19, 2008. On May 2, 2008, the Department issued another supplemental questionnaire for sections A through C, as well as for section E, the latter of which pertains to an affiliated U.S. reseller, Ken-Mac Metals (Ken-Mac). Mexinox filed its response to this supplemental questionnaire also on May 19, 2008. Finally, the Department issued separate supplemental questionnaires covering section D and sections A through C on May 19, 2008 and May 30, 2008, respectively. Mexinox submitted its responses to both of these supplemental questionnaires on June 11, 2008.

Because it was not practicable to complete this review within the normal time frame, on February 22, 2008, we published in the Federal Register our notice of the extension of time limits for this review. See Stainless Steel Sheet and Strip in Coils from Mexico; Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review , 73 FR 9772 (February 22, 2008). This extension established the deadline for these preliminary results as July 30, 2008.

On December 19, 2007, Mexinox submitted information regarding its material input costs for the period of review (POR) and claimed the use of a single weighted-average cost for austenitic products for the entire POR would distort the dumping margin calculation due to sharply rising nickel costs throughout the period. Rather than using a single POR-average cost for purposes of the sales-below-cost test, Mexinox urged the Department to consider employing monthly or quarterly costs for austenitic products ( i.e. those products that contain nickel) in this segment of the proceeding. On June 27, 2008, petitioners submitted comments claiming the Department's standard practice of using POR-average costs is appropriate in the instant case. In rebuttal comments submitted July 2, 2008, Mexinox maintains record evidence shows a direct link between cost increases for austenitic hot-rolled stainless steel band (hot band), the principle material input for S4 in coils, and price increases for finished S4 in coils during the POR through alloy surcharges which Mexinox claims act as a pass-through pricing mechanism. In addition, on July 10, 2008, the Department met with representatives for Mexinox on this issue. See Ex Parte Memorandum to the File, from Maryanne Burke dated July 14, 2008, on file in CRU in room 1117 of the main Commerce building.

The Department has considered the sales and cost information reported by Mexinox, in addition to the comments submitted by petitioners and Mexinox. Based on our analysis, we preliminarily find it appropriate to use Mexinox's reported quarterly costs of austenitic products for this review. With the exception of cases where high inflation exists in which the Department restates an annual weighted-average cost to an equivalent basis, the Department's normal practice is to calculate a weighted-average cost for the entire POR unless this methodology results in inappropriate comparisons or skewed data. See, e.g., Certain Pasta from Italy; Final Results of Antidumping Duty Administrative Review, 65 FR 77852 (December 13, 2000) and accompanying Issues and Decision Memorandum at comment 18; see also Final Results of Antidumping Duty Administrative Review and Determination not to Revoke the Antidumping Order: Brass Sheet and Strip from the Netherlands, 65 FR 742, 746 (January 5, 2000). In determining whether distortions result from significant cost fluctuations in the context of our antidumping duty calculations, the Department has historically evaluated the case specific record evidence using two primary factors: (1) Whether the cost changes throughout the POI/POR were significant; and (2) whether sales during the shorter averaging periods could be accurately linked with the COP/CV during the same shorter averaging periods. See Certain Steel Concrete Reinforcing Bars From Turkey; Final Results, Rescission of Antidumping Duty Administrative Review in Part, and Determination To Revoke in Part (Rebar from Turkey), 70 FR 67665 (November 8, 2005) and accompanying Issues and Decision Memorandum at Comment 1. See also Habas Sinai ve Tibbi Gazlar Istihsal Endustrisi A.S., Plantiff, v. United States, Court No. 05-00613, Slip Op. 07-167 (CIT November 15, 2007).

With regard to the first factor, record evidence provided by Mexinox demonstrates significant changes in the total cost of manufacture (COM) throughout the POR for austenitic stainless steel sheet and strip products produced during the POR. Based upon the record of this review, the significant change throughout the POR in the total COM is due to the price volatility of nickel which is used in the production of the austenitic hot band purchased by Mexinox. Austenitic hot band is Mexinox's raw material input for certain merchandise under consideration. Thus, unlike Rebar from Turkey, we preliminary conclude that the differences in COM are significant enough to warrant a departure from our standard annual costing approach based upon record evidence indicating our annual cost approach would lead to distortions in our sales-below-cost test and inconsistencies in our overall margin calculation.

To address the second factor, Mexinox demonstrated that, through its alloy surcharge levied on all sales during the POR, there is a linkage between the increasing direct material costs and final sale prices. Specifically, Mexinox illustrated that nickel acquisition and consumption costs are related to the market prices promulgated by the London Metal Exchange. We note the alloy surcharge regime is a common business practice in the stainless steel industry, whereby the changes in material costs realized by producers during the months preceding the date of sale are measured and ultimately transferred to its final customers. While we acknowledge that the alloy surcharge figure does not directly correspond to changes in the price of the applicable raw material used in the production to which the surcharge applies, as found in Brass from the Netherlands, the surcharge amount is, by design, a pass-through mechanism developed to account for raw material price changes. The objective of this pass-through mechanism satisfies the basic theory behind our second criterion—it demonstrates a direct link between production costs and sales prices. We have examined the data submitted by Mexinox and have concluded that a quarterly costing approach would lead to more appropriate comparisons in our antidumping duty calculations for austenitic products. For those products reported that do not contain nickel, we have continued to use a single weighted-average cost for the POR.

Additionally, we note the Department solicited comments from outside parties on shorter cost averaging periods in a Federal Register notice. See Antidumping Methodologies for Proceedings that Involve Significant Cost Changes Throughout the Period of Investigation (POI)/Period of Review (POR) that May Require Using Shorter Cost Averaging Periods; Request for Comment, 73 FR 26364 (May 9, 2008) ( Antidumping Methodologies; Request for Comment  ). On June 9, 2008, the Department extended the time limit for parties to submit written comments concerning this issue to June 23, 2008. See Antidumping Methodologies for Proceedings that Involve Significant Cost Changes Throughout the Period of Investigation (POI)/Period of Review (POR) that May Require Using Shorter Cost Averaging Periods; Request for Comment and Proposed Methodology for Identifying and Analyzing Targeted Dumping in Antidumping Investigations; Request for Comment, 73 FR 32557 (June 9, 2008). We are currently analyzing the comments received which could lead the Department to formulate a different methodological framework on this matter. Thus, we will further examine the facts of this case for the final results of this review in light of both the comments received from the interested parties in this administrative review and the general comments received with respect to Antidumping Methodologies; Request for Comment.

The POR is July 1, 2006 through June 30, 2007.

For purposes of this order, the products covered are certain stainless steel sheet and strip in coils. Stainless steel is an alloy steel containing, by weight, 1.2 percent or less of carbon and 10.5 percent or more of chromium, with or without other elements. The subject sheet and strip is a flat-rolled product in coils that is greater than 9.5 mm in width and less than 4.75 mm in thickness, and that is annealed or otherwise heat treated and pickled or otherwise descaled. The subject sheet and strip may also be further processed ( e.g., cold-rolled, polished, aluminized, coated, etc. ) provided that it maintains the specific dimensions of sheet and strip following such processing.

The merchandise subject to this order is currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) at subheadings: 7219.13.00.31, 7219.13.00.51, 7219.13.00.71, 7219.13.00.81, 7219.14.00.30, 7219.14.00.65, 7219.14.00.90, 7219.32.00.05, 7219.32.00.20, 7219.32.00.25, 7219.32.00.35, 7219.32.00.36, 7219.32.00.38, 7219.32.00.42, 7219.32.00.44, 7219.33.00.05, 7219.33.00.20, 7219.33.00.25, 7219.33.00.35, 7219.33.00.36, 7219.33.00.38, 7219.33.00.42, 7219.33.00.44, 7219.34.00.05, 7219.34.00.20, 7219.34.00.25, 7219.34.00.30, 7219.34.00.35, 7219.35.00.05, 7219.35.00.15, 7219.35.00.30, 7219.35.00.35, 7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60, 7219.90.00.80, 7220.12.10.00, 7220.12.50.00, 7220.20.10.10, 7220.20.10.15, 7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10, 7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.20.70.05, 7220.20.70.10, 7220.20.70.15, 7220.20.70.60, 7220.20.70.80, 7220.20.80.00, 7220.20.90.30, 7220.20.90.60, 7220.90.00.10, 7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTSUS subheadings are provided for convenience and customs purposes, the Department's written description of the merchandise under review is dispositive.

Excluded from the scope of this order are the following: (1) Sheet and strip that is not annealed or otherwise heat treated and pickled or otherwise descaled; (2) sheet and strip that is cut to length; (3) plate ( i.e., flat-rolled stainless steel products of a thickness of 4.75 mm or more); (4) flat wire ( i.e., cold-rolled sections, with a prepared edge, rectangular in shape, of a width of not more than 9.5 mm); and (5) razor blade steel. Razor blade steel is a flat-rolled product of stainless steel, not further worked than cold-rolled (cold-reduced), in coils, of a width of not more than 23 mm and a thickness of 0.266 mm or less, containing, by weight, 12.5 to 14.5 percent chromium, and certified at the time of entry to be used in the manufacture of razor blades. See Chapter 72 of the HTSUS, “Additional U.S. Note” 1(d).

In response to comments by interested parties, the Department has determined that certain specialty stainless steel products are also excluded from the scope of this order. These excluded products are described below.

Flapper valve steel is defined as stainless steel strip in coils containing, by weight, between 0.37 and 0.43 percent carbon, between 1.15 and 1.35 percent molybdenum, and between 0.20 and 0.80 percent manganese. This steel also contains, by weight, phosphorus of 0.025 percent or less, silicon of between 0.20 and 0.50 percent, and sulfur of 0.020 percent or less. The product is manufactured by means of vacuum arc remelting, with inclusion controls for sulphide of no more than 0.04 percent and for oxide of no more than 0.05 percent. Flapper valve steel has a tensile strength of between 210 and 300 ksi, yield strength of between 170 and 270 ksi, plus or minus 8 ksi, and a hardness (Hv) of between 460 and 590. Flapper valve steel is most commonly used to produce specialty flapper valves for compressors.

Also excluded is a product referred to as suspension foil, a specialty steel product used in the manufacture of suspension assemblies for computer disk drives. Suspension foil is described as 302/304 grade or 202 grade stainless steel of a thickness between 14 and 127 microns, with a thickness tolerance of plus-or-minus 2.01 microns, and surface glossiness of 200 to 700 percent Gs. Suspension foil must be supplied in coil widths of not more than 407 mm, and with a mass of 225 kg or less. Roll marks may only be visible on one side, with no scratches of measurable depth. The material must exhibit residual stresses of 2 mm maximum deflection, and flatness of 1.6 mm over 685 mm length.

Certain stainless steel foil for automotive catalytic converters is also excluded from the scope of this order. This stainless steel strip in coils is a specialty foil with a thickness of between 20 and 110 microns used to produce a metallic substrate with a honeycomb structure for use in automotive catalytic converters. The steel contains, by weight, carbon of no more than 0.030 percent, silicon of no more than 1.0 percent, manganese of no more than 1.0 percent, chromium of between 19 and 22 percent, aluminum of no less than 5.0 percent, phosphorus of no more than 0.045 percent, sulfur of no more than 0.03 percent, lanthanum of between 0.002 and 0.05 percent, and total rare earth elements of more than 0.06 percent, with the balance iron.

Permanent magnet iron-chromium-cobalt alloy stainless strip is also excluded from the scope of this order. This ductile stainless steel strip contains, by weight, 26 to 30 percent chromium, and 7 to 10 percent cobalt, with the remainder of iron, in widths 228.6 mm or less, and a thickness between 0.127 and 1.270 mm. It exhibits magnetic remanence between 9,000 and 12,000 gauss, and a coercivity of between 50 and 300 oersteds. This product is most commonly used in electronic sensors and is currently available under proprietary trade names such as “Arnokrome III.”  2

Certain electrical resistance alloy steel is also excluded from the scope of this order. This product is defined as a non-magnetic stainless steel manufactured to American Society of Testing and Materials (ASTM) specification B344 and containing, by weight, 36 percent nickel, 18 percent chromium, and 46 percent iron, and is most notable for its resistance to high temperature corrosion. It has a melting point of 1390 degrees Celsius and displays a creep rupture limit of 4 kilograms per square millimeter at 1000 degrees Celsius. This steel is most commonly used in the production of heating ribbons for circuit breakers and industrial furnaces, and in rheostats for railway locomotives. The product is currently available under proprietary trade names such as “Gilphy 36.”  3

Certain martensitic precipitation-hardenable stainless steel is also excluded from the scope of this order. This high-strength, ductile stainless steel product is designated under the Unified Numbering System (UNS) as S45500-grade steel, and contains, by weight, 11 to 13 percent chromium, and 7 to 10 percent nickel. Carbon, manganese, silicon and molybdenum each comprise, by weight, 0.05 percent or less, with phosphorus and sulfur each comprising, by weight, 0.03 percent or less. This steel has copper, niobium, and titanium added to achieve aging, and will exhibit yield strengths as high as 1700 Mpa and ultimate tensile strengths as high as 1750 Mpa after aging, with elongation percentages of 3 percent or less in 50 mm. It is generally provided in thicknesses between 0.635 and 0.787 mm, and in widths of 25.4 mm. This product is most commonly used in the manufacture of television tubes and is currently available under proprietary trade names such as “Durphynox 17.”  4

Finally, three specialty stainless steels typically used in certain industrial blades and surgical and medical instruments are also excluded from the scope of this order. These include stainless steel strip in coils used in the production of textile cutting tools ( e.g., carpet knives). 5 This steel is similar to ASTM grade 440F, but containing, by weight, 0.5 to 0.7 percent of molybdenum. The steel also contains, by weight, carbon of between 1.0 and 1.1 percent, sulfur of 0.020 percent or less, and includes between 0.20 and 0.30 percent copper and between 0.20 and 0.50 percent cobalt. This steel is sold under proprietary names such as “GIN4 Mo.” The second excluded stainless steel strip in coils is similar to AISI 420-J2 and contains, by weight, carbon of between 0.62 and 0.70 percent, silicon of between 0.20 and 0.50 percent, manganese of between 0.45 and 0.80 percent, phosphorus of no more than 0.025 percent and sulfur of no more than 0.020 percent. This steel has a carbide density on average of 100 carbide particles per square micron. An example of this product is “GIN5” steel. The third specialty steel has a chemical composition similar to AISI 420 F, with carbon of between 0.37 and 0.43 percent, molybdenum of between 1.15 and 1.35 percent, but lower manganese of between 0.20 and 0.80 percent, phosphorus of no more than 0.025 percent, silicon of between 0.20 and 0.50 percent, and sulfur of no more than 0.020 percent. This product is supplied with a hardness of more than Hv 500 guaranteed after customer processing, and is supplied as, for example, “GIN6.”  6

Mexinox USA, a wholly-owned subsidiary of Mexinox S.A., which in turn is a subsidiary of ThyssenKrupp AG, sold subject merchandise in the United States during the POR to unaffiliated customers. Mexinox USA also made sales of subject merchandise to U.S. affiliate Ken-Mac which is an operating division of ThyssenKrupp Materials Inc., which is a subsidiary of ThyssenKrupp USA, Inc., the primary holding company for ThyssenKrupp AG in the U.S. market. Ken-Mac purchased subject merchandise from Mexinox USA and further manufactured and/or resold the subject merchandise to unaffiliated customers in the United States during the POR. See Mexinox's October 3, 2007, section A questionnaire response at 13, 22 and 29. For purposes of this review, we have included both Mexinox USA's and Ken-Mac's sales of subject merchandise to unaffiliated customers in the United States in our margin calculation.

Mexinox Trading, S.A. de C.V. (Mexinox Trading), a wholly owned subsidiary of Mexinox S.A., resold the foreign like product as well as other merchandise in the home market. Mexinox S.A.'s sales to Mexinox Trading represented a small portion of Mexinox S.A.'s total sales of the foreign like product in the home market and constituted less than five percent of all home market sales. See , e.g. , Mexinox's October 3, 2007, section A questionnaire response at 3, and its April 7, 2008, supplemental questionnaire response covering sections A through C at Attachment A-26 (quantity and value chart). Because sales to Mexinox Trading of the foreign like product were below the five percent threshold established under 19 CFR 351.403(d), we did not require Mexinox S.A. to report Mexinox Trading's downstream sales to its first unaffiliated customer. This is consistent with our practice to date and the methodology we have employed in past administrative reviews of S4 in coils from Mexico. See, e.g., Stainless Steel Sheet and Strip in Coils from Mexico; Final Results of Antidumping Duty Administrative Review , 73 FR 7710 (February 11, 2008) ( 2005-2006 Final Results ), as amended, Stainless Steel Sheet and Strip in Coils from Mexico: Amended Final Results of Antidumping Duty Administrative Review , 73 FR 14215 (March 17, 2008) ( 2005-2006 Amended Final Results . See also Stainless Steel Sheet and Strip in Coils from Mexico; Final Results of Antidumping Duty Administrative Review , 70 FR 73444 (December 12, 2005) and accompanying Issues and Decisions Memorandum at Comment 2.

To determine whether sales of S4 in coils from Mexico to the United States were made at less than fair value, we compared CEP sales made in the United States by both Mexinox USA and Ken-Mac to unaffiliated purchasers to NV as described in the “Constructed Export Price” and “Normal Value” sections of this notice, below. In accordance with section 777A(d)(2) of the Tariff Act of 1930, as amended (the Tariff Act), we compared individual CEPs to monthly weighted-average NVs.

In accordance with section 771(16) of the Tariff Act we considered all products produced by Mexinox S.A. covered by the description in the “Scope of the Order” section above, and sold in the home market during the POR, to be foreign like product for purposes of determining appropriate product comparisons to U.S. sales. We relied on nine characteristics to match U.S. sales of subject merchandise to comparison sales of the foreign like product (listed in order of priority): (1) Grade; (2) cold/hot rolled; (3) gauge; (4) surface finish; (5) metallic coating; (6) non-metallic coating; (7) width; (8) temper; and (9) edge trim. Where there were no sales of identical merchandise in the home market 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 and reporting instructions listed in the Department's original September 11, 2007, questionnaire.

In accordance with section 773(a)(1)(B) of the Tariff Act, to the extent practicable, we base NV on sales made in the comparison market at the same level of trade (LOT) as the export transaction. The NV LOT is based on the starting price of sales in the home market or, when NV is based on constructed value (CV), that of the sales from which selling, general, and administrative (SG&A) expenses and profit are derived. With respect to CEP transactions in the U.S. market, the CEP LOT is defined as the level of the constructed sale from the exporter to the importer. See section 773(a)(7)(A) of the Tariff Act.

To determine whether NV sales are at a different LOT than CEP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the customer. See 19 CFR 351.412(c)(2). 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-market sales at the LOT of the export transaction, we make a LOT adjustment under section 773(a)(7)(A) of the Tariff 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 Tariff Act (the CEP offset provision). See, e.g., Final Determination of Sales at Less Than Fair Value: Greenhouse Tomatoes From Canada , 67 FR 8781 (February 26, 2002) and accompanying Issues and Decisions Memorandum at Comment 8; see also Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil; Preliminary Results of Antidumping Duty Administrative Review , 70 FR 17406, 17410 (April 6, 2005), unchanged in Notice of Final Results of Antidumping Duty Administrative Review of Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products from Brazil , 70 FR 58683 (October 7, 2005). For CEP sales, we consider only the selling activities reflected in the price after the deduction of expenses and CEP profit under section 772(d) of the Tariff Act. See Micron Technology, Inc. v. United States , 243 F.3d 1301, 1314-1315 (Fed. Cir. 2001). We expect that if the claimed LOTs are the same, the functions and activities of the seller should be similar. Conversely, if a party claims the LOTs are different for different groups of sales, the functions and activities of the seller should be dissimilar. See Porcelain-on-Steel Cookware from Mexico: Final Results of Administrative Review , 65 FR 30068 (May 10, 2000) and accompanying Issues and Decisions Memorandum at Comment 6.

We obtained information from Mexinox regarding the marketing stages involved in making its reported home market and U.S. sales to both affiliated and unaffiliated customers. Mexinox provided a description of all selling activities performed, along with a flowchart and tables comparing the levels of trade among each channel of distribution and customer category for both markets. See Mexinox's October 3, 2007, section A questionnaire response at 33 through 39 and Attachments A-4-A through A-4-C; see also Mexinox's February 1, 2008, supplemental section A questionnaire response at 21 through 24 and Attachments A-20-A and A-20-B.

Mexinox sold S4 in coils to end-users and retailers/distributors in the home market and to end-users and distributors/service centers in the United States. For the home market, Mexinox identified two channels of distribution described as follows: (1) direct shipments ( i.e. , products produced to order) and (2) sales from inventory. Within each of these two channels of distribution, Mexinox S.A. made sales to affiliated and unaffiliated distributors/retailers and end-users. See Mexinox's October 3, 2007, section A questionnaire response at 3 and 26 through 27. We reviewed the intensity of all selling functions Mexinox claimed to perform for each channel of distribution and customer category. For certain functions, such as pre-sale technical assistance, processing of customer orders, sample analysis, prototypes and trial lots, freight and delivery, price negotiation/customer communications, sales calls and visits, and warranty services, the level of performance for both direct shipments and sales through inventory was identical across all types of customers. Only a few functions exhibited differences, including inventory maintenance/just-in-time performance, further processing, credit and collection, low volume orders and shipment of small packages. See Mexinox's February 1, 2008, supplemental section A questionnaire response at Attachment A-20. While we find differences in the levels of intensity performed for some of these functions, such differences are minor and do not establish distinct levels of trade in Mexico. Based on our analysis of all of Mexinox S.A.'s home market selling functions, we find all home market sales were made at the same LOT, the NV LOT.

We then compared the NV LOT, based on the selling functions associated with the transactions between Mexinox S.A. and its customers in the home market, to the CEP LOT, which is based on the selling functions associated with the transaction between Mexinox S.A. and its affiliated importer, Mexinox USA. Our analysis indicates the selling functions performed for home market customers are either performed at a higher degree of intensity or are greater in number than the selling functions performed for Mexinox USA. See Mexinox's October 3, 2007 section A questionnaire response at 33 through 39 and Attachments A-4-A through A-4-C; see also Mexinox's February 1, 2008, supplemental section A questionnaire response at 21 through 24 and Attachment A-20. For example, in comparing Mexinox's selling functions, we find there are more functions performed in the home market which are not a part of CEP transactions ( e.g., pre-sale technical assistance, sample analysis, prototypes and trial lots, price negotiation/customer communications, sales calls and visits, credit and collection, and warranty services). For selling functions performed for both home market sales and CEP sales ( e.g., processing customer orders, freight and delivery arrangements), we find Mexinox S.A. actually performed each activity at a higher level of intensity in the home market. Based on Mexinox's responses, we note that CEP sales from Mexinox S.A. to Mexinox USA generally occur at the beginning of the distribution chain, representing essentially a logistical transfer of inventory that resembles ex-factory sales. In contrast, all sales in the home market occur closer to the end of the distribution chain and involve smaller volumes and more customer interaction which, in turn, require the performance of more selling functions. See Mexinox's October 3, 2007, section A questionnaire response at 33 through 39 and Attachments A-4-A through A-4-C; see also Mexinox's February 1, 2008, supplemental section A questionnaire response at Attachment A-20. Based on the foregoing, we conclude the NV LOT is at a more advanced stage than the CEP LOT.

Because we found the home market and U.S. sales were made at different LOTs, we examined whether a LOT adjustment or a CEP offset may be appropriate in this review. As we found only one LOT in the home market, it was not possible to make a LOT adjustment to home market sales, because such an adjustment is dependent on our ability to identify a pattern of consistent price differences between the home market sales on which NV is based and home market sales at the LOT of the export transaction. See 19 CFR 351.412(d)(1)(ii). Furthermore, we have no other information that provides an appropriate basis for determining a LOT adjustment. Because the data available do not form an appropriate basis for making a LOT adjustment, and because the NV LOT is at a more advanced stage of distribution than the CEP LOT, we have made a CEP offset to NV in accordance with section 773(a)(7)(B) of the Tariff Act.

Mexinox indicated it made CEP sales through its U.S. affiliate, Mexinox USA, in the following four channels of distribution: (1) Direct shipments to unaffiliated customers; (2) stock sales from the San Luis Potosi (SLP) factory; (3) sales to unaffiliated customers through Mexinox USA's warehouse inventory; and (4) sales through Ken-Mac. See Mexinox's October 3, 2007, section A questionnaire response at 27 through 31. Ken-Mac is an affiliated service center located in the United States which purchases S4 in coils produced by Mexinox S.A. and then resells the merchandise (after, in some instances, further manufacturing) to unaffiliated U.S. customers.

