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Notice

Chlorinated Isocyanurates from Spain: Preliminary Results of Antidumping Duty Administrative Review

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Information about this document as published in the Federal Register.

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to timely requests by Biolab, Inc., Clearon Corporation and Occidental Chemical Corporation (collectively, “Petitioners”), and Aragonesas Industrias y Energía S.A. (“Aragonesas”), the Department of Commerce (“Department”) is conducting an administrative review of the antidumping duty order on chlorinated isocyanurates (“chlorinated Start Printed Page 39651isos”) from Spain with respect to Aragonesas. The period of review (“POR”) is June 1, 2006 through May 31, 2007.

The Department preliminarily determines that Aragonesas made U.S. sales of chlorinated isos at prices less than normal value (“NV”). See Preliminary Results of Review section, below. If these preliminary results are adopted in our final results of administrative review, the Department will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on all appropriate entries. Interested parties are invited to comment on these preliminary results. See Disclosure and Public Hearing section, below. We will issue the final results of review no later than 120 days from the date of publication of this notice.

EFFECTIVE DATE:

July 10, 2008.

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FOR FURTHER INFORMATION CONTACT:

Scott Lindsay, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-0780.

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SUPPLEMENTARY INFORMATION:

On June 24, 2005, the Department published in the Federal Register an antidumping duty order on chlorinated isos from Spain. See Chlorinated Isocyanurates from Spain: Notice of Antidumping Duty Order, 70 FR 36562 (June 24, 2005). In response to timely requests filed by Petitioners and Aragonesas, the Department published a notice of initiation of an administrative review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 72 FR 41057 (July 26, 2007). The POR for this administrative review is June 1, 2006 through May 31, 2007.

On August 24, 2007, the Department issued an antidumping duty questionnaire to Aragonesas. On September 25, 2007, the Department received Aragonesas's response to section A of the antidumping questionnaire. On October 12, 2007, the Department received Aragonesas's response to sections B and C of the antidumping questionnaire. On October 23, 2007, the Department received Aragonesas's response to section D of the antidumping questionnaire. We issued supplemental questionnaires to Aragonesas on November 19, 2007, December 3, 2007, January 3, 2008, and May 15, 2008. Aragonesas filed a timely response to each questionnaire.

The Department extended the time limit for the preliminary results by 120 days. See Chlorinated Isocyanurates from Spain: Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review, 73 FR 12079 (March 6, 2008).

Scope of the Order

The products covered by this order are chlorinated isocyanurates. Chlorinated isocyanurates are derivatives of cyanuric acid, described as chlorinated s-triazine triones. There are three primary chemical compositions of chlorinated isocyanurates: (1) trichloroisocyanuric acid (Cl3(NCO)3), (2) sodium dichloroisocyanurate (dihydrate) (NaCl2(NCO)3 2H2O), and (3) sodium dichloroisocyanurate (anhydrous) (NaCl2(NCO)3). Chlorinated isocyanurates are available in powder, granular, and tableted forms. This order covers all chlorinated isocyanurates.

Chlorinated isocyanurates are currently classifiable under subheadings 2933.69.6015, 2933.69.6021, and 2933.69.6050 of the Harmonized Tariff Schedule of the United States (“HTSUS”). The tariff classification 2933.69.6015 covers sodium dichloroisocyanurates (anhydrous and dihydrate forms) and trichloroisocyanuric acid. The tariff classifications 2933.69.6021 and 2933.69.6050 represent basket categories that include chlorinated isocyanurates and other compounds including an unfused triazine ring. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

Date of Sale

Aragonesas reported invoice date as the date of sale for U.S. sales. The Department's regulations 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.” See 19 CFR 351.401(i). We examined the questionnaire responses and the sales documentation placed on the record by Aragonesas, and determine that invoice date is the appropriate date of sale in both the U.S. and home markets.

