Preliminary Results of Antidumping Duty Administrative Review: Gray Portland Cement and Clinker From Mexico, 54013-54017 [E5-4974]
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Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Notices
DEPARTMENT OF COMMERCE
International Trade Administration
[A–201–802]
Preliminary Results of Antidumping
Duty Administrative Review: Gray
Portland Cement and Clinker From
Mexico
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests from
interested parties, the Department of
Commerce is conducting an
administrative review of the
antidumping duty order on gray
portland cement and clinker from
Mexico. The review covers exports of
subject merchandise to the United
States during the period August 1, 2003,
through July 31, 2004, from one firm,
CEMEX, S.A. de C.V., and its affiliate,
GCC Cemento, S.A. de C.V. We have
preliminarily determined that sales
were made below normal value during
the period of review.
We invite interested parties to
comment on these preliminary results.
Parties who submit arguments in this
proceeding are requested to submit with
the argument (1) a statement of the
issues, and (2) a brief summary of the
argument.
AGENCY:
September 13, 2005.
FOR FURTHER INFORMATION CONTACT:
Hermes Pinilla or Jeffrey Frank, Office
of AD/CVD Operations 5, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW., Washington, DC 20230;
telephone (202) 482–3477, (202) 482–
0090, respectively.
SUPPLEMENTARY INFORMATION:
EFFECTIVE DATE:
Background
On August 3, 2004, the Department of
Commerce (the Department) published
in the Federal Register the Notice of
Opportunity to Request Administrative
Review of Antidumping or
Countervailing Duty Order, Finding, or
Suspended Investigation concerning the
antidumping duty order on gray
portland cement and clinker (cement)
from Mexico (69 FR 46496). In
accordance with 19 CFR 351.213(b), the
petitioner, the Southern Tier Cement
Committee (STCC), requested a review
of CEMEX, S.A. de C.V. (CEMEX), and
CEMEX’s affiliate, GCC Cemento, S.A.
de C.V. (GCCC). In addition, CEMEX
and GCCC requested reviews of their
own sales during the period of review
(POR). On September 22, 2004, the
Department published in the Federal
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Register the Notice of Initiation of
Antidumping and Countervailing Duty
Administrative Reviews and Request for
Revocation in Part (69 FR 56745) in
which it initiated an administrative
review of the antidumping duty order
on cement from Mexico. The POR is
August 1, 2003, through July 31, 2004.
We are conducting a review of CEMEX
and GCCC pursuant to section 751 of the
Tariff Act of 1930, as amended (the Act).
Scope of the Order
The products subject to this order
include gray portland cement and
clinker. Gray portland cement is a
hydraulic cement and the primary
component of concrete. Clinker, an
intermediate material product produced
when manufacturing cement, has no use
other than of being ground into finished
cement. Gray portland cement is
currently classifiable under Harmonized
Tariff Schedule of the United States
(HTSUS) item number 2523.29, and
cement clinker is currently classifiable
under HTSUS item number 2523.10.
Gray portland cement has also been
entered under HTSUS item number
2523.90 as ‘‘other hydraulic cements.’’
Although the HTSUS subheadings are
provided for convenience and customs
purposes, the written description of the
scope of this proceeding is dispositive.
Verification
As provided in section 782(i) of the
Act, we verified certain home–market
information submitted by CEMEX using
standard verification procedures,
including an examination of relevant
sales and financial records and the
selection of original documentation
containing relevant information. For
further details, please see the
Department’s verification report dated
August 30, 2005, on file in the Central
Records Unit (CRU), Room B–099 of the
main Department building.
Collapsing
Section 771(33) of the Act defines
when two or more parties will be
considered affiliated for purposes of an
antidumping analysis. Moreover, the
regulations describe when the
Department will treat two or more
affiliated producers as a single entity
(i.e., ‘‘collapse’’ the firms) for purposes
of calculating a dumping margin (see 19
CFR 351.401(f)). In previous
administrative reviews of this order, we
analyzed the record evidence and
collapsed CEMEX and GCCC in
accordance with the regulations.1
1 See, e.g., Preliminary Results and Rescission in
Part of Antidumping Duty Administrative Review:
Gray Portland Cement and Clinker From Mexico, 69
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The regulations state that we will treat
two or more affiliated producers as a
single entity where those producers
have production facilities for similar or
identical products that would not
require substantial retooling of either
facility in order to restructure
manufacturing priorities and we
conclude that there is a significant
potential for the manipulation of price
or production. In identifying a
significant potential for the
manipulation of price or production, the
factors we may consider include the
following: (i) the level of common
ownership; (ii) the extent to which
managerial employees or board
members of one firm sit on the board of
directors of an affiliated firm; (iii)
whether operations are intertwined,
such as through the sharing of sales
information, involvement in production
and pricing decisions, the sharing of
facilities or employees, or significant
transactions between the affiliated
producers. See 19 CFR 351.401(f).
Having reviewed the current record,
we found that the factual information
underlying our decision to collapse
these two entities has not changed from
previous administrative reviews. See
‘‘Collapsing CEMEX, S.A., de C.V. and
GCC Cemento, S.A. de C.V. for the
Current Administrative Review,’’ dated
June 7, 2005. CEMEX’s indirect
ownership of GCCC exceeds five
percent; therefore, these two companies
are affiliated pursuant to section
771(33)(E) of the Act. In addition, both
CEMEX and GCCC satisfy the criteria for
treatment of affiliated parties as a single
entity described at 19 CFR 351.401(f)(1):
both producers have production
facilities for similar and identical
products such that substantial retooling
of their production facilities would not
be necessary to restructure
manufacturing priorities. Consequently,
any minor retooling required could be
accomplished swiftly and with relative
ease.
We also find that a significant
potential for manipulation of prices and
production exists as outlined under 19
CFR 351.401(f)(2). CEMEX owns
indirectly a substantial percentage of
GCCC. Also, CEMEX’s managers or
directors sit on the board of directors of
GCCC and its affiliated companies.
Accordingly, CEMEX’s percentage
ownership of GCCC and the interlocking
boards of directors give rise to a
significant potential for affecting
GCCC’s pricing and production
FR 34647, 34648 (June 22, 2004). No changes were
made in the final results of review (see Gray
Portland Cement and Clinker From Mexico: Final
Results of Antidumping Duty Review, 69 FR 77989
(December 29, 2004)).
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decisions. Therefore, we have collapsed
CEMEX and GCCC into one entity and
calculated a single weighted–average
margin using the information the firms
provided in this review.
Constructed Export Price
Both CEMEX and GCCC reported
constructed export price (CEP) sales. We
calculated CEP based on delivered
prices to unaffiliated customers in
accordance with section 772(b) of the
Act. Where appropriate, we made
adjustments to the starting price for
discounts, rebates, and billing
adjustments. In accordance with section
772(d) of the Act and 19 CFR
351.402(b), we deducted those
expenses, including inventory carrying
costs, that were associated with
commercial activities in the United
States and related to the sale to an
unaffiliated purchaser. We also made
deductions for foreign brokerage and
handling, foreign inland freight, U.S.
inland freight and insurance, U.S.
warehousing expenses, U.S. brokerage
and handling, and U.S. duties pursuant
to section 772(c)(2)(A) of the Act.
