[Federal Register Volume 75, Number 152 (Monday, August 9, 2010)]
[Notices]
[Pages 47788-47794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19581]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-405-803]


Purified Carboxymethylcellulose from Finland; Notice of 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests from Aqualon Company, a division of 
Hercules Inc., (the petitioner) and respondents CP Kelco Oy and CP 
Kelco U.S., Inc. (collectively, CP Kelco), the Department of Commerce 
(the Department) is conducting an administrative review of the 
antidumping duty order on purified carboxymethylcellulose (CMC) from 
Finland. The review covers exports of the subject merchandise to the 
United States produced by CP Kelco. The period of review (POR) is July 
1, 2008, through June 30, 2009.
    We preliminarily find that CP Kelco made sales at less than normal 
value (NV) during the POR. If these preliminary results are adopted in 
our final results of this review, we will instruct U.S. Customs and 
Border Protection (CBP) to assess antidumping duties based on 
differences between the export price (EP) or constructed export price 
(CEP) and NV.

EFFECTIVE DATE: August 9, 2010.

FOR FURTHER INFORMATION CONTACT: Tyler Weinhold or Robert James, AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1121 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department published the antidumping duty order on CMC from

[[Page 47789]]

Finland on July 11, 2005. See Notice of Antidumping Duty Orders: 
Purified Carboxymethylcellulose from Finland, Mexico, the Netherlands, 
and Sweden, 70 FR 39734 (July 11, 2005). On July 11, 2009, the 
Department published the notice of opportunity to request an 
administrative review of CMC from Finland for the period July 1, 2008, 
through June 30, 2009. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 74 FR 31406 (July 1, 2009).
    On July 20, 2009, the petitioner requested a review of CP Kelco for 
the period July 1, 2008, through June 30, 2009. On July 29, 2009, CP 
Kelco requested an administrative review for the same period. On August 
25, 2009, the Department published in the Federal Register a notice of 
initiation of this antidumping duty administrative review. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Requests for Revocation in Part, 74 FR 42873 (August 25, 
2009).
    On August 31, 2009, the Department issued its standard antidumping 
questionnaire (the Antidumping Questionnaire) to CP Kelco. CP Kelco 
submitted its response to section A of the Antidumping Questionnaire on 
October 2, 2009 (CP Kelco's Section A Response). CP Kelco submitted its 
responses to sections B and C of the Antidumping Questionnaire on 
October 30, 2009 (CP Kelco's Section B Response and CP Kelco's Section 
C Response, respectively). Because the Department disregarded sales at 
prices below the cost of production in the most recently completed 
administrative review as of the initiation of the instant review, we 
are conducting a sales-at-below-cost investigation in this review. See 
Purified Carboxymethylcellulose from Finland; Notice of Preliminary 
Results of Antidumping Duty Administrative Review, 74 FR 16180 (April 
9, 2009) (2009 Preliminary Results) (unchanged in Purified 
Carboxymethylcellulose from Finland; Notice of Final Results of 
Antidumping Duty Administrative Review, 74 FR 28886 (June 18, 2009). 
Accordingly, CP Kelco submitted its response to section D of the 
Antidumping Questionnaire on October 30, 2009 (CP Kelco's Section D 
Response).
    On December 10, 2009, the Department issued a supplemental 
questionnaire to CP Kelco regarding its responses to section D of the 
Antidumping Questionnaire. CP Kelco submitted its response to the 
Department's section D supplemental questionnaire on January 20, 2010 
(CP Kelco's January 20, 2010, Response). On December 16, 2009, the 
Department issued a supplemental questionnaire to CP Kelco regarding 
its responses to sections A, B, and C of the Antidumping Questionnaire. 
CP Kelco submitted its response to the Department's sections A, B, and 
C supplemental questionnaire on January 28, 2010 (CP Kelco's January 
28, 2010, Response). On December 29, 2009, the Department issued a 
second supplemental questionnaire to CP Kelco regarding its responses 
to sections A, B, and C of the antidumping questionnaire. CP Kelco 
submitted its response to the Department's supplemental questionnaire 
on January 14, 2010 (CP Kelco's January 14, 2010, Response). On 
February 18, 2010, CP Kelco voluntarily submitted a section D cost 
comparison (CP Kelco's February 18, 2010, Submission). On March 16, 
2010, the Department issued a third supplemental questionnaire to CP 
Kelco regarding its responses to sections A, B, and C of the 
Antidumping Questionnaire. CP Kelco submitted its response to the 
Department's supplemental questionnaire on March 30, 2010, (CP Kelco's 
March 30, 2010, Response). On July 15, 2010, the Department issued 
another supplemental questionnaire to CP Kelco regarding its responses 
to sections A, B, C, and D of the antidumping questionnaire. CP Kelco 
submitted its response to the Department's supplemental questionnaire 
on July 20, 2010, (CP Kelco's July 20, 2010, Response).