In accordance with section 772(b) of the Tariff Act, CEP is the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise, or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. We find Mexinox properly classified all of its U.S. sales of subject merchandise as CEP transactions because such sales were made in the United States through Mexinox USA or Ken-Mac to unaffiliated purchasers. We based CEP on packed prices to unaffiliated purchasers in the United States sold by Mexinox USA or its affiliated reseller, Ken-Mac. We made adjustments for billing adjustments, discounts and rebates where applicable. We also made deductions for movement expenses in accordance with section 772(c)(2)(A) of the Tariff Act. These expenses included, where appropriate: foreign inland freight, foreign brokerage and handling, inland insurance, U.S. customs duties, U.S. inland freight, U.S. brokerage, and U.S. warehousing expenses. As directed by section 772(d)(1) of the Tariff Act, we deducted those selling expenses associated with economic activities occurring in the United States, including direct selling expenses ( i.e., credit costs, warranty expenses, and a certain expense of proprietary nature), commissions, inventory carrying costs, and other indirect selling expenses. We also made an adjustment for profit in accordance with section 772(d)(3) of the Tariff Act. We used the expenses as reported by Mexinox made in connection with its U.S. sales, with the exception of the U.S. indirect selling expense ratio which we recalculated. See “Analysis of Data Submitted by ThyssenKrupp Mexinox S.A. de C.V. for the Preliminary Results of the Antidumping Duty Administrative Review of S4 in Coils from Mexico” (Preliminary Analysis Memorandum) from Maryanne Burke, Trade Analyst, to the File, dated July 30, 2008.

For sales in which the material was sent to an unaffiliated U.S. processor, we made an adjustment based on the transaction-specific further-processing expenses incurred by Mexinox USA. In addition, the U.S. affiliated reseller Ken-Mac performed some further manufacturing for its sales to unaffiliated U.S. customers. For these sales, we deducted the cost of further processing in accordance with section 772(d)(2) of the Tariff Act. In calculating the cost of further manufacturing for Ken-Mac, we relied upon Ken-Mac's reported cost of further manufacturing materials, labor and overhead. We also included amounts for further manufacturing general and administrative expenses (G&A), as reported in Mexinox's May 19, 2008, supplemental section D questionnaire response.

To determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV ( i.e. , the aggregate volume of home market sales of the foreign like product is greater than five percent of the aggregate volume of U.S. sales), we compared Mexinox's volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(B) of the Tariff Act. Because Mexinox'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 for subject merchandise, we determined the home market was viable. See, e.g. , Mexinox's April 7, 2008, supplemental questionnaire response covering sections A through C and E at Attachment A-26.

Sales to affiliated customers in the home market not made at arm's-length prices are excluded from our analysis because we consider them to be outside the ordinary course of trade. See section 773(f)(2) of the Tariff Act; see also 19 CFR 351.102(b). Consistent with 19 CFR 351.403(c) and (d) and agency practice, “the Department may calculate NV based on sales to affiliates if satisfied that the transactions were made at arm's length.” See China Steel Corp. v. United States , 264 F. Supp. 2d 1339, 1365 (CIT 2003). To test whether the sales to affiliates were made at arm's-length prices, we compared, on a model-specific basis, the starting prices of sales to affiliated and unaffiliated customers, net of all direct selling expenses, billing adjustments, discounts and rebates, movement charges and packing. Where prices to the affiliated party were, on average, within a range of 98 to 102 percent of the price of identical or comparable merchandise to the unaffiliated parties, we determined that the sales made to the affiliated party were at arm's length. See Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course of Trade , 67 FR 69186, 69194 (November 15, 2002). We found both affiliated home market customers failed the arm's length test and, in accordance with the Department's practice, we excluded sales to these affiliates from our analysis.

Because we disregarded sales of certain products made at prices below the cost of production (COP) in the most recently completed review of S4 in coils from Mexico ( see Stainless Steel Sheet and Strip in Coils from Mexico; Preliminary Results of Antidumping Duty Administrative Review , 71 FR 35618, 35623 (June 21, 2006), unchanged in Stainless Steel Sheet and Strip in Coils from Mexico; Final Results of Antidumping Duty Administrative Review , 71 FR 76978 (December 22, 2006) ( 2004-2005 Final Results ) we had reasonable grounds to believe or suspect that sales of the foreign like product under consideration for the determination of NV in this review for Mexinox may have been made at prices below the COP, as provided by section 773(b)(2)(A)(ii) of the Tariff Act. Pursuant to section 773(b)(1) of the Tariff Act, we initiated a COP investigation of sales by Mexinox. We relied on home market sales and COP information provided by Mexinox in its questionnaire responses, except where noted below:

ThyssenKrupp Nirosta GmbH (TKN) and ThyssenKrupp AST, S.p.A. (TKAST), hot band producers affiliated with Mexinox, sold hot band to Mexinox USA, which in turn sold hot band to Mexinox S.A. Hot band is considered a major input to the production of S4 in coils. Section 773(f)(3) of the Tariff Act, (the major input rule) states:

Paragraph 2 of section 773(f) (transactions disregarded) states:

For these preliminary results, we evaluated the transfer prices between Mexinox and its affiliated hot band suppliers on a grade-specific basis. For certain grades of hot band, all three elements of the major input analysis were available. These grades of hot band account for the majority of volume of hot band that Mexinox purchased from TKN and TKAST during the POR. As such, we find these purchases provide a reasonable basis for the Department to measure the preferential treatment, if any, given to Mexinox for purchases of hot band from TKN and TKAST during the POR. Therefore, we adjusted the reported costs to reflect the higher of transfer prices, COP, or market prices of hot band, where available. Additionally, we relied on these results to adjust the reported cost for grades where all three elements of the major input were not available. See the Department's Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results—ThyssenKrupp Mexinox S.A. de C.V. from LaVonne Clark, Senior Accountant, to Neal M. Halper, Director, Office of Accounting, dated July 30, 2008 (Cost Calculation Memorandum).

In certain cases, where market prices have not been available, the Department has constructed market prices in order to perform the major input analysis. See Certain Polyester Staple Fiber from Korea: Final Results of the 2005-2006 Antidumping Duty Administrative Review, 72 FR 69663 (December 10, 2007) ( PSF from Korea ) and accompanying Issues and Decision Memorandum at Comment 5 and Certain Hot-Rolled Carbon Steel Flat Product from Thailand: Final Results of Antidumping Duty Administrative Review and Partial Rescission of Antidumping Duty Administrative Review, 72 FR 27802 (May 17, 2007) ( Carbon Steel Flat Products from Thailand ) and accompany Issues and Decision Memorandum at Comment 3. In the instant case we have applied the results of our analysis of those grades where market prices were available to those grades where market prices were not available. We find this approach to be reasonable because the grades where market prices are available constitute the majority of hot band purchased by Mexinox from the affiliated parties. As such, these purchases provide reasonable grounds to determine the arm's length nature of purchases between Mexinox and its affiliates during the POR. For further details, see Cost Calculation Memorandum.

Because we have determined that shorter cost periods are appropriate for the COP analysis of austenitic grades, we have performed the cost-based part of the major input analysis by quarter for all grades of austenitic hot band. For all other grades of hot band, we have performed the cost-based part of the major input analysis on a POR basis.

We also revised Mexinox's reported COP to include depreciation expenses related to a newly installed production line. We recalculated Mexinox's G&A expense rate to include employee profit sharing in the numerator, and adjusted for a certain provision accounted for during a prior period. We revised Mexinox's financial expense ratio to exclude certain interest income from accounts receivable and adjusted ThyssenKrupp AG's cost of goods sold to exclude packing expenses. See Cost Calculation Memorandum.

In determining whether to disregard home market sales made at prices below the COP, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Tariff Act, whether, within an extended period of time, such sales were made in substantial quantities, and whether such sales were made at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade. As noted in section 773(b)(1)(D) of the Tariff Act, prices are considered to provide for recovery of costs if such prices are above the weighted average per-unit COP for the period of investigation or review. In the instant case, we have relied on Mexinox's reported quarterly costs of austenitic grades of merchandise. Mexinox calculated the reported quarterly costs using a methodology that is similar to that used by the Department in cases of high-inflation ( see e.g. Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon-Quality Steel Plate Products from Indonesia, 64 FR 73164 (December 29, 1999) at Comment 1). Because this methodology restates the quarterly costs on an equivalent basis, by calculating an annual weighted-average COP for the POR and then restating it to each respective quarter, we find Mexinox's reported quarterly costs meet the requirements of section 773(b)(1)(D) of the Tariff Act.

Where less than 20 percent of the respondent's home market sales of a given model were at prices below the COP, we did not disregard any below-cost sales of that model because we determined that the below-cost sales were not made within an extended period of time and in “substantial quantities.” Where 20 percent or more of the respondent's home market sales of a given model were at prices less than the COP, we disregarded the below-cost sales because: (1) they were made within an extended period of time in “substantial quantities,” in accordance with sections 773(b)(2)(B) and (C) of the Tariff Act; and (2) based on our comparison of prices to the weighted-average COPs for the POR, they were at prices which would not permit the recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Tariff Act.

Our cost test for Mexinox revealed that, for home market sales of certain models, less than 20 percent of the sales of those models were at prices below the COP. We therefore retained all such sales in our analysis and used them as the basis for determining NV. Our cost test also indicated that for home market sales of other models, more than 20 percent were sold at prices below the COP within an extended period of time and were at prices which would not permit the recovery of all costs within a reasonable period of time. Thus, in accordance with section 773(b)(1) of the Tariff Act, we excluded these below-cost sales from our analysis and used the remaining above-cost sales as the basis for determining NV.

In accordance with section 773(e) of the Tariff Act, we calculated CV based on the sum of Mexinox's material and fabrication costs, SG&A expenses, profit, and U.S. packing costs. We calculated the COP component of CV as described above in the “Cost of Production Analysis” section of this notice. In accordance with section 773(e)(2)(A) of the Tariff Act, we based SG&A expenses and profit on the amounts incurred and realized by the respondent in connection with the production and sale of the foreign like product in the ordinary course of trade, for consumption in the foreign country.

We calculated NV based on prices to unaffiliated customers or prices to affiliated customers we determined to be at arm's length. Mexinox S.A. reported home market sales in Mexican pesos, but noted certain home market sales were invoiced in U.S. dollars during the POR. See Mexinox's October 29, 2007, section B questionnaire response at B-26 and B-27. In our margin calculation we used the currency of the sale invoice at issue and applied the relevant adjustments in the actual currency invoiced or incurred by Mexinox. We accounted for billing adjustments, discounts, and rebates, where appropriate. We also made deductions, where appropriate, for foreign inland freight, insurance, handling, and warehousing, pursuant to section 773(a)(6)(B) of the Tariff Act. In addition, we made adjustments for differences in cost attributable to differences in physical characteristics of the merchandise compared pursuant to section 773(a)(6)(C)(ii) of the Tariff Act and 19 CFR 351.411. We also made adjustments for differences in circumstances of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410. We made COS adjustments for imputed credit expenses and warranty expenses. As noted above in the “Level of Trade” section of this notice, we also made an adjustment for the CEP offset in accordance with section 773(a)(7)(B) of the Tariff Act. Finally, we deducted home market packing costs and added U.S. packing costs in accordance with sections 773(a)(6)(A) and (B) of the Tariff Act.

We used Mexinox's home market adjustments and deductions as reported, except for certain handling expenses and imputed credit expenses. We have recalculated the handling expenses incurred by Mexinox's home market affiliate, Mexinox Trading, and applied the revised ratio to those home market sales for which Mexinox reported a handling expense. We calculated imputed credit expenses based on the short-term borrowing rate associated with the currency of each home market sale transaction. See Preliminary Analysis Memorandum. Our methodology for calculating handling charges and imputed credit expenses is consistent with past administrative reviews of this case. See, e.g. , 2005-2006 Final Results, as amended, and 2004-2005 Final Results.

Where we were unable to find a home market match of such or similar merchandise, in accordance with section 773(a)(4) of the Tariff Act, we based NV on CV. Where appropriate, we made adjustments to CV in accordance with section 773(a)(8) of the Tariff Act.

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

As a result of our review we preliminarily determine the following weighted-average dumping margin exists for the period July 1, 2006 through June 30, 2007:

The Department will disclose calculations performed within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). An interested party may request a hearing within thirty days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, will be held 37 days after the date of publication, or the first business day thereafter, unless the Department alters the date per 19 CFR 351.310(d). Interested parties may submit case briefs no later than 30 days after the date of publication of these preliminary results of review. See 19 CFR 351.309(c). Rebuttal briefs limited to issues raised in the case briefs may be filed no later than five days after the time limit for submitting the case briefs. See 19 CFR 351.309(d). Parties who submit argument in these proceedings 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, parties submitting case briefs and/or rebuttal briefs are requested to provide the Department with an additional copy of the public version of any such argument on diskette. The Department will issue final results of this administrative review, including the results of our analysis of the issues in any such argument or at a hearing, within 120 days of publication of these preliminary results.

Upon completion of this administrative review, the Department shall determine, and United States Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we will calculate importer-specific ad valorem assessment rates for the merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales made during the POR to the total customs value of the sales used to calculate those duties. The total customs value is based on the entered value reported by Mexinox for all U.S. entries of subject merchandise initially purchased for consumption to the United States made during the POR. See Preliminary Analysis Memorandum. In accordance with 19 CFR 356.8(a), the Department intends to issue assessment instructions to CBP on or after 41 days following the publication of the final results of review.

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.

Furthermore, the following cash deposit requirements will be effective for all shipments of S4 in coils from Mexico entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Tariff Act: (1) The cash deposit rate for the reviewed company will be the rate established in the final results of this review, except if the rate is less than 0.50 percent ( de minimis within the meaning of 19 CFR 351.106(c)(1)), the cash deposit will be zero; (2) for previously 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, or the original 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) the cash deposit rate for all other manufacturers or exporters will continue to be the all-others rate of 30.85 percent, which is the all-others rate established in the LTFV investigation. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order; Stainless Steel Sheet and Strip in Coils from Mexico, 64 FR 40560 (July 27, 1999). These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

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 entries 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.

We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i) of the Tariff Act.

On July 24, 1996, the Department published in the Federal Register the antidumping duty order on pasta from Italy. See Notice of Antidumping Duty Order and Amended Final Determination of Sales at Less Than Fair Value: Certain Pasta From Italy , 61 FR 38547 (July 24, 1996).

On July 3, 2007, the Department published a notice of opportunity to request an administrative review of the antidumping duty order on certain pasta from Italy. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation: Opportunity to Request Administrative Review , 72 FR 36420 (July 3, 2007). We received requests for review from petitioners  1 and from individual Italian exporters/producers of pasta, in accordance with 19 CFR 351.213(b)(1) and (2). On August 24, 2007, the Department published the notice of initiation of this antidumping duty administrative review covering the period July 1, 2006, through June 30, 2007, listing the following companies as respondents: Atar S.r.L. (“Atar”), Domenico Paone fu Erasmo S.p.A., F. Divella SpA (“Divella”), Industria Alimentare Colavita S.p.A., and Pasta Zara SpA 1 (“Zara 1”) and Pasta Zara SpA 2 (“Zara 2”) (collectively, “Zara”), Pastificio Carmine Russo, Pastificio Di Martino Gaetano & F. lli SrL., Pastificio Felicetti SrL, Pastificio Fratelli Pagani S.p.A., Pastificio Russo di Cicciano, Rummo S.p.A. Molino e Pastificio, and Valdigrano Di Flavio Pagani SrL. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part , 72 FR 48613 (August 24, 2007) (“ Initiation Notice ”).

On October 15, 2007, due to the significant number of requests received and then current resource constraints, the Department selected the three exporters/producers accounting for the largest volume of exports—Atar, Divella, and Zara, as mandatory respondents. 2

The following companies self-requested that the Department conduct an administrative review: Atar, Domenico Paone fu Erasmo S.p.A., Industria Alimentare Colavita S.p.A., Pastificio Carmine Russo, Pastificio Fratelli Pagani S.p.A. [sic], Pastificio Russo di Cicciano, Rummo S.p.A. Molino e Pastificio, and Valdigrano Di Flavio Pagani SrL. The companies subsequently timely withdrew their request for review. Therefore, on December 10, 2007, the Department rescinded the review with respect to these companies. 3

On January 18, 2008, the Department initiated an investigation to determine whether Divella and Zara were selling pasta in Italy at prices below the cost of production (“COP”). 4

Between August 2006 and May 2007, the Department issued its initial questionnaire and supplemental questionnaires to each respondent, as applicable. We received responses to the Department's initial and supplemental questionnaires on December 12, 2007, February 15, 2008, March 31, 2008, April 14, 2008, May 5, 2008, and July 3, 2008, from Divella. Zara provided responses to the Department's initial and supplemental questionnaires on December 12, 2007, April 8, 2008, May 27, 2008, and July 1, 2008. On January 2, 2008, and March 6, 2008, and March 27, 2008, and May 29, 2008, the petitioners filed comments on Divella's responses. On January 14, 2008, March 7, 2008, and on May 21, 2008, petitioners filed comments on Zara's responses. On March 12, 2008, the Department fully extended the due date for the preliminary results of review from April 1, 2008, to July 30, 2008. See Certain Pasta from Italy: Extension of Time Limits for the Preliminary Results of Eleventh Antidumping Duty Administrative Review , 73 FR 13208 (March 12, 2008).

Imports covered by this order are shipments of certain non-egg dry pasta in packages of five pounds four ounces or less, whether or not enriched or fortified or containing milk or other optional ingredients such as chopped vegetables, vegetable purees, milk, gluten, diastasis, vitamins, coloring and flavorings, and up to two percent egg white. The pasta covered by this scope is typically sold in the retail market, in fiberboard or cardboard cartons, or polyethylene or polypropylene bags of varying dimensions.

Excluded from the scope of this order are refrigerated, frozen, or canned pastas, as well as all forms of egg pasta, with the exception of non-egg dry pasta containing up to two percent egg white. Also excluded are imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by the Instituto Mediterraneo Di Certificazione, by Bioagricoop Scrl, by QC&I International Services, by Ecocert Italia, by Consorzio per il Controllo dei Prodotti Biologici, by Associazione Italiana per l'Agricoltura Biologica, or by Instituto per la Certificazione Etica e Ambientale (“ICEA”) are also excluded from this order. See Memorandum from Audrey Twyman to Susan Kuhbach, dated February 28, 2006, “Recognition of Instituto per la Certificazione Etica e Ambientale.”

The merchandise subject to this order is currently classifiable under subheadings 1901.90.95 and 1902.19.20 of the Harmonized Tariff Schedule of the United States (“ HTSUS ”). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to the order is dispositive.

In accordance with section 771(16) of the Tariff Act of 1930, as amended (“the Act”), we first attempted to match contemporaneous sales of products sold in the United States and comparison markets that were identical with respect to the following characteristics: (1) Pasta shape; (2) type of wheat; (3) additives; and (4) enrichment. When there were no sales of identical merchandise in the comparison market to compare with U.S. sales, we compared U.S. sales with the most similar product based on the characteristics listed above, in descending order of priority. When there were no appropriate comparison market sales of comparable merchandise, we compared the merchandise sold in the United States to constructed value (“CV”), in accordance with section 773(a)(4) of the Act.

For purposes of the preliminary results, where appropriate, we have calculated the adjustment for differences in merchandise based on the difference in the variable cost of manufacturing (“VCOM”) between each U.S. model and the most similar home market model selected for comparison.

To determine whether sales of certain pasta from Italy were made in the United States at less than NV, we compared the export price (“EP”) or constructed export price (“CEP”) to the NV, as described in the “Export Price/Constructed Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(2) of the Act, we calculated monthly weighted-average prices for NV and compared these to individual U.S. transactions. See the Department's “Calculation Memorandum for F. Divella S.p.A.” (“Divella's calculation memo”) see also “Calculation Memorandum for Pasta Zara S.p.A.” (“Zara's calculation memo”), both dated July 30, 2008, available in the Central Records Unit (CRU) in Room 1117 of the Main Commerce Building.

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. We calculated EP when the merchandise was sold by the producer or exporter outside of the United States directly to the first 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 sale to the first unaffiliated purchaser in the United States of the subject merchandise. We based EP and CEP on the packed cost-insurance-freight (“CIF”), ex-factory, free-on-board (“FOB”), or delivered prices to the first unaffiliated customer in, or for exportation to, the United States. When appropriate, we reduced these prices to reflect discounts and rebates.

In accordance with section 772(c)(2) of the Act, we made deductions, where appropriate, for movement expenses including inland freight from plant or warehouse to port of exportation, foreign brokerage, handling and loading charges, export duties, international freight, marine insurance, U.S. inland freight expenses, warehousing, and U.S. duties. In addition, when appropriate, we increased EP or CEP as applicable, by an amount equal to the countervailing duty rate attributed to export subsidies in the most recently completed countervailing duty administrative review, in accordance with section 772(c)(1)(C) of the Act.

Zara's U.S. sales are made through Zara USA, an affiliated subsidiary in the United States. Zara argues that its U.S. sales should be treated as EP because the pasta is shipped directly from Italy to the U.S. customer, and that Zara USA's role is minimal as it has no employees and its functions are performed by an accountant/consultant. Zara states that Zara USA is the importer of record, and that Zara USA receives an invoice from the U.S. customs broker, which it then pays. Zara USA invoices the unaffiliated U.S. customer in the United States and also receives payment from the unaffiliated U.S. customers and deposits the checks into Zara USA's bank account. Zara states that in terms of document flow, Zara sells to Zara USA, and Zara USA sells to the American customer, who pays Zara USA. See Zara's April 8, 2008, questionnaire response at pages 39-41.

The Department finds that the transactions at issue constitute CEP rather than EP sales. First, Zara's argument regarding functions performed by Zara USA is misplaced because the Department no longer employs a function-driven approach known as the “PQ” test in determining whether sales are EP or CEP.

As the U.S. Court of Appeals for the Federal Circuit explained:

Thus, the primary focus in determining whether a sale is properly classified as EP or CEP is: (1) The identity of the seller of subject merchandise to the first unaffiliated U.S. customer; and (2) the location of the sale to the first unaffiliated U.S. customer. 6 Because the Federal Circuit invalidated the “PQ” test in AK Steel , the Department will not conduct an analysis of the relative functions or activities performed by Zara USA in the sales process.

In AK Steel , the Court held that the “seller” is the party who contracts to sell. 7 In Corus Staal , the Court stated “{a}s the material terms of the sale or agreement to sell were not fixed until the final invoice, Commerce could properly conclude that the final invoices determined when a sale or agreement to sell first occurred.”  8 In this case, even though the U.S. customer places the order directly with Zara, the record evidence suggests that the terms of sale are not finalized prior to invoice date. As the invoice issued to the first unaffiliated customer identifies Zara USA as the seller of subject merchandise, and as Zara USA serves as importer of record, thus transferring title to the first unaffiliated purchaser in the United States, we preliminarily find that the subject merchandise is first sold in the United States to an unaffiliated U.S. customer, and thus CEP is warranted. See e.g., Certain New Pneumatic Off-The-Road Tires from the People's Republic of China: Final Affirmative Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances , 73 FR 40485 (July 15, 2008). See also , Zara's calculation memo.

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 (advertising, cost of credit, warranties, banking, slotting fees, and commissions paid to unaffiliated sales agents). In addition, we deducted indirect selling expenses that related to economic activity in the United States. These expenses include certain indirect selling expenses incurred by its affiliated U.S. distributors. We also deducted from CEP an amount for profit in accordance with sections 772(d)(3) and (f) of the Act. See Divella's calculation memo, see also Zara's calculation memo.

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 each respondent's volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise. Pursuant to sections 773(a)(1)(B) of the Act, because Divella and Zara each 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 for both Divella and Zara.

With respect to Divella, we made the following COP and CV adjustments for the preliminary results. First, we revised the yielded per-unit cost of semolina reported in the cost database to include the transportation costs related to the sales of by-products, costs incurred to transport semolina from the wheat mill to the pasta plant, property taxes, and an adjustment made to the June 30, 2007, durum wheat inventory. Second, we revised the fixed overhead costs of the pasta plant to include property taxes and other operating costs. Third, we revised the general and administrative (“G&A”) expense rate to include property taxes, other operating costs, and various litigation and settlement losses. In addition, the G&A expense ratio denominator was revised to exclude the fixed overhead costs related to packing and include transportation costs related to the sales of by-products. Finally, we revised Divella's net financial expenses to exclude dividend income. For further discussion of these adjustments for Divella, see the Memorandum from Sheikh Hannan to Neal Halper entitled, “Cost of Production and Constructed Value Adjustments for the Preliminary Results—F. Divella SpA,” dated July 30, 2008.