However, in accordance with the Department's practice, whenever shipment date precedes invoice date, we used shipment date as the date of sale. See, e.g., Stainless Steel Sheet and Strip in Coils from the Republic of Korea; Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review, 71 FR 18074, 18079-80 (April 10, 2006), remaining unchanged in Stainless Steel Sheet and Strip in Coils from the Republic of Korea; Final Results and Rescission of Antidumping Duty Administrative Review in Part, 72 FR 4486 (January 31, 2007); and Certain Steel Concrete Reinforcing Bars From Turkey; Final Results of Antidumping Duty Administrative Review and New Shipper Review and Determination To Revoke in Part, 72 FR 62630, (November 6, 2007) and accompanying Issues and Decision Memorandum at Issue 2, where the Department finds “that it is appropriate to use the earlier of shipment or invoice date as Colakoglu's and Habas' U.S. date of sale in the instant review, consistent with the date-of-sale methodology established in the previous review.” Accordingly, because Aragonesas has reported that shipment date for its U.S. sales always precedes invoice date, we are using shipment date as the date of sale for its U.S. sales.

Comparisons to Normal Value

To determine whether Aragonesas sold chlorinated isos in the United States at prices less than NV, the Department compared the export price (“EP”) of individual U.S. sales to the weighted-average NV of sales of the foreign like product made in the ordinary course of trade in a month contemporaneous with the month in which the U.S. sale was made. See section 777A(d)(2) of the Tariff Act of 1930 (“the Act”); see also section 773(a)(1)(B)(i) of the Act.

Section 771(16) of the Act defines foreign like product as merchandise that is identical or similar to subject merchandise and produced by the same person and in the same country as the subject merchandise. Thus, we considered all products covered by the scope of the order that were produced by the same person and in the same country as the subject merchandise, and sold by Aragonesas in the home market during the POR, to be foreign like products for the purpose of determining appropriate product comparisons to chlorinated isos sold in the United States.

Product Comparisons

In accordance with section 771(16) of the Act, the Department considered all products produced by the respondent, covered by the description in the “Scope of the Order” section above, to be foreign like products for purposes of Start Printed Page 39652determining appropriate product comparisons to U.S. sales. Pursuant to 19 CFR 351.414(e)(2), the Department compared U.S. sales made by Aragonesas to sales made in the home market within the contemporaneous window period, which extends from three months prior to the U.S. sale until two months after the sale. 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 comparisons, the Department used the physical characteristics determined by the Department and reported by Aragonesas, to match foreign like products to U.S. sales: chemical structure, free available chlorine content, physical form, and packaging.

Export Price

The Department based the price of Aragonesas's U.S. sales on EP methodology, in accordance with section 772(a) of the Act, because the subject merchandise was sold directly by Aragonesas to the first unaffiliated purchaser in the United States prior to importation and the constructed export price (“CEP”) methodology was not otherwise indicated. We based EP on packed prices to unaffiliated purchasers in the United States. Aragonesas reported its U.S. sales on a delivered, duty paid basis. We made deductions from the starting price, where appropriate, for foreign inland freight, international freight, foreign inland and marine insurance, foreign and U.S. brokerage and handling, U.S. inland freight, commissions and U.S. duty, in accordance with section 772(c)(2) of the Act and 19 CFR 351.402.

Normal Value

After testing home market viability, whether home market sales to affiliates were at arm's-length prices, and whether home market sales were at below-cost prices, we calculated NV for Aragonesas as noted in the “Calculation of Normal Value Based on Comparison Market Prices” section of this notice.

A. Home Market Viability

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, the Department compared Aragonesas'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. We excluded sales of merchandise that were not foreign like product for reasons that are of a business proprietary nature. See Memorandum to Barbara E. Tillman, Director, AD/CVD Operations, Office 6, “Whether Certain Merchandise Sold By Aragonesas Industrias y Energía, S.A. Constitutes Subject Merchandise and Foreign Like Product,” dated June 30, 2008 (“Foreign Like Product Memorandum”). Because Aragonesas'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 the subject merchandise, the Department determined that its home market was viable.

B. Arm's-Length Test

The Department may calculate NV based on a sale to an affiliated party only if it is satisfied that the price to the affiliated party is comparable to the prices at which sales are made to parties not affiliated with the exporter or producer, i.e., sales at arm's-length. See 19 CFR 351.403(c). Sales to affiliated customers for consumption in the home market that are determined not to be at arm's-length are excluded from our analysis. In this proceeding, Aragonesas reported sales of the foreign like product to affiliated customers. To test whether these sales were made at arm's-length prices, the Department compared the prices of sales of comparable merchandise to affiliated and unaffiliated customers, net of all movement charges, direct selling expenses, and packing. Pursuant to 19 CFR 351.403(c), and in accordance with the Department's practice, when the prices charged to an affiliated party were, on average, between 98 and 102 percent of the prices charged to unaffiliated parties for merchandise comparable to that sold to the affiliated party, we determined that the sales to the affiliated party were at arm's-length. See Antidumping Proceedings: Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186, 69187 (November 15, 2002). Where Aragonesas's sales to affiliated home market customers did not pass the arm's-length test, we excluded those sales from our analysis. See section 773(b)(1) of the Act.