Scope of the Order

    The merchandise covered by this order is all purified 
carboxymethylcellulose (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 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 the order is 
dispositive.

Fair Value Comparisons

    To determine whether sales of CMC in the United States were made at 
less than normal value (NV), we compared U.S. price to NV, as described 
in the ``Export Price'' (EP), ``Constructed Export Price'' (CEP), and 
``Normal Value'' sections of this notice. In accordance with section 
777A(d)(2) of the Tariff Act of 1930, as amended (the Tariff Act), we 
calculated monthly weighted-average NVs and compared these to 
individual U.S. transactions. Because we determined that CP Kelco made 
both EP and CEP sales during the POR, we used both EP and CEP as the 
basis for U.S. price in our comparisons. We used the invoice date, as 
recorded in CP Kelco's normal books and records, as the date of sale 
for CP Kelco's EP, CEP, and home market sales. See 19 CFR 351.401(i). 
For a more detailed discussion of these calculations, see Memorandum 
from Tyler Weinhold, to the File, ``Analysis of Data Submitted by CP 
Kelco Oy and CP Kelco U.S. Inc. (collectively, CP Kelco) in the 
Preliminary Results of the 2008-2009 Administrative Review of Purified 
Carboxymethylcellulose (CMC) from Finland,'' dated August 2, 2010 
(Preliminary Analysis Memorandum).

Product Comparisons

    In accordance with section 771(16) of the Tariff Act, we considered 
all products produced by CP Kelco covered by the ``scope of the order'' 
section and sold in the home market during the POR to be foreign like 
products for purposes of determining appropriate product comparisons to 
U.S. sales. We relied on five characteristics to match U.S. sales of 
subject merchandise to home market sales of the foreign like product 
(listed in order of priority): 1) grade; 2) viscosity; 3) degree of 
substitution; 4) particle size; and 5) solution gel characteristics. 
See the Antidumping Questionnaire at Appendix 5. 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 these product characteristics and the reporting 
instructions listed in the antidumping questionnaire. Because there 
were sales of identical or similar merchandise in the home market 
suitable for comparison to each U.S. sale, we did not compare any U.S. 
sales to constructed value (CV).
    CP Kelco reported that it sold material which was suitable for 
pharmaceutical grade applications and for other regulated applications 
as well (i.e., food,

[[Page 47790]]