Finally, we made an adjustment for CEP
profit in accordance with section
772(d)(3) of the Act2. No other
adjustments to CEP were claimed or
allowed.
With respect to subject merchandise
to which value was added in the United
States prior to sale to unaffiliated U.S.
customers (i.e., cement that was
imported and further–processed into
finished concrete by U.S. affiliates of
foreign exporters), we preliminarily
determine that the special rule under
section 772(e) of the Act for
merchandise with value added after
importation is applicable.
Section 772(e) of the Act provides
that, where the subject merchandise is
imported by a person affiliated with the
exporter or producer and the value
added in the United States by the
affiliated person is likely to exceed
substantially the value of the subject
merchandise, we will determine the
CEP for such merchandise using the
price of identical or other subject
merchandise if there is a sufficient
quantity of sales to provide a reasonable
2 As a result of our findings at verification, we
made an adjustment to the information CEMEX
provided concerning its U.S. sales which affects the
calculation of constructed export price profit.
Specifically, while verifying indirect selling
expenses CEMEX incurred in Mexico for sales to
the United States, we found that CEMEX did not
account for or claim a portion of its corporate
selling expenses attributable to U.S. sales. For the
preliminary results, we made an adjustment to the
amount CEMEX claimed for indirect selling
expenses incurred in Mexico for sales to the United
States to correct for this omission.
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basis for comparison and we determine
that the use of such sales is appropriate.
The regulations at 19 CFR 351.402(c)(2)
provide that normally we will
determine that the value added in the
United States by the affiliated person is
likely to exceed substantially the value
of the subject merchandise if we
estimate the value added to be at least
65 percent of the price charged to the
first unaffiliated purchaser for the
merchandise as sold in the United
States. Normally, we will estimate the
value added based on the difference
between the price charged to the first
unaffiliated purchaser for the
merchandise as sold in the United
States and the price paid for the subject
merchandise by the affiliated person.
We will base this determination
normally on averages of the prices and
the value added to the subject
merchandise. If there is not a sufficient
quantity of such sales or if we determine
that using the price of identical or other
subject merchandise is not appropriate,
we may use any other reasonable basis
to determine the CEP. See section 772(e)
of the Act.
During the course of this
administrative review, the respondent
submitted information which allowed
us to determine whether, in accordance
with section 772(e) of the Act, the value
added in the United States by its U.S.
affiliates is likely to exceed substantially
the value of the subject merchandise. 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
purchaser for the merchandise as sold in
the United States and the averages of the
prices paid for subject merchandise by
the affiliate. Based on this analysis, we
estimate that the value added was at
least 65 percent of the price the
respondent charged to the first
unaffiliated purchaser for the
merchandise as sold in the United
States. Therefore, we preliminarily
determine that the value added is likely
to exceed substantially the value of the
subject merchandise. Also, the record
indicates that there is a sufficient
quantity of subject merchandise to
provide a reasonable and appropriate
basis for comparison. Accordingly, for
purposes of determining dumping
margins for the further–manufactured
sales, we have applied the preliminary
weighted–average margin reflecting the
rate we calculated for sales of identical
or other subject merchandise sold to
unaffiliated purchasers.
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Normal Value
A. Comparisons
In order to determine whether there
was a sufficient volume of sales in the
home market to serve as a viable basis
for calculating normal value, 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)(C) of the Act.
Because the respondent’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,
we determined that the home market
was viable. Therefore, we have based
normal value on home–market sales.
During the POR, the respondent sold
Type II LA and Type V LA cement in
the United States. The statute expresses
a preference for matching U.S. sales to
identical merchandise in the home
market. See section 771(16) of the Act.
The respondent sold cement produced
as CPC 30 R, CPC 40, CPO 30, CPO 40,
and CPO30R BRA cement in the home
market. We have attempted to match the
subject merchandise to identical
merchandise sold in the home market.
In situations where identical product
types cannot be matched, we have
attempted to match the subject
merchandise to sales of similar
merchandise in the home market. See
sections 773(a)(1)(B) and 771(16) of the
Act.
We were able to find home–market
sales of identical and similar
merchandise to which we could match
sales of Type II LA and Type V LA
cement sold in the U.S. market. In the
three most recent administrative
reviews of this proceeding, we
determined that CPO 40 cement
produced and sold in the home market
is the identical match to Type V LA
cement sold in the United States. See,
e.g., Gray Portland Cement and Clinker
From Mexico; Final Results of
Antidumping Duty Administrative
Review, 67 FR 12518 (March 19, 2002),
and the accompanying Issues and
Decision Memorandum at Comment 7.
We have reviewed the information on
the record and have determined that
CPO 40 cement produced and sold in
the home market is the identical match
to Type V LA cement sold in the United
States during this review period. If we
could not find an identical match to the
cement types sold in the United States
in the same month in which the U.S.
sale was made or during the
contemporaneous period, we based
normal value on similar merchandise.
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During the POR, GCCC had sales of
Type II LA cement in the United States
and asserted that the merchandise it
sells in the home market as CPO30R
BRA cement is identical to Type II LA
cement. We have reviewed the
information on the record of this review
and, based on our analysis, we have
determined that GCCC’s sales of
CPO30R BRA cement in the home
market were made outside the ordinary
course of trade. See ‘‘Ordinary Course of
Trade’’ section below.
In the 2000/2001 administrative
review of this proceeding, we
determined that the chemical and
physical characteristics of CPO 40
cement produced and sold in Mexico
are most similar to Type II LA cement
sold in the United States. We have
reviewed the information on the record
of this POR and have determined that it
is appropriate to match sales of CPO 40
cement produced and sold in Mexico to
all sales of Type II LA sold in the United
States.
Further, in accordance with section
771(16)(B) of the Act, we find that both
bulk and bagged cement are produced in
the same country and by the same
producer as the types sold in the United
States, both bulk and bagged cement are
like the types sold in the United States
in component materials and in the
purposes for which used, and both bulk
and bagged cement are approximately
equal in commercial value to the types
sold in the United States. The
questionnaire responses submitted by
the respondent indicate that, with the
exception of packaging, sales of cement
in bulk and sales of cement in bags are
physically identical and both are used
in the production of concrete. Also,
because there is no difference in the cost
of production between cement sold in
bulk or in bagged form, both are
approximately equal in commercial
value. See CEMEX’s and GCCC’s
responses to the Department’s original
and supplemental questionnaires dated
November 30, 2004, December 9, 2004,
March 31, 2005, and April 8, 2005.
Therefore, we find that matching the
U.S. merchandise which is sold in both
bulk and bag to the foreign like product
sold in either bulk or bag is appropriate.
B. Ordinary Course of Trade
Section 773(a)(1)(B) of the Act
requires the Department to base normal
value on ‘‘the price at which the foreign
like product is first sold (or in the
absence of a sale, offered for sale) for
consumption in the exporting country,
in the usual commercial quantities and
in the ordinary course of trade.’’