With respect to Zara, we revised Zara 1 and Zara 2's reported database to reflect differences in the originally submitted trial balance and the finalized trial balance used to prepare the audited financial statements. Additionally, we included credit notes for purchases of semolina for both companies and for Zara 2, we included water costs and purchases of semolina from Zara 1 in the cost of manufacturing (“COM”). We also included certain non-operating expenses in the G&A expenses. Further, we adjusted Zara 1's financial expenses to exclude certain income items generated from long-term assets and losses related to investment activity. Last, we weight-averaged Zara 1 and Zara 2's respective cost databases to calculate one weighted-average COP for the POR. For further discussion of these adjustments for Zara, see the Memorandum from Christopher Zimpo to Neal Halper entitled, “Cost of Production and Constructed Value Adjustments for the Preliminary Results—Pasta Zara SpA,” dated July 30, 2008.

Before making any comparisons to NV, we conducted a COP analysis of Divella and Zara pursuant to section 773(b) of the Act, to determine whether Divella's and Zara's comparison market sales were made at prices below the COP. We calculated the COP based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for selling, general, and administrative (“SG&A”) expenses and packing, in accordance with section 773(b)(3) of the Act.

As required under section 773(b)(2) of the Act, we compared the weighted-average COP to the per-unit price of the comparison market sales of the foreign like product to determine whether these sales had been made at prices below the COP within an extended period of time in substantial quantities, and whether such prices were sufficient to permit the recovery of all costs within a reasonable period of time. We determined the net comparison market prices for the below-cost test by subtracting from the gross unit price any applicable movement charges, discounts, rebates, direct and indirect selling expenses (also subtracted from the COP), and packing expenses. See Divella's calculation memo, see also Zara's calculation memo.

Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 percent of 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 a respondent's sales of a given product during the POR were at prices less than the COP we determined such sales to have been made in “substantial quantities.” See section 773(b)(2)(C) of the Act. The sales were made within an extended period of time, in accordance with section 773(b)(2)(B) of the Act, because they were made over the course of the POR. In such cases, because we compared prices to POR-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. Therefore, for Divella and Zara, we disregarded below-cost sales of a given product of 20 percent or more and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act. See Divella's calculation memo, see also Zara's calculation memo.

We calculated NV based on ex-works, FOB or delivered prices to comparison market customers. We made deductions from the starting price, when appropriate, for handling, loading, inland freight, warehousing, inland insurance, discounts, and rebates. In accordance with sections 773(a)(6)(A) and (B) of the Act, we added U.S. packing costs and deducted comparison market packing, respectively. In addition, we made circumstance-of-sale adjustments for direct expenses, including imputed credit expenses, advertising, warranty expenses, commissions, bank charges, and billing adjustments, in accordance with section 773(a)(6)(C)(iii) of the Act.

We also made adjustments for Divella and Zara, in accordance with 19 CFR 351.410(e), for indirect selling expenses incurred in the home market or the United States where commissions were granted on sales in one market but not in the other, the “commission offset.” Specifically, where commissions are incurred in one market, but not in the other, we will limit the amount of such allowance to the amount of either the selling expenses incurred in the one market or the commissions allowed in the other market, whichever is less.

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 VCOM for the foreign like product and subject merchandise, using POR-average costs.

Sales of pasta purchased by the respondents from unaffiliated producers and resold in the comparison market were disregarded. See Divella's calculation memo, see also Zara's calculation memo.

In accordance with section 773(a)(1)(B) of the Act, we determined NV based on sales in the comparison market at the same level of trade (“LOT”) as the EP and CEP sales, to the extent practicable. When there were no sales at the same LOT, we compared U.S. sales to comparison market sales at a different LOT. When NV is based on CV, the NV LOT is that of the sales from which we derive SG&A expenses and profit.

Consistent with 19 CFR 351.412, to determine whether comparison market sales were at a different LOT, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated (or arm's-length) customers. If the comparison market sales were at a different LOT and the differences affect 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 LOT of the export transaction, we will make an LOT adjustment under section 773(a)(7)(A) of the Act.

Finally, if the NV LOT is more remote from the factory than the CEP LOT and there is no basis for determining whether the differences in LOT between NV and CEP affected price comparability, we will grant a CEP offset, as provided in section 773(a)(7)(B) of the Act. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 (November 19, 1997).

Both respondents claim two LOTs in the home market. Divella reported that it sold through three channels of distribution to seven customer categories. Divella reported that two of the seven customer categories constituted a separate LOT because these two customer categories had a greater intensity of selling activities. Zara reported that it sold through three channels of distribution to 14 customer categories. Zara claimed that six of the customer categories were at a different LOT because of a greater intensity of selling activities.

We disagree with both Divella and Zara that there are two LOTs in the home market. Section 351.412(c)(2) of the Department's regulations provides that: The Department will determine that sales are made at different LOTs if they are made at different marketing stages (or their equivalent). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stage of marketing. Some overlap in selling activities will not preclude a determination that two sales are at different stages of marketing.

Our analysis of the selling activities for Divella shows that there is overlap in these activities for channels of distribution and customer categories. In other words, Divella performs similar selling activities for all customer categories and channels of distribution. Although there is greater intensity of these activities for some of the claimed customer categories, this, in and of itself, does not show a substantial difference in selling activities that would form the basis for finding a different LOT. See e.g., Certain Frozen Warmwater Shrimp from Ecuador: Final Results of Antidumping Duty Administrative Review, 72 FR 52070 (September 12, 2007), and accompanying Issues and Decision Memorandum at Comment 4. Due to the proprietary nature of this issue, please refer to Divella's calculation memo for further discussion.

Our analysis of the selling activities for Zara shows that Zara also performs similar selling activities for different customer categories, although some of the activities were at different levels of intensity. Moreover, some selling activities within the claimed LOT1 are at higher level of intensity while other selling activities are at lower level of intensity than the same selling activities in the claimed LOT2. In addition, there is overlap among the channels of distribution for the different customer categories in these two claimed LOTs. The differences in Zara's selling activities chart do not rise to a level of substantial differences that would support a finding that there are two LOTs in the home market. Due to the proprietary nature of this issue, please refer to Zara's calculation memo for further discussion.

While Divella and Zara attempted to further support their LOT claims by submitting an analysis comparing the average volume per invoice sold to these different customer categories, the Department does not normally consider average quantities as part of our LOT analysis. See e.g., Notice of Final Results of the Sixth Administrative Review of the Antidumping Duty Order on Certain Pasta from Italy and Determination Not to Revoke in Part, 69 FR 6255 (February 10, 2004).

In the U.S. market, both Divella and Zara reported that their sales were made through one channel of distribution to one customer category, therefore, at one LOT. The Department has determined that Divella's and Zara's home market sales were made at LOT1 and at the same stage of marketing as the U.S. sales LOT. Therefore, the Department will not make an LOT adjustment for Divella or Zara's sales to the United States.

For purposes of these preliminary results, we made currency conversions in accordance with section 773A(a) of the Act, based on the official exchange rates published by the Federal Reserve Bank. See Divella's calculation memo, see also Zara's calculation memo.

As a result of our review, we preliminarily determine that the following weighted-average percentage margins exist for the period July 1, 2006, through June 30, 2007, for the mandatory respondents:

For those companies not selected as mandatory respondents, we preliminarily determine that the following simple average percentage margin (based on the two reviewed companies) exists for the period July 1, 2006, through June 30, 2007:

The Department will disclose the calculations performed for these preliminary results within five days of the date of publication of this notice to the parties of this proceeding, in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). The Department intends to verify the information upon which we will rely in making our final determination. As a result, we intend to establish the briefing schedule upon the completion of verification.

Pursuant to 19 CFR 351.213(h), the Department intends to issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, or at a hearing, if requested, within 120 days of publication of these preliminary results.

Pursuant to 19 CFR 351.212(b), the Department calculated an assessment rate for each importer of the subject merchandise. Upon issuance of the final results of this administrative review, if any importer-specific assessment rates calculated in the final results are above de minimis ( i.e., at or above 0.5 percent), the Department will issue appraisement instructions directly to CBP to assess antidumping duties on appropriate entries by applying the assessment rate to the entered value of the merchandise. For assessment purposes, we calculated importer-specific assessment rates for the subject merchandise by aggregating the dumping margins for all U.S. sales to each importer and dividing the amount by the total entered value of the sales to that importer. Where appropriate, to calculate the entered value, we subtracted international movement expenses ( e.g., international freight) from the gross sales value. For the responsive companies which were not selected for individual review, we have calculated an assessment rate based on the simple average of the cash deposit rates calculated for the companies selected for individual review.

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 POR produced by companies included in these preliminary results of review for which the reviewed companies 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(ies) involved in the transaction. For a full discussion of this clarification, see Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).

To calculate the cash deposit rate for Divella and Zara, we divided its total dumping margin by the total net value of its sales during the review period. For the responsive companies which were not selected for individual review, we have calculated a cash deposit rate based on the simple average of the cash deposit rates calculated for the companies selected for individual review.

The following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of pasta from Italy entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for companies subject to this review will be the rate established in the final results of this review, except if the rate is less than 0.5 percent and, therefore, de minimis, no cash deposit will be required; (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 final results for a review in which that manufacturer or exporter participated; (3) if the exporter is not a firm covered in this review, a prior review, or the original less-than-fair-value (“LTFV”) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent final results 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 15.45 percent, the all-others rate established in the LTFV investigation. See Implementation of the Findings of the WTO Panel in US—Zeroing (EC): Notice of Determination Under Section 129 of the Uruguay Round Agreements Act and Revocations and Partial Revocations of Certain Antidumping Duty Orders, 72 FR 25261 (May 4, 2007). These cash deposit requirements, when imposed, shall remain in effect until further notice.

This notice 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 Secretary's presumption that reimbursement of antidumping duties occurred and increase the subsequent assessment of the antidumping duties by the amount of antidumping duties reimbursed.

These preliminary results of administrative review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).

On July 24, 1996, the Department published a countervailing duty order on certain pasta (“pasta” or “subject merchandise”) from Italy. See Notice of Countervailing Duty Order and Amended Final Affirmative Countervailing Duty Determination: Certain Pasta From Italy , 61 FR 38544 (July 24, 1996) (“ Pasta Order ”). On July 3, 2007, the Department published a notice of “Opportunity to Request Administrative Review” of this countervailing duty order for calendar year 2006, the period of review (“POR”). See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review , 72 FR 36420 (July 3, 2007). On July 31, 2007, we received requests for review from Garofalo, Valdigrano Di Flavio Pagani SrL (“Valdigrano”), Felicetti, and Prodotti Mediterranei, Inc. on behalf of De Cecco. On July 31, 2007, we received a request for review from New World Pasta Company, American Italian Pasta Company, and Dakota Growers Pasta Company (“petitioners”) for De Matteis. In accordance with 19 CFR 351.221(c)(1)(i), we published a notice of initiation of the review on August 24, 2007. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part , 72 FR 48613 (August 24, 2007).

On September 11, 2007, we issued countervailing duty questionnaires to the Commission of the European Union (“EU”), the Government of Italy (“GOI”), Garofalo, Valdigrano, Felicetti, De Cecco, and De Matteis. On October 16, 2007, Valdigrano withdrew its request for review. On November 5, 2007, we rescinded the review with respect to Valdigrano. See Certain Pasta from Italy: Notice of Partial Rescission of Countervailing Duty Administrative Review , 72 FR 62437 (November 5, 2007).

We received responses to our questionnaires in November 2007. We issued supplemental questionnaires to the respondents and GOI in February, March, April, May, June, and July 2008, and we received responses to our supplemental questionnaires in March, April, May, June, and July 2008.

The POR for which we are measuring subsidies is January 1, 2006, through December 31, 2006.

Imports covered by the order are shipments of certain non-egg dry pasta in packages of five pounds four ounces or less, whether or not enriched or fortified or containing milk or other optional ingredients such as chopped vegetables, vegetable purees, milk, gluten, diastasis, vitamins, coloring and flavorings, and up to two percent egg white. The pasta covered by this scope is typically sold in the retail market, in fiberboard or cardboard cartons, or polyethylene or polypropylene bags of varying dimensions.

Excluded from the scope of the order are refrigerated, frozen, or canned pastas, as well as all forms of egg pasta, with the exception of non-egg dry pasta containing up to two percent egg white. Also excluded are imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by the Instituto Mediterraneo Di Certificazione, Bioagricoop S.r.l., QC&I International Services, Ecocert Italia, Consorzio per il Controllo dei Prodotti Biologici, Associazione Italiana per l'Agricoltura Biologica, or Codex S.r.l. In addition, based on publicly available information, the Department has determined that, as of August 4, 2004, imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by Bioagricert S.r.l. are also excluded from this order. See Memorandum from Eric B. Greynolds to Melissa G. Skinner, dated August 4, 2004, which is on file in the Department's Central Records Unit (“CRU”) in Room B-099 of the main Department building. In addition, based on publicly available information, the Department has determined that, as of March 13, 2003, imports of organic pasta from Italy that are accompanied by the appropriate certificate issued by Instituto per la Certificazione Etica e Ambientale (ICEA) are also excluded from this order. See Memorandum from Audrey Twyman to Susan Kuhbach, dated February 28, 2006, entitled “Recognition of Instituto per la Certificazione Etica e Ambientale (ICEA) as a Public Authority for Certifying Organic Pasta from Italy” which is on file in the Department's Central Records Unit (“CRU”) in Room B-099 of the main Department building.

The merchandise subject to review is currently classifiable under items 1901.90.9095 and 1902.19.20 of the Harmonized Tariff Schedule of the United States (“ HTSUS ”). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise subject to the order is dispositive.

The Department has issued the following scope rulings to date:

(1) On August 25, 1997, the Department issued a scope ruling that multicolored pasta, imported in kitchen display bottles of decorative glass that are sealed with cork or paraffin and bound with raffia, is excluded from the scope of the antidumping and countervailing duty orders. See Memorandum from Edward Easton to Richard Moreland, dated August 25, 1997, which is on file in the CRU.

(2) On July 30, 1998, the Department issued a scope ruling finding that multipacks consisting of six one-pound packages of pasta that are shrink-wrapped into a single package are within the scope of the antidumping and countervailing duty orders. See Letter from Susan H. Kuhbach to Barbara P. Sidari, dated July 30, 1998, which is available in the CRU.

(3) On October 26, 1998, the Department self-initiated a scope inquiry to determine whether a package weighing over five pounds as a result of allowable industry tolerances is within the scope of the antidumping and countervailing duty orders. On May 24, 1999, we issued a final scope ruling finding that, effective October 26, 1998, pasta in packages weighing or labeled up to (and including) five pounds four ounces is within the scope of the antidumping and countervailing duty orders. See Memorandum from John Brinkmann to Richard Moreland, dated May 24, 1999, which is available in the CRU.

(4) On April 27, 2000, the Department self-initiated an anti-circumvention inquiry to determine whether Pastificio Fratelli Pagani S.p.A.'s importation of pasta in bulk and subsequent repackaging in the United States into packages of five pounds or less constitutes circumvention with respect to the antidumping and countervailing duty orders on pasta from Italy pursuant to section 781(a) of the Act and 19 CFR 351.225(b). See Certain Pasta from Italy: Notice of Initiation of Anti-Circumvention Inquiry of the Antidumping and Countervailing Duty Orders , 65 FR 26179 (May 5, 2000). On September 19, 2003, we published an affirmative finding of the anti-circumvention inquiry. See Anti-Circumvention Inquiry of the Antidumping and Countervailing Duty Orders on Certain Pasta from Italy: Affirmative Final Determinations of Circumvention of Antidumping and Countervailing Duty Orders , 68 FR 54888 (September 19, 2003).

Pursuant to 19 CFR 351.524(b), non-recurring subsidies are allocated over a period corresponding to the average useful life (“AUL”) of the renewable physical assets used to produce the subject merchandise. The Department's regulations create a rebuttable presumption that the AUL will be taken from the U.S. Internal Revenue Service's 1977 Class Life Asset Depreciation Range System (“IRS Tables”). See 19 CFR 351.524(d)(2). For pasta, the IRS Tables prescribe an AUL of 12 years. None of the responding companies or interested parties objected to this allocation period. Therefore, we have used the 12-year allocation period for all respondents.

Pursuant to 19 CFR 351.525(b)(6), the Department will attribute subsidies received by certain companies to the combined sales of those companies. Based on our review of the responses, we preliminarily find that “cross-ownership” exists with respect to certain companies, as described below, and we have attributed subsidies accordingly:

Pursuant to 19 CFR 351.524(d)(3)(i)(B), we used the national average cost of long-term, fixed-rate loans as a discount rate for allocating non-recurring benefits over time because no company for which we need such discount rates took out any loans in the years in which the government agreed to provide the subsidies in question. Consistent with past practice in this proceeding, for years prior to 1995, we used the Bank of Italy reference rate adjusted upward to reflect the mark-up an Italian commercial bank would charge a corporate customer. See , e.g. , Certain Pasta from Italy: Preliminary Results and Partial Rescission of the Eighth Countervailing Duty Administrative Review , 70 FR 17971 (April 8, 2005); Certain Pasta from Italy: Final Results of the Eighth Countervailing Duty Administrative Review , 70 FR 37084 (June 28, 2005) (unchanged in Final Results). For benefits received in 1995-2004, we used the Italian Bankers' Association (“ABI”) prime interest rate (as reported by the Bank of Italy), increased by the average spread charged by banks on loans to commercial customers plus an amount for bank charges. The Bank of Italy ceased reporting this rate in 2004. Because the ABI prime rate was no longer reported after 2004, for 2005 and 2006, we have used the “Bank Interest Rates on Euro Loans: Outstanding Amounts, Non-Financial Corporations, Loans With Original Maturity More Than Five Years” published by the Bank of Italy and provided by the GOI in its November 8, 2007, QR at Exhibit 5. We made the adjustments described above to this rate.

Law 64/86 provided assistance to promote development in the Mezzogiorno (the south of Italy). Grants were awarded to companies constructing new plants or expanding or modernizing existing plants. Pasta companies were eligible for grants to expand existing plants but not to establish new plants because the market for pasta was deemed to be close to saturated. Grants were made only after a private credit institution chosen by the applicant made a positive assessment of the project.

In 1992, the Italian Parliament abrogated Law 64/86 and replaced it with Law 488/92 ( see below). This decision became effective in 1993. However, companies whose projects had been approved prior to 1993 were authorized to continue receiving grants under Law 64/86 after 1993. De Matteis, Garofalo, and De Cecco received grants under Law 64/86 which conferred a benefit during the POR.

In the Pasta Investigation , 1 the Department determined that these grants confer a countervailable subsidy within the meaning of section 771(5) of the Tariff Act of 1930, as amended (“the Act”). They are a direct transfer of funds from the GOI bestowing a benefit in the amount of the grant. See section 771(5)(D)(i); see also 19 CFR 351.504(a). Also, these grants were found to be regionally specific within the meaning of section 771(5A)(D)(iv) of the Act. In this review, neither the GOI nor the responding companies have provided new information which would warrant reconsideration of our determination that these grants are countervailable subsidies.

In the Pasta Investigation , the Department treated the industrial development grants as non-recurring. No new information has been placed on the record of this review that would cause us to depart from this treatment. We have followed the methodology described in 19 CFR 351.524(b)(2) which directs us to allocate over time those non-recurring grants whose total authorized amount exceeds 0.5 percent of the recipient's sales in the year of authorization. Where the total amount authorized is less than 0.5 percent of the recipient's sales in the year of authorization, the benefit is countervailed in full (“expensed”) in the year of receipt. We determined that grants received by De Matteis, Garofalo, and De Cecco under Law 64/86 exceeded 0.5 percent of their sales in the year in which the grants were approved.

We used the grant methodology described in 19 CFR 351.524(d) to allocate the benefits from those grants that were allocated over time. We divided the benefit received by each company in the POR by its total sales in the POR.

On this basis, we preliminarily determine the countervailable subsidy from the Law 64/86 industrial development grants to be 0.05 percent ad valorem for De Matteis, 0.59 percent ad valorem for Garofalo, and 0.56 percent ad valorem for De Cecco. See Memorandum to the File, “2006 Preliminary Results Calculation Memorandum for De Matteis Agroalimentare S.p.A.,” dated July 30, 2008 (“De Matteis Calc Memo”); Memorandum to the File, “2006 Preliminary Results Calculation Memorandum for Pastificio Lucio Garofalo S.p.A.,” dated July 30, 2008 (“Garofalo Calc Memo”); and Memorandum to the File, “2006 Preliminary Results Calculation Memorandum for F.lli De Cecco di Filippo Fara San Martino S.p.A.,” dated July 30, 2008 (“De Cecco Calc Memo”).

In addition to the Law 64/86 industrial development grants discussed above, Law 64/86 also provided reduced-rate industrial development loans with interest contributions paid by the GOI on loans taken by companies constructing new plants or expanding or modernizing existing plants in the Mezzogiorno . As with the grants discussed above, pasta companies were eligible for interest contributions to expand existing plants, but not to establish new plants. The fixed-interest rates on these long-term loans were set at the reference rate with the GOI's interest contributions serving to reduce this rate. Although Law 64/86 was abrogated in 1992 (effective 1993), projects approved prior to 1993 were authorized to receive interest subsidies after 1993.

Garofalo and De Cecco had Law 64/86 industrial development loans outstanding during the POR.

In the Pasta Investigation , the Department determined that Law 64/86 loans confer a countervailable subsidy within the meaning of section 771(5) of the Act. They are a direct transfer of funds from the GOI providing a benefit in the amount of the difference between the benchmark interest rate and the interest rate paid by the companies after accounting for the GOI's interest contributions. See Section 751(5)(E)(ii). Also, these loans were found to be regionally specific within the meaning of section 771(5A)(D)(iv) of the Act. In this review, neither the GOI nor the responding companies have provided new information which would warrant reconsideration of our determination that these grants are countervailable subsidies.

In accordance with 19 CFR 351.505(c)(2), we calculated the benefit for the POR by computing the difference between the payments Garofalo and De Cecco made on their Law 64/86 loans net of GOI interest contributions and the payments Garofalo and De Cecco would have made on the benchmark loan. We divided the benefit received by Garofalo and De Cecco by their respective total sales in the POR.

On this basis, we determine the countervailable subsidy from the Law 64/86 industrial development loans to be 0.16 percent ad valorem for Garofalo and 0.02 percent ad valorem for De Cecco. See Garfalo Calc Memo and De Cecco Calc Memo.

In 1986, the EU initiated an investigation of the GOI's regional subsidy practices. As a result of this investigation, the GOI changed the regions eligible for regional subsidies to include depressed areas in central and northern Italy in addition to the Mezzogiorno . After this change, the areas eligible for regional subsidies are the same as those classified as Objective 1 (underdeveloped regions), Objective 2 (declining industrial regions), or Objective 5(b) (declining agricultural regions) areas by the EU. The new policy was given legislative form in Law 488/92 under which Italian companies in the eligible sectors (manufacturing, mining, and certain business services) may apply for industrial development grants.

Law 488/92 grants are made only after a preliminary examination by a bank authorized by the Ministry of Industry. On the basis of the findings of this preliminary examination, the Ministry of Industry ranks the companies applying for grants. The ranking is based on indicators such as the amount of capital the company will contribute from its own funds, the number of jobs created, regional priorities, etc. Grants are then made based on this ranking.

De Matteis, Garofalo, and De Cecco received grants under Law 488/92 which conferred a benefit during the POR. Based upon findings at verification, we adjusted De Matteis's reported disbursement amounts to include an interest amount received by De Matteis reflecting a lag in payment. See Memorandum to the File, “Verification of the Questionnaire Responses of De Matteis Agroalimentare S.p.A. in the 11 th Administrative Review,” dated July 30, 2008 (“De Matteis Verification Report”), at 8; see also De Matteis Calc Memo.

In the Second Administrative Review , 2 the Department determined that these grants confer a countervailable subsidy within the meaning of section 771(5) of the Act. They are a direct transfer of funds from the GOI bestowing a benefit in the amount of the grant. See section 771(5)(D)(i); see also 19 CFR 351.504(a). Also, these grants were found to be regionally specific within the meaning of section 771(5A)(D)(iv) of the Act. In this review, neither the GOI nor the responding companies have provided new information which would warrant reconsideration of our determination that these grants are countervailable subsidies.