C. Cost of Production Analysis

We calculated a margin for Delsa S.A. (Delsa) in Chlorinated Isocyanurates From Spain: Notice of Final Determination of Sales at Less Than Fair Value, 70 FR 24506, 24511 (May 10, 2005) (“Final LTFV Determination”), which was the most recently completed segment of this proceeding as of the publication date of the initiation of this review. In the Final LTFV Determination, the Department disregarded sales made at prices that were below COP. As a result, in accordance with section 773(b)(2)(A)(ii) of the Act, in this review the Department determined that there are reasonable grounds to believe or suspect that Aragonesas1 sold the foreign like product at prices below the cost of producing the product during the instant POR. Accordingly, the Department required that Aragonesas provide a response to Section D of the questionnaire.

1. Calculation of Cost of Production

In accordance with section 773(b)(3) of the Act, for each product, sorted by control number, sold by Aragonesas during the POR, the Department calculated Aragonesas's weighted-average COP based on the sum of its materials and fabrication costs, plus amounts for general and administrative (“G&A”) expenses and interest expenses. See “Test of Comparison Market Sales Prices” section below for treatment of home market selling expenses. We relied on the COP information provided by Aragonesas in its questionnaire responses.

2. Test of Comparison Market Sales Prices

In order to determine whether sales were made at prices below the COP, on a product-specific basis, the Department compared Aragonesas's adjusted weighted-average COP to the home market sales of the foreign like product, as required under section 773(b) 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) in substantial quantities within an extended period of time; and (2) at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade. The prices 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.Start Printed Page 39653

3. Results of the COP Test

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 less than the COP, the Department does not disregard any below cost sales of that product, because the Department determines that in such instances the below cost sales were not made within an extended period of time and in “substantial quantities.” Where 20 percent or more of a respondent's sales of a given product are at prices less than the COP, the Department disregards the below cost sales because they: (1) were made within an extended period of time in “substantial quantities,” in accordance with sections 773(b)(2)(B) and (C) of the Act; and (2) based on our comparison of prices to the weighted-average COPs for the POR, 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 Aragonesas's home market sales were at prices less than the COP and, 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 as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

D. Calculation of Normal Value Based on Comparison Market Prices

We based NV on the prices at which the foreign like product was first sold by Aragonesas for consumption in the home market, in the usual commercial quantities, in the ordinary course of trade, and, to the extent possible, at the same level of trade (“LOT”) as the comparison U.S. sale. We excluded sales of merchandise that were not foreign like product, for reasons that are of a business proprietary nature. See Foreign Like Product Memorandum. We calculated NV for Aragonesas using the reported gross unit prices to unaffiliated purchasers, or where appropriate, affiliated purchasers. Aragonesas reported that it offers its home market customers the following terms of delivery: carriage insurance paid, carriage paid, delivered duty paid, delivered duty unpaid, ex-works, and free carrier. Where appropriate, the Department made adjustments to the starting price for billing adjustments. We also deducted home market movement expenses pursuant to section 773(a)(6)(B) of the Act. We deducted, where appropriate, discounts and rebates, pursuant to section 773(a)(6)(B)(ii) of the Act. See Memorandum from Scott Lindsay, International Trade Compliance Analyst, to the File, “Calculation Memorandum for the Preliminary Results for Aragonesas Industrias y Energia S.A.,” dated June 30, 2008. We also made adjustments for differences in costs attributable to differences in the physical characteristics of the merchandise, in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. In addition, the Department made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in circumstances of sale for imputed credit and warranty expenses. We also deducted home market packing costs and added U.S. packing costs, in accordance with section 773(a)(6)(A) and (B) of the Act.