Ordinary course of trade is defined as
‘‘the conditions and practices which, for
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a reasonable time prior to the
exportation of the subject merchandise,
have been normal in the trade under
consideration with respect to
merchandise of the same class or kind.’’
See section 771(15) of the Act.
In the instant review, we analyzed
home–market sales of CPO30R BRA
cement. Pursuant to section 773(a)(1)(B)
of the Act, we based our examination on
the totality of circumstances
surrounding the respondent’s sales in
Mexico of CPO30R BRA cement, and we
find that the respondent’s home–market
sales of this product made during the
instant POR are outside the ordinary
course of trade. See memorandum from
Minoo Hatten to Laurie Parkhill,
entitled ‘‘Ordinary–Course-of–Trade
Analysis for the Preliminary Results of
the 2003/2004 Administrative Review of
the Antidumping Duty Order on Gray
Portland Cement and Clinker from
Mexico,’’ dated August 30, 2005.
Consequently, we have disregarded
the respondent’s sales of CPO30R BRA
cement in Mexico and, as in previous
reviews, matched sales of CPO 40
cement produced and sold in Mexico to
sales of Type II LA sold in the United
States. See ‘‘Comparisons’’ section
above.
C. Arm’s–Length Sales
To test whether sales to affiliated
customers were made at arm’s length,
we compared the prices of sales to
affiliated and unaffiliated customers, net
of all movement charges, direct selling
expenses, discounts, and packing.
Where the price to the affiliated party
was, on average, within a range of 98
to102 percent of the price of the same
or comparable merchandise to the
unaffiliated parties, we determined that
the sales made to the affiliated party
were at arm’s length. See Modification
Concerning Affiliated Party Sales in the
Comparison Market, 67 FR 69186
(November 15, 2002). Consistent with
19 CFR 351.403, we only included in
our margin analysis those sales to
affiliated parties that were made at
arm’s length.
D. Cost of Production
The petitioner alleged on December
29, 2004, that the respondent sold
cement in the home market at prices
below the cost of production (COP).
Upon examining the allegation, we
determined that the petitioner had
provided a reasonable basis to believe or
suspect that the CEMEX and GCCC sold
cement in Mexico at prices below the
COP. Therefore, pursuant to section
773(b)(1) of the Act, we initiated a COP
investigation to determine whether
CEMEX and GCCC made home–market
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sales of cement during the POR at
below–cost prices. See the
memorandum from Mark Ross to Laurie
Parkhill entitled ‘‘Gray Portland Cement
and Clinker from Mexico: Request to
Initiate Cost Investigation in the 2003/
2004 Review,’’ dated February 18, 2005.
In accordance with section 773(b)(3)
of the Act, we calculated the COP based
on the sum of the costs of materials and
fabrication employed in producing
cement plus amounts for home–market
selling, general, and administrative
(SG&A) expenses. We used the home–
market sales data and COP information
provided by CEMEX and GCCC in their
questionnaire responses.
After calculating the weighted–
average COP and in accordance with
section 773(b)(3) of the Act, we tested
whether CEMEX’s and GCCC’s home–
market sales were made at prices below
the 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 the COP
appropriate to the home–market prices
less any applicable direct selling
expenses, movement charges, discounts
and rebates, and indirect selling
expenses.
Pursuant to section 773(b)(2)(C) of the
Act, if less than 20 percent of CEMEX’s
and GCCC’s sales of a certain type of
cement were at prices less than the COP,
we do 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. If 20 percent or more of CEMEX’s
and GCCC’s sales of a certain type
during the POR were at prices less than
the COP, such below–cost sales 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 the appropriate weighted–
average COP for the POR, we
determined that below–cost sales were
not made in substantial quantities
within an extended period of time, and,
therefore, we did not disregard any
below–cost sales.
E. Adjustments to Normal Value
Where appropriate, we adjusted
home–market prices for discounts,
rebates, packing, handling revenue,
interest revenue, and billing
adjustments to the invoice price. In
addition, we adjusted the starting price
for inland freight, inland insurance, and
warehousing expenses. We also
deducted home–market direct selling
expenses from the home–market price
and home–market indirect selling
expenses as a CEP–offset adjustment
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(see Level of Trade/CEP Offset section
below). In addition, in accordance with
section 773(a)(6) of the Act, we
deducted home–market packing costs
from and added U.S. packing costs to
normal value.
Section 773(a)(6)(C)(ii) of the Act
directs us to make an adjustment to
normal value to account for differences
in the physical characteristics of
merchandise where similar products are
compared. The regulations at 19 CFR
351.411(b) direct us to consider
differences in variable costs associated
with the physical differences in the
merchandise. Where we matched U.S.
sales of subject merchandise to similar
models in the home market, we adjusted
for differences in merchandise.
F. Level of Trade/CEP Offset
In accordance with section
773(a)(1)(B) of the Act, to the extent
practicable, we determine normal value
based on sales in the home market at the
same level of trade as the CEP. The
home–market level of trade is that of the
starting–price sales in the home market
or, when normal value is based on
constructed value, that of sales from
which we derive SG&A expenses and
profit. For CEP, it is the level of the
constructed sale from the exporter to an
affiliated importer after the deductions
required under section 772(d) of the Act
(the CEP level).
To determine whether home–market
sales are at a different level of trade than
CEP level, we examine stages in the
marketing process and selling functions
along the chain of distribution between
the producer and the unaffiliated
customer. If the comparison–market
sales are at a different level of trade and
the difference affects price
comparability, as manifested in a
pattern of consistent price differences
between the sales on which normal
value is based and comparison–market
sales at the level of trade of the export
transaction, we make a level–of-trade
adjustment under section 773(a)(7)(A) of
the Act. Finally, for CEP sales, if the
normal–value level is more remote from
the factory than the CEP level and there
is no basis for determining whether the
difference in the levels between normal
value and CEP level affects price
comparability, we adjust normal value
under section 773(a)(7)(B) of the Act
(the CEP–offset provision). See Final
Determination of Sales at Less Than
Fair Value: Certain Cut–to-Length
Carbon Steel Plate from South Africa,
62 FR 61731, 61732–33 (November 19,
1997).
With respect to U.S. sales (respondent
reported CEP sales in the U.S. market),
we conclude that CEMEX’s and GCCC’s
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sales constituted one level of trade. We
based our conclusion on our analysis of
each company’s reported selling
functions and sales channels after
making deductions for selling expenses
under section 772(d) of the Act. We
found that, with some minor exceptions,
CEMEX and GCCC performed the same
selling functions to varying degrees in
similar channels of distribution. We also
concluded that the variations in the
intensities of selling functions
performed were not substantial when all
selling expenses were considered.
Based on our analysis of CEMEX’s
and GCCC’s reported selling functions
and sales channels, we conclude that
CEMEX’s and GCCC’s home–market
sales to various classes of customers
constitute two separate levels of trade
(the CEMEX home–market level of trade
and the GCCC home–market level of
trade). We found that CEMEX and GCCC
performed significantly different sales
functions for sales to their home–market
customers. Specifically, we found that
the two home–market levels of trade
differed with respect to selling activities
such as after–sales service/warranties,
customer approval, sales promotion/
discount programs, sales forecasting,
personnel training/exchange, and
procurement and sourcing services. See
the memorandum entitled ‘‘Gray
Portland Cement and Clinker from
Mexico: Level–of-Trade Analysis for the
03/04 Administrative Review,’’ dated
August 30, 2005.