In the Second Administrative Review , the Department treated the industrial development grants as non-recurring. No new information has been placed on the record of this review that would cause us to depart from this treatment. We have followed the methodology described in 19 CFR 351.524(b)(2) which directs us to allocate over time those non-recurring grants whose total authorized amount exceeds 0.5 percent of the recipient's sales in the year of authorization. Where the total amount authorized is less than 0.5 percent of the recipient's sales in the year of authorization, the benefit is expensed in the year of receipt. We determined that grants received by De Matteis, Garofalo, and De Cecco under Law 488/92 exceeded 0.5 percent of their sales in the year in which the grants were approved.

We used the grant methodology described in 19 CFR 351.524(d) to allocate the benefits over time. We divided the benefit received by each company in the POR by its total sales in the POR.

On this basis, we preliminarily determine the countervailable subsidy from the Law 488/92 industrial development grants to be 1.11 percent ad valorem for De Matteis, 0.81 percent ad valorem for Garofalo, and 0.25 percent ad valorem for De Cecco. See De Matteis Calc Memo, Garofalo Calc Memo, and De Cecco Calc Memo.

The ERDF is one of the EU's Structural Funds. It was created pursuant to the authority in Article 130 of the Treaty of Rome in order to reduce regional disparities in socio-economic performance within the EU. The ERDF program provides grants to companies located within regions which meet the criteria, as described above, of Objective 1, Objective 2, or Objective 5(b) under the Structural Funds.

De Matteis received a P.O.P. Grant from the Regione Campania in 1998. 3 The P.O.P. Grants were funded by the EU, the GOI, and the Regione Campania.

In the Pasta Investigation , the Department determined that ERDF P.O.P. Grants confer a countervailable subsidy within the meaning of section 771(5) of the Act. They are a direct transfer of funds from the GOI bestowing a benefit in the amount of the grant. See section 771(5)(D)(i); see also 19 CFR 351.504(a). Also, these grants were found to be regionally specific within the meaning of section 771(5A)(D)(iv) of the Act. In this review, neither the EU, the GOI, nor the responding companies have provided new information which would warrant reconsideration of our determination that ERDF grants are countervailable subsidies.

In the Pasta Investigation , the Department treated ERDF grants as non-recurring. No new information has been placed on the record of this review that would cause us to depart from this treatment. In accordance with 19 CFR 351.524(b)(2), we determined that the ERDF grant received by De Matteis exceeded 0.5 percent of its sales in the year in which the grant was approved, as was the case in the Fourth Administrative Review .

We used the grant methodology described in 19 CFR 351.524(d) to allocate the benefits over time. We divided the benefit received by De Matteis in the POR by its total sales in the POR.

On this basis, we preliminarily determine the countervailable subsidy from the ERDF P.O.P. Grant to be 0.05 percent ad valorem for De Matteis. See De Matteis Calc Memo.

Italian law allows companies, particularly those located in the Mezzogiorno region, to use a variety of exemptions from and reductions ( sgravi ) of payroll contributions that employers make to the Italian social security system for health care benefits, pensions, etc. The sgravi benefits are regulated by a complex set of laws and regulations, and are sometimes linked to conditions such as creating more jobs. We have found in past segments of this proceeding that benefits under some of these laws ( e.g. , Laws 183/76, 449/97, and 223/91) are available only to companies located in the Mezzogiorno and other disadvantaged regions. Certain other laws ( e.g. , Laws 407/90 and 863/84) provide benefits to companies all over Italy, but the level of benefits is higher for companies in the Mezzogiorno and other disadvantaged regions than for companies in other parts of the country. Still, other laws provide benefits that are not linked to any region.

In the Pasta Investigation and subsequent reviews, the Department determined that certain types of social security reductions and exemptions confer countervailable subsidies within the meaning of section 771(5) of the Act. They represent revenue foregone by the GOI bestowing a benefit in the amount of the savings received by the companies. See section 771(5)(D)(ii) of the Act. Also, they were found to be regionally specific within the meaning of section 771(5A)(D)(iv) of the Act because they were limited to companies in the Mezzogiorno or because the higher levels of benefits were limited to companies in the Mezzogiorno .

In the instant review, no party in this proceeding challenged our past determinations in the Pasta Investigation and subsequent reviews that sgravi benefits, generally, were countervailable for companies located within the Mezzogiorno region. However, the GOI has submitted information claiming that benefits provided under Article 8 of Law 223/91 should be found not countervailable. See Memorandum to the File, “GOI's June 11, 2008, Letter,” dated July 30, 2008.

The laws identified as having provided sgravi benefits during the POR are the following: Law 863/84 (De Matteis and Garofalo), Law 196/97 (De Matteis), Law 407/90 (De Matteis and Garofalo), Law 223/91 Article 8 Paragraph 2 (De Matteis), and Law 223/91 Article 25 Paragraph 9 (De Matteis). These companies are located in the Mezzogiorno region of Italy.

1) Law 863/84

Law 863/84 provides social security reductions or exemptions when a company hires a worker under a non-renewable contract with a term of 24 months or less and the contract includes an educational or training component. The GOI refers to these as “skilling” contracts. See GOI Verification Report, 4 at 10-11. The employer may receive reductions or exemptions from social security contributions for a period of up to 24 months. Id. Typically, employees hired under these contracts must be no more than 29 years old, but in the Mezzogiorno , the maximum age is 32 years old. Id. Also, a company in the Mezzogiorno is exempted from making social security contributions for employees hired under these skilling contracts, while companies in other areas of Italy received a 25 percent reduction in social security contributions. Id.

Legislative Decree (“L.D.”) 276/03 repealed the provision related to skilling contracts by private companies and, as of November 2004, no new skilling contracts could be made. Id. However, for skilling contracts entered into as of October 2004, benefits could be realized for the duration of the two-year period. Id.

In the Pasta Investigation , we determined Law 863/84 conferred a countervailable subsidy within the meaning of section 771(5) of the Act. The reduction or exemption of taxes is revenue forgone and is, therefore, a financial contribution within the meaning of section 771(5)(D)(ii) of the Act. The benefit is the difference in the amount of the tax savings between companies located in the Mezzigiorno and companies located in the rest of Italy in accordance with 19 CFR 351.509(a). Additionally, the program is regionally specific within the meaning of section 771(5A)(D)(iv) of the Act because higher levels of benefits are limited to companies in the Mezzogiorno region.

In accordance with 19 CFR 351.524(c) and consistent with our methodology in the Pasta Investigation and in reviews subsequent to the Pasta Investigation , we have treated social security reductions and exemptions as recurring benefits. To calculate the countervailable subsidy for De Matteis and Garofalo, we calculated the difference during the POR between the savings for each of these respondent companies located in the Mezzogiorno and the savings a company located in the rest of Italy would have received. This amount was divided by the respondent's total sales in the POR.

On this basis, we preliminarily determine the countervailable subsidy from Law 863/84 to be 0.01 percent ad valorem for De Matteis and 0.03 percent ad valorem for Garofalo. See De Matteis Calc Memo and Garofalo Calc Memo.

2) Law 196/97

Law 196/97 is closely related to Law 863/84. See GOI Verification Report, at 11-12. It provides additional exemptions for employers in the Mezzogiorno that hire on a long-term (or permanent) basis, employees hired under skilling contracts. Id. Law 196/97 permits such employers a total exemption from social security contributions for an additional 12-month period.

Benefits from Law 196/97 could only be requested after an employee had participated in a 24-month skilling contract under Law 863/84. As noted above, no new skilling contracts under Law 863/84 could be made after October 31, 2004. Thus, the last possible date to request exemptions under Law 196/97 was October 31, 2006. Moreover, because the exemption granted under Law 196/97 only lasts for twelve months, benefits were set to expire by October 31, 2007.

In the Fourth Administrative Review , we determined Law 196/97 confers a countervailable subsidy within the meaning of section 771(5) of the Act. The reduction or exemption of taxes is revenue forgone and is, therefore, a financial contribution within the meaning of section 771(5)(D)(ii) of the Act . The benefit is the amount of the tax savings in accordance with 19 CFR 351.509(a). Additionally, the program is regionally specific within the meaning of section 771(5A)(D)(iv) of the Act because benefits are limited to companies in the Mezzogiorno region.

In accordance with 19 CFR 351.524(c) and consistent with our methodology in the Pasta Investigation and in reviews subsequent to the Pasta Investigation , we have treated social security reductions and exemptions as recurring benefits. To calculate the countervailable subsidy, we divided De Matteis's savings in social security contributions during the POR by its total sales in the POR.

On this basis, we preliminarily determine the countervailable subsidy from Law 196/97 to be 0.09 percent ad valorem for De Matteis. See De Matteis Calc Memo.

3) Law 407/90

Law 407/90 grants an exemption from social security taxes for three years when a company hires a worker who (1) has received wage supplementation for a period of at least two years, or (2) has been previously unemployed for a period of two years. See GOI Verification Report, at 12-13. A 100-percent exemption is allowed for companies in the Mezzogiorno , while companies located in the rest of Italy receive a 50-percent reduction.

In the Pasta Investigation , we determined Law 407/90 confers a countervailable subsidy within the meaning of section 771(5) of the Act. The reduction or exemption of taxes is revenue forgone and is, therefore, a financial contribution within the meaning of section 771(5)(D)(ii) of the Act. The benefit is the difference in the amount of the tax savings between companies located in the Mezzigiorno and companies located in the rest of Italy in accordance with 19 CFR 351.509(a). Additionally, the program is regionally specific within the meaning of section 771(5A)(D)(iv) of the Act because higher levels of benefits are limited to companies in the Mezzogiorno region.

In accordance with 19 CFR 351.524(c) and consistent with our methodology in the Pasta Investigation and in reviews subsequent to the Pasta Investigation , we have treated social security reductions and exemptions as recurring benefits. To calculate the countervailable subsidy for De Matteis and Garofalo, we divided the difference during the POR between the savings for each respondent company located in the Mezzogiorno and the savings a company located in the rest of Italy would have received. This amount was divided by the respondent's total sales in the POR.

On this basis, we preliminarily determine the countervailable subsidy from Law 407/90 to be 0.03 percent ad valorem for De Matteis and 0.01 percent ad valorem for Garofalo. See De Matteis Calc Memo and Garofalo Calc Memo.

4) Law 223/91

Law 223/91 is designed to increase employment by providing benefits to companies that hire unemployed workers on a special mobility list. The mobility list comprises recently fired workers in certain sectors of the economy, but companies in any sector may hire workers off the mobility list.

(a) Article 8, Paragraph 2

Under Law 223/91, Article 8, Paragraph 2, the employer is exempted from social security contributions when a mobility-listed worker is hired under a short-term contract of up to 12 months. See GOI Verification Report, at 13-14. The employer receives such benefits for the length of the contract to a maximum of 12 months. Id. But, if the short-term contract is converted to a permanent contract, the employer receives benefits for an additional 12 months. Id.

In the Seventh Administrative Review , 5 we determined that Law 223/91 conferred a countervailable subsidy within the meaning of section 771(5) of the Act. The reduction or exemption of taxes was treated as revenue forgone and was, therefore, a financial contribution within the meaning of section 771(5)(D)(ii) of the Act. The benefit is the amount of tax savings in accordance with 19 CFR 351.509(a). Additionally, we found that the program was regionally specific within the meaning of section 771(5A)(D)(iv) of the Act because it was limited to companies in the Mezzogiorno or because the higher levels of benefits were limited to companies in the Mezzogiorno .

Based on our review of the record of the seventh administrative review and our verification in this administrative review, we continue to find the exemption or reduction of taxes as revenue forgone, with the benefit equal to the amount not collected; however, we now find no basis for de jure specificity under Law 223/91, Article 8, Paragraph 2. See GOI Verification Report, at 13-14. However, on June 16, 2008, we sent a supplemental questionnaire to the GOI which in part asked for a list of the industries that received benefits under this law. The GOI did not respond to this portion of the supplemental questionnaire. See GOI's June 27, 2008, SQR. Therefore, the GOI has not provided information to support a finding that Law 223/91, Article 8, Paragraph 2, is not de facto specific, within the meaning of section 771(5A)(iii) of the Act. Accordingly, we continue to find the exemptions provided under Law 223/91, Article 8, Paragraph 2, countervailable. After these preliminary results, we intend to issue another supplemental questionnaire to the GOI asking about industry usage of Law 223/91, Article 8, Paragraph 2.

To calculate the countervailable subsidy, we divided De Matteis's savings in social security contributions during the POR by its total sales in the POR. On this basis, we preliminarily determine the countervailable subsidy from Law 223/91, Article 8, Paragraph 2 to be 0.02 percent ad valorem for De Matteis. See De Matteis Calc Memo.

(b) Article 25, Paragraph 9

Under Law 223/91, Article 25, Paragraph 9, an employer is exempted from social security contributions for a period of 18 months when the worker is hired from the mobility list on a permanent basis. See GOI Verification Report, at 13-14.

In the Seventh Administrative Review , we determined that Law 223/91 conferred a countervailable subsidy within the meaning of section 771(5) of the Act. The reduction or exemption of taxes was treated as revenue forgone and was, therefore, a financial contribution within the meaning of section 771(5)(D)(ii) of the Act. The benefit is the amount of tax savings in accordance with 19 CFR 351.509(a). Additionally, we found that the program was regionally specific within the meaning of section 771(5A)(D)(iv) of the Act because it was limited to companies in the Mezzogiorno or because the higher levels of benefits were limited to companies in the Mezzogiorno .

Based on our review of the record of the seventh administrative review and our verification in this administrative review, we continue to find the exemption or reduction of taxes as revenue forgone, with the benefit equal to the amount not collected; however, we now find no basis for de jure specificity under Law 223/91, Article 25, Paragraph 9. See GOI Verification Report, at 13-14. However, on June 16, 2008, we sent a supplemental questionnaire to the GOI which in part asked for a list of the industries that received benefits under this Law. The GOI did not respond to this portion of the supplemental questionnaire. See GOI's June 27, 2008, SQR. Therefore, the GOI has not provided information to support a finding that Law 223/91, Article 25, Paragraph 9, is not de facto specific, within the meaning of section 771(5A)(iii) of the Act. Accordingly, we continue to find the exemptions provided under Law 223/91, Article 25, Paragraph 9, countervailable. After these preliminary results, we intend to issue another supplemental questionnaire to the GOI asking about industry usage of Law 223/91, Article 25, Paragraph 9.

To calculate the countervailable subsidy, we divided De Matteis's savings in social security contributions during the POR by its total sales in the POR. On this basis, we preliminarily determine the countervailable subsidy from Law 223/91, Article 25, Paragraph 9, to be 0.00 percent ad valorem for De Matteis. See De Matteis Calc Memo.

1) Article 62 - Investments in Disadvantaged Areas

Article 62 of Law 289/02 provides a benefit in the form of a credit towards direct taxes, indirect taxes, or social security contributions. See GOI Verification Report, at 2-4. The credit must be used within three years. Id. The law was established to promote investment in disadvantaged areas by providing credits to companies that undertake new investment by purchasing capital goods, equipment, patents, licenses, or know how. Id. The granting of new benefits under Article 62 of Law 289/02 expired as of December 31, 2006, but the credits obtained prior to this date may be used in future years. Id.

In the Tenth Administrative Review , 6 we determined that Article 62 of Law 289/02 confers a countervailable subsidy. The credits are a financial contribution within the meaning of section 771(5)(D)(ii) of the Act because they represent revenue foregone by the GOI, and a benefit is conferred in the amount of the tax savings in accordance with 19 CFR 351.509(a). Finally, the program is specific within the meaning of 751(5A)(D)(iv) of the Act because it is limited to certain geographical regions in Italy, specifically, the regions of Calabria, Campania, Basilicata, Pugilia, Sicilia, and Sardegna, and certain municipalities in the Abruzzo and Molise region, and certain municipalities in central and northern Italy. No new information has been placed on the record of this review that would cause us to depart from this treatment.

De Matteis is located in Campania and took advantage of this program. It did so by constructing a new semolina milling facility, including wheat silos, by-product storage silos, semolina silos, and milling equipment. A tax credit for De Matteis was approved in 2005 and a portion was used to reduce the company's income taxes for 2005 and 2006.

In the Tenth Administrative Review , the Department treated the amount credited against 2005 income as a non-recurring grant in accordance with the criteria in 19 CFR 351.524(c)(2)(i)-(iii). Specifically, the tax credit is exceptional because it was only available for a limited period of time, and was dependent upon companies making specific investments. Further, the tax credit required the GOI's authorization, and was tied to capital assets of the firm. Moreover, in accordance with 19 CFR 351.524(b)(2), we determined that the tax credit received by De Matteis exceeded 0.5 percent of its sales in the year in which the tax credit was approved. Therefore, we treated the portion of the tax credit used to offset income in 2005 as a grant received in that year and allocated the benefit over the AUL using the formula described in 19 CFR 351.524(d).

We have followed the same methodology for the portion of the tax credit used to offset income earned during the POR. Consequently, we divided the benefit received by De Matteis from the 2005 and 2006 grants in the POR by the company's total sales in the POR. On this basis, we preliminarily determine the countervailable subsidy from Law 289/02 Article 62 to be 0.74 percent ad valorem for De Matteis. See De Matteis Calc Memo.

2) Article 63 - Increase in Employment

Article 63 of Law 289/02 provides a benefit in the form of a credit towards direct taxes, indirect taxes, or social security contributions. See GOI Verification Report, at 4-5. The law was established to promote employment by providing a tax credit to companies that increase the number of employees at the company by hiring new workers to long-term contracts. Id. The monthly credit is 100 euros for a new hire for any company in Italy. If the employee is 45 years old or older, the monthly amount increases to 150 euros. The monthly credit is 300 euros if the company is located in the Mezzogiorno . Id. Under the law, the granting of new credits ceased as of December 31, 2006. Id. There is no limit as to when the credits can be applied as these credits carry over from one year to the next. Id. However, as of 2007, the credits must be used as soon as possible and failure to do so forfeits the portion of the credit that could have been taken during the given year. Id.

In the Tenth Administrative Review , we determined that Article 63 of Law 289/02 confers a countervailable subsidy. The credits are a financial contribution within the meaning of section 771(5)(D)(ii) of the Act because they represent revenue foregone by the GOI, and a benefit is conferred in the amount of the tax savings in accordance with 19 CFR 351.509(a). Finally, the program is specific within the meaning of 751(5A)(D)(iv) of the Act because the greater benefit amount is limited to certain geographical regions in Italy, specifically, Campania, Basilicata, Puglia, Calabria, Sicilia, Sardegna, Abruzzo, Molise, and the municipalities of Tivoli, Formia, Sora, Cassino, Frosnone, Viterbo, and Massa. No new information has been placed on the record of this review that would cause us to depart from this treatment.

De Matteis and Garofalo are located in Campania; however, only De Matteis claimed the higher tax credits on the income tax forms filed during the POR.

Consistent with the Tenth Administrative Review , we are treating these as recurring subsidies and attributing the benefit to the year in which the taxes would otherwise have been due, i.e. , the year in which the company filed its tax form. 7 Based upon findings at verification, we revised De Matteis's reported amount to reflect the amount associated with the tax return filed during the POR. See De Matteis Verification Report and De Matteis Calc Memo. To calculate the countervailable subsidy, we divided the credit taken by De Matteis on the tax return filed during the POR by its total sales in the POR.

On this basis, we preliminarily determine the countervailable subsidy from Law 289/02 Article 63 to be 0.05 percent ad valorem for De Matteis. See De Matteis Calc Memo.

G. Law 662/96

The GOI describes Patti Territoriali grants (Law 662/96 Article 2, Paragraph 203, Letter d) as being provided to companies for entrepreneurial initiatives such as new plants, additions, modernization, restructuring, conversion, reactivation, or transfer. Companies that can apply for the grants must be involved in mining, manufacturing, production of thermal or electric power from biomasses, service companies, tourist companies, agricultural, maritime and salt-water fishing businesses, aquaculture enterprises, or their associations.

The Patti Territoriali provides grants to companies located within regions which meet the criteria of Objective 1 or Objective 2 under the Structural Funds or article 87.3.c of the Treaty of Rome. A Patti Territoriali is signed between the provincial government and the GOI. See GOI Verification Report, at 5-7. Based upon project submissions, the provincial government ranks the projects and selects the projects it considers to be the best. Id. The provincial government submits the detailed plans to the GOI and, if approved, a special authorizing decree is issued for each company specifying the investment required and a schedule of the benefits. Id.

The GOI reported that De Matteis received disbursements from the Patti Territoriali in 2000 and 2004 from a grant approved on January 29, 1999.

In the Tenth Administrative Review , the Department determined that this grant confers a countervailable subsidy within the meaning of section 771(5) of the Act. It is a direct transfer of funds from the GOI bestowing a benefit in the amount of the grant. See Section 771(5)(D)(i); see also 19 CFR 351.504(a). Also, this grant was found to be regionally specific within the meaning of section 771(5A)(D)(iv) of the Act because it is limited to companies located within regions which meet the criteria of Objective 1 or Objective 2 under the Structural Funds or article 87.3.c of the Treaty of Rome. In this review, neither the GOI nor the responding companies have provided new information which would warrant reconsideration of our determination that these grants are countervailable subsidies.

In the Tenth Administrative Review , the Department treated the Patti Territoriali grant as non-recurring. No new information has been placed on the record of this review that would cause us to depart from this treatment. We have followed the methodology described in 19 CFR 351.524(b)(2) which directs us to allocate over time those non-recurring grants whose total authorized amount exceeds 0.5 percent of the recipient's sales in the year of authorization. Where the total amount authorized is less than 0.5 percent of the recipient's sales in the year of authorization, the benefit is expensed in the year of receipt. We determined that the grant received by De Matteis under Law 662/96 exceeded 0.5 percent of its sales in the year in which the grant as approved.

We used the grant methodology described in 19 CFR 351.524(d) to allocate the benefits over time. We divided the benefit received by De Matteis in the POR by its total sales in the POR.

On this basis, we preliminarily determine the countervailable subsidy from the Patti Territoriali grant to be 0.50 percent ad valorem for De Matteis. See De Matteis Calc Memo.

Garofalo has reported receiving benefits under Legislative Decree (“L.D.”) 297/99 which is implemented by Ministerial Decree (“M.D.”) 593/00. M.D. 593/00 provides a tax credit or contribution to costs for planned research or analytical investigations aimed at acquiring new knowledge for new products, production processes, or services or to improve existing products, production processes, or services. See GOI's April 1, 2008, SQR at Exhibit 3. Requests for these benefits can be filed by (1) companies engaged in industrial activities aimed at the production of goods and/or services, (2) companies engaged in transportation by land, sea, or air; (3) companies engaged in handicraft activities; (4) research centers, and (5) consortia companies. See GOI's April 1, 2008, SQR. The benefits are paid automatically after the filing of the request and after verification of eligibility. Id. Additionally, M.D. 593 has no provisions that restrict eligibility by region.

We preliminarily find that L.D. 297/99 is a nationwide program that potentially provides a similar level of deductions to all recipients and is not de jure specific to any particular company or industry pursuant to sections 771(5A)(D)(i) or 771(5A)(D)(ii) of the Act. We reviewed the translated text of this law and find the only location requirement for consideration under L.D. 297/99 Article 5 is that applicants must have a permanent establishment in the national territory. See GOI's April 1, 2008, SQR at Exhibit 3. Therefore, it appears to be not regionally specific under section 771(5A)(D)(iv) of the Act. Additionally, we find that L.D. 297/99/M.D. 593/00 is not de facto specific pursuant to 771(5A)(D)(iii), as during the POR, companies from diverse sectors were granted benefits under this law and the agro-food sector received only 3.7 percent of the total disbursements granted by the Ministry of University and Research. See GOI's May 19, 2008, SQR at Exhibit 2. Moreover, there is no record evidence indicating that there are a limited number of recipients under this program. See section 771(5A)(D)(iii)(I) of the Act. Accordingly, we preliminarily determine that assistance provided under L.D. 297/99 and M.D. 593/00 is not countervailable.

We examined the following programs and preliminarily determine that the producers and/or exporters of the subject merchandise under review did not apply for or receive benefits under these programs during the POR:

PRISMA, a program funded by the European Structural Fund, seeks to contribute to the creation of a single EU market by improving standardization and quality control procedures, and seeks to assist small- and medium-sized enterprises in Objective 1 regions to adapt to a single EU market and increased competition. Garofalo received a PRISMA grant in 1996.

