Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of antidumping duty administrative review.
In response to a request from the respondent, Bergerac, N.C., the Department of Commerce is conducting an administrative review of the antidumping duty order on industrial nitrocellulose from France. The review covers one manufacturers/exporter, Bergerac, N.C. The period of review is August 1, 1999, through July 31, 2000.
We have preliminarily determined that sales by Bergerac, N.C. have been made below normal value. If these preliminary results are adopted in our final results of administrative review, we will instruct the Customs Service to assess antidumping duties on all appropriate entries.
We invite interested parties to comment on these preliminary results. Parties who submit comments in these proceedings are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument.
September 7, 2001.Start Further Info
FOR FURTHER INFORMATION CONTACT:
David Dirstine, AD/CVD Enforcement 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-4033.End Further Info End Preamble Start Supplemental Information
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department of Commerce's (the Department's) regulations are to 19 CFR part 351 (2000).
On August 10, 1983, the Department of Commerce (the Department) published in the Federal Register (48 FR 36303) the antidumping duty order on industrial nitrocellulose (INC) from France. On August 25, 2000, the respondent requested a review of that order for respondent Bergerac, N.C. On October 2, 2000, in accordance with 19 CFR 351.213(b), we published a notice of initiation of administrative review of this order for the period of review August 1, 1999, through July 31, 2000 (POR) (65 FR 58733). The Department is conducting this administrative review in accordance with section 751 of the Act.
Scope of Review
The product covered by this review is INC containing between 10.8 and 12.2 percent nitrogen. INC is a dry, white amorphous synthetic chemical produced by the action of nitric acid on cellulose. The product comes in serveral viscosities and is used to form films in lacquers, coatings, furniture finishes and printing inks. Imports of this product are classified under the Harmonized Tariff Schedule of the United States Annotated (HTSUS) subheadings 3912.20.00 and 3912.90.00. Although the HTSUS item numbers are provided for convenience and customs purposes, the written descriptions of the scope of this proceeding remain dispositive.
As provided in section 782(i) of the Act, we verified information provided by Bergerac, N.C. (BNC), using standard verification procedures, including on-site inspection of the manufacturer's facilities, the examination of relevant sales, financial, and cost records, and the selection of original documentation containing relevant information. Our verification results are outlined in the public versions of the verification reports, which are on file in the Central Records Unit (CRU), Main Commerce Building, Room B-099.
Constructed Export Price
For the price to the United States, we used constructed export price (CEP) as defined in section 772(b) of the Act. We calculated CEP based on the packed F.O.B., C.I.F., or delivered price to unaffiliated purchasers in the United States. We made deductions, as appropriate, for discounts and rebates. We also made deductions for any movement expenses in accordance with section 772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act and the Statement of Administrative Action (SAA) (H.R. Doc. 103-316 (1994) at 823-824) to the URAA, we calculated the CEP by deducting selling expenses associated with economic activities occurring in the United States, including commissions, direct selling expenses, and indirect selling expenses in the United States. Finally, we made an adjustment for profit allocated to these expenses in accordance with section 772(d)(3) of the Act. No other adjustments to CEP were claimed or allowed.
Tevco, Inc. (TEVCO), a U.S. affiliate of BNC, imported subject merchandise to which value was added in the United States prior to sale to unaffiliated U.S. customers. The further-manufactured products were then sold to unaffiliated parties. We preliminarily determine that the special rule under section 772(e) of the Act for merchandise with value added after importation applies to the sales made by TEVCO in the United States.
Section 772(e) of the Act provides that, when the subject merchandise is imported by an affiliated person and the value added in the United States by the affiliated person is likely to exceed substantially the value of the subject merchandise, we shall determine the CEP for such merchandise using the price to an unaffiliated party of identical or other subject merchandise if there is a sufficient quantity of sales to provide a reasonable basis for comparison, and we determine that the use of such sales is appropriate. If there is not a sufficient quantity of such sales or if we determine that using the price to an unaffiliated party of identical or other subject merchandise is not appropriate, we may use any other reasonable basis to determine the CEP.