Further, we compared the CEMEX
home–market level of trade to the CEP
level and found that significantly
different selling functions are performed
at each level of trade and that fewer
selling functions are performed for the
U.S. sales than for the home–market
sales. For example, sales at the CEP
level do not include activities such as
market research, strategic and economic
planning, advertising, and after–sales
service/warranties whereas sales in the
CEMEX home–market level of trade
include these activities. Based on this
analysis, we concluded that the CEMEX
home–market level of trade is different,
is at a more advanced stage of
distribution, and is more remote from
the factory than the CEP level.
Next, we compared the GCCC home–
market level of trade to the CEP level
and also found that significantly
different selling functions are performed
at these levels of trade and that fewer
selling functions are performed for the
U.S. sales than for the home–market
sales. For example, sales at the CEP
level do not include activities such as
advertising, customer approval, sales
promotion, sales forecasting, strategic
and economic planning, personnel
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training/exchange, and procurement
and sourcing services whereas sales in
the GCCC home–market level of trade
include these activities. Based on this
analysis, we have concluded that the
GCCC home–market level of trade is
different, is at a more advanced stage of
distribution, and is more remote from
the factory than the CEP level.
We could not match the CEP sales to
sales at the same level of trade in the
home market. In addition, we could not
make a level–of-trade adjustment
because the differences in price between
the CEP level of trade and the home–
market level of trade cannot be
quantified due to the lack of an
equivalent to the CEP level in the home
market. Also, there is no other data on
the record which would allow us to
make a level–of-trade adjustment. Thus,
we made a CEP–offset adjustment to
normal value in accordance with section
773(a)(7)(B) of the Act. In accordance
with section 773(a)(7) of the Act, we
calculated the CEP offset as the smaller
of the indirect selling expenses on the
home–market sale or the indirect selling
expenses we deducted from the starting
price in calculating CEP.
Currency Conversion
Pursuant to section 773A(a) of the
Act, we made currency conversions into
U.S. dollars based on the exchange rates
in effect on the dates of U.S. sales as
certified by the Federal Reserve Bank.
Preliminary Results of Review
As a result of our review, we
preliminarily determine the dumping
margin for the collapsed respondent for
the period August 1, 2003, through July
31, 2004, to be 40.54 percent.
Case briefs or other written comments
in at least six copies must be submitted
to the Assistant Secretary for Import
Administration no later than one week
after the issuance of the Department’s
last verification report in this review.
The Department will notify all parties of
the applicable briefing schedule.
Pursuant to 19 CFR 351.309(d)(2),
rebuttal briefs are due no later than five
days after the submission of case briefs.
A list of authorities used, a table of
contents, and an executive summary of
issues should accompany any briefs
submitted to the Department. Executive
summaries should be limited to five
pages total, including footnotes. In
accordance with 19 CFR 351.310, we
will hold a public hearing to afford
interested parties an opportunity to
comment on arguments raised in case or
rebuttal briefs, provided that such a
hearing is requested by an interested
party. If we receive a request for a
hearing, we plan to hold the hearing
E:\FR\FM\13SEN1.SGM
13SEN1
Federal Register / Vol. 70, No. 176 / Tuesday, September 13, 2005 / Notices
three days after the deadline for
submission of the rebuttal briefs at the
U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW.,
Washington, DC 20230. Interested
parties who wish to request a hearing,
or to participate if one is requested,
must submit a written request to the
Assistant Secretary for Import
Administration, U.S. Department of
Commerce, Room 1870, within 30 days
after the date of publication of the
preliminary results of this review in the
Federal Register. Requests should
contain the following information: (1)
the party’s name, address, and
telephone number; (2) the number of
participants; (3) a list of the issues to be
discussed. Oral presentations will be
limited to issues raised in the briefs.
The Department will publish the final
results of this administrative review,
including the results of its analysis of
issues raised in any case or rebuttal
briefs, within 120 days of publication of
this notice. See 19 CFR 351.213(h).
Assessment Rates
Upon completion of this review, the
Department will determine, and U.S.
Customs and Border Protection (CBP)
shall assess, antidumping duties on all
appropriate entries. In accordance with
19 CFR 351.212(b)(1), we have
calculated an importer–specific
assessment rate for merchandise subject
to this review. If these preliminary
results are adopted in the final results
of review, we will direct CBP to assess
the resulting assessment rates against
the entered customs values for the
subject merchandise on the importer’s
entries during the POR.
Cash–Deposit Requirements
In conducting recent reviews of
CEMEX and GCCC, the Department has
observed a pattern of significant
differences between the weighted–
average margins and the assessment
rates it has determined for this
respondent in those reviews. This
pattern of differences suggests that the
collection of a cash deposit for
estimated antidumping duty based on
net U.S. price may result in the
undercollection of estimated
antidumping duties at the time of entry,
as discussed at Comment 6 of the
‘‘Issues and Decision Memorandum for
the Administrative Review of Gray
Portland Cement and Clinker from
Mexico August 1, 2002, through July 31,
2003,’’ dated December 29, 2004.
Therefore, we have determined that it is
appropriate to continue to require a per–
unit cash–deposit amount for entries of
subject merchandise produced or
exported by CEMEX and GCCC.
VerDate Aug<18>2005
16:06 Sep 12, 2005
Jkt 205001
The following 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 review, as
provided by section 751(a)(1) of the Act:
(1) The cash–deposit amount for
CEMEX/GCCC will be the amount per
metric ton determined in the final
results of review; (2) for previously
reviewed or investigated companies not
mentioned 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 in the original less–than-fair–
value (LTFV) investigation but the
manufacturer is, the cash–deposit rate
will be the rate established for the most
recent period for the manufacturer of
the merchandise; and (4) the cash–
deposit rate for all other manufacturers
or exporters will be 61.85 percent, the
all–others rate from the LTFV
investigation. See Final Determination
of Sales at Less Than Fair Value: Gray
Portland Cement and Clinker from
Mexico, 55 FR 29244 (July 18, 1990).
These deposit requirements, when
imposed, shall remain in effect until
publication of the final results of the
next administrative review.
Notification to Interested Parties
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 POR. Failure
to comply with this requirement could
result in the Secretary’s presumption
that reimbursement of antidumping
duties occurred and the subsequent
assessment of double antidumping
duties.
We are issuing and publishing this
notice in accordance with sections
751(a)(1) and 777(i)(1) of the Act.
Dated: August 30, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import
Administration.
[FR Doc. E5–4974 Filed 9–12–03; 8:45 am]
BILLING CODE 3510–DS–S
PO 00000
DEPARTMENT OF COMMERCE
International Trade Administration
A–201–827
Certain Large Diameter Carbon and
Alloy Seamless Standard, Line and
Pressure Pipe from Mexico: Notice of
Final Rescission of Antidumping Duty
Administrative Review
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: We have determined that the
fourth antidumping duty administrative
review of Tubos de Acero de Mexico,
S.A. (‘‘TAMSA’’) should be rescinded.
