Notice of Preliminary Determination of Sales at Not Less Than Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip from Thailand, 24565-24572 [E8-9840]
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Federal Register / Vol. 73, No. 87 / Monday, May 5, 2008 / Notices
requested, must submit a written
request to the Assistant Secretary for
Import Administration, U.S. Department
of Commerce, APO/Dockets, Room
1870, within 30 days of the publication
of this notice. Requests should contain:
(1) the party’s name, address, and
telephone number; (2) the number of
participants; and (3) a list of the issues
to be discussed. See 19 CFR 351.310(c).
At the hearing oral presentations will be
limited to issues raised in the briefs.
This determination is issued and
published pursuant to sections 733(f)
and 777(i)(1) of the Tariff Act.
Dated: April 25, 2008.
David M. Spooner,
Assistant Secretary for Import
Administration.
[FR Doc. E8–9846 Filed 5–2–08; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
(A–549–825)
Notice of Preliminary Determination of
Sales at Not Less Than Fair Value:
Polyethylene Terephthalate Film,
Sheet, and Strip from Thailand
Import Administration,
International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: May 5, 2008.
SUMMARY: The U.S. Department of
Commerce (the Department)
preliminarily determines that
polyethylene terephthalate film, sheet,
and strip (PET Film) from Thailand is
not being, nor likely to be, sold in the
United States at less than fair value
(LTFV), as provided in section 733(b) of
the Tariff Act of 1930, as amended (the
Act). Interested parties are invited to
comment on this preliminary
determination.
FOR FURTHER INFORMATION CONTACT:
Stephen Bailey or Angelica Mendoza,
AD/CVD Operations, Office 7, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW, Washington, DC 20230;
telephone: (202) 482–0193, or (202)
482–3019, respectively.
SUPPLEMENTARY INFORMATION:
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AGENCY:
Background
On July 17, 2007, the Department
initiated the antidumping duty
investigation of PET Film from
Thailand. See Polyethylene
Terephthalate Film, Sheet, and Strip
(PET Film) from Brazil, the People’s
Republic of China, Thailand, and the
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United Arab Emirates: Initiation of
Antidumping Duty Investigations, 72 FR
60801 (October 26, 2007) (Notice of
Initiation).
The Department set aside a period of
time for parties to raise issues regarding
product coverage and encouraged all
parties to submit comments within 20
calendar days of publication of the
Notice of Initiation. See Notice of
Initiation. On November 15, 2007,
Avery Dennison Fasson Roll North
America (Avery Dennison) requested
that the Department find ‘‘release liner,’’
a PET film product treated on one or
both sides with a specially–cured
silicon coating, is outside the scope of
these investigations. Petitioners (DuPont
Teijin Films, Mitsubishi Polyester Film
of America, Inc., SKC, Inc. and Toray
Plastics (America), Inc. (collectively,
petitioners)) objected to Avery
Dennison’s request on November 29,
2007; petitioners re–submitted their
objections with amended bracketing on
December 14, 2007, and the document
was accepted for the record on that date.
On August 28, 2007, the United States
International Trade Commission (ITC)
preliminarily determined that there is a
reasonable indication that imports of
PET Film from Brazil, China, Thailand,
and the United Arab Emirates (UAE) are
materially injuring the U.S. industry
and the ITC notified the Department of
its findings. See Polyethylene
Terephthalate Film, Sheet, and Strip
From Brazil, China, Thailand, and the
United Arab Emirates Case Number:
731–TA–1131–1134, 72 FR 67756,
(November 30, 2007) (Preliminary ITC
Determination).
Polyplex (Thailand) Public Company
Ltd. (Polyplex Thailand) and Polyplex
(Americas) Inc. (PA) (collectively
Polyplex) was issued an antidumping
duty questionnaire on November 29,
2007. The Department received the
Section A response from Polyplex on
January 4, 2008 (AQR), and received the
Sections B and C responses from
Polyplex on January 18, 2008 (BCQR).
On January 23, 2008, petitioners
requested that the Department postpone
the preliminary determination by 50
days. The Department published an
extension notice on February 11, 2008,
which set the new deadline for the
preliminary determination at April 25,
2008. See Polyethylene Terephthalate
Film, Sheet, and Strip from Brazil, the
People’s Republic of China, Thailand,
and the United Arab Emirates:
Postponement of Preliminary
Determinations of Antidumping Duty
Investigations, 73 FR 7710 (February 11,
2008).
Petitioners filed comments on
Polyplex’s Sections A, B and C
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responses on February 13, 2008. The
Department issued a supplemental
questionnaire regarding Polyplex’s
Sections A, B and C responses on
February 19, 2008. Also on February 19,
2008, based on a timely allegation filed
by petitioners on February 6, 2008, the
Department initiated a sales–below-cost
investigation for Polyplex, finding
reasonable grounds to believe that
Polyplex made comparison market sales
of PET Film at prices below its cost of
production (COP). See ‘‘Sales Below
Cost of Production’’ section below for
further information. Consequently, the
Department requested that Polyplex
respond to Section D of the
Department’s antidumping duty
questionnaire. We received Polyplex’s
Section D response on March 11, 2008.
On March 12, 2008, Polyplex filed its
response to the Department’s
supplemental questionnaire regarding
Sections A–C (SABCQR). Additionally
on March 12, 2008, a U.S. customer of
Polyplex filed a response to Department
questions regarding this U.S. customer’s
relationship with Polyplex Thailand.
On March 14, 2008, the Department
requested a SAS version of Polyplex’s
comparison market, United States
market, and cost datasets submitted
with its SABCQR, which Polyplex did
on March 17, 2008. See the
Department’s March 17, 2008,
Memorandum to the File.
On March 21, 2008, petitioners filed
a targeted dumping allegation on sales
made by Polyplex in the U.S., and also
filed section D comments. On March 24,
2008, the Department issued a section D
supplemental questionnaire to Polyplex.
On March 31, 2008, Polyplex filed
comments on petitioners’ targeted
dumping allegation.
The Department issued a second
supplemental questionnaire to Polyplex
concerning the company’s Sections A,
B, C, and D responses and information
regarding the value added to PET Film
by one U.S. customer on April 1, 2008.
On April 7, 2008, the Department
issued a memorandum in which it
determined that Polyplex Thailand was
affiliated with one of Polyplex
Thailand’s U.S. customers that produces
non–subject merchandise using PET
Film. See Affiliation section below.
Because the name of this customer is
proprietary we will refer to it here as
‘‘Company A.’’
In light of our finding of affiliation, on
April 7, 2008, the Department requested
that Polyplex Thailand and Company A
respond to Section E (Cost of Further
Manufacture or Assembly Performed in
the United States) of the Department’s
November 29, 2007, antidumping
questionnaire in regard to the PET Film
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further processed by the U.S. customer
after importation.
On April 8, 2008, Polyplex submitted
its section D supplemental
questionnaire response.
Upon review of petitioners’ targeted
dumping allegation, we determined that
further information was needed in order
to adequately analyze petitioners’
allegation, and issued a targeted
dumping supplemental questionnaire to
petitioners on April 8, 2008.
On April 9, 2008, Polyplex submitted
a letter requesting that the Department
not collect section E information
because the value added by Company A
substantially exceeds the value of the
PET Film input. Because the application
of the Department’s standard further
manufacture methodology pursuant to
section 772(d)(2) of the Act would be
particularly burdensome based on the
special facts of this case, Polyplex
requested that the Department apply
section 772(e) of the Act (the ‘‘special
rule’’) and base the margin for Company
A sales on prices of other subject
merchandise sold by Polyplex Thailand
and PA to companies