In the First Administrative Review , 8 the Department determined that PRISMA grants confer a countervailable subsidy within the meaning of section 771(5) of the Act. They are a direct transfer of funds from the GOI bestowing a benefit in the amount of the grant. See section 771(5)(D)(i); see also 19 CFR 351.504(a). Also, these grants were found to be regionally specific within the meaning of section 771(5A)(D)(iv) of the Act because they are limited to firms located in designated geographic regions. In this review, neither the GOI nor the responding companies have provided new information which would warrant reconsideration of our determination that these grants are countervailable subsidies.

Because the grant received by Garofalo was less than 0.5 percent of the company's sales in 1996, the year in which the grant was approved, we expensed the entire grant in the year of receipt, i.e. , 1996. Therefore, this program was not used in the POR. See Garofalo Calc Memo.

The P.O.M. Grants are managed by the central government and the Ministry of Industry (now the Ministry of Economic Development) is responsible for the administration of grants related to industry and services. See GOI's May 19, 2008, SQR.

Garofalo was approved to receive a P.O.M. Grant from the GOI in 1998. The P.O.M. Grants are co-funded by the EU and the GOI. Because the amount was less than 0.5 percent of Garofalo's sales in 1998, we expensed the entire grant in the years of receipt, i.e. , 1998 and 2000. Therefore, this program was not used in the POR. See Garofalo Calc Memo.

1) Legislative Decree (“L.D.”) 276/03

De Matteis, Garofalo, and De Cecco have reported receiving benefits under L.D. 276/03. L.D. 276/03 is aimed at making the labor market more flexible by providing incentives for apprentice contracts. See GOI's April 1, 2008, SQR. Companies receive benefits for hiring workers under mixed contracts possessing a work component and a training component. See GOI Verification Report, at 14-15. Specifically, three categories of employee contracts recognized under this decree are: (1) working toward completion of compulsory schooling, (2) working toward completion of trade schooling, and (3) high-level training of special skills for a worker. Id.

Except for a weekly flat fee paid by the employer on behalf of the employee, the employer receives a total exemption from its social security contribution. See GOI Verification Report, at 14-15. The contributions are applied in equal measure across Italy and the decree may be used in all sectors of activity. See GOI's May 19, 2008, SQR and Exhibit 1; see also GOI Verification Report, at 14-15.

Based on our review of the record of this administrative review and our verification, we find no basis for de jure specificity. Additionally, based on record evidence and our verification, the law does not appear to be regionally specific under section 771(5A)(D)(iv) of the Act. However, at this time, we do not have sufficient information to determine whether this program is de facto specific under section 771(5A)(D)(iii) of the Act. Therefore, we intend to seek further information regarding specificity of this program from the GOI and we will provide parties an opportunity to comment on this information before the final results.

In accordance with 19 CFR 351.222(f)(2)(ii) and 351.307(b)(1)(v), we verified information submitted by the GOI for De Matteis in Rome, Italy on May 26-28, 2008. See GOI Verification Report. We verified information submitted by De Matteis in Flumeri, Italy on May 29-30, 2008. See De Matteis Verification Report.

In accordance with 19 CFR 351.221(b)(4)(i), we calculated individual subsidy rates for De Matteis, Garofalo, and De Cecco. Felicetti had no countervailable subsidies.

For the period January 1, 2006, through December 31, 2006, we preliminarily determine the net subsidy rates for the producers/exporters under review to be those specified in the chart shown below:

Consequently, if these preliminary results are adopted in our final results of this review, the Department will instruct U.S. Customs and Border Protection (“CBP”) to assess countervailing duties at these net subsidy rates. The Department will issue appropriate instructions directly to CBP 15 days after publication of the final results of this review.

For all other companies that were not reviewed (except Barilla G. e R. F.lli S.p.A. and Gruppo Agricoltura Sana S.r.l., which are excluded from the order, and Pasta Lensi S.r.l. which was revoked from the order), the Department has directed CBP to assess countervailing duties on all entries between January 1, 2006, and December 31, 2006, at the rates in effect at the time of entry.

The Department also intends to instruct CBP to collect cash deposits of estimated countervailing duties in the amounts shown above. No cash deposits of estimated duties will be required for Felicetti. For all non-reviewed firms (except Barilla G. e R. F.lli S.p.A. and Gruppo Agricoltura Sana S.r.l., which are excluded from the order, and Pasta Lensi S.r.l. which was revoked from the order), we will instruct CBP to collect cash deposits of estimated countervailing duties at the most recent company-specific or all-others rate applicable to the company. These rates shall apply to all non-reviewed companies until a review of a company assigned these rates is requested.

Pursuant to 19 CFR 351.224(b), the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within five days after the date of the public announcement of this notice.

Pursuant to 19 CFR 351.309(c)(ii), interested parties may submit written arguments in case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, limited to issues raised in case briefs, may be filed no later than five days after the date of filing the case briefs, in accordance with 19 CFR 351.309(d). Parties who submit briefs in this proceeding should provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited. Copies of case briefs and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f).

Interested parties may request a hearing within 30 days after the date of publication of this notice, pursuant to 19 CFR 351.310(c). Any hearing, if requested, will be held two days after the scheduled date for submission of rebuttal briefs.

The Department will publish a notice of the final results of this administrative review within 120 days from the publication of these preliminary results, in accordance with section 751(a)(3) of the Act.

We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).

On December 31, 2007, the Department of Commerce (“Department”) received petitions on imports of innersprings from the PRC, South Africa, and the Socialist Republic of Vietnam (“Vietnam”) filed in proper form by Leggett & Platt Incorporated (“Petitioner”). See Antidumping Duty Petition: Uncovered Innerspring Units from China, South Africa, and Vietnam (December 31, 2007) (“petition”). These investigations were initiated on January 22, 2008. See Uncovered Innerspring Units From the People's Republic of China, South Africa, and the Socialist Republic of Vietnam: Initiation of Antidumping Duty Investigations , 73 FR 4817 (January 28, 2008) (“ Initiation Notice ”).

On February 14, 2008, the United States International Trade Commission (“ITC”) issued its affirmative preliminary determination 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 from the PRC, South Africa, and Vietnam of innersprings. The ITC's determination was published in the Federal Register on November 30, 2007. See Uncovered Innerspring Units From China, South Africa, and Vietnam, 73 FR 13567 (March 13, 2008); see also Uncovered Innerspring Units from China, South Africa, and Vietnam: Investigation Nos. 731-TA-1140-1142 (Preliminary) , USITC Publication 3983 (February 2008).

In accordance with the preamble to our regulations, 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. See Antidumping Duties; Countervailing Duties; Final Rule , 62 FR 27296, 27323 (May 19, 1997). See also Initiation Notice , 73 FR at 4818. We received no comments from interested parties on issues related to the scope.

In the Initiation Notice , the Department stated that it intended to select respondents based on U.S. Customs and Border Protection (“CBP”) data of U.S. imports of innersprings. See Initiation Notice , 73 FR at 4822. On January 28, 2008, the Department placed the CBP information on the record of the investigation, and set aside a period for interested parties to submit comments on the CBP information. On February 4, 2008, the Department received comments on respondent selection from Petitioner. After receiving comments from interested parties, the Department determined to seek quantity and value (“Q&V”) data from all known producers/exporters of the subject merchandise from the PRC. On February 22, 2008, the Department requested Q&V information from 17 companies that petitioner identified with sufficient address information as potential exporters or producers of innersprings from the PRC. See Petition at Exhibit I-8. Additionally, on February 25, 2008, the Department posted the questionnaire requesting Q&V information from potential producers/exporters of innersprings on its website at www.trade.gov/ia. For a complete list of all parties from which the Department requested Q&V information, see Memorandum to the File, from Blaine Wiltse, International Trade Compliance Analyst, regarding “Antidumping Duty Investigation of Uncovered Innerspring Units from the People's Republic of China (“PRC”): Delivery of Quantity and Value Questionnaires,” dated March 10, 2008 (“Q&V Delivery Memo”). The Department received timely Q&V responses from twelve interested parties. One of the Q&V responses that the Department received on March 14, 2008, was from High Hope Int'l Group Jiangsu Native Produce Imp. & Exp. Corp. Ltd. (“High Hope”). On March 27, 2008, High Hope submitted a letter to the Department withdrawing its Q&V submission, stating that it would no longer be participating in the investigation.

On April 3, 2008, the Department selected Jiangsu Soho International Group Holding Co., Ltd. (“Jiangsu Soho”) and Nanhai Animal By-Products I&E Co. Ltd. Guangdong (“Nanhai Animal”) as mandatory respondents in this investigation. See Memorandum to Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, through James C. Doyle, Director, Office 9, AD/CVD Operations, and Scot T. Fullerton, Program Manager, Office 9, AD/CVD Operations, from Erin Begnal, Senior International Trade Analyst, “Selection of Respondents for the Antidumping Investigation of Uncovered Innerspring Units from the People's Republic of China,” dated April 3, 2008.

Between March 24, 2008, and March 31, 2008, we received timely separate-rate applications from eight non-mandatory respondent companies: Zibo Senbao Furniture Co., Ltd. (“Senbao”), Hebei Yililan Furniture Co., Ltd. (“Yililan”), Anshan Yuhua Industrial Trade Co., Ltd. (“Yuhua”), Xilinmen Group Co., Ltd. (“Xilinmen”), East Grace Corporation (“East Grace”), Jiangsu Soho Technology Trading Co., Ltd. (“Soho Tech”), Nanjing Meihua I&E Trade Co., Ltd. (“Meihua”), and Zhejiang Sanmen Herod Mattress Co., Ltd. ( “Sanmen”).

In the Initiation Notice , the Department asked all parties in this investigation and in the concurrent antidumping duty investigations of innersprings from South Africa and Vietnam, for comments on the appropriate product characteristics for defining individual products. We received comments from Petitioner on February 15, 2008, with recommended appropriate product characteristics and proposed model matching criteria and hierarchy.

On April 7, 2008, the Department issued to Jiangsu Soho and Nanhai Animal its sections A, C, D, and E questionnaire, 1 which included product characteristics used in the designation of CONNUMs and assigned to the merchandise under consideration. Between April 29, 2008, and May 29, 2008, the Department received section A, C, and D questionnaire responses from Jiangsu Soho and Nanhai Animal. Jiangsu Soho and Nanhai Animal were not required by the Department to submit a Section E response, because the Department determined that neither company had further manufacturing in the United States. Petitioner submitted deficiency comments on the Section A questionnaire responses of both respondents on May 22, 2008, deficiency comments on the questionnaire responses to Sections C & D of both respondents on June 27, 2008, and deficiency comments on Nanhai Animal's response to the supplemental Section A questionnaire on July 10, 2008. The Department issued supplemental questionnaires to Jiangsu Soho and Nanhai Animal and received responses between June 13, 2008, and July 15, 2008.

On April 11, 2008, the Department determined that India, Indonesia, the Philippines, Colombia, and Thailand are countries comparable to the PRC in terms of economic development. See Letter to All Interested Parties, from Scot T. Fullerton, Program Manager, Office 9, AD/CVD Operations, regarding “Antidumping Duty Investigation of Uncovered Innerspring Units from the People's Republic of China,” dated April 14, 2008 (“Surrogate Country Letter”), attaching Memorandum to Scot T. Fullerton, Program Manager, Office 9, AD/CVD Operations, from Carole Showers, Acting Director, Office of Policy, regarding “Antidumping Duty Investigation of Uncovered Innerspring Units from the People's Republic of China (PRC): Request for List of Surrogate Countries,” dated March 25, 2008.

On April 11, 2008, the Department requested comments on surrogate country selection from the interested parties in this investigation. On June 2, 2008, the Department extended the deadline for interested parties to submit comments on surrogate country selection. Petitioner submitted surrogate country comments on June 16, 2008. No other interested parties commented on the selection of a surrogate country. For a detailed discussion of the selection of the surrogate country, see “Surrogate Country” section below.

On June 27, 2008, the Department extended the deadline for interested parties to submit surrogate information with which to value the factors of production in this proceeding. On July 7, 2008, Petitioner submitted surrogate value comments.

On May 20, 2008, Petitioner made a request, pursuant to 19 CFR 351.205(b)(2) and (e), for a 50-day postponement of the preliminary determinations with respect to China, South Africa, and Vietnam. The Department published a postponement of the preliminary determination on May 28, 2008. See Postponement of Preliminary Determinations of Antidumping Duty Investigations; Uncovered Innerspring Units from the People's Republic of China, South Africa, and the Socialist Republic of Vietnam , 73 FR 30604 (May 28, 2008).

The period of investigation (“POI”) is April 1, 2007, through September 30, 2007. This period corresponds to the two most recent fiscal quarters prior to the month of the filing of the petition, December, 2007. See 19 CFR 351.204(b)(1).

The merchandise covered by this investigation is uncovered innerspring units composed of a series of individual metal springs joined together in sizes corresponding to the sizes of adult mattresses ( e.g. , twin, twin long, full, full long, queen, California king, and king) and units used in smaller constructions, such as crib and youth mattresses. All uncovered innerspring units are included in this scope regardless of width and length. Included within this definition are innersprings typically ranging from 30.5 inches to 76 inches in width and 68 inches to 84 inches in length. Innersprings for crib mattresses typically range from 25 inches to 27 inches in width and 50 inches to 52 inches in length.

Uncovered innerspring units are suitable for use as the innerspring component in the manufacture of innerspring mattresses, including mattresses that incorporate a foam encasement around the innerspring.

Pocketed and non-pocketed innerspring units are included in this definition. Non-pocketed innersprings are typically joined together with helical wire and border rods. Non-pocketed innersprings are included in this definition regardless of whether they have border rods attached to the perimeter of the innerspring. Pocketed innersprings are individual coils covered by a “pocket” or “sock” of a nonwoven synthetic material or woven material and then glued together in a linear fashion.

Uncovered innersprings are classified under subheading 9404.29.9010 and have also been classified under subheadings 9404.10.0000, 7326.20.00.70, 7320.20.5010, or 7320.90.5010 of the Harmonized Tariff Schedule of the United States (“HTSUS”). The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of these investigations is dispositive.

For purposes of initiation, Petitioner submitted LTFV analyses for the PRC as a non-market economy (“NME”). See Initiation Notice , 73 FR at 4819. The Department considers the PRC to be a NME country. See, e.g., Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Coated Free Sheet Paper from the People's Republic of China , 72 FR 30758, 30760 (June 4, 2007), unchanged in Final Determination of Sales at Less Than Fair Value: Coated Free Sheet Paper from the People's Republic of China , 72 FR 60632 (October 25, 2007). In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. No party has challenged the designation of the PRC as an NME country in this investigation. Therefore, we continue to treat the PRC as an NME country for purposes of this preliminary determination.

When the Department is investigating imports from an NME, section 773(c)(1) of the Act directs it to base normal value, in most circumstances, on the NME producer's factors of production (“FOP”) valued in a surrogate market-economy country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, in valuing the factors of production, the Department shall utilize, to the extent possible, the prices or costs of factors of production in one or more market-economy countries that are at a level of economic development comparable to that of the NME country and are significant producers of comparable merchandise. The sources of the surrogate values we have used in this investigation are discussed under the “Normal Value” section below.

The Department's practice with respect to determining economic comparability is explained in Policy Bulletin 04.1 , 2 which states that “OP {Office of Policy} determines per capita economic comparability on the basis of per capita gross national income, as reported in the most current annual issue of the World Development Report (The World Bank).” The Department considers the five countries identified in its Surrogate Country List as “equally comparable in terms of economic development.” See Policy Bulletin 04.1 at 2. Thus, we find that India, Indonesia, the Philippines, Colombia, and Thailand are all at an economic level of development equally comparable to that of the PRC.

Second, Policy Bulletin 04.1 provides some guidance on identifying comparable merchandise and selecting a producer of comparable merchandise. Based on the data provided by Petitioner, we find that India is a producer of identical merchandise. See Petition at 5-6 and Exhibit PRC-6. Additionally, Petitioner submitted information for Indian companies that produce comparable merchandise, such as comparable spring products, and noted that the Department has found India to be a significant producer of related steel wire products. Id. See also Certain Steel Nails from the People's Republic of China: Final Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances , 73 FR 33977 (June 16, 2008). Because the Department was unable to find production data, we are relying on export data as a substitute for overall production data in this case. The Department first attempted to obtain export data for innersprings from the World Trade Atlas (“WTA”) and was unable to find data for any of the countries on the Surrogate Country List. Thus, the Department obtained worldwide export data for steel wire products, which Petitioner also stated were comparable to innersprings. Specifically, we reviewed export data from the WTA for the HTS heading 7326.20, “Other Articles of Iron/Steel Wire,” for 2007. The Department found that, of the countries provided in the Surrogate Country List, all five countries were exporters of comparable merchandise: steel wire products. Thus, all countries on the Surrogate Country List are considered as appropriate surrogates because each exported comparable merchandise.

The Policy Bulletin 04.1 also provides some guidance on identifying significant producers of comparable merchandise and selecting a producer of comparable merchandise. Further analysis was required to determine whether any of the countries which produce comparable merchandise are significant producers of that comparable merchandise. The data we obtained show that, in 2007, worldwide exports for HTS 7326.20 from: India were approximately 7,375,861 kg; Indonesia were approximately 431,376 kg; Colombia were approximately 9,309,295 units; the Philippines were approximately 271,308 kg; and Thailand were approximately 8,193,889 kg. Although India, Colombia, and Thailand appear to be significant producers of comparable merchandise, no party in this proceeding requested that Colombia or Thailand be selected as the surrogate country.

With respect to data considerations in selecting a surrogate country, it is the Department's practice that, ”. . . if more than one country has survived the selection process to this point, the country with the best factors data is selected as the primary surrogate country.” See Policy Bulletin 04.1 at 4 . Currently, the record contains surrogate value information, including possible surrogate financial statements, only from India.

Thus, the Department is preliminarily selecting India as the surrogate country on the basis that: (1) it is at a similar level of economic development to the PRC, pursuant to 773(c)(4) of the Act; (2) it is a significant producer of comparable merchandise; and (3) we have reliable data from India that we can use to value the factors of production. Thus, we have calculated normal value using Indian prices when available and appropriate to value Foshan Jingxin Steel Wire & Spring Co., Ltd.'s (“Foshan Jingxin”) 3 factors of production. See Memorandum to the File through Scot T. Fullerton, Program Manager, AD/CVD Operations, Office 9, from Susan Pulongbarit, International Trade Analyst, AD/CVD Operations, Office 9, regarding “Antidumping Duty Investigation of Uncovered Innerspring Units from the People's Republic of China: Selection of Factor Values,” dated July 30, 2008 (“Surrogate Value Memorandum”).

In accordance with 19 CFR 351.301(c)(3)(i), for the final determination in an antidumping investigation, interested parties may submit publicly available information to value the factors of production within 40 days after the date of publication of the preliminary determination. 4

For purposes of the preliminary determination, we find that Nanhai Animal should not be considered the mandatory respondent for purposes of calculating a dumping margin because we determine that Nanhai Animal did not make any sales of innersprings to the United States during the POI. In its questionnaire responses, Nanhai Animal stated that all of the sales negotiations for exports of innersprings to the United States take place directly between its producer, Foshan Jingxin, and the U.S. customer. In addition, Nanhai Animal stated that it is solely responsible for PRC customs declaration and receipt of payment from the U.S. customer, which is sent directly to Foshan Jingxin minus a commission. Nanhai Animal also stated in its questionnaire responses that it does not take title to the merchandise, and the merchandise is shipped directly from the producer's location to the U.S. customer. Therefore, we find that Nanhai Animal acts as an export agent for Foshan Jingxin and that all essential terms of sale are negotiated and executed between Foshan Jingxin and its U.S. customer. Thus, we find that Foshan Jingxin should be considered the seller for purposes of calculating a dumping margin. See, e.g., Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the People's Republic of China , 71 FR 29303 (May 22, 2006) and accompanying Issues and Decision Memorandum at Comment 17.

Additionally, in the Initiation Notice , the Department notified parties of the application process by which exporters and producers may obtain separate-rate status in NME investigations. See Initiation Notice , 73 FR at 4822. The process requires exporters and producers to submit a separate-rate status application. The Department's practice is discussed further in Policy Bulletin 05.1: Separate-Rates Practice and Application of Combination Rates in Antidumping Investigations involving Non-Market Economy Countries , (April 5, 2005), (“ Policy Bulletin 05.1 ”) available at http://ia.ita.doc.gov/policy/bull05-1.pdf. 5 However, the standard for eligibility for a separate rate (which is whether a firm can demonstrate an absence of both de jure and de facto governmental control over its export activities) has not changed.

In proceedings involving NME countries, the Department has a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty rate. It is the Department's policy to assign all exporters of merchandise subject to investigation in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. Senbao, Yililan, Yuhua, Xilinmen, East Grace, Meihua, and Sanmen, (hereinafter referred to as “Separate Rate Companies”) have provided company-specific information to demonstrate that they operate independently of de jure and de facto government control, and therefore satisfy the standards for the assignment of a separate rate.

We have considered whether each PRC company that submitted a complete application is eligible for a separate rate. The Department's separate-rate test is not concerned, in general, with macroeconomic/border-type controls, e.g. , export licenses, quotas, and minimum export prices, particularly if these controls are imposed to prevent dumping. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Preserved Mushrooms from the People's Republic of China , 63 FR 72255, 72256 (December 31, 1998). The test focuses, rather, on controls over the investment, pricing, and output decision-making process at the individual firm level. See Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final Determination of Sales at Less than Fair Value , 62 FR 61754, 61758 (November 19, 1997), and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of Antidumping Duty Administrative Review , 62 FR 61276, 61279 (November 17, 1997).

To establish whether a firm is sufficiently independent from government control of its export activities to be entitled to a separate rate, the Department analyzes each entity exporting the subject merchandise under a test arising from the Notice of Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China , 56 FR 20588 (May 6, 1991) (“ Sparklers ”), as further developed in Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China , 59 FR 22585 (May 2, 1994) (“ Silicon Carbide ”). In accordance with the separate-rates criteria, the Department assigns separate rates in NME cases only if respondents can demonstrate the absence of both de jure and de facto governmental control over export activities.

The Department considers the following de jure criteria in determining whether an individual company may be granted a separate rate: (1) an absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) other formal measures by the government decentralizing control of companies. See Sparklers , 56 FR at 20589.

The evidence provided by the Separate Rate Companies supports a preliminary finding of de jure absence of governmental control based on the following: 1) an absence of restrictive stipulations associated with the individual exporter's business and export licenses; 2) the applicable legislative enactments decentralizing control of the companies; and 3) any other formal measures by the government decentralizing control of companies. See, e.g. , Yililan's March 28, 2008, Separate Rate Application (“SRA”) at 6-9; East Grace's March 28, 2008, SRA at 5-9; and Yuhua's March 28, 2008, SRA at 6-9.

Typically the Department considers four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (1) whether the export prices are set by or are subject to the approval of a governmental agency; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses. See Silicon Carbide , 59 FR at 22586-87; see also Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From the People's Republic of China , 60 FR 22544, 22545 (May 8, 1995). The Department has determined that an analysis of de facto control is critical in determining whether respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates.

We determine that, for the Separate Rate Companies, the evidence on the record supports a preliminary finding of de facto absence of governmental control based on record statements and supporting documentation showing the following: 1) each exporter sets its own export prices independent of the government and without the approval of a government authority; 2) each exporter retains the proceeds from its sales and makes independent decisions regarding disposition of profits or financing of losses; 3) each exporter has the authority to negotiate and sign contracts and other agreements; and 4) each exporter has autonomy from the government regarding the selection of management. See, e.g. , Meihua's March 28, 2008, SRA at Exhibit 7; Xilinmen's March 28, 2008, SRA at Exhibit 8; Sanmen's March 31, 2008, SRA at Exhibit 7; and Senbao's March 24, 2008, SRA at Exhibit 5.

As the Department has preliminarily determined that Foshan Jingxin is properly considered the seller of the subject merchandise for purposes of calculating a dumping margin, and because we have changed the designation of the appropriate party to serve as the mandatory respondent, we are preliminarily granting Foshan Jingxin a separate rate. Although the information on the record demonstrating Foshan Jingxin's eligibility for a separate rate is not complete, as information regarding separate rate status was submitted by its exporting agent, Nanhai Animal, the Department finds that it cannot preliminarily deny Foshan Jingxin a separate rate because the Department did not specifically ask for additional information to determine Foshan Jingxin's separate rate eligibility. Thus, we intend to request additional information from Foshan Jingxin subsequent to the preliminary determination in order to determine Foshan Jingxin's separate rate status for the final determination. Moreover, as mentioned above, because we have determined that Nanhai Animal had no sales of subject merchandise during the POI, we preliminarily determine that Nanhai Animal is not eligible to receive a separate rate.