To determine whether the value added is likely to exceed substantially the value of the subject merchandise, we estimated the value added based on the difference between the averages of the prices charged to the first unaffiliated Start Printed Page 46774purchaser for the merchandise as sold in the United States and the averages of the prices paid for the subject merchandise by the affiliated purchaser, TEVCO. Based on this analysis, we determined that the estimated value added in the United States by TEVCO accounted for at least 65 percent of the price charged to the first unaffiliated customer for the merchandise as sold in the United States. See 19 CFR 351.402(c) for an explanation of our practice on this issue; see also Antifriction Bearings (other than Tapered Roller Bearings) and Parts Thereof from France, Germany, Italy, Japan, Sweden, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews and Revocation of Orders in Part, 66 FR 36551, 36555, Decision Memorandum at Comment 28 (July 12, 2001) (AFBs). Therefore, we determine preliminarily that the value added is likely to exceed substantially the value of the subject merchandise.
For BNC, we determine preliminarily that there was a remaining sufficient quantity of sales of identical or other subject merchandise to unaffiliated persons to provide a reasonable basis for comparison and that the use of these sales is appropriate as a basis for calculating margins of dumping on the value-added merchandise. See AFBs. Accordingly, for purposes of determining dumping margins for the sales subject to the special rule, we have used the weighted-average dumping margins calculated on sales of identical or other subject merchandise sold to unaffiliated persons. See the Analysis Methodology memorandum from J. David Dirstine to the file dated August 30, 2001.
Based on a comparison of the aggregate quantity of home-market and U.S. sales and absent any information that a particular market situation in the exporting country did not permit a proper comparison, we determined that the quantity of foreign like product sold by BNC in France was sufficient to permit a proper comparison with the sales of the subject merchandise to the United States, pursuant to section 773(a) of the Act. BNC's quantity of sales in its home market was greater than five percent of its sales to the U.S. market. Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we based normal value on the prices at which the foreign like products were first sold for consumption in the exporting country.
We used sales to affiliated customers only where we determined such sales were made at arm's-length prices, i.e., at prices comparable to prices at which the firm sold identical merchandise to unaffiliated customers.
On November 29, 2000, the Department received a below-cost allegation from the petitioner, Green Tree Chemical Technologies, Inc. The petitioner's below-cost allegation made use of BNC's data on the record, employed a reasonable methodology, and provided evidence that alleged below-cost sales are representative of a broader range of models that may be used as a basis for normal value. Therefore, pursuant to section 773(b)(1)(A) and (B), on December 20, 2000, we initiated a below-cost investigation of sales by BNC in its home market. For a further discussion of this below-cost investigation, see Memorandum to Richard W. Moreland from Laurie Parkhill, dated December 20, 2000, on file in the CRU, Room B-099.
In accordance with section 773(b)(3) of the Act, we calculated the cost of production (COP) based on the sum of the costs of materials and fabrication employed in producing the foreign like product, plus amounts for home-market selling, general and administrative (SG&A) expenses, and all costs and expenses incidental to packing the merchandise. We used the home-market sales data and COP information provided by BNC in its questionnaire response.
After calculating a weighted-average COP, in accordance with section 773(b)(3) of the Act, we tested whether the home-market sales of INC were made at prices below COP within an extended period of time in substantial quantities, and whether such prices permitted recovery of all costs within a reasonable period of time. We compared grade-specific COP's to the reported home-market prices less any applicable movement charges, discounts and rebates, indirect selling expenses, commissions, and packing.