EFFECTIVE DATE: September 13, 2005.
FOR FURTHER INFORMATION CONTACT:
Victoria Cho or George McMahon, AD/
CVD Operations, Office 3, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW, Washington, DC 20230;
telephone: (202) 482–5075, or (202)
482–1167, respectively.
SUPPLEMENTARY INFORMATION:
AGENCY:
Background
On August 3, 2004, the Department of
Commerce (‘‘the Department’’)
published in the Federal Register the
notice of ‘‘Opportunity to Request
Administrative Review’’ of the
antidumping duty order on certain large
diameter carbon and alloy seamless
standard, line, and pressure pipe
(‘‘SLP’’) from Mexico, for the period
August 1, 2003, through July 31, 2004.
See Notice of Opportunity to Request an
Administrative Review, 69 FR 46496
(August 3, 2004).
On August 31, 2004, we received a
request from the petitioner1 to review
TAMSA. On September 22, 2004, we
published the notice of initiation of this
antidumping duty administrative review
with respect to TAMSA. See Initiation
of Antidumping and Countervailing
Duty Administrative Reviews, Requests
for Revocation in Part, 69 FR 56745
(September 22, 2004). On November 23,
2004, TAMSA submitted a letter
certifying that neither TAMSA, nor its
U.S. affiliate, Tenaris Global Services
USA (‘‘Tenaris’’), directly or indirectly,
exported or sold for consumption in the
United States any subject merchandise
during the period of review (‘‘POR’’).
On May 6, 2005, the Department
published in the Federal Register,
Certain Large Diameter Carbon and
Alloy Seamless Standard, Line and
Pressure Pipe from Mexico: Notice of
1 The petitioner is United States Steel
Corporation.
Frm 00013
Fmt 4703
Sfmt 4703
54017
E:\FR\FM\13SEN1.SGM
13SEN1
Agencies
[Federal Register Volume 70, Number 176 (Tuesday, September 13, 2005)]
[Notices]
[Pages 54013-54017]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-4974]
[[Page 54013]]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-802]
Preliminary Results of Antidumping Duty Administrative Review:
Gray Portland Cement and Clinker From Mexico
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests from interested parties, the
Department of Commerce is conducting an administrative review of the
antidumping duty order on gray portland cement and clinker from Mexico.
The review covers exports of subject merchandise to the United States
during the period August 1, 2003, through July 31, 2004, from one firm,
CEMEX, S.A. de C.V., and its affiliate, GCC Cemento, S.A. de C.V. We
have preliminarily determined that sales were made below normal value
during the period of review.
We invite interested parties to comment on these preliminary
results. Parties who submit arguments in this proceeding are requested
to submit with the argument (1) a statement of the issues, and (2) a
brief summary of the argument.
EFFECTIVE DATE: September 13, 2005.
FOR FURTHER INFORMATION CONTACT: Hermes Pinilla or Jeffrey Frank,
Office of AD/CVD Operations 5, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
3477, (202) 482-0090, respectively.
SUPPLEMENTARY INFORMATION:
Background
On August 3, 2004, the Department of Commerce (the Department)
published in the Federal Register the Notice of Opportunity to Request
Administrative Review of Antidumping or Countervailing Duty Order,
Finding, or Suspended Investigation concerning the antidumping duty
order on gray portland cement and clinker (cement) from Mexico (69 FR
46496). In accordance with 19 CFR 351.213(b), the petitioner, the
Southern Tier Cement Committee (STCC), requested a review of CEMEX,
S.A. de C.V. (CEMEX), and CEMEX's affiliate, GCC Cemento, S.A. de C.V.
(GCCC). In addition, CEMEX and GCCC requested reviews of their own
sales during the period of review (POR). On September 22, 2004, the
Department published in the Federal Register the Notice of Initiation
of Antidumping and Countervailing Duty Administrative Reviews and
Request for Revocation in Part (69 FR 56745) in which it initiated an
administrative review of the antidumping duty order on cement from
Mexico. The POR is August 1, 2003, through July 31, 2004. We are
conducting a review of CEMEX and GCCC pursuant to section 751 of the
Tariff Act of 1930, as amended (the Act).
Scope of the Order
The products subject to this order include gray portland cement and
clinker. Gray portland cement is a hydraulic cement and the primary
component of concrete. Clinker, an intermediate material product
produced when manufacturing cement, has no use other than of being
ground into finished cement. Gray portland cement is currently
classifiable under Harmonized Tariff Schedule of the United States
(HTSUS) item number 2523.29, and cement clinker is currently
classifiable under HTSUS item number 2523.10. Gray portland cement has
also been entered under HTSUS item number 2523.90 as ``other hydraulic
cements.'' Although the HTSUS subheadings are provided for convenience
and customs purposes, the written description of the scope of this
proceeding is dispositive.
Verification
As provided in section 782(i) of the Act, we verified certain home-
market information submitted by CEMEX using standard verification
procedures, including an examination of relevant sales and financial
records and the selection of original documentation containing relevant
information. For further details, please see the Department's
verification report dated August 30, 2005, on file in the Central
Records Unit (CRU), Room B-099 of the main Department building.
Collapsing
Section 771(33) of the Act defines when two or more parties will be
considered affiliated for purposes of an antidumping analysis.
Moreover, the regulations describe when the Department will treat two
or more affiliated producers as a single entity (i.e., ``collapse'' the
firms) for purposes of calculating a dumping margin (see 19 CFR
351.401(f)). In previous administrative reviews of this order, we
analyzed the record evidence and collapsed CEMEX and GCCC in accordance
with the regulations.\1\
---------------------------------------------------------------------------
\1\ See, e.g., Preliminary Results and Rescission in Part of
Antidumping Duty Administrative Review: Gray Portland Cement and
Clinker From Mexico, 69 FR 34647, 34648 (June 22, 2004). No changes
were made in the final results of review (see Gray Portland Cement
and Clinker From Mexico: Final Results of Antidumping Duty Review,
69 FR 77989 (December 29, 2004)).
---------------------------------------------------------------------------
The regulations state that we will treat two or more affiliated
producers as a single entity where those producers have production
facilities for similar or identical products that would not require
substantial retooling of either facility in order to restructure
manufacturing priorities and we conclude that there is a significant
potential for the manipulation of price or production. In identifying a
significant potential for the manipulation of price or production, the
factors we may consider include the following: (i) the level of common
ownership; (ii) the extent to which managerial employees or board
members of one firm sit on the board of directors of an affiliated
firm; (iii) whether operations are intertwined, such as through the
sharing of sales information, involvement in production and pricing
decisions, the sharing of facilities or employees, or significant
transactions between the affiliated producers. See 19 CFR 351.401(f).