With respect to Soho Tech, we determine that it failed to provide evidence regarding its affiliations, specifically whether any of its affiliates were involved in the export or production of the subject merchandise. The separate rate application requires that the applicant provide specific documentation regarding its affiliation with any entities that exported merchandise to the United States that would fall under the description of the merchandise covered by the scope of the proceeding. Although Soho Tech stated that it was not affiliated with any entities involved in the production or export of the subject merchandise, information submitted on the record by Jiangsu Soho proves otherwise. Specifically, Jiangsu Soho stated that Soho Tech is a subsidiary of Jiangsu Soho, and that Soho Tech is responsible for exporting Jiangsu Soho's sales of innersprings to the United States as well as its own exports of innersprings. See Jiangsu Soho's July 2, 2008, Supplemental Section A response at 13. Therefore, we determine that Soho Tech has failed to provide accurate information with respect to its affiliates and therefore has failed to establish its eligibility for a separate rate. As a result, Soho Tech will be considered a part of the PRC-wide Entity.

The evidence placed on the record of this investigation by the Separate Rate Companies demonstrates an absence of de jure and de facto government control with respect to each of the exporter's exports of the merchandise under investigation, in accordance with the criteria identified in Sparklers and Silicon Carbide . As a result, we have granted the Separate Rate Companies a weighted-average margin based on the experience of mandatory respondents and excluding any de minimis or zero rates or rates based on total AFA for the purposes of this preliminary determination. In addition, for the reasons outlined above, we have preliminarily granted Foshan Jingxin separate rate status and assigned Foshan Jingxin a rate based on the data submitted by Nanhai Animal.

The Department has data that indicate there were more exporters of innersprings from the PRC than those indicated in the response to our request for Q&V information during the POI. See Respondent Selection Memorandum . We issued our request for Q&V information to 17 potential Chinese exporters of the subject merchandise, in addition to posting the Q&V questionnaire on the Department's website. See Q&V Delivery Memo . While information on the record of this investigation indicates that there are numerous producers/exporters of innersprings in the PRC, we received only twelve timely filed Q&V responses. Although all exporters were given an opportunity to provide Q&V information, not all exporters provided a response to the Department's Q&V letter. Further, we received a Q&V response from High Hope, who subsequently withdrew it and informed the Department that it was not going to participate further in the investigation. Additionally, Jiangsu Soho, the mandatory respondent, did not cooperate to the best of its ability in responding to the Department's requests for information. Therefore, the Department has preliminarily determined that there were exporters/producers of the subject merchandise during the POI from the PRC that did not respond to the Department's request for information. We have treated these PRC producers/exporters as part of the PRC-wide entity because they did not qualify for a separate rate.

Jiangsu Soho withheld or failed to provide information specifically requested by the Department during the course of this investigation. First, in its response to Sections C and D of the Department's questionnaire, Jiangsu Soho did not submit a sales or cost reconciliation, as required in the Department's questionnaire. The company offered no explanation as to why, but simply stated that it did not complete them. We gave Jiangsu Soho additional time to submit the reconciliations, but the information that Jiangsu Soho submitted was incomplete, and unusable for purposes of reconciling Jiangsu Soho's reported sales and FOP information to its financial statements.

Next, Jiangsu Soho withheld information requested by the Department and provided information that cannot be verified. In its questionnaire responses, Jiangsu Soho reported that its POI sales were sourced from four producers. Of the four producers, only one producer has provided factors of production data. The remaining three producers have been uncooperative and have not responded to the Department's requests for information. Therefore, the Department has incomplete information with respect to the factors of production for all of Jiangsu Soho's sales during the POI. Additionally, Jiangsu Soho has provided very limited information with regard to its accounting system and that of the one cooperative producer. Moreover, there are a number of data issues that have prevented the Department from being able to calculate a dumping margin. 6 Due to the proprietary nature of these issues, see the Memorandum to James C. Doyle, Director, AD/CVD Operations, Office 9, through Scot T. Fullerton, Program Manager, AD/CVD Operations, Office 9, from Erin Begnal, Senior International Trade Analyst, “Uncovered Innerspring Units from the People's Republic of China: Preliminary Application of Adverse Facts Available to Jiangsu Soho International Group Holding Co., Ltd.,” dated July 30, 2008.

Finally, as mentioned above, Jiangsu Soho did not cooperate to the best of its ability to provide the Department with timely information regarding its affiliations with other exporters/producers of the subject merchandise. Jiangsu Soho initially stated that it was not affiliated with any other exporters/producers of the subject merchandise during the POI, but the Department, through deficiency questionnaires, learned that Jiangsu Soho is affiliated with Soho Tech, another exporter of innersprings to the United States during the POI. Because the Department was given this information only a few weeks prior to the preliminary determination, we were unable to sufficiently investigate this matter over the course of the investigation, as the information was initially withheld by Jiangsu Soho. Therefore, because of the number of deficiencies with respect to Jiangsu Soho's questionnaire responses and the amount of misleading and inadequate information, we find that the information provided by Jiangsu Soho to be so deficient that there is insufficient information to analyze and verify. Thus, we find that Jiangsu Soho does not merit a separate rate, and will be subject to the PRC-wide rate. See Final Determination of Sales at Less Than Fair Value: Wooden Bedroom Furniture From the People's Republic of China , 69 FR 67313 (November 17, 2004) and accompanying Issues and Decision Memorandum at Comment 4.

Section 776(a)(2) of the Act provides that, if an interested party (A) withholds information that has been requested by the Department, (B) fails to provide such information in a timely manner or in the form or manner requested, subject to subsections 782(c)(1) and (e) of the Act, (C) significantly impedes a proceeding under the antidumping statute, or (D) provides such information but the information cannot be verified, the Department shall, subject to subsection 782(d) of the Act, use facts otherwise available in reaching the applicable determination.

Information on the record of this investigation indicates that the PRC-wide entity was non-responsive. Certain companies did not respond to our request for Q&V information and did not respond to the Department's questionnaire. In addition, Jiangsu Soho withheld information requested by the Department and provided insufficient information to analyze and verify. As a result, pursuant to section 776(a)(2)(A) of the Act, we find that the use of facts available is appropriate to determine the PRC-wide rate. S ee Preliminary Determination of Sales at Less Than Fair Value, Affirmative Preliminary Determination of Critical Circumstances and Postponement of Final Determination: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam , 68 FR 4986 (January 31, 2003), unchanged in Final Determination of Sales at Less Than Fair Value and Affirmative Critical Circumstances: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam , 68 FR 37116 (June 23, 2003).

Section 776(b) of the Act provides that, in selecting from among the facts otherwise available, the Department may employ an adverse inference if an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information. See Statement of Administrative Action , accompanying the Uruguay Round Agreements Act (“URAA”), H.R. Rep. No. 103-316, 870 (1994) (“SAA”); see also Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, 65 FR 5510, 5518 (February 4, 2000). We find that, because the PRC-wide entity did not respond to our requests for information, it has failed to cooperate to the best of its ability. Therefore, the Department preliminarily finds that, in selecting from among the facts available, an adverse inference is appropriate.

When employing an adverse inference, the statute indicates that the Department may rely upon information derived from the petition, the final determination from the LTFV investigation, a previous administrative review, or any other information placed on the record. In selecting a rate for adverse facts available (“AFA”), the Department selects a rate that is sufficiently adverse to ensure that the uncooperative party does not obtain a more favorable result by failing to cooperate than if it had fully cooperated. See SAA at 870. It is the Department's practice to select, as AFA, the higher of the (a) highest margin alleged in the petition, or (b) the highest calculated rate of any respondent in the investigation. See Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Quality Steel Products from the People's Republic of Chin a, 65 FR 34660 (May 21, 2000) and accompanying Issues and Decision Memorandum, at “Facts Available.” As AFA, we have preliminarily assigned to the PRC-wide entity a rate of 234.51 percent, the highest calculated rate from the petition. The Department preliminarily determines that this information is the most appropriate from the available sources to effectuate the purposes of AFA. The Department's reliance on the petition rate to determine an AFA rate is subject to the requirement to corroborate secondary information. 7

Section 776(c) of the Act provides that, when the Department relies on secondary information rather than on information obtained in the course of an investigation as facts available, it must, to the extent practicable, corroborate that information from independent sources reasonably at its disposal. Secondary information is described in the SAA as “information derived from the petition that gave rise to the investigation or review, the final determination concerning subject merchandise, or any previous review under section 751 concerning the subject merchandise.” 8 The SAA explains that to “corroborate” means simply that the Department will satisfy itself that the secondary information to be used has probative value. Id . The SAA also explains that independent sources used to corroborate may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. Id. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used. 9

We corroborated the U.S. price used to calculate the highest calculated rate from the petition listed in the Initiation Notice by comparing it to the U.S. prices calculated for Foshan Jingxin. We found that the U.S. price used to calculate the highest petition margin was within the range of net U.S. prices in our margin calculations for Foshan Jingxin in this investigation. See Memorandum to the File, through Scot T. Fullerton, Program Manager, AD/CVD Operations, Office 9, from Susan Pulongbarit, International Trade Analyst, AD/CVD Operations, Office 9, regarding “Program Analysis for the Preliminary Determination of Antidumping Duty Investigation of Uncovered Innerspring Units from the People's Republic of China,” dated July 30, 2008 (“Foshan Jingxin Analysis Memorandum”).

We then corroborated the normal value used to calculate the highest calculated rate from the petition listed in the Initiation Notice with the normal values calculated for Foshan Jingxin based on its reported factors of production. We found that the normal value used to calculate the highest petition margin was within the range of normal values in our margin calculations for Foshan Jingxin in this investigation. See Foshan Jingxin Analysis Memorandum.

Consequently, we are applying the 234.51 percent rate from the petition as the AFA antidumping rate to the PRC-wide entity, which includes Jiangsu Soho. The PRC-wide rate applies to all entries of the merchandise under investigation except for entries from Foshan Jingxin, and the Separate Rate Companies.

The Department received timely and complete separate rate applications from the Separate Rate Companies, who are all exporters of innersprings from the PRC, which were not selected as mandatory respondents in this investigation. Through the evidence in their applications, these companies have demonstrated their eligibility for a separate rate, as discussed above. Consistent with the Department's practice, as the separate rate, we have established a margin for the Separate Rate Companies based on the rate we calculated for the cooperating mandatory respondent, Foshan Jingxin. 10 Companies receiving this rate are identified by name in the “Suspension of Liquidation” section of this notice.

Section 351.401(i) of the Department's regulations states that, “{i}n identifying the date of sale of the subject merchandise or foreign like product, the Secretary normally will use the date of invoice, as recorded in the exporter or producer's records kept in the ordinary course of business.” However, the Secretary 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 exporter or producer establishes the material terms of sale. See 19 CFR 351.401(i); see also Allied Tube and Conduit Corp. v. United States , 132 F. Supp. 2d 1087, 1090-1093 (CIT 2001) (“ Allied Tube ”). The date of sale is generally the date on which the parties agree upon all substantive terms of the sale. This normally includes the price, quantity, delivery terms and payment terms. In Allied Tube , the Court of International Trade (“CIT”) noted that a “party seeking to establish a date of sale other than invoice date bears the burden of producing sufficient evidence to satisf{y}' the Department that a different date better reflects the date on which the exporter or producer establishes the material terms of sale.'” Allied Tube 132 F. Supp. 2d at 1090 (quoting 19 CFR 351.401(i)). In order to simplify the determination of date of sale for both the respondent and the Department and in accordance with 19 CFR 351.401(i), the date of sale will normally be the date of the invoice, as recorded in the exporter's or producer's records kept in the ordinary course of business, unless satisfactory evidence is presented that the exporter or producer establishes the material terms of sale on some other date. In other words, the date of the invoice is the presumptive date of sale, although this presumption may be overcome. For instance, in Notice of Preliminary Results of Antidumping Duty Administrative Review, Intent to Rescind and Partial Rescission of Antidumping Duty Administrative Review: Stainless Steel Bar from India , 72 FR 10151 (March 7, 2007), unchanged in Notice of Final Results and Final Partial Rescission of Antidumping Duty Administrative Review: Stainless Steel Bar from India , 72 FR 51595 (September 10, 2007), the Department used the date of the purchase order as the date of sale because the terms of sale were established at that point.

We note that Nanhai Animal reported that Foshan Jingxin did not issue any commercial invoices because the U.S. customer did not require Foshan Jingxin to do so. However, after examining the questionnaire responses and the sales documentation that Foshan Jingxin placed on the record, we preliminarily determine that the factory delivery note date, otherwise known as the date of loading and date of exit of factory, is the most appropriate date of sale for all EP sales made by Foshan Jingxin, as it is the date on which the seller's obligation of delivery has been fulfilled and the exact sales quantity and unit price are confirmed and finalized. See Nanhai Animal May 29, 2008, Section C questionnaire response at C-13 and July 8, 2008, supplemental response at A-13.

To determine whether sales of innersprings to the United States by Foshan Jingxin were made at less than fair value, we compared EP to NV, as described in the “U.S. Price” and “Normal Value” sections of this notice.

For Foshan Jingxin, we based U.S. price on EP in accordance with section 772(a) of the Act, because the first sale to an unaffiliated purchaser was made prior to importation, and CEP was not otherwise warranted by the facts on the record. We calculated EP based on the packed price from Foshan Jingxin to the first unaffiliated customer in the United States. Where applicable, we deducted a commission from the starting price (gross unit price), in accordance with section 772(c) of the Act.

For a complete discussion of the calculation of the U.S. price for Foshan Jingxin, see Foshan Jingxin Analysis Memorandum .

Section 773(c)(1) of the Act provides that the Department shall determine the NV using a FOP methodology if the merchandise is exported from an NME and the information does not permit the calculation of NV using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. The Department bases NV on the FOP because the presence of government controls on various aspects of non-market economies renders price comparisons and the calculation of production costs invalid under the Department's normal methodologies.

In accordance with section 773(c) of the Act, we calculated NV based on FOP data reported by Foshan Jingxin. To calculate NV, we multiplied the reported per-unit factor-consumption rates by publicly available surrogate values (except as discussed below). In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data. A detailed description of all surrogate values used for Foshan Jingxin can be found in the Surrogate Value Memorandum and Foshan Jingxin Analysis Memorandum.

For this preliminary determination, in accordance with the Department's practice, we used data from the Indian Import Statistics and other publicly available Indian sources in order to calculate surrogate values for Foshan Jingxin FOPs (direct materials, energy, and packing materials) and certain movement expenses. In selecting the best available information for valuing FOPs in accordance with section 773(c)(1) of the Act, the Department's practice is to select, to the extent practicable, surrogate values which are non-export average values, most contemporaneous with the POI, product-specific, and tax-exclusive. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value, Negative Preliminary Determination of Critical Circumstances and Postponement of Final Determination: Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic of Vietnam , 69 FR 42672, 42682 (July 16, 2004), unchanged in Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp from the Socialist Republic of Vietnam , 69 FR 71005 (December 8, 2004). The record shows that data in the Indian Import Statistics, as well as those from the other Indian sources, are contemporaneous with the POI, product-specific, and tax-exclusive. In those instances where we could not obtain publicly available information contemporaneous to the POI with which to value factors, we adjusted the surrogate values using, where appropriate, the Indian Wholesale Price Index (“WPI”) as published in the International Financial Statistics of the International Monetary Fund.

Furthermore, with regard to the Indian import-based surrogate values, we have disregarded import prices that we have reason to believe or suspect may be subsidized. We have reason to believe or suspect that prices of inputs from Indonesia, South Korea, and Thailand may have been subsidized. We have found in other proceedings that these countries maintain broadly available, non-industry-specific export subsidies and, therefore, it is reasonable to infer that all exports to all markets from these countries may be subsidized. See Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China , 69 FR 20594 (April 16, 2004) and accompanying Issues and Decision Memorandum at Comment 7 (“ CTVs from the PRC ”). Further, guided by the legislative history, it is the Department's practice not to conduct a formal investigation to ensure that such prices are not subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, the Department bases its decision on information that is available to it at the time it makes its determination. Therefore, we have not used prices from these countries in calculating the Indian import-based surrogate values. Additionally, we disregarded prices from NME countries. Finally, imports that were labeled as originating from an “unspecified” country were excluded from the average value, because the Department could not be certain that they were not from either an NME country or a country with general export subsidies.

The Department used the Indian Import Statistics to value the raw material and packing material inputs that Foshan Jingxin used to produce the subject merchandise during the POI, except where listed below.

For direct, indirect, and packing labor, consistent with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate as reported on Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, revised in May 2008, see Corrected 2007 Calculation of Expected Non-Market Economy Wages , 73 FR 27795 (May 14, 2008), and http://ia.ita.doc.gov/wages/index.html. The source of these wage-rate data on the Import Administration's web site is the Yearbook of Labour Statistics 2005, ILO (Geneva: 2007), Chapter 5B: Wages in Manufacturing. Because this regression-based wage rate does not separate the labor rates into different skill levels or types of labor, we have applied the same wage rate to all skill levels and types of labor reported by the respondent. See Surrogate Value Memorandum.

We used Indian transport information in order to value the freight-in cost of the raw materials. Due to the proprietary nature of this information, see Surrogate Value Memorandum.

To value electricity, the Department used rates from Key World Energy Statistics 2003 , published by the International Energy Agency (“IEA”). Because the data were not contemporaneous to the POI, we adjusted for inflation using WPI. See Surrogate Value Memorandum.

To value factory overhead, selling, general, and administrative expenses, and profit, we used the audited 2006-2007 financial statements from Lakshmi Precision Screws Limited, a producer of merchandise comparable to innersprings in India.

For a detailed discussion of all surrogate values used for this preliminary determination, see Surrogate Values Memorandum.

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

As provided in section 782(i)(1) of the Act, we intend to verify the information upon which we will rely in making our final determination.

In the Initiation Notice , the Department stated that it would calculate combination rates for certain respondents that are eligible for a separate rate in this investigation. See Initiation Notice , 72 FR at 60806. This practice is described in Policy Bulletin 05.1 , available at http://ia.ita.doc.gov/.

The weighted-average dumping margins are as follows:

We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).

In accordance with section 733(d) of the Act, we will instruct CBP to suspend liquidation of all entries of innersprings from the PRC as described in the “Scope of Investigation” section, entered, or withdrawn from warehouse, for consumption from Foshan Jingxin, Senbao, Yililan, Yuhua, Xilinmen, East Grace, Meihua, and Sanmen, and the PRC-wide entity on or after the date of publication of this notice in the Federal Register . We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the normal value exceeds U.S. price, as indicated above.

In accordance with section 733(f) of the Act, we have notified the ITC of our preliminary affirmative determination of sales at less than fair value. Section 735(b)(2) of the Act requires the ITC to make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of innersprings, or sales (or the likelihood of sales) for importation, of the subject merchandise within 45 days of our final determination.

Case briefs or other written comments may be submitted to the Assistant Secretary for Import Administration no later than seven days after the date of the final verification report is issued in this proceeding and rebuttal briefs limited to issues raised in case briefs no later than five days after the deadline date for case briefs ( see 19 CFR 351.309(c)(i) and (d)). A list of authorities used and an executive summary of issues should accompany any briefs submitted to the Department. This summary should be limited to five pages total, including footnotes.

In accordance with section 774 of the Act, and if requested, we will hold a public hearing, to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs. If a request for a hearing is made, we intend to hold the hearing shortly after the deadline of submission of rebuttal briefs at the U.S. Department of Commerce, 14th Street and Constitution Ave, NW, Washington, DC 20230, at a time and location to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, within 30 days after the date of publication of this notice. See 19 CFR 351.310(c). Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. At the hearing, each party may make an affirmative presentation only on issues raised in that party's case brief and may make rebuttal presentations only on arguments included in that party's rebuttal brief.

Unless the deadline is extended pursuant to section 735(a)(2) of the Act, the Department will make its final determination within 75 days after the date of this preliminary determination, pursuant to section 735(a)(1) of the Act.

This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act.

On December 31, 2007, Leggett and Platt, Incorporated (“Petitioner”), filed petitions in proper form on behalf of the domestic industry, concerning imports of innersprings from the People's Republic of China (“the PRC”), South Africa, and Vietnam (collectively, the Petitions). On January 28, 2008, the Department of Commerce (“the Department”) published in the Federal Register the initiation of a antidumping investigations on innersprings from the PRC, South Africa, and Vietnam. See Uncovered Innerspring Units From the People's Republic of China, South Africa, and the Socialist Republic of Vietnam: Initiation of Antidumping Duty Investigations , 73 FR 4817 (January 28, 2008) (“ Initiation Notice ”). The Department set aside a period for all interested parties to raise issues regarding product coverage. See Initiation Notice , 73 FR at 4818. We did not receive comments regarding product coverage from any interested party. Additionally, in the Initiation Notice , the Department applied a process by which exporters and producers may obtain separate-rate status in non-market economy (“NME”) investigations. The process requires exporters and producers to submit a separate-rate status application (“SRA”), 1 rather than a full response to Section A of the Department's Questionnaire. The standard for eligibility for a separate rate (which is whether a firm can demonstrate an absence of both de jure and de facto government control over its export activities), however, has not changed. The SRA for this investigation was posted on the Department's website at http://ia.ita.doc.gov/ia-highlights-and-news.html on January 28, 2008. The due date for filing an SRA was March 28, 2008. No party filed an SRA in this investigation.

In our Initiation Notice , we requested parties to provide comments regarding the physical characteristics of subject merchandise by February 11, 2008, and rebuttal comments by February 21, 2008. On February 8, 2008, we extended the deadline for submission of comments regarding physical characteristics to February 15, 2008, and the deadline for rebuttal comments to February 25, 2008. On February 15, 2008, Petitioner submitted comments. No other party submitted comments, and no party submitted rebuttal comments.

On February 14, 2008, the International Trade Commission (“ITC”) notified the Department of its affirmative preliminary determination that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of innersprings from the PRC, South Africa, and Vietnam. See Uncovered Innerspring Units From China, South Africa, and Vietnam , USITC Pub. 3983, Inv. Nos. 731-TA-1140-1142 (Preliminary) (February 2008).

On February 21, 2008, the Department issued its Quantity and Value (“Q&V”) questionnaire to eleven potential exporters of innersprings from Vietnam identified in the petition. We received a response to our Q&V questionnaire from only three of the potential respondents ( i.e. , Yang Ching Enterprise Co., Ltd. (“Yang Ching”), Uu Viet Co., Ltd. (“Uu Viet”), and Dong Bang Stainless Steel Co. Ltd (“Dong Bang”)). Each potential respondent stated that they did not export innersprings to the United States during the period of investigation (“POI”). See Memorandum to the File, Response to the Department of Commerce's Quantity and Value Questionnaire from Yang Ching, March 13, 2008; Memorandum to the File, Response to the Department of Commerce's Quantity and Value Questionnaire from Uu Viet, March 20, 2008; and Memorandum to the File, Response to the Department of Commerce's Quantity and Value Questionnaire from Dong Bang, March 25, 2008.

The POI is April 1, 2007, through September 30, 2007. This period corresponds to the two most recent fiscal quarters prior to the month of the filing of the petition, which was December 2007. See 19 CFR 351.204(b)(1).

The merchandise covered by this investigation is uncovered innerspring units composed of a series of individual metal springs joined together in sizes corresponding to the sizes of adult mattresses ( e.g. , twin, twin long, full, full long, queen, California king, and king) and units used in smaller constructions, such as crib and youth mattresses. All uncovered innerspring units are included in this scope regardless of width and length. Included within this definition are innersprings typically ranging from 30.5 inches to 76 inches in width and 68 inches to 84 inches in length. Innersprings for crib mattresses typically range from 25 inches to 27 inches in width and 50 inches to 52 inches in length.

Uncovered innerspring units are suitable for use as the innerspring component in the manufacture of innerspring mattresses, including mattresses that incorporate a foam encasement around the innerspring.

Pocketed and non-pocketed innerspring units are included in this definition. Non-pocketed innersprings are typically joined together with helical wire and border rods. Non-pocketed innersprings are included in this definition regardless of whether they have border rods attached to the perimeter of the innerspring. Pocketed innersprings are individual coils covered by a “pocket” or “sock” of a nonwoven synthetic material or woven material and then glued together in a linear fashion.

Uncovered innersprings are classified under subheading 9404.29.9010 and have also been classified under subheadings 9404.10.0000, 7326.20.00.70, 7320.20.5010, or 7320.90.5010 of the Harmonized Tariff Schedule of the United States (“HTSUS”). The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of this proceeding is dispositive.