Pursuant to section 773(b)(2)(C) of the Act, when less than 20 percent of BNC's sales of a grade of INC were at prices less than the COP, we did not disregard any below-cost sales of that product because the below-cost sales were not made in substantial quantities within an extended period of time. When 20 percent or more of BNC's sales of a grade of INC during the period of review were at prices less than the COP, we disregarded such below-cost sales because they were made in substantial quantities within an extended period of time pursuant to sections 773(b)(2)(B) and (C) of the Act. Based on comparisons of home-market prices to weighted-average COPs for the period of review, we determined that below-cost sales of INC were 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. Based on this test, we disregarded certain below-cost sales with respect to BNC.
We compared U.S. sales with sales of the foreign like product in the home market.
Home-market prices were based on the packed, ex-factory or delivered prices to affiliated or unaffiliated purchasers. When applicable, we made adjustments for differences in packing and for movement expenses in accordance with sections 773(a)(6)(A) and (B) of the Act. We also 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 for differences in circumstances of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. For comparisons to CEP, we made COS adjustments by deducting home-market direct selling expenses from normal value. We also made adjustments, when applicable, for home-market indirect selling expenses to offset U.S. commissions deducted from CEP.
Level of Trade
In accordance with section 773(a)(1)(B)(i) of the Act, we base normal value, to the extent practicable, on sales at the same level of trade as the CEP. If normal value is calculated at a different level of trade, we make an adjustment, if appropriate and if possible, in accordance with section 773(a)(7) of the Act. We determined that there was one level of trade in the home market. We were unable to match CEP sales at the same level of trade in the home market or to make a level-of-trade adjustment, because the differences in price between the CEP level of trade and the home-market level of trade are not quantifiable due to the lack of an equivalent CEP level of trade in the home market. Section 773(a)(7)(B) of the Act provides for an adjustment to normal value if normal value is established at a level of trade that is a more advanced stage of distribution than the level of trade of the CEP sale and the information on the record does not provide a basis for determining a level-of-trade adjustment. Therefore, we have made a CEP offset for all such sales as requested by the respondent. (See the Level of Trade section of our analysis memorandum to the file, dated August 30, 2001, on file in the CRU, Room B-099.) Start Printed Page 46775
Preliminary Results of Reviews
As a result of our review, we preliminarily determine the weighted-average dumping margins of 3.26 percent for the period August 1, 1999, through July 31, 2000.
Any interested party may request a hearing within 30 days of the date of publication of this notice. A hearing, if requested, will be held at the main Commerce Department building three days after submission of rebuttal briefs.
Issues raised in hearings will be limited to those raised in the respective case and rebuttal briefs. Case briefs from interested parties may be filed no later than 30 days after publication of this notice. Rebuttal briefs, limited to the issues raised in case briefs, may be submitted no later than five days after the deadline for filing case briefs.
Parties who submit case or rebuttal briefs in this proceeding are requested to submit with each argument (1) a statement of the issue, and (2) a brief summary of the argument with an electronic version included.
The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs. The Department will issue final results of this review within 120 days of publication of these preliminary results.
The Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. We have calculated importer-specific ad valorem duty-assessment rates based on the ratio of the total amount of antidumping duties calculated for the examined CEP sales made during the POR to the total customs entered value of the sales used to calculate these duties. We will direct the Customs Service to assess the resulting percentage margin for the reviewed CEP sales uniformly on all entries of that particular importer during the POR as well as on those entries of subject merchandise for which we determined that the special rule for merchandise with value added after importation applied under section 772(e) of the Act. See 19 CFR 351.212(a).
The following deposit requirements will be effective upon publication of the notice of final results of administrative review for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) The cash-deposit rate for Bergerac, N.C. will be the rate established in the final results of review; (2) for previously reviewed or investigated companies not listed above, the cash-deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the less-than-fair-value 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 1.38 percent. This is the “All Others” rate from the less-than-fair-value investigation.
These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
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 Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
We are issuing and publishing these determinations in accordance with sections 751(a)(1) and 777(i)(1) of the Act.Start Signature
Dated: August 31, 2001.
Bernard T. Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-22557 Filed 9-6-01; 8:45 am]
BILLING CODE 3510-DS-P