cosmetic, personal care).\1\ In its responses to section B, C, and D of 
our antidumping questionnaire, CP Kelco reported these sales as sales 
of grade ``2'' material, ``regulated-other (food).'' At our request, CP 
Kelco differentiated between (a) sales which were individually 
certified as pharmaceutical grade and (b) other sales of the same 
commercial product in its March 30, 2010, Response. We asked them to 
report sales for which there was a certification as grade ``1'' 
products, and to report sales for which there was no such certification 
as grade ``2'' products.
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    \1\ See CP Kelco's March 30, 2010, Response at page 18, 
referencing CP Kelco's brochures in CP Kelco's Section A Response at 
Exhibit A-33.
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    However, it has been the Department's practice to consider a 
product to be identified according to the strictest requirements of 
subject merchandise which has multiple specifications. All of the 
relevant commercial products were manufactured to be suitable both for 
the strictest specifications, that of regulated pharmaceutical grade 
CMC, and for a less-strict specification, that of regulated-other 
(food) grade CMC. In accordance with our practice, we, therefore, asked 
CP Kelco to report these sales as sales of products which meet the 
strictest specification to which the material was manufactured: 
regulated pharmaceutical grade material.\2\ CP Kelco complied with this 
request.  See CP Kelco's July 20, 2010, Response.
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    \2\ See, e.g., Rautaruukki Oy v. United States, 23 C.I.T. 257 
(CT. Int'l Trade 1998), in which the court found that the Department 
should have considered all steel plate products graded as ``A'' 
under different national classification standards to be identical 
merchandise in the absence of a showing of any significant physical 
distinction between the products. See also, Certain Cut-to-Length 
Carbon Steel Plate From Finland; Notice of Amended Final Results of 
Administrative Review in Accordance With Final Court Decision, 64 FR 
68669 (December 8, 1999). Further, it is the Department's practice 
to consider the strictest requirements of subject merchandise which 
has multiple specifications (i.e., the strictest specifications). 
See, e.g., Certain Small Diameter Carbon and Alloy Seamless 
Standard, Line, and Pressure Pipe From Romania: Final Results of 
Antidumping Duty Administrative Review and Final Determination Not 
To Revoke Order in Part, 70 FR 7237 (February 11, 2005) and the 
accompanying Issues and Decision Memorandum at Comment 13, where the 
Department states: ``To establish the most appropriate match for the 
triple-certified pipe in the comparison market, we looked for 
products that met most closely the strictest requirements of the 
subject merchandise with multiple specifications.''
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Export Price

    Section 772(a) of the Tariff Act defines EP as ``the price at which 
the subject merchandise is first sold (or agreed to be sold) before the 
date of importation by the producer or exporter of 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,'' as adjusted under section 772(c) of the Tariff Act. In 
accordance with section 772(a) of the Tariff Act, we used EP for a 
number of CP Kelco's U.S. sales. We preliminarily find that these sales 
are properly classified as EP sales because these sales were made 
before the date of importation and because our CEP methodology was not 
otherwise warranted.
    We based EP on the prices to unaffiliated customers in the United 
States. We made adjustments for price or billing adjustments and 
discounts, where applicable. We also made deductions for movement 
expenses in accordance with section 772(c)(2)(A) of the Tariff Act, 
which included, where appropriate: foreign inland freight; 
international freight; marine insurance; U.S. brokerage and handling; 
and direct selling expenses (credit expenses).
    CP Kelco incurred certain expenses as a result of factoring certain 
sales with an affiliated financial institution (i.e., selling the 
accounts receivable associated with certain commercial sales in 
exchange for an immediate payment). See CP Kelco's Section B Response 
at B-22 to B-23; CP Kelco's Section C response at C-24 to C-25; and CP 
Kelco's January 28, 2010, Response, B-1 to B-4, and C-1 to C-3. In past 
segments of this proceeding we made adjustments to gross unit price 
based upon the difference between the face value of the accounts 
receivable factored and the immediate payment received upon the 
factoring of those accounts receivable (factoring discount).
    The date of factoring represents the date upon which CP Kelco 
received the (discounted) payment from the factoring institution, as 
the full payment from the customer went to the factoring institution at 
a later date. See CP Kelco's Section B Response at B-16 to B-17, and B-
28 to B-29; see also CP Kelco's Section C Response C-17 to C-18 and C-
37 to C-39. Accordingly, in past segments of this proceeding, where we 
made an adjustment for factoring discount, we also calculated imputed 
credit according to the date on which the sales were factored, rather 
than the date of payment from the customer.
    In past segments of this proceeding, we recognized that factoring 
expenses are actual direct selling expenses incurred by CP Kelco. 
However, in the most recently completed review of the concurrent 
proceeding of CMC from the Netherlands, to which CP Kelco U.S., Inc. 
and CP Kelco Oy's affiliate, CP Kelco BV are respondents, we stated our 
intent to re-examine the appropriateness of including the affiliated 
party factoring expenses. Subsequently, we have re-examined the 
appropriateness of including the factoring expenses in the 
administrative review of CMC from Finland as well. We have examined the 
arm's-length nature of these transactions and found that there is 
insufficient information available to continue to treat factoring 
expenses as expenses incurred during arm's-length transactions. 
Therefore, we have not made an adjustment for factoring expenses.\3\ 
Accordingly, we have used CP Kelco's imputed credit expenses as 
calculated normally (according to the date of payment by the customer 
rather than the date of factoring of the accounts receivable associated 
with the invoice).
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    \3\ See Purified Carboxymethylcellulose from the Netherlands; 
Preliminary Results of Antidumping Duty Administrative Review, 74 FR 
24822, 24827 (May 26, 2009) unchanged in Purified 
Carboxymethylcellulose from the Netherlands: Final Results of 
Antidumping Duty Administrative Review, 74 FR 52742 (October 14, 
2009).
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    We reduced movement expenses, where appropriate, by the amount of 
freight revenue paid by the customer to CP Kelco in reimbursement for 
CP Kelco arranging and initially paying for freight. See CP Kelco's 
Section B Response at B-25; CP Kelco's Section C Response at C-28; CP 
Kelco's January 28, 2010, Response, Section B, at 9 to 11, and Section 
C, at 11 to 14. We limited the amount of freight revenue deducted to no 
greater than the amount of movement expenses in the home market. See 
Polyethylene Retail Carrier Bags from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review, 74 FR 6857 
(February 11, 2009) (Bags from the PRC) and the accompanying Issues and 
Decision Memorandum at Comment 6. As the Department explained in Bags 
from the PRC, section 772 (c)(1) of the Tariff Act provides that the 
Department shall increase the price used to establish either export 
price or constructed export price in only the following three 
instances: (A) when not included in such price, the cost of all 
containers and coverings and all other costs, charges, and expenses 
incident to placing the subject merchandise in condition packed ready 
for shipment to the United States; (B) the amount of any import duties 
imposed by the country of exportation which have been rebated, or which 
have not been collected, by reason of the exportation of the subject 
merchandise to the United States; and (C) the amount of any 
countervailing duty imposed on the subject merchandise under subtitle A 
to offset an export subsidy. In addition, section