Having reviewed the current record, we found that the factual
information underlying our decision to collapse these two entities has
not changed from previous administrative reviews. See ``Collapsing
CEMEX, S.A., de C.V. and GCC Cemento, S.A. de C.V. for the Current
Administrative Review,'' dated June 7, 2005. CEMEX's indirect ownership
of GCCC exceeds five percent; therefore, these two companies are
affiliated pursuant to section 771(33)(E) of the Act. In addition, both
CEMEX and GCCC satisfy the criteria for treatment of affiliated parties
as a single entity described at 19 CFR 351.401(f)(1): both producers
have production facilities for similar and identical products such that
substantial retooling of their production facilities would not be
necessary to restructure manufacturing priorities. Consequently, any
minor retooling required could be accomplished swiftly and with
relative ease.
We also find that a significant potential for manipulation of
prices and production exists as outlined under 19 CFR 351.401(f)(2).
CEMEX owns indirectly a substantial percentage of GCCC. Also, CEMEX's
managers or directors sit on the board of directors of GCCC and its
affiliated companies. Accordingly, CEMEX's percentage ownership of GCCC
and the interlocking boards of directors give rise to a significant
potential for affecting GCCC's pricing and production
[[Page 54014]]
decisions. Therefore, we have collapsed CEMEX and GCCC into one entity
and calculated a single weighted-average margin using the information
the firms provided in this review.
Constructed Export Price
Both CEMEX and GCCC reported constructed export price (CEP) sales.
We calculated CEP based on delivered prices to unaffiliated customers
in accordance with section 772(b) of the Act. Where appropriate, we
made adjustments to the starting price for discounts, rebates, and
billing adjustments. In accordance with section 772(d) of the Act and
19 CFR 351.402(b), we deducted those expenses, including inventory
carrying costs, that were associated with commercial activities in the
United States and related to the sale to an unaffiliated purchaser. We
also made deductions for foreign brokerage and handling, foreign inland
freight, U.S. inland freight and insurance, U.S. warehousing expenses,
U.S. brokerage and handling, and U.S. duties pursuant to section
772(c)(2)(A) of the Act. Finally, we made an adjustment for CEP profit
in accordance with section 772(d)(3) of the Act\2\. No other
adjustments to CEP were claimed or allowed.
---------------------------------------------------------------------------
\2\ As a result of our findings at verification, we made an
adjustment to the information CEMEX provided concerning its U.S.
sales which affects the calculation of constructed export price
profit. Specifically, while verifying indirect selling expenses
CEMEX incurred in Mexico for sales to the United States, we found
that CEMEX did not account for or claim a portion of its corporate
selling expenses attributable to U.S. sales. For the preliminary
results, we made an adjustment to the amount CEMEX claimed for
indirect selling expenses incurred in Mexico for sales to the United
States to correct for this omission.
---------------------------------------------------------------------------
With respect to subject merchandise to which value was added in the
United States prior to sale to unaffiliated U.S. customers (i.e.,
cement that was imported and further-processed into finished concrete
by U.S. affiliates of foreign exporters), we preliminarily determine
that the special rule under section 772(e) of the Act for merchandise
with value added after importation is applicable.
Section 772(e) of the Act provides that, where the subject
merchandise is imported by a person affiliated with the exporter or
producer and the value added in the United States by the affiliated
person is likely to exceed substantially the value of the subject
merchandise, we will determine the CEP for such merchandise using the
price 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.
The regulations at 19 CFR 351.402(c)(2) provide that normally we will
determine that the value added in the United States by the affiliated
person is likely to exceed substantially the value of the subject
merchandise if we estimate the value added to be at least 65 percent of
the price charged to the first unaffiliated purchaser for the
merchandise as sold in the United States. Normally, we will estimate
the value added based on the difference between the price charged to
the first unaffiliated purchaser for the merchandise as sold in the
United States and the price paid for the subject merchandise by the
affiliated person. We will base this determination normally on averages
of the prices and the value added to the subject merchandise. If there
is not a sufficient quantity of such sales or if we determine that
using the price of identical or other subject merchandise is not
appropriate, we may use any other reasonable basis to determine the
CEP. See section 772(e) of the Act.
During the course of this administrative review, the respondent
submitted information which allowed us to determine whether, in
accordance with section 772(e) of the Act, the value added in the
United States by its U.S. affiliates is likely to exceed substantially
the value of the subject merchandise. 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
purchaser for the merchandise as sold in the United States and the
averages of the prices paid for subject merchandise by the affiliate.
Based on this analysis, we estimate that the value added was at least
65 percent of the price the respondent charged to the first
unaffiliated purchaser for the merchandise as sold in the United
States. Therefore, we preliminarily determine that the value added is
likely to exceed substantially the value of the subject merchandise.
Also, the record indicates that there is a sufficient quantity of
subject merchandise to provide a reasonable and appropriate basis for
comparison. Accordingly, for purposes of determining dumping margins
for the further-manufactured sales, we have applied the preliminary
weighted-average margin reflecting the rate we calculated for sales of
identical or other subject merchandise sold to unaffiliated purchasers.
Normal Value
A. Comparisons
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating
normal value, 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)(C) of the Act. Because
the respondent'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, we determined that the home
market was viable. Therefore, we have based normal value on home-market
sales.
During the POR, the respondent sold Type II LA and Type V LA cement
in the United States. The statute expresses a preference for matching
U.S. sales to identical merchandise in the home market. See section
771(16) of the Act. The respondent sold cement produced as CPC 30 R,
CPC 40, CPO 30, CPO 40, and CPO30R BRA cement in the home market. We
have attempted to match the subject merchandise to identical
merchandise sold in the home market. In situations where identical
product types cannot be matched, we have attempted to match the subject
merchandise to sales of similar merchandise in the home market. See
sections 773(a)(1)(B) and 771(16) of the Act.
We were able to find home-market sales of identical and similar
merchandise to which we could match sales of Type II LA and Type V LA
cement sold in the U.S. market. In the three most recent administrative
reviews of this proceeding, we determined that CPO 40 cement produced
and sold in the home market is the identical match to Type V LA cement
sold in the United States. See, e.g., Gray Portland Cement and Clinker
From Mexico; Final Results of Antidumping Duty Administrative Review,
67 FR 12518 (March 19, 2002), and the accompanying Issues and Decision
Memorandum at Comment 7. We have reviewed the information on the record
and have determined that CPO 40 cement produced and sold in the home
market is the identical match to Type V LA cement sold in the United
States during this review period. If we could not find an identical
match to the cement types sold in the United States in the same month
in which the U.S. sale was made or during the contemporaneous period,
we based normal value on similar merchandise.
[[Page 54015]]
During the POR, GCCC had sales of Type II LA cement in the United
States and asserted that the merchandise it sells in the home market as
CPO30R BRA cement is identical to Type II LA cement. We have reviewed
the information on the record of this review and, based on our
analysis, we have determined that GCCC's sales of CPO30R BRA cement in
the home market were made outside the ordinary course of trade. See
``Ordinary Course of Trade'' section below.
In the 2000/2001 administrative review of this proceeding, we
determined that the chemical and physical characteristics of CPO 40
cement produced and sold in Mexico are most similar to Type II LA
cement sold in the United States. We have reviewed the information on
the record of this POR and have determined that it is appropriate to
match sales of CPO 40 cement produced and sold in Mexico to all sales
of Type II LA sold in the United States.