The Department considers Vietnam to be an NME country. In accordance with section 771(18)(C)(i) of the Act, any determination that a country is an NME country shall remain in effect until revoked by the administering authority. See, e.g., Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic of Vietnam , 69 FR 71005, 71007 (December 8, 2004). The Department has not revoked Vietnam's status as an NME country. Therefore, in this preliminary determination, we have treated Vietnam as an NME country and applied our NME methodology.

In proceedings involving NME countries, the Department has a rebuttable presumption that all companies within the country are subject to government control and should be assessed a single antidumping duty rate. It is the Department's policy to assign all exporters of merchandise subject to an investigation involving an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. Exporters must demonstrate the absence of both de jure and de facto government control over export activities, under a test developed by the Department and described in the Notice of Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China , 56 FR 20588 (May 6, 1991); and Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China , 59 FR 22585, 22587 (May 2, 1994).

No party filed separate rate information in this investigation. Absent separate rate information, the Department has presumed that all companies within Vietnam exporting the subject merchandise are subject to government control and are part of the Vietnam-wide entity and should be assessed a single, Vietnam-wide, antidumping duty rate.

Sections 776(a)(1) and (2) of the Act provides that the Department shall apply “facts otherwise available” if, inter alia , necessary information is not on the record or an interested party or any other person: (A) withholds information that has been requested; (B) fails to provide information within the deadlines established, or in the form and manner requested by the Department, subject to subsections (c)(1) and (e) of section 782; (C) significantly impedes a proceeding; or (D) provides information that cannot be verified as provided by section 782(i) of the Act.

Where the Department determines that a response to a request for information does not comply with the request, section 782(d) of the Act provides that the Department will so inform the party submitting the response and will, to the extent practicable, provide that party the opportunity to remedy or explain the deficiency. If the party fails to remedy the deficiency within the applicable time limits and subject to section 782(e) of the Act, the Department may disregard all or part of the original and subsequent responses, as appropriate. Section 782(e) of the Act provides that the Department “shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all applicable requirements established by the administering authority” if the information is timely, can be verified, is not so incomplete that it cannot be used, and if the interested party acted to the best of its ability in providing the information. Where all of these conditions are met, the statute requires the Department to use the information supplied if it can do so without undue difficulties.

Section 776(b) of the Act further provides that the Department may use an adverse inference in applying the facts otherwise available when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. Such an adverse inference may include reliance on information derived from the petition, the final determination, a previous administrative review, or other information placed on the record.

Section 776(c) of the Act provides that, when the Department relies on secondary information rather than on information obtained in the course of an investigation or review, it shall, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. Secondary information is defined as “[i]nformation derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise.” Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, at 870 (1994) (“SAA”). Corroborate means that the Department will satisfy itself that the secondary information to be used has probative value. See id. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used.

The Department issued a Q&V questionnaire to all exporters identified in the petition. Out of the eleven exporters to whom the Department issued its Q&V questionnaire, only three responded. Each of the responding exporters stated that they did not export innersprings to the United States during the POI. See Memorandum to the File, Response to the Department of Commerce's Quantity and Value Questionnaire from Yang Ching, March 13, 2008; Memorandum to the File, Response to the Department of Commerce's Quantity and Value Questionnaire from Uu Viet, March 20, 2008, and Memorandum to the File, Response to the Department of Commerce's Quantity and Value Questionnaire from Dong Bang, March 25, 2008. However, the remaining eight companies did not respond to the Department's Q&V questionnaire. The Department issued and tracked its Q&V questionnaire via DHL. According to DHL's tracking system the remaining eight exporters received the Department's Q&V questionnaire. Record evidence indicates there were imports into the United States of innersprings from Vietnam. Based on the above facts, the Department preliminarily determines that there were exports of the subject merchandise under investigation from Vietnam producers/exporters that did not respond to the Department's questionnaire, and we are treating these Vietnam producers/exporters as part of the countrywide entity. Additionally, because we have determined that the companies named above are part of the Vietnam-wide entity, the Vietnam-wide entity is now under investigation. Further, pursuant to section 776(a)(2)(A) of the Act, we find that because the Vietnam-wide entity (including the eight companies discussed above) failed to respond to the Department's Q&V questionnaire, withheld or failed to provide information in a timely manner or in the form or manner requested by the Department, and otherwise impeded the proceeding, it is appropriate to apply a dumping margin to the Vietnam-wide entity using the facts otherwise available on the record pursuant to section 776(a)(2)(A) of the Act. Additionally, because these parties failed to respond to our requests for information, we find an adverse inference is appropriate.

In sum, because the Vietnam-wide entity failed to respond to our request for information, it has failed to cooperate to the best of its ability. Therefore, the Department preliminarily finds that, in selecting from among the facts available, an adverse inference is appropriate pursuant to section 776(b) of the Act for the Vietnam-wide entity.

In deciding which facts to use as adverse facts available (“AFA”), section 776(b) of the Act and 19 CFR 351.308(c)(1) authorize the Department to rely on information derived from: (1) the petition; (2) a final determination in the investigation; (3) any previous review or determination; or (4) any information placed on the record. In selecting a rate for AFA, the Department selects a rate that is sufficiently adverse “as to effectuate the purpose of the facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.” See Notice of Final Determination of Sales at Less than Fair Value: Static Random Access Memory Semiconductors From Taiwan , 63 FR 8909, 8932 (February 23, 1998). The Department's practice also ensures “that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See SAA at 870. See also Brake Rotors From the People's Republic of China: Final Results and Partial Rescission of the Seventh Administrative Review; Final Results of the Eleventh New Shipper Review , 70 FR 69937, 69939 (November 18, 2005).

Generally, it is the Department's practice to select, as AFA, the highest rate in any segment of the proceeding. See, e.g., Certain Cased Pencils from the People's Republic of China; Notice of Preliminary Results of Antidumping Duty Administrative Review and Intent to Rescind in Part , 70 FR 76755, 76761 (December 28, 2005) (unchanged in the final results, 71 FR 38366 (July 6, 2006)).

The Court of International Trade (“CIT”) and the Court of Appeals for the Federal Circuit (“Fed. Cir.”) have consistently upheld the Department's practice. See Rhone Poulenc, Inc. v. United States , 899 F.2d 1185, 1190 (Fed. Cir. 1990) (upholding the Department's presumption that the highest margin was the best information of current margins) (“ Rhone Poulenc ”); NSK Ltd. v. United States , 346 F. Supp. 2d 1312, 1335 (CIT 2004) (upholding a 73.55 percent total AFA rate, the highest available dumping margin from a different respondent in an LTFV investigation); Kompass Food Trading International v. United States , 24 CIT 678, 683-84 (CIT 2000) (upholding a 51.16 percent total AFA rate, the highest available dumping margin from a different, fully cooperative respondent); and Shanghai Taoen International Trading Co., Ltd. v. United States , 360 F. Supp. 2d 1339, 1348 (CIT 2005) (upholding a 223.01 percent total AFA rate, the highest available dumping margin from a different respondent in a previous administrative review).

In choosing the appropriate balance between providing respondents with an incentive to respond accurately and imposing a rate that is reasonably related to the respondents' prior commercial activity, selecting the highest prior margin “reflects a common sense inference that the highest prior margin is the most probative evidence of current margins, because, if it were not so, the importer, knowing of the rule, would have produced current information showing the margin to be less.” See Rhone Poulenc , 899 F. 2d at 1190 (emphasis removed). In this case, as AFA, the Department has selected 116.31 percent, the highest margin alleged in the petition, as revised in the Petitioner's supplemental responses, and the margin the Department used in the Initiation Notice .

Section 776(c) of the Act provides that, when the Department relies on secondary information in using the facts otherwise available, it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. We have interpreted “corroborate” to mean that we will, examine the reliability and relevance of the information submitted. See, e.g. Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil: Notice of Final Determination of Sales at Less Than Fair Value , 65 FR 5554, 5568 (February 4, 2000). Because there are no mandatory respondents, to corroborate the 116.31 percent margin used as AFA for the Vietnam-wide entity, to the extent appropriate information was available, we revisited our pre-initiation analysis of the adequacy and accuracy of the information in the petition. See Antidumping Investigation Initiation Checklist: Uncovered Innersprings from the Socialist Republic of Vietnam (“Initiation Checklist”) (January 22, 2008). We examined evidence supporting the calculations in the petition and the supplemental information provided by Petitioner prior to initiation to determine the probative value of the margins alleged in the petition. During our pre-initiation analysis, we examined the information used as the basis of export price and normal value (“NV”) in the petition, and the calculations used to derive the alleged margins. Also during our pre-initiation analysis, we examined information from various independent sources provided either in the petition or, based on our requests, in supplements to the petition, which corroborated key elements of the export price and NV calculations. See id . We received no comments as to the relevance or probative value of this information. Therefore, the Department finds that the rates derived from the petition and used for purposes of initiation have probative value for the purpose of being selected as the AFA rate assigned to the Vietnam-wide entity.

The weighted-average dumping margin is as follows:

In accordance with section 733(d)(2) of the Act, we are directing U.S. Customs and Border Protection (“CBP”) to suspend liquidation of all entries of innersprings from Vietnam, as described in the “Scope of the Investigation” section of this notice, that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register . We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted-average dumping margin indicated in the chart above. The suspension of liquidation will remain in effect until further notice.

In accordance with section 733(f) of the Act, we have notified the ITC of the Department's preliminary affirmative determination. Under section 735(b)(2) of the Act, if the Department's final determination is affirmative, the ITC will determine whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of the subject merchandise, or sales (or the likelihood of sales) for importation of the subject merchandise within 45 days of our final determination.

Case briefs or other written comments on the preliminary determination may be submitted to the Assistant Secretary for Import Administration no later than 50 days after the date of publication of this preliminary determination. 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 after the deadline for the submission of case briefs. See 19 CFR 351.309(d). A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. See 19 CFR 351.309. Executive summaries should be limited to five pages total, including footnotes. See id. Further, we request that parties submitting briefs and rebuttal briefs provide the Department with an electronic copy of the public version of such briefs.

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 and rebuttal briefs. If a request for a hearing is made in this investigation, the hearing will tentatively be held two days after the deadline for submitting rebuttal briefs 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. See 19 CFR 351.310(d)(1). 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. See 19 CFR 351.310(c). 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. At the hearing, oral presentations will be limited to issues raised in the briefs. See id .

This determination is issued and published pursuant to sections 733(f) and 777(i)(1) of the Act.

On January 28, 2008, the Department of Commerce (the Department) published in the Federal Register the initiation of an antidumping investigation on uncovered innerspring units from South Africa. See Uncovered Innerspring Units From the People's Republic of China, South Africa, and the Socialist Republic of Vietnam: Initiation of Antidumping Duty Investigations , 73 FR 4817 (January 28, 2008) ( Initiation Notice ). The Department set aside a period for all interested parties to raise issues regarding product coverage. See Initiation Notice , 73 FR at 4818. We did not receive comments regarding product coverage from any interested party.

On February 14, 2008, the International Trade Commission (ITC) notified the Department of its affirmative preliminary determination that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of uncovered innerspring units from South Africa. See Uncovered Innerspring Units From China, South Africa, and Vietnam Investigation Nos. 731 TA 1140 1142 (Preliminary), , 73 FR 13567 (March 13, 2008).

On May 28, 2008, the Department extended the deadline for the preliminary results of this investigation from June 9, 2008, to July 30, 2008. See Postponement of Preliminary Determinations of Antidumping Duty Investigations; Uncovered Innerspring Units from the People's Republic of China, South Africa, and the Socialist Republic of Vietnam , 73 FR 30604 (May 28, 2008).

The period of investigation (POI) is October 1, 2006, through September 30, 2007.

The merchandise covered by this investigation is uncovered innerspring units composed of a series of individual metal springs joined together in sizes corresponding to the sizes of adult mattresses ( e.g. , twin, twin long, full, full long, queen, California king, and king) and units used in smaller constructions, such as crib and youth mattresses. All uncovered innerspring units are included in this scope regardless of width and length. Included within this definition are innersprings typically ranging from 30.5 inches to 76 inches in width and 68 inches to 84 inches in length. Innersprings for crib mattresses typically range from 25 inches to 27 inches in width and 50 inches to 52 inches in length.

Uncovered innerspring units are suitable for use as the innerspring component in the manufacture of innerspring mattresses, including mattresses that incorporate a foam encasement around the innerspring.

Pocketed and non-pocketed innerspring units are included in this definition. Non-pocketed innersprings are typically joined together with helical wire and border rods. Non-pocketed innersprings are included in this definition regardless of whether they have border rods attached to the perimeter of the innerspring. Pocketed innersprings are individual coils covered by a “pocket” or “sock” of a nonwoven synthetic material or woven material and then glued together in a linear fashion.

Uncovered innersprings are classified under subheading 9404.29.9010 and have also been classified under subheadings 9404.10.0000, 7326.20.00.70, 7320.20.5010, or 7320.90.5010 of the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of this investigation is dispositive.

On February 26, 2008, we identified Bedding Component Manufacturers (Pty) Ltd. (BCM) as the sole exporter of subject merchandise during the POI. See the Memorandum to Stephen J. Claeys entitled “Antidumping Duty Investigation of Uncovered Innerspring Units from South Africa - Respondent Identification,” dated February 26, 2008.

On March 4, 2008, we issued sections A, B, C, D, and E 1 of the antidumping questionnaire to BCM. In the cover letter to the antidumping questionnaire, we informed BCM that, if we did not receive its questionnaire response by 5 p.m. on the due date or a written request for an extension of the due date and if we have information demonstrating that BCM either received the questionnaire or refused delivery of the questionnaire, we would conclude that BCM had decided not to cooperate in this investigation. We also informed BCM that its refusal to cooperate in an investigation requires application of facts available, which may include an adverse inference, in accordance with sections 776(a) and 776(b) of the Act, when determining the company's antidumping duty margin.

On March 25, 2008, we received a facsimile communication from BCM requesting an extension of time to submit a response to Section A of the antidumping questionnaire. 2 On March 25, 2008, we granted BCM's request for an extension in full with the new due date of April 2, 2008, for its response to Section A of our questionnaire. On April 4, 2008, we received an electronic-mail communication, containing an attachment in the form of a dated letter in PDF format, from BCM notifying us that BCM would not “be able to” file its response (see letter on file in Import Administration's Central Records Unit (CRU), Room 1117, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230). In addition, we did not receive a response from BCM to sections B and C by the close of business on April 10, 2008, the established deadline.

For the reasons discussed below, we determine that the use of facts available with an adverse inference (AFA) is appropriate for the preliminary determination with respect to BCM.

Section 776(a)(2) of the Act provides that, if an interested party withholds requested information or fails to provide such information by the deadlines for submission of the information or in the form or manner requested, subject to subsections (c)(1) and (e) of section 782 of the Act, significantly impedes a proceeding under this title, or provides such information but the information cannot be verified as provided in section 782(i) of the Act, the administering authority shall use, subject to section 782(d) of the Act, facts otherwise available in reaching the applicable determination. Section 782(d) of the Act provides that, if the administering authority determines that a response to a request for information does not comply with the request, the administering authority shall promptly inform the responding party and provide an opportunity to remedy the deficient submission. Section 782(e) of the Act states further that the Department shall not decline to consider submitted information if all of the following requirements are met: (1) the information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.

In this case, BCM did not provide pertinent information we requested that is necessary to calculate an antidumping margin for the preliminary determination. Specifically, BCM failed to respond to our questionnaire, thereby withholding, among other things, home-market and U.S. sales data that are necessary for preliminarily determining whether BCM is selling subject merchandise into the United States at less than fair value, pursuant to section 733 of the Act. BCM's failure to provide this necessary information has significantly impeded this proceeding pursuant to section 776(a)(2)(C) of the Act. Furthermore, because BCM did not submit any response to our requests for information and did not suggest alternative forms in which it could submit such responses, sections 782(c)(1), (d), and (e) of the Act do not apply. Thus, in reaching our preliminary determination, pursuant to sections 776(a)(2)(A), (B), and (C) of the Act, we have based the dumping margin on facts otherwise available for BCM.

In applying the facts otherwise available, section 776(b) of the Act provides that, if the administering authority finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from the administering authority, in reaching the applicable determination under this title, the administering authority may use an inference adverse to the interests of that party in selecting from among the facts otherwise available. See, e.g., Notice of Final Determination of Sales at Less than Fair Value: Circular Seamless Stainless Steel Hollow Products from Japan , 65 FR 42985, 42986 (July 12, 2000) ( Steel Hollow Products from Japan ).

Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Notice of Preliminary Determination of Sales at Less Than Fair Value: Glycine from Japan , 72 FR 52349, 52352 (September 13, 2007) ( Glycine from Japan ) (unchanged in Notice of Final Determination of Sales at Less Than Fair Value and Affirmative Final Determination of Critical Circumstances: Glycine from Japan , 72 FR 67271 (November 28, 2007)); see also Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, vol.1 (1994) at 870 ( SAA ). Further, “affirmative evidence of bad faith on the part of a respondent is not required before the Department may make an adverse inference.” See Antidumping Duties; Countervailing Duties , 62 FR 27296, 27340 (May 19, 1997).

Although the Department provided BCM with notice informing it of the consequences of its failure to respond adequately to the questionnaire in this case, BCM did not respond to the questionnaire. This constitutes a failure on the part of BCM to cooperate to the best of its ability to comply with a request for information by the Department within the meaning of section 776(b) of the Act. Based on the above, the Department has preliminarily determined that BCM failed to cooperate to the best of its ability and, therefore, in selecting from among the facts otherwise available, an adverse inference is warranted. See, e.g., Steel Hollow Products from Japan (the Department applied total AFA where the respondent failed to respond to the antidumping questionnaire).

Where the Department applies AFA because a respondent failed to cooperate by not acting to the best of its ability to comply with a request for information, section 776(b) of the Act authorizes the Department to rely on information derived from the petition, a final determination, a previous administrative review, or other information placed on the record. See also 19 CFR 351.308(c) and the SAA at 829-831. It is the Department's practice to use the highest rate from the petition in an investigation when a respondent fails to act to the best of its ability to provide the necessary information and there are no other respondents. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Purified Carboxymethylcellulose From Finland , 69 FR 77216 (December 27, 2004) (unchanged in Notice of Final Determination of Sales at Less Than Fair Value: Purified Carboxymethylcellulose From Finland , 70 FR 28279 (May 17, 2005)). Therefore, because an adverse inference is warranted, we have assigned to BCM the single margin alleged in the petition, as recalculated in the Initiation Notice, of 121.39 percent (see Petitions on Uncovered Innerspring Units from China, South Africa, and Vietnam , dated December 31, 2007 ( Petition ), and January 11, 2008, supplement to the Petition filed on behalf of Leggett and Platt, Incorporated, Inc. (the petitioner)), as recalculated in the January 22, 2008, Antidumping Investigation Initiation Checklist: Uncovered Innerspring Units from South Africa (Initiation Checklist) on file in Import Administration's CRU. See also Initiation Notice , 73 FR at 4822.

When using facts otherwise available, section 776(c) of the Act provides that, when the Department relies on secondary information (such as the petition) rather than on information obtained in the course of an investigation, it must corroborate, to the extent practicable, information from independent sources that are reasonably available at its disposal.

“Corroborate” means the Department will satisfy itself that the secondary information to be used has probative value. See, e.g., Glycine from Japan; see also SAA at 870. As stated in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, from Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews , 61 FR 57391, 57392 (November 6, 1996) (unchanged in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan; Final Results of Antidumping Duty Administrative Reviews and Termination in Part , 62 FR 11825, 11843 (March 13, 1997)), to corroborate secondary information, the Department will examine, to the extent practicable, the reliability and relevance of the information used. The Department's regulations state that independent sources used to corroborate such evidence may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. See 19 CFR 351.308(d) and SAA at 870.

For the purposes of this investigation, to the extent appropriate information was available, we reviewed the adequacy and accuracy of the information in the Petition during our pre-initiation analysis and for purposes of this preliminary determination. See Initiation Checklist . We examined evidence supporting the calculations in the Petition to determine the probative value of the margins alleged in the Petition for use as AFA for purposes of this preliminary determination. During our pre-initiation analysis, we examined the key elements of the export-price and normal-value calculations used in the Petition to derive an estimated margin. During our pre-initiation analysis, we also examined information from various independent sources provided either in the Petition or, on our request, in the supplement to the Petition , that corroborates key elements of the export-price and normal-value calculations used in the Petition to derive an estimated margin.

Specifically, the petitioner calculated an export price using pricing information during the POI obtained from its U.S. customer of South African-produced uncovered innerspring units sold, or offered for sale, by U.S. importers of the subject merchandise. The pricing information identified specific terms of sale and payment terms. We obtained affidavits from persons who obtained the U.S. price quote. See Initiation Checklist at 6-8. The petitioner made adjustments to the starting price, where applicable, for foreign inland freight, ocean freight, marine insurance, and U.S. customs and port fees to arrive at net export price. To examine further the reliability of the U.S. price information in the Petition for purposes of this preliminary determination we obtained the average monthly Average Unit Values (AUVs) (Landed, Duty Paid) of imports of uncovered innerspring units from South Africa for consumption in the United States, classified under HTSUS number 9404299010 for the POI gathered from the Bureau of the Census IM145 import statistics. 3 We confirmed, by examining the Harmonized Tariff Schedule of the United States Annotated, that this HTSUS number is not a “basket category” such that it only includes entries of subject merchandise. U.S. official import statistics are sources that we consider reliable. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value: Superalloy Degassed Chromium from Japan , 70 FR 48538 (August 18, 2005), and applicable Memorandum to the File from Dmitry Vladimirov entitled “Preliminary Determination in the Antidumping Duty Investigation of Superalloy Degassed Chromium from Japan: Corroboration of Total Adverse Facts Available Rate,” dated August 11, 2005 ( Chromium from Japan ) (unchanged in Notice of Final Determination of Sales at Less Than Fair Value: Superalloy Degassed Chromium from Japan , 70 FR 65886 (November 1, 2005)). We then compared the U.S. price quote in the Petition to the AUVs for the POI and confirmed that the value of the U.S. price quote was consistent with average U.S. import values. Further, we obtained no other information that would make us question the reliability of the pricing information provided in the Petition .

The petitioner made adjustments to the starting U.S. price for foreign inland freight, ocean freight, marine insurance, and U.S. customs and port fees to arrive at the net export price. The petitioner calculated foreign inland-freight costs based on the petitioner's South African subsidiary's transportation experience and the related shipping costs it incurs. See Initiation Checklist at 7-8. The petitioner provided an affidavit from an individual attesting to the source and validity of the inland-freight costs it used in the calculation of net U.S. price. Id . The petitioner calculated international-freight costs and marine-insurance charges based on price quotes it obtained from respective service providers. Id . The petitioner provided an affidavit from an individual attesting to the source and validity of the international-freight and marine- insurance charges it used in the calculation of net U.S. price. Id . The petitioner estimated harbor-maintenance and merchandise-processing fees using standard U.S. government percentage rates. Id. Such publically available data are sources of information we consider reliable. See, e.g., Glycine from Japan , 72 FR at 52353. The petitioner calculated U.S. credit expense using the Federal Reserve's reported average prime rate charged by banks on commercial and industrial loans with duration of less than a year and an estimated credit period consisting of ocean transit time and customary payment terms of 30 days commencing with the arrival of product at the U.S. port of entry. See Initiation Checklist at 7-8. The petitioner calculated the U.S. short-term interest rate and the time period in ocean transit using publically available information. Id . Such publically available data are sources of information we consider reliable. See, e.g., Glycine from Japan , 72 FR at 52353. The petitioner provided an affidavit from an individual attesting to the validity of customary payment terms associated with sales of subject merchandise to the United States. See Initiation Checklist at 7-8. Because we obtained no other information that would make us question the reliability of the adjustments to the U.S. price provided in the Petition, based on our examination of the aforementioned information, we preliminarily consider the petitioner's calculation of net U.S. price to be reliable. See, e.g., Glycine from Japan , 72 FR at 52353.