[[Page 47791]]

351.401(c) of the Department's regulations directs the Department to 
use a price in the calculation of U.S. price which is net of any price 
adjustments that are reasonably attributable to the subject 
merchandise. The term ``price adjustments'' is defined under 19 CFR 
351.102(b) (38) as ``any change in the price charged for subject 
merchandise or the foreign like product, such as discounts, rebates, 
and post-sale adjustments, that are reflected in the purchaser's net 
outlay.''
    In past cases, we have declined to treat freight-related revenues 
as either an addition to U.S. price under section 772(c) of the Tariff 
Act or as price adjustments under 19 CFR 351.102(b). Rather, we have 
incorporated these revenues as offsets to movement expenses because 
they relate to the transportation of subject merchandise. See, e.g., 
Stainless Steel Wire Rod from Sweden: Preliminary Results of 
Antidumping Duty Administrative Review, 72 FR 51414 (September 7, 2007) 
(Steel Wire Rod Preliminary) (unchanged in Stainless Steel Wire Rod 
from Sweden: Final Results of Antidumping Duty Administrative Review, 
72 FR 12950 (March 1, 2008)). Our offset practice limits the granting 
of an offset to situations where a respondent incurs expenses and 
realizes revenue for the same type of activity. Steel Wire Rod 
Preliminary, 72 FR 51415. According to CP Kelco's responses, freight 
revenues are revenues received from customers for invoice items 
covering transportation expenses and they arise not when freight is 
included in the selling price under the applicable terms of delivery, 
but rather when CP Kelco arranges and prepays freight for the customer. 
See CP Kelco's Section B Response at B-25; see also CP Kelco's Section 
C response at C-27. Therefore, we have limited the amount of the 
freight revenue used to offset CP Kelco's movement expenses to the 
amount of movement expenses incurred on the sale of subject 
merchandise. See Preliminary Analysis Memorandum at page 2.