Further, in accordance with section 771(16)(B) of the Act, we find
that both bulk and bagged cement are produced in the same country and
by the same producer as the types sold in the United States, both bulk
and bagged cement are like the types sold in the United States in
component materials and in the purposes for which used, and both bulk
and bagged cement are approximately equal in commercial value to the
types sold in the United States. The questionnaire responses submitted
by the respondent indicate that, with the exception of packaging, sales
of cement in bulk and sales of cement in bags are physically identical
and both are used in the production of concrete. Also, because there is
no difference in the cost of production between cement sold in bulk or
in bagged form, both are approximately equal in commercial value. See
CEMEX's and GCCC's responses to the Department's original and
supplemental questionnaires dated November 30, 2004, December 9, 2004,
March 31, 2005, and April 8, 2005. Therefore, we find that matching the
U.S. merchandise which is sold in both bulk and bag to the foreign like
product sold in either bulk or bag is appropriate.
B. Ordinary Course of Trade
Section 773(a)(1)(B) of the Act requires the Department to base
normal value on ``the price at which the foreign like product is first
sold (or in the absence of a sale, offered for sale) for consumption in
the exporting country, in the usual commercial quantities and in the
ordinary course of trade.'' Ordinary course of trade is defined as
``the conditions and practices which, for a reasonable time prior to
the exportation of the subject merchandise, have been normal in the
trade under consideration with respect to merchandise of the same class
or kind.'' See section 771(15) of the Act.
In the instant review, we analyzed home-market sales of CPO30R BRA
cement. Pursuant to section 773(a)(1)(B) of the Act, we based our
examination on the totality of circumstances surrounding the
respondent's sales in Mexico of CPO30R BRA cement, and we find that the
respondent's home-market sales of this product made during the instant
POR are outside the ordinary course of trade. See memorandum from Minoo
Hatten to Laurie Parkhill, entitled ``Ordinary-Course-of-Trade Analysis
for the Preliminary Results of the 2003/2004 Administrative Review of
the Antidumping Duty Order on Gray Portland Cement and Clinker from
Mexico,'' dated August 30, 2005.
Consequently, we have disregarded the respondent's sales of CPO30R
BRA cement in Mexico and, as in previous reviews, matched sales of CPO
40 cement produced and sold in Mexico to sales of Type II LA sold in
the United States. See ``Comparisons'' section above.
C. Arm's-Length Sales
To test whether sales to affiliated customers were made at arm's
length, we compared the prices of sales to affiliated and unaffiliated
customers, net of all movement charges, direct selling expenses,
discounts, and packing. Where the price to the affiliated party was, on
average, within a range of 98 to102 percent of the price of the same or
comparable merchandise to the unaffiliated parties, we determined that
the sales made to the affiliated party were at arm's length. See
Modification Concerning Affiliated Party Sales in the Comparison
Market, 67 FR 69186 (November 15, 2002). Consistent with 19 CFR
351.403, we only included in our margin analysis those sales to
affiliated parties that were made at arm's length.
D. Cost of Production
The petitioner alleged on December 29, 2004, that the respondent
sold cement in the home market at prices below the cost of production
(COP). Upon examining the allegation, we determined that the petitioner
had provided a reasonable basis to believe or suspect that the CEMEX
and GCCC sold cement in Mexico at prices below the COP. Therefore,
pursuant to section 773(b)(1) of the Act, we initiated a COP
investigation to determine whether CEMEX and GCCC made home-market
sales of cement during the POR at below-cost prices. See the memorandum
from Mark Ross to Laurie Parkhill entitled ``Gray Portland Cement and
Clinker from Mexico: Request to Initiate Cost Investigation in the
2003/2004 Review,'' dated February 18, 2005.
In accordance with section 773(b)(3) of the Act, we calculated the
COP based on the sum of the costs of materials and fabrication employed
in producing cement plus amounts for home-market selling, general, and
administrative (SG&A) expenses. We used the home-market sales data and
COP information provided by CEMEX and GCCC in their questionnaire
responses.
After calculating the weighted-average COP and in accordance with
section 773(b)(3) of the Act, we tested whether CEMEX's and GCCC's
home-market sales were made at prices below the 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 the COP appropriate to the home-market prices less any
applicable direct selling expenses, movement charges, discounts and
rebates, and indirect selling expenses.
Pursuant to section 773(b)(2)(C) of the Act, if less than 20
percent of CEMEX's and GCCC's sales of a certain type of cement were at
prices less than the COP, we do 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. If 20 percent or more of
CEMEX's and GCCC's sales of a certain type during the POR were at
prices less than the COP, such below-cost sales 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 the appropriate weighted-average COP for the POR, we
determined that below-cost sales were not made in substantial
quantities within an extended period of time, and, therefore, we did
not disregard any below-cost sales.
E. Adjustments to Normal Value
Where appropriate, we adjusted home-market prices for discounts,
rebates, packing, handling revenue, interest revenue, and billing
adjustments to the invoice price. In addition, we adjusted the starting
price for inland freight, inland insurance, and warehousing expenses.
We also deducted home-market direct selling expenses from the home-
market price and home-market indirect selling expenses as a CEP-offset
adjustment
[[Page 54016]]
(see Level of Trade/CEP Offset section below). In addition, in
accordance with section 773(a)(6) of the Act, we deducted home-market
packing costs from and added U.S. packing costs to normal value.
Section 773(a)(6)(C)(ii) of the Act directs us to make an
adjustment to normal value to account for differences in the physical
characteristics of merchandise where similar products are compared. The
regulations at 19 CFR 351.411(b) direct us to consider differences in
variable costs associated with the physical differences in the
merchandise. Where we matched U.S. sales of subject merchandise to
similar models in the home market, we adjusted for differences in
merchandise.
F. Level of Trade/CEP Offset
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine normal value based on sales in the home
market at the same level of trade as the CEP. The home-market level of
trade is that of the starting-price sales in the home market or, when
normal value is based on constructed value, that of sales from which we
derive SG&A expenses and profit. For CEP, it is the level of the
constructed sale from the exporter to an affiliated importer after the
deductions required under section 772(d) of the Act (the CEP level).
To determine whether home-market sales are at a different level of
trade than CEP level, we examine stages in the marketing process and
selling functions along the chain of distribution between the producer
and the unaffiliated customer. If the comparison-market sales are at a
different level of trade and the difference affects price
comparability, as manifested in a pattern of consistent price
differences between the sales on which normal value is based and
comparison-market sales at the level of trade of the export
transaction, we make a level-of-trade adjustment under section
773(a)(7)(A) of the Act. Finally, for CEP sales, if the normal-value
level is more remote from the factory than the CEP level and there is
no basis for determining whether the difference in the levels between
normal value and CEP level affects price comparability, we adjust
normal value under section 773(a)(7)(B) of the Act (the CEP-offset
provision). See Final Determination of Sales at Less Than Fair Value:
Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR
61731, 61732-33 (November 19, 1997).