To calculate normal value, the petitioner relied on its South African subsidiary's actual price to an unaffiliated customer in South Africa for uncovered innerspring units it sold during the POI. The pricing information identified specific terms of sale and payment terms. See Initiation Checklist at 7-8. The petitioner provided an affidavit from an individual attesting to the validity of the South African price and associated sale and payment terms that the petitioner used in the calculation of net foreign price. Id . The petitioner converted the starting price from Rand to U.S. dollars using the POI-average exchange rate of 0.1388 dollars per Rand. The petitioner calculated the POI-average exchange rate using the daily exchange rates listed on Import Administration's website. Id . The petitioner made adjustments to the starting home-market price by deducting home-market credit expense and adding U.S. credit expenses and packing costs. To calculate home-market credit expenses, the petitioner used the payment terms its South African subsidiary extends to its customer, which the petitioner claims are typical payment terms in South Africa. Id . The petitioner calculated home-market credit expenses using a payment period typical in South Africa and the average three-month trade-financing interest rate as reported by the South African Reserve Bank for the period of investigation. Id . The petitioner provided information indicating that its South African subsidiary ships the foreign like product unpacked and ships subject merchandise roll-packed. The petitioner calculated U.S. packing costs based on the experience of its South African subsidiary. Id .

The petitioner demonstrated the validity of the various assumptions it employed in its calculation of normal value and it used public sources of information such as official home-market and U.S. short-term interest rates and currency exchange rates that we confirmed were accurate. See, e.g., Chromium from Japan (where we stated that publicly available information or import statistics do not require further corroboration). Therefore, absent other information on the record disputing the validity of the sources of information or the validity of information supporting the underlying price (and applicable price adjustments) used in the Petition , we consider the petitioner's calculation of normal value to be reliable. Accordingly, because we confirmed the accuracy and validity of the information underlying the derivation of the margin in the Petition by examining source documents and affidavits, as well as publically available information, we preliminarily determine that the margins in the Petition are reliable for the purposes of this investigation. See, e.g., Glycine from Japan , 72 FR at 52353.

In making a determination as to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal as to whether there are circumstances that would render a margin not relevant. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin. For example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping Duty Administrative Review , 61 FR 6812 (February 22, 1996), the Department disregarded the highest margin as “best information available” (the predecessor to “facts available”) because the margin was based on another company's uncharacteristic business expense that resulted in an unusually high dumping margin.

In Am. Silicon Techs. v. United States , 273 F. Supp. 2d 1342, 1346 (CIT 2003), the court found that the AFA rate bore a “rational relationship” to the respondent's “commercial practices” and was, therefore, relevant. In the pre-initiation stage of this investigation, we confirmed that the calculation of the margin in the Petition reflects commercial practices of the particular industry during the POI. Further, no information has been presented in the investigation that calls into question the relevance of this information. As such, we preliminarily determine that the margin in the Petition , which we determined during our pre-initiation analysis was based on adequate and accurate information and which we have corroborated for purposes of this preliminary determination, is relevant as the AFA rate for BCM. See, e.g., Glycine from Japan .

As described above, the Department attempted to corroborate all of the secondary information from which the margin in the Petition was calculated by reviewing all of the data presented and by requesting clarification, attestation, and confirmation from the petitioner and its sources, as needed. Moreover, during the investigation, the Department was provided no other information from any other interested party. The Department also is aware of no other independent sources of information that would enable it to corroborate further the U.S. and home-market prices (and their respective adjustments), as furnished by the petitioner, for this preliminary determination. Similar to our position in Polyethylene Retail Carrier Bags from Thailand: Preliminary Results of Antidumping Duty Administrative Review , 71 FR 53405, 53407 (September 11, 2006) (unchanged in Polyethylene Retail Carrier Bags from Thailand: Final Results of Antidumping Duty Administrative Review , 72 FR 1982 (January 17, 2007)), because this is the first proceeding involving BCM, there are no probative alternatives. Accordingly, by using information that was corroborated in the pre-initiation stage of this investigation and preliminarily determined to be reliable and relevant to BCM in this investigation, we have corroborated the AFA rate “to the extent practicable.” See section 776(c) of the Act, 19 CFR 351.308(d), and NSK Ltd. v. United States , 346 F. Supp. 2d 1312, 1336 (CIT 2004) (stating, “pursuant to the to the extent practicable' language...the corroboration requirement itself is not mandatory when not feasible”). See also Notice of Preliminary Determination of Sales at Less Than Fair Value: Stainless Steel Plate in Coils From Canada , 63 FR 59527, 59529 (November 4, 1998) (unchanged in Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Plate in Coils from Canada , 64 FR 15457 (March 31, 1999)).

Therefore, based on our efforts described above to corroborate the margin in the Petition , we find that the estimated margin of 121.39 percent in the Initiation Notice has probative value within the meaning of section 776(c) of the Act. Consequently, in selecting AFA with respect to BCM, we have applied the margin rate of 121.39 percent, the estimated dumping margin set forth in the notice of initiation. See Initiation Notice .

Section 735(c)(5)(A) of the Act provides that “the estimated all-others rate shall be an amount equal to the weighted average of the estimated weighted average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776.” Section 735(c)(5)(B) of the Act provides that, where the estimated weighted-average dumping margins established for all exporters and producers individually investigated are zero or de minimis margins or are determined entirely under section 776 of the Act, the Department may use any reasonable method to establish the estimated all-others rate for exporters and producers not individually investigated. This provision contemplates that, if the data do not permit weight-averaging margins other than the zero, de minimis, or total facts-available margins, the Department may use any other reasonable methods. See also SAA at 873. Because the petition contained only one estimated dumping margin and because there are no other respondents in this investigation, there are no additional estimated margins available with which to establish the all-others rate. See Notice of Final Determination of Sales at Less Than Fair Value: Ferrovandium from the Republic of South Africa , 67 FR 71136 (November 29, 2002). Therefore, we are using the preliminary determination margin of 121.39 percent as the all-others rate.

We preliminarily determine that the following dumping margins exist for the period October 1, 2006, through September 30, 2007:

In accordance with section 733(d) of the Act, we are directing U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of uncovered innerspring units from South Africa that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register . We will instruct CBP to require a cash deposit or the posting of a bond equal to the margins, as indicated above, as follows: (1) the rate for BCM will be 121.39 percent; (2) if the exporter is not a firm identified in this investigation but the producer is, the rate will be the rate established for the producer of the subject merchandise; (3) the rate for all other producers or exporters will be 121.39 percent. These suspension-of-liquidation instructions will remain in effect until further notice.

In accordance with section 733(f) of the Act, we have notified the ITC of our preliminary determination of sales at less than fair value. If our final antidumping determination is affirmative, the ITC will determine whether the imports covered by that determination are materially injuring, or threatening material injury to, the U.S. industry. The deadline for the ITC's determination would be the later of 120 days after the date of this preliminary determination or 45 days after the date of our final determination, pursuant to section 735(b)(2) of the Act.

Case briefs for this investigation must be submitted no later than 50 days after the publication of this notice, pursuant to 19 CFR 351.309(c)(1)(i). Rebuttal briefs must be filed within five days after the deadline for submission of case briefs consistent with 19 CFR 351.309(d)(1). A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes.

Section 774 of the Act provides that the Department will hold a hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by an interested party. If a request for a hearing is made in an investigation, the hearing normally will be held two 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. See 19 CFR 351.310(d)(1). Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request within 30 days of the publication of this notice. See 19 CFR 351.310(c). Requests should specify the number of participants and provide a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs.

We will not be conducting a verification of BCM because it failed to respond to our questionnaire, as discussed above in the “Use of Facts Otherwise Available” section in this notice. Therefore, the deadline for submission of factual information pursuant to 19 CFR 351.301(b)(1) is not applicable. Thus, the deadline for submission of factual information in this investigation will be seven days after the date of publication of this notice. We intend to make our final determination within 75 days after the date of publication of this preliminary determination, pursuant to section 735(a)(1) of the Act.

This determination is issued and published pursuant to sections 733(f) and 777(i)(1) of the Act.

Under the USAFTA, the parties are required to progressively eliminate customs duties on originating goods. See Article 2.3.1. The USAFTA provides that, after consultations, the parties may agree to revise the rules of origin for textile and apparel products to address issues of availability of supply of fibers, yarns, or fabrics in the free trade area. See Article 4.2.5 of the USAFTA. In the consultations, each party must consider data presented by the other party showing substantial production of the good. Substantial production has been shown if domestic producers are capable of supplying commercial quantities of the good in a timely manner. See Article 4.2.4 of the USAFTA.

The USAFTA Implementation Act provides the President with the authority to proclaim modifications to the USAFTA rules of origin as are necessary to implement the agreement after complying with the consultation and layover requirements of Section 104 of the USAFTA Implementation Act. See Section 203(o)(2)(B)(i) of the USAFTA Implementation Act. Executive Order 11651 established CITA to supervise the implementation of textile trade agreements and authorizes the Chairman of CITA to take actions or recommend that the United States take actions necessary to implement textile trade agreements. 37 FR 4699 (March 4, 1972).

On February 1, 2008, the Chairman of CITA received a request from Gentry Mills, alleging that certain viscose rayon fiber, classified in HSTUS subheading 5504.10.0000, cannot be supplied by the domestic or Australian industry in commercial quantities in a timely manner and requesting that CITA consider whether the USAFTA rule of origin for 52% viscose/48% polyester blended yarn, classified under HTSUS subheading 5510.90.2000 should be modified to allow the use of non-U.S. and non-Australian viscose rayon fiber. On February 26, 2008, CITA published in the Federal Register a request for public comment on the proposed modification (73 FR 10227). No public comments were received alleging that viscose rayon fiber could be supplied in commercial quantities in a timely manner. Subsequently, the United States requested consultations with the Government of Australia on Gentry Mills' request. In those consultations, the Government of Australia proposed expanding the scope of the modification of the rule of origin to all yarns under HTSUS subheading 5510.90 to allow the use of non-U.S. and non-Australian viscose rayon fiber.

CITA is soliciting public comments regarding this proposal to expand the scope of the rule of origin modification to all yarns in HTSUS subheading 5510.90 to allow the use of non-U.S. and non-Australian viscose rayon fiber. Comments must be received no later than September 5, 2008. Interested persons are invited to submit six copies of such comments or information to the Chairman, Committee for the Implementation of Textile Agreements, Room 3001, U.S. Department of Commerce, 14th and Constitution Avenue, N.W., Washington, DC 20230.

CITA will protect any business confidential information that is marked “business confidential” from disclosure to the full extent permitted by law. CITA will make available to the public non-confidential versions of the request and non-confidential versions of any public comments received with respect to a request in room 3001 in the Herbert Hoover Building, 14th and Constitution Avenue, N.W., Washington, DC 20230. Persons submitting comments on a request are encouraged to include a non-confidential version and a non-confidential summary.

Anyone wishing to object to the grant of this license can file written objections along with supporting evidence, if any, 15 days from the date of this publication. Written objections are to be filed with the Command Judge Advocate (see ADDRESSES ).

Anyone wishing to object to the grant of this license can file written objections along with supporting evidence, if any, 15 days from the date of this publication. Written objections are to be filed with the Command Judge Advocate (see ADDRESSES ).

Section 3182 of the Water Resources Development Act of 2007 (Pub. L. 110-114) directed the Secretary of the Army (Secretary) to offer to convey, at fair market value to the city of Denison, TX, all right, title and interest of the United States in and to approximately 900 acres of land located in Grayson County, TX. The exact acreage and description of the real property will be determined by a survey that is satisfactory to the Secretary and the property conveyed by quitclaim deed. The real property is currently held in fee by the U.S. Government and managed by the Tulsa District Corps of Engineers as a part of Lake Texoma, a multipurpose reservoir located along the Red River in Oklahoma and Texas. The lands subject to this action are located along the eastern shore of the Little Mineral Arm of Lake Texoma in Grayson County, TX. Upon receipt of title to the property, the City of Denison intends to develop the area, in conjunction with development of adjacent private lands, to include such features as single and multi-family residential housing, hotel and conference facilities, golf course(s), retail and commercial space, office and light industry, public boat ramp(s), beach and yacht clubs, and related commercial development facilities.

Reasonable alternatives to be considered include varying amounts of acreages to be conveyed, alternative deed restrictions on conveyed lands, varying development features and locations, alternative locations and nature of shoreline development, and no action.

Issues to be addressed in the EIS include but are not limited to: (1) Socioeconomic impacts associated with planned development, (2) matters pertaining to shoreline management and potential changes to the Lake Texoma shoreline management plan in the immediate area of the conveyance, (3) potential impacts to cultural and ecological resources, (4) public access and safety, (5) impacts to lake use and recreation, (6) aesthetics, (7) water and wastewater infrastructure, (8) lake water quality, (9) traffic patterns, (10) terrestrial and aquatic fish and wildlife habitat, (11) Federally-listed threatened and endangered species, and (12) cumulative impacts associated with past, current, and reasonably foreseeable future actions at Lake Texoma.

A public scoping meeting for the action will be conducted in early fall, 2008 in Denison, TX. News releases and notices informing the public and local, state, and Federal agencies of the proposed action and date of the public scoping meeting will be published in local newspapers. Comments received as a result of this notice, news releases, and the public scoping meeting will be used to assist the Tulsa District Corps of Engineers in identifying potential impacts to the quality of the human or natural environment. Affected Federal, state, or local agencies, affected Indian tribes, and other interested private organizations and parties are encouraged to participate in the scoping process by forwarding written comments to (see ADDRESSES ) or attending the scoping meeting.

The draft EIS will be available for public review and comment. While the specific date for release of the draft EIS has yet to be determined, all interested agencies, tribes, organizations and parties expressing an interest in this action will be placed on a mailing list for receipt of the draft EIS. In order to be considered, any comments and suggestions should be forwarded to (see ADDRESSES ) in accordance with dates specified upon release of the draft EIS.

Setting: The White River and its tributaries drain a total area of 27,765 square miles (10,620 square miles in Missouri and 17,145 square miles in Arkansas). The White River basin originates in the Boston Mountains of northwest Arkansas (AR), near the city of Fayetteville. Three forks, the White River, the Middle Fork, and the West Fork, come together in Washington County, AR, to form the mainstem of the White River. The White River is first impounded as Lake Sequoyah, a 500-acre impoundment at the junction of the Middle Fork and the White River, near Fayetteville. The White River flows south out of Lake Sequoyah and joins the West Fork before entering Beaver Lake just west of Eureka Springs, AR. The White flows out of Beaver Dam (the first in a series of four hydroelectric dams) northward into Missouri (MO) near the town of Eagle Rock, Barry County. The White then flows eastward where it has been impounded as Table Rock Lake, just below its confluence with the James River near Branson. The White River below Table Rock Lake is again impounded by Powersite Dam near Forsyth, MO, and forms Lake Taneycomo. The river flow takes a southerly turn and flows back into Arkansas where it has again been impounded by Bull Shoals Dam near Cotter, Marion County. The White River flows towards the southeast from Bull Shoals Dam. The White river exits the Ozark Plateau and enters the Mississippi Alluvial Plain near Newport, AR. The White River continues to flow in a southerly direction from where it enters the delta until its confluence with the Mississippi River near Montgomery Point, AR, some 720 miles from its origin.

The original focus of the White River Minimum Flow Reallocation Study was to look at the five USACE reservoirs and associated tailwaters (TW). The TW below Beaver is considered as White River Mile (WRM) 609.0-604.5, Bull Shoals WRM 418.6-329.1, Table Rock WRM 528.7-506.0, below Norfork, North Fork River mile (NRM) 4.75 to 0.0, and the Buffalo National River enters at WRM 387.8 and the Norfork enters at WRM 376.4. The Greers Ferry TW Little Red River mile (LRRM) 78.7-48.7 is below Greers Ferry dam.

Background : The Department of the Army, Corps of Engineers, published a Notice of Intent in the Federal Register (65 FR 51299), August 23, 2000, stating its intent to prepare an EIS for a proposed water storage reallocation for the 5 White River lakes.

The Corps was directed to complete a study and report to determine if minimum flow reallocations adversely affect other authorized purposes under Section 374 of the Water Resources Development Act (WRDA) 1999 and Section 304 of WRDA 2000.

Under the original authorization, water levels were managed primarily for flood control and hydroelectric power generation at four of the White River Reservoirs as well as water supply at Beaver Lake. WRDA 1999 and 2000 provided minimum flows necessary to sustain tailwater trout fisheries by reallocating the following recommended amounts of project storage: Beaver Lake, 1.5 feet; Table Rock Lake, 2 feet; Bull Shoals Lake, 5 feet; Norfork Lake, 3.5 feet; and Greers Ferry Lake, 3 feet. The Act further stated that no funds may be obligated to carry out work on the modification under subsection (a) until the Chief of Engineers, through completion of a final report, determines that the work is technically sound, environmentally acceptable, and economically justified.

Subsequent to the completion of the Draft Environmental Impact Statement (DEIS), Section 132 of the FY 2006 Energy and Water Resources Development Act (Pub. L. 109-103) authorized the implementation of plans BS-3 at Bull Shoals and NF-7 at Norfork lakes, as described in the Reallocation Report, at full Federal expense in accordance with section 906(e) of WRDA 86. Section 132 did not authorize implementation of Minimum Flows at Beaver, Norfork, and Greers Ferry Lakes. Also, Section 132 repealed the previous project authorities in WRDA 99 and WRDA 00, resulting in a new project.

The SDEIS analyzed the impacts to the five White River Reservoirs, however; emphasis is placed on Bull Shoals and Norfork Lakes due to the changes made with the FY 2006 Energy and Water Resources Development Act (Pub. L. 109-103). Previous study efforts evaluating the other lakes are included in the interest of full disclosure.

Proposed Action and Alternatives: WRDA 1999 and 2000 authorized the Little Rock District Corps of Engineers to reallocate specific “feet” of storage from each of the five White River reservoirs. WRDA did not specify which storage zone to take the “feet” of storage. Currently the lakes are divided into two zones, flood pool and conservation pool. The volume of storage provided by reallocating “feet” of storage from conservation pool is less than the volume of storage provided by the same “feet” of storage from the flood pool.

The White River Reallocation Study completed in 2004 and the DEIS evaluated three reallocation plans at each reservoir, (1) Reallocation from the flood pool, (2) reallocation from the conservation pool and, (3) splitting the reallocation 50:50 from each pool. The study also looked at different methods of water release such as through existing station service units and siphons, new station service units, through the main turbines, or through siphons only.

After the submittal of the 2004 reallocation study, authorization was included in the FY 2006 Energy and Water Resources Development Act (EWRDA) that selected alternatives BS3 (reallocation at Bull Shoals Lake from the flood pool released through an existing hydropower main turbine) and NF7 (reallocation from a 50:50 split between the flood pool and the conservation pool with releases through existing station service units and siphons). These alternatives were designated the “preferred alternative” and as such comply with Congressional directives and provide compensation to the hydropower users and affected facilities.

SDEIS Availability: The SDEIS will be available for public review at the following locations:

Commenting: Comments received in response to this SDEIS, including names and addresses of those who comment will be considered part of the public record. Comments submitted anonymously will also be accepted and considered. Pursuant to Title 7 of the CFR 1.27(d), any person may request that the Corps withhold a submission from the public record if he or she can demonstrate that the Freedom of Information Act (FOIA) permits such confidentiality. Persons requesting such confidentiality should be aware that, under FOIA, confidentiality may be granted in only very limited circumstances, such as to protect trade secrets. The Corps will inform the requester of the agency's decision regarding the request for confidentiality. If the request is denied, the Corps will return the submission with notification that the comments may be resubmitted either with or without the commentor's name and address.

Affected local, State, or Federal agencies, affected American Indian tribes, and other interested private organizations and parties may participate in the review process by forwarding written comments to the address given previously or by attending the public meetings.

The Corps and the State of Minnesota will jointly prepare the DEIS. The Corps is the lead federal agency and the Minnesota Department of Natural Resources (MnDNR) is the lead state agency. To determine issues to be addressed in the DEIS, a public scoping process will be conducted. The MnDNR, with assistance from the Corps, will prepare and release to the public a Draft Scoping Decision Document (Draft SDD) and a Scoping Environmental Assessment Worksheet (SEAW). Federal, state, and local agencies; the general public; interested private organizations and parties; and affected Native American tribes will have 30 days to provide comments on those two documents. During the 30-day public comment period, the Corps and the MnDNR will jointly conduct a public scoping meeting. The meeting will be held on Wednesday, October 1, 2008, from 6:30 p.m. to 9 p.m. at the Nashwauk-Keewatin High School gymnasium at 400 2nd Street, Nashwauk, MN. The MnDNR, with assistance from the Corps, will prepare and release to the public a Final SDD based upon the comments received during the scoping process. Significant issues and resources identified in the Final SDD will be addressed in the DEIS.

The DEIS will assess impacts of the proposed action and reasonable alternatives, identify and evaluate mitigation alternatives, and discuss potential environmental monitoring. Anyone who has an interest in participating in the development of the DEIS is invited to contact the St. Paul District, Corps of Engineers. Major issues identified to date for discussion in the DEIS are the impacts of the proposed project on:

1. Fish, wildlife, and ecologically sensitive resources.

2. Water resources, including: surface and groundwater resources; waters of the U.S., including wetlands; and receiving stream geomorphology.

3. Water quality, including: surface water runoff; and storm water management.

4. Air quality.

5. Cumulative impacts, including: Wildlife habitat loss/fragmentation and habitat corridor obstruction/landscape barriers; wetlands in the Swan River watershed; air quality in federally-administered Class I areas; and water quality and flow in Swan Lake and the Swan River.

Issuing a permit for the expansion of an open pit taconite mine and expansion of a taconite ore processing facility is considered to be a major Federal action that may have a significant impact on the quality of the human environment. The project: (1) Would have a significant adverse effect on wetlands (which are special aquatic sites), and (2) has the potential to significantly affect water quality, groundwater, air quality, fish, and wildlife. Our environmental review will be conducted to meet the requirements of the National Environmental Policy Act of 1969, National Historic Preservation Act of 1966, Council of Environmental Quality Regulations, Endangered Species Act of 1973, Section 404 of the Clean Water Act, and other applicable laws and regulations.

This information collection request contains:

(1) OMB No. 1910-0600;

(2) Information Collection Request Title: Industrial Relations;

(3) Purpose: This information is required for management oversight for the Department of Energy's Facilities Management Contractors and to ensure that the programmatic and administrative management requirements of the contract are managed efficiently and effectively;

(4) Estimated Number of Respondents: 316;

(5) Estimated Total Burden Hours: 8,140;

(6) Number of Collections: The information collection request contains 8 information and/or recordkeeping requirements.

This information collection request contains: (1) OMB No. {“New”}; (2) Information Collection Request Title: Organization Climate and Safety Conscious Work Environment; (3) Type of Request: New collection; (4) Purpose: The proposed collection will be used to assess the organizational climate and Safety Conscious Work Environment as part of the Office of Civilian Radioactive Waste Management's (OCRWM) desire to continuously improve performance and comply with the employee protection requirements of 10 CFR 63.9, Employee protection , and Section 211 of the Energy Reorganization Act of 1974, as amended (42 U.S.C. 5851; (5) Type of Respondents: Federal, national laboratory, and other contractor employees supporting the OCRWM mission; (6) Estimated Number of Respondents: 1,750; and (7) Estimated Number of Burden Hours: 1,000.

This section contains the following information about the energy information collection submitted to OMB for review: (1) The collection numbers and title; (2) the sponsor ( i.e. , the Department of Energy component; (3) the current OMB docket number (if applicable); (4) the type of request ( i.e. , new, revision, extension, or reinstatement); (5) response obligation ( i.e. , mandatory, voluntary, or required to obtain or retain benefits); (6) a description of the need for and proposed use of the information; (7) a categorical description of the likely respondents; and (8) an estimate of the total annual reporting burden ( i.e. , the estimated number of likely respondents times the proposed frequency of response per year times the average hours per response).

1. Form OE-417, “Electric Emergency Incident and Disturbance Report.”

2. Office of Electricity Delivery and Energy Reliability/OE.

3. OMB Number 1901-0288.

4. Revision and three-year extension.

5. Mandatory.

6. Form OE-417 collects information on electric emergency incidents and disturbances for DOE's use in fulfilling its overall national security and other energy management responsibilities. The information will also be used by DOE for analytical purposes. All electric utilities, including those that operate Control Area Operator functions and Reliability Authority functions, will be required to supply information when an incident or disturbance meets a reporting threshold.

Since the pre-survey consultation notice was published, Federal Register notice 73 FR 15498, the proposal for an “N-3 contingency event” has been withdrawn and the proposed criterion will not be added to the form.

7. Business or other for-profit; State, local or tribal government.

8. 3,919 hours.

Please refer to the supporting statement as well as the proposed forms and instructions for more information about the purpose, who must report, when to report, where to submit, the elements to be reported, detailed instructions, provisions for confidentiality, and uses (including possible nonstatistical uses) of the information. For instructions on obtaining materials, see the FOR FURTHER INFORMATION CONTACT section.