Constructed Export Price

    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,'' as adjusted under 
sections 772(c) and (d) of the Tariff Act. In accordance with section 
772(b) of the Tariff Act, we used CEP for a number of CP Kelco's U.S. 
sales because CP Kelco sold merchandise to affiliate CP Kelco U.S., 
Inc. in the United States; CP Kelco U.S., Inc. in turn sold subject 
merchandise to unaffiliated U.S. customers. We preliminarily find that 
these U.S. sales are properly classified as CEP sales because they 
occurred in the United States after importation and were made through 
CP Kelco U.S. Inc. to unaffiliated U.S. customers.
    We based CEP on the prices to unaffiliated purchasers in the United 
States. We made adjustments for price or billing adjustments, and early 
payment discounts, where applicable. We also made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Tariff 
Act, which included, where appropriate: foreign inland freight; foreign 
brokerage and handling; international freight; marine insurance; 
customs duties; U.S. brokerage; U.S. inland freight; and U.S. 
warehousing expenses. We also reduced movement expenses, where 
appropriate, by the amount of freight revenue paid by the customer to 
CP Kelco. In accordance with our treatment of freight revenue on U.S. 
sales of subject merchandise (see ``Export Price'' section, above), we 
capped the amount of freight revenue deducted at no greater than the 
amount of movement expenses in the home market. In accordance with 
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 (imputed credit expenses), inventory 
carrying costs, and indirect selling expenses. We also made an 
adjustment for profit in accordance with section 772(d)(3) of the 
Tariff Act.

Further-Manufactured U.S. Sales

    In the administrative review CMC from Finland covering the period 
July 1, 2007, through June 30, 2008, CP Kelco reported that it had made 
certain sales of subject merchandise to affiliated companies in the 
United States. See Purified Carboxymethylcellulose from Finland; Notice 
of Preliminary Results of Antidumping Duty Administrative Review, 74 FR 
16180 (April 9, 2009) at 16182. However, now, CP Kelco reports that one 
of the alleged affiliates in question was not, in fact, an affiliate of 
CP Kelco. See CP Kelco's Section A Response at A-49 to A-50. CP Kelco 
explains that it had erroneously reported that the further manufacturer 
was affiliated with CP Kelco during the previous review. CP Kelco now 
reports that the requisite criteria for affiliation thought to be 
present in the July 1, 2007, through June 30, 2008, administrative 
review were not actually present then and are not present in this POR. 
Further, CP Kelco reports that no other affiliated U.S. customers 
engaged in further manufacturing.
    The following persons shall be considered to be ``affiliated'' or 
``affiliated persons'' according to Section 771(33) the Tariff Act: (A) 
Members of a family, including brothers and sisters (whether by the 
whole or half blood), spouse, ancestors, and lineal descendants; (B) 
Any officer or director of an organization and such organization; (C) 
Partners; (D) Employer and employee; (E) Any person directly or 
indirectly owning, controlling, or holding with power to vote, 5 
percent or more of the outstanding voting stock or shares of any 
organization and such organization; (F) Two or more persons directly or 
indirectly controlling, controlled by, or under common control with, 
any person; or (G) Any person who controls any other person and such 
other person. Section 771(33) of the Tariff Act further provides that 
``a person shall be considered to control another person if the person 
is legally or operationally in a position to exercise restraint or 
direction over the other person.''
    The Statement of Administrative Action (SAA) to the Uruguay Round 
Agreements Act states the following:
    The traditional focus on control through stock ownership fails to 
address adequately modern business arrangements, which often find one 
firm ``operationally in a position to exercise restraint or direction'' 
over another even in the absence of an equity relationship. A company 
may be in a position to exercise restraint or direction, for example, 
through corporate or family groupings, franchises or joint venture 
agreements, debt financing, or close supplier relationships in which 
the supplier or buyer becomes reliant upon the other.
See SAA, H.R. Doc. 103-316, vol. 1 at 838 (1994).
    Section 351.102(b)(3) of the Department's regulations defines 
affiliated persons and affiliated parties as having the same meaning as 
in section 771(33) of the Tariff Act and states that:
    In determining whether control over another person exists, within 
the meaning of section 771(33) of the Act, the Secretary will consider 
the following factors, among others: corporate or family groupings; 
franchise or joint venture agreements; debt financing; and close 
supplier relationships. The