With respect to U.S. sales (respondent reported CEP sales in the
U.S. market), we conclude that CEMEX's and GCCC's sales constituted one
level of trade. We based our conclusion on our analysis of each
company's reported selling functions and sales channels after making
deductions for selling expenses under section 772(d) of the Act. We
found that, with some minor exceptions, CEMEX and GCCC performed the
same selling functions to varying degrees in similar channels of
distribution. We also concluded that the variations in the intensities
of selling functions performed were not substantial when all selling
expenses were considered.
Based on our analysis of CEMEX's and GCCC's reported selling
functions and sales channels, we conclude that CEMEX's and GCCC's home-
market sales to various classes of customers constitute two separate
levels of trade (the CEMEX home-market level of trade and the GCCC
home-market level of trade). We found that CEMEX and GCCC performed
significantly different sales functions for sales to their home-market
customers. Specifically, we found that the two home-market levels of
trade differed with respect to selling activities such as after-sales
service/warranties, customer approval, sales promotion/discount
programs, sales forecasting, personnel training/exchange, and
procurement and sourcing services. See the memorandum entitled ``Gray
Portland Cement and Clinker from Mexico: Level-of-Trade Analysis for
the 03/04 Administrative Review,'' dated August 30, 2005.
Further, we compared the CEMEX home-market level of trade to the
CEP level and found that significantly different selling functions are
performed at each level of trade and that fewer selling functions are
performed for the U.S. sales than for the home-market sales. For
example, sales at the CEP level do not include activities such as
market research, strategic and economic planning, advertising, and
after-sales service/warranties whereas sales in the CEMEX home-market
level of trade include these activities. Based on this analysis, we
concluded that the CEMEX home-market level of trade is different, is at
a more advanced stage of distribution, and is more remote from the
factory than the CEP level.
Next, we compared the GCCC home-market level of trade to the CEP
level and also found that significantly different selling functions are
performed at these levels of trade and that fewer selling functions are
performed for the U.S. sales than for the home-market sales. For
example, sales at the CEP level do not include activities such as
advertising, customer approval, sales promotion, sales forecasting,
strategic and economic planning, personnel training/exchange, and
procurement and sourcing services whereas sales in the GCCC home-market
level of trade include these activities. Based on this analysis, we
have concluded that the GCCC home-market level of trade is different,
is at a more advanced stage of distribution, and is more remote from
the factory than the CEP level.
We could not match the CEP sales to sales at the same level of
trade in the home market. In addition, we could not make a level-of-
trade adjustment because the differences in price between the CEP level
of trade and the home-market level of trade cannot be quantified due to
the lack of an equivalent to the CEP level in the home market. Also,
there is no other data on the record which would allow us to make a
level-of-trade adjustment. Thus, we made a CEP-offset adjustment to
normal value in accordance with section 773(a)(7)(B) of the Act. In
accordance with section 773(a)(7) of the Act, we calculated the CEP
offset as the smaller of the indirect selling expenses on the home-
market sale or the indirect selling expenses we deducted from the
starting price in calculating CEP.
Currency Conversion
Pursuant to section 773A(a) of the Act, we made currency
conversions into U.S. dollars based on the exchange rates in effect on
the dates of U.S. sales as certified by the Federal Reserve Bank.
Preliminary Results of Review
As a result of our review, we preliminarily determine the dumping
margin for the collapsed respondent for the period August 1, 2003,
through July 31, 2004, to be 40.54 percent.
Case briefs or other written comments in at least six copies must
be submitted to the Assistant Secretary for Import Administration no
later than one week after the issuance of the Department's last
verification report in this review. The Department will notify all
parties of the applicable briefing schedule. Pursuant to 19 CFR
351.309(d)(2), rebuttal briefs are due no later than five days after
the submission of case briefs. A list of authorities used, a table of
contents, and an executive summary of issues should accompany any
briefs submitted to the Department. Executive summaries should be
limited to five pages total, including footnotes. In accordance with 19
CFR 351.310, we will hold a public hearing to afford interested parties
an opportunity to comment on arguments raised in case or rebuttal
briefs, provided that such a hearing is requested by an interested
party. If we receive a request for a hearing, we plan to hold the
hearing
[[Page 54017]]
three days after the deadline for submission of the rebuttal briefs at
the U.S. Department of Commerce, 14th Street and Constitution Avenue,
NW., Washington, DC 20230. Interested parties who wish to request a
hearing, or to participate if one is requested, must submit a written
request to the Assistant Secretary for Import Administration, U.S.
Department of Commerce, Room 1870, within 30 days after the date of
publication of the preliminary results of this review in the Federal
Register. Requests should contain the following information: (1) the
party's name, address, and telephone number; (2) the number of
participants; (3) a list of the issues to be discussed. Oral
presentations will be limited to issues raised in the briefs.
The Department will publish the final results of this
administrative review, including the results of its analysis of issues
raised in any case or rebuttal briefs, within 120 days of publication
of this notice. See 19 CFR 351.213(h).
Assessment Rates
Upon completion of this review, the Department will determine, and
U.S. Customs and Border Protection (CBP) shall assess, antidumping
duties on all appropriate entries. In accordance with 19 CFR
351.212(b)(1), we have calculated an importer-specific assessment rate
for merchandise subject to this review. If these preliminary results
are adopted in the final results of review, we will direct CBP to
assess the resulting assessment rates against the entered customs
values for the subject merchandise on the importer's entries during the
POR.
Cash-Deposit Requirements
In conducting recent reviews of CEMEX and GCCC, the Department has
observed a pattern of significant differences between the weighted-
average margins and the assessment rates it has determined for this
respondent in those reviews. This pattern of differences suggests that
the collection of a cash deposit for estimated antidumping duty based
on net U.S. price may result in the undercollection of estimated
antidumping duties at the time of entry, as discussed at Comment 6 of
the ``Issues and Decision Memorandum for the Administrative Review of
Gray Portland Cement and Clinker from Mexico August 1, 2002, through
July 31, 2003,'' dated December 29, 2004. Therefore, we have determined
that it is appropriate to continue to require a per-unit cash-deposit
amount for entries of subject merchandise produced or exported by CEMEX
and GCCC.
The following 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 review, as provided by section 751(a)(1) of the Act:
(1) The cash-deposit amount for CEMEX/GCCC will be the amount per
metric ton determined in the final results of review; (2) for
previously reviewed or investigated companies not mentioned 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 in the original less-than-
fair-value (LTFV) investigation but the manufacturer is, the cash-
deposit rate will be the rate established for the most recent period
for the manufacturer of the merchandise; and (4) the cash-deposit rate
for all other manufacturers or exporters will be 61.85 percent, the
all-others rate from the LTFV investigation. See Final Determination of
Sales at Less Than Fair Value: Gray Portland Cement and Clinker from
Mexico, 55 FR 29244 (July 18, 1990). These deposit requirements, when
imposed, shall remain in effect until publication of the final results
of the next administrative review.
Notification to Interested Parties
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 POR. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
We are issuing and publishing this notice in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: August 30, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-4974 Filed 9-12-03; 8:45 am]
BILLING CODE 3510-DS-S