We also made the appropriate adjustment for commissions paid in the home market pursuant to 773(a)(6)(C)(iii) of the Act and19 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 (i.e., commission offset). Specifically, where commissions are incurred in one market, but not in the other, we limited the amount of such allowance to the amount of either the indirect selling expenses incurred in the one market or the commissions allowed in the other market, whichever is less.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, the Department determines NV based on sales in the comparison market at the same LOT as the EP or CEP sales in the U.S. market (Aragonesas 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 CV, the Department determines the NV LOT based on the LOT of the sales from which the Department derives selling expenses, 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, see Notice of Final Determination of Sales at Less Than Fair Value: Fresh Atlantic Salmon from Chile, 63 FR 31411, (June 9, 1998)). 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 functions along the chain of distribution between the producer and the customer. 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). 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 difference affects price comparability, as manifested by a pattern of consistent price differences between comparison-market sales at the NV LOT and comparison-market sales at the LOT of the export transaction, the Department makes an LOT adjustment under section 773(a)(7)(A) of the Act.

In this administrative review, Aragonesas had only EP sales in the U.S. market, thus the CEP methodology was not employed in this review. The Department obtained information from Aragonesas regarding the marketing stages involved in making the reported home market and U.S. sales, including a description of the selling activities performed for each channel of distribution. Aragonesas reported that it made EP sales in the U.S. market through a single distribution channel (i.e., sales to industrial users). Because all sales in the United States are made through a single distribution channel, we preliminarily determine that there is one LOT in the U.S. market. Aragonesas reported that it made sales in the home market through three channels of distribution (i.e., industrial customers, retail customers, and distributors). We compared the selling functions performed by Aragonesas for these three distribution channels and found that Aragonesas performed similar selling activities in the home market for the retail and distributor channels of distribution, and fewer selling activities for industrial home market customers. Thus, we preliminarily find that the retail and distributor channels of distribution constitute one NV LOT, while the channel of distribution for industrial customers is a second NV Start Printed Page 39654LOT. Moreover, we preliminarily find that the NV LOT for retail and industrial purchasers is at a more advanced stage than the NV LOT for industrial customers. See Memorandum from Scott Lindsay, International Trade Compliance Analyst, through Thomas Gilgunn, Program Manager, to Barbara E. Tillman, Director, AD/CVD Operations, Office 6, “Level of Trade Analysis: Aragonesas Industrias y Energía S.A. (Aragonesas),” dated June 30, 2008 (LOT Memorandum).

Finally, the Department compared the EP LOT to the two home market LOTs. The Department finds that selling activities performed by Aragonesas for industrial users in the U.S. market and home market are similar. Because selling activities for industrial users in the U.S. market (the only LOT in the U.S. market) and industrial users in the home market are similar, the Department preliminarily determines that, for sales to the U.S. and home markets during the POR that were made at this same LOT (i.e., sales to industrial users), the Department will not make an LOT adjustment to NV. However, where the Department matches sales between the U.S. and home markets where the home market sale is made at a more advanced LOT (i.e., retail and distributor channels of distribution) than the sale in the U.S. market, the Department will grant an LOT adjustment to NV because there is a consistent pattern of price differences. For additional details regarding the Department=s LOT analysis, see LOT Memorandum.

Currency Conversion

Pursuant to section 773A(a) of the Act, we converted amounts expressed in foreign currencies into U.S. dollar amounts based on the exchange rates in effect on the dates of the U.S. sales, as reported by the Federal Reserve Bank of the United States.

Preliminary Results of Review

As a result of this review, the Department preliminarily determines that the weighted-average dumping margin for the period June 1, 2006, through May 31, 2007, is as follows:

Manufacturer/ExporterWeighted- Average Margin (percentage)
Aragonesas Industrias y Energía S.A.4.16

Cash Deposit Requirements

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 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 24.83 percent, the “All Others” rate made effective by the LTFV investigation. See Final LTFV Determination. These requirements, when imposed, shall remain in effect until further notice.

Assessment Rates

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 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 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.

Disclosure and Public Hearing

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 B-099, 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.

Notification to Importers

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate Start Printed Page 39655regarding 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 published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.

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Dated: June 30, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.

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Footnotes

1.  The Department determined Aragonesas to be the successor-in-interest to Delsa. See Chlorinated Isocyanurates from Spain: Preliminary Results of Antidumping Duty Administrative Review, 72 FR 37189 (July 9, 2007) (unchanged in final results, see Chlorinated Isocyanurates from Spain: Final Results of Antidumping Duty Administrative Review, 72 FR 64194 (November 17, 2007)).

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[FR Doc. E8-15736 Filed 7-9-08; 8:45 am]

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