[[Page 47792]]

Secretary will not find that control exists on the basis of these 
factors unless the relationship has the potential to impact decisions 
concerning the production, pricing, or cost of the subject merchandise 
or foreign like product. The Secretary will consider the temporal 
aspect of a relationship in determining whether control exists; 
normally, temporary circumstances will not suffice as evidence of 
control.
    The record of this review does not show that any of the above-
mentioned criteria are present with regard to the further manufacturer. 
Thus, we preliminarily determine that the further manufacturer is not 
affiliated with CP Kelco. In the instant review, CP Kelco made sales of 
subject merchandise only to the further manufacturer, to the above-
mentioned affiliated CEP reseller, and to unaffiliated customers. 
Therefore, CP Kelco reports that no sales were made to affiliates 
during this period of review other than to the CEP importer-reseller CP 
Kelco U.S., Inc. Accordingly, we preliminarily determine that there 
were no sales made to affiliates in the United Sates during the instant 
POR which were further manufactured and sold to unaffiliated customers 
as non-subject merchandise.

Normal Value

A. Selection of Comparison Market

    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 was equal to or greater than five percent of the aggregate 
volume of U.S. sales), we compared the respondent's volume of home 
market sales of the foreign like product to the volume of U.S. sales of 
the subject merchandise in accordance with section 773(a)(1) of the 
Tariff Act. As 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 the home 
market was viable. Therefore, we have based NV on home market sales in 
the usual commercial quantities and in the ordinary course of trade.

B. Cost of Production Analysis

    In accordance with section 773(b)(2)(A)(ii) of the Tariff Act, we 
are conducting a sales-below-cost investigation in this review because 
the Department disregarded some of CP Kelco's sales as having been made 
at prices below the cost of production in the previous administrative 
review. See 2009 Preliminary Results

C. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Tariff Act, we 
calculated the weighted-average cost of production (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, general, 
and administrative (SG&A) expenses, financial expenses, and packing 
costs. We relied on the COP data submitted by CP Kelco except in the 
following instance: we included certain factoring expenses in CP 
Kelco's financial expense calculation since we did not adjust the sales 
prices for factoring expenses. For a more detailed discussion of this 
matter, see Memorandum from Sheikh M. Hannan, Accountant to Neal 
Halper, Director, Office of Accounting, regarding ``Cost of Production 
and Constructed Value Calculation Adjustments for the Preliminary 
Results CP Kelco Oy'' dated August 2, 2010.
    We compared the weighted-average COP of CP Kelco's home market 
sales to home market sales prices of the foreign like product (net of 
billing adjustments, discounts, any applicable movement expenses, 
direct and indirect selling expenses, and packing), as required under 
section 773(b) of the Tariff Act, in order to determine whether these 
sales had been made at prices below the COP. 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 such sales were made in substantial quantities within an 
extended period of time; We also examined whether such sales were made 
at prices which would permit recovery of all costs within a reasonable 
period of time.

D. Results of the Cost Test

    Pursuant to section 773(b)(2)(C) of the Tariff 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) within an extended period of 
time and in ``substantial quantities'' within the POR, in accordance 
with section 773(b)(2)(B) and (C) of the Tariff 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 Tariff 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 in accordance with section 773(b)(1) of the Tariff Act.

E. Price-to-Price Comparisons

    We calculated NV based on prices to unaffiliated customers. We made 
adjustments for billing adjustments, early payment discounts, and 
rebates, where appropriate. We made deductions, where appropriate, for 
foreign inland freight, pursuant to section 773(a)(6)(B) of the Tariff 
Act. We also reduced foreign inland freight, where appropriate, by the 
amount of freight revenue paid by the customer to CP Kelco. In 
accordance with our treatment of freight revenue on U.S. sales of 
subject merchandise (see ``Export Price'' section, above), we capped 
the amount of freight revenue deducted at no greater than the amount of 
movement expenses in the home market. In addition, when comparing sales 
of similar merchandise, we made adjustments for differences in cost 
(i.e., DIFMER), where those differences were attributable to 
differences in physical characteristics of the merchandise, pursuant to 
section 773(a)(6)(C)(ii) of the Tariff Act and section 351.411 of the 
Department's regulations. 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 section 351.410 of the 
Department's regulations. 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 Tariff Act. See 
``Level of Trade and CEP Offset'' section below. 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.

F. Constructed Value (CV)

    In accordance with section 773(a)(4) of the Tariff Act, we base NV 
on 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 Tariff Act provides that CV shall be based on the sum of 
the cost of materials and fabrication employed in making the subject 
merchandise, SG&A 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

[[Page 47793]]

with section 773(e)(2)(A) of the Tariff Act, we based SG&A expenses and 
profit on the amounts incurred and realized by CP Kelco in connection 
with the production and sale of the foreign like product in the 
ordinary course of trade, for consumption in the foreign country. 
However, for these preliminary results, we did not base NV on CV in any 
instances.

Level of Trade and CEP Offset

    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 CV, on the LOT of the sales from which 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 trade 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 LOT is more 
remote from the factory than the CEP LOT 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 final results of review, 70 FR 58683 (October 7, 
2005)). For CEP sales, we consider only the selling activities 
reflected in the U.S. price after the deduction of expenses incurred in 
the U.S. 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 Antidumping 
Duty Administrative Review, 65 FR 30068 (May 10, 2000) and accompanying 
Issues and Decisions Memorandum at Comment 6.
    In the current review, CP Kelco reported only one level of trade in 
the home market. CP Kelco reported two levels of trade in its U.S. 
sales listing: the EP level of trade and the CEP level of trade. See CP 
Kelco's Section C Response at page C-25.
    CP Kelco reported it sold CMC to end users and distributors in both 
the home market and in the United States. CP Kelco identified two 
channels of distribution for sales in both the home market and the U.S. 
market: end users (channel 1) and distributors (channel 2). See, e.g., 
CP Kelco's Section A Response at A-16 to A-17, and CP Kelco's Section B 
Response at B-19 to B-20. CP Kelco made both direct (EP) sales of 
subject merchandise to U.S. customers and indirect (CEP) sales of 
subject merchandise through its affiliate, CP Kelco U.S., Inc.
    We obtained information from CP Kelco regarding the marketing 
stages involved in making its reported home market and U.S. sales. See 
CP Kelco's Section A response at A-32. CP Kelco described all selling 
activities performed, and provided a table comparing the selling 
functions performed among each channel of distribution for both 
markets. Id., at A-34. We reviewed the nature of the selling functions 
and the intensity to which all selling functions were performed for 
each home market channel of distribution and customer category; we then 
compared CP Kelco's EP and home market channels of distribution and 
customer categories.
    While we found differences in the levels of intensity performed for 
some of these functions between the home market end user and 
distributor channels of distribution, such differences are minor and do 
not establish distinct and separate levels of trade in Finland. Based 
on our analysis of all of CP Kelco's home market selling functions, we 
find all home market sales were made at the same LOT. Further, we find 
only minor differences between the sole home market LOT and that of CP 
Kelco's EP sales. Accordingly, we preliminarily determine CP Kelco's 
home market and EP sales were made at the same LOT.
    CP Kelco claims that it did not make home market sales at a level 
of trade comparable to the CEP level of trade. Therefore, CP Kelco 
requests the Department make a CEP offset. See CP Kelco's Section A 
Response at A-34 to A-35, CP Kelco's Sections B Response at B-23, and 
CP Kelco's Sections C Response at C-2.
    Thus, we compared the NV LOT (based on the selling activities 
associated with the transactions between CP Kelco and its customers in 
the home market) to the CEP LOT (which is based on the selling 
activities associated with the transaction between CP Kelco and its 
affiliated importer, CP Kelco U.S., Inc.) 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 CP Kelco U.S., Inc. For example, in 
comparing CP Kelco's selling activities, we find most of the reported 
selling functions performed in the home market are not a part of CEP 
transactions (i.e., sales negotiations, credit risk management, 
intermediate warehousing, collection, sales promotion, direct sales 
personnel, technical support, guarantees, and discounts). For those 
selling activities performed for both home market sales and CEP sales 
(i.e., customer service, logistics, inventory maintenance, packing, and 
freight/delivery), CP Kelco reported it performed each activity at 
either the same or at a higher level of intensity in one or both of the 
home market channels of distribution. For both the packing and the 
freight/delivery selling functions, each function is performed at the 
same level of intensity in one home market channel of distribution, but 
at a lower level of intensity in the other home market channel of 
distribution.
    We further note that CEP sales from CP Kelco to CP Kelco U.S., 
Inc., generally occur at the beginning of the distribution chain, 
representing essentially a logistical transfer of inventory. In 
contrast, all sales in the home market occur closer to the end of the 
distribution chain and involve smaller volumes; they require more 
customer interaction and consequently the performance of more selling 
functions. Based on the foregoing, we conclude that the NV LOT is at a 
more advanced stage than the CEP LOT.
    Because we found the home market and U.S. CEP 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

[[Page 47794]]

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 U.S. sales. 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.

Currency Conversions

    CP Kelco reported certain U.S. sales prices and certain U.S. 
expenses and adjustments in euros. Therefore, we made euro-U.S. dollar 
currency conversions, where appropriate. Conversions were based on the 
exchange rates in effect on the dates of the U.S. sales, as certified 
by the Federal Reserve Board, in accordance with section 773A(a) of the 
Tariff Act.

Preliminary Results of Review

    As a result of our review, we preliminarily find the following 
weighted-average dumping margin exists for the period July 1, 2008, 
through June 30, 2009:

------------------------------------------------------------------------
                                                       Weighted Average
               Manufacturer / Exporter                      Margin
                                                         (percentage)
------------------------------------------------------------------------
CP Kelco............................................               6.10%
------------------------------------------------------------------------

    The Department will disclose calculations performed within five 
days of the date of publication of this notice in accordance with 
section 351.224(b) of the Department's regulations. An interested party 
may request a hearing within thirty days of publication. See section 
351.310(c) of the Department's regulations. 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 pursuant 
to section 351.310(d) of the Department's regulations. 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.

Comments

    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 35 days after the date of 
publication of this notice. See 19 CFR 351.309(d). Parties who submit 
arguments 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 
written comments should provide the Department with an additional copy 
of the public version of any such comments on diskette. The Department 
will issue final results of this administrative review, including the 
results of our analysis of the issues in any such written comments or 
at a hearing, within 120 days of publication of these preliminary 
results.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Upon completion of this 
administrative review, pursuant to section 351.212(b) of the 
Department's regulations, the Department will calculate an assessment 
rate on all appropriate entries. CP Kelco has reported entered values 
for all of its sales of subject merchandise to the U.S. during the POR. 
Therefore, in accordance with section 351.212(b)(1) of the Department's 
regulations, we will calculate importer-specific duty assessment rates 
on the basis of the ratio of the total amount of antidumping duties 
calculated for the examined sales to the total entered value of the 
examined sales of that importer. These rates will be assessed uniformly 
on all entries the respective importers made during the POR. Where the 
assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer. The 
Department will issue appropriate assessment instructions directly to 
CBP fifteen days after 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 respondent for which it did not know its 
merchandise was destined for the United States. In such instances, we 
will instruct CBP to liquidate un-reviewed entries at the all-others 
rate if there is no rate for the intermediate company(ies) involved in 
the transaction. Id.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of CMC from Finland 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)(1) of the 
Tariff Act: 1) the cash deposit rate for CP Kelco will be the rate 
established in the final results of review; 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 6.65 
percent ad valorem from the LTFV investigation. See Notice of 
Antidumping Duty Orders: Purified Carboxymethylcellulose from Finland, 
Mexico, the Netherlands and Sweden, 70 FR 39734 (July 11, 2005). These 
deposit requirements, when imposed, shall remain in effect until 
further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double the antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act.

    Dated: August 2, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-19581 Filed 8-6-10; 8:45 am]
BILLING CODE 3510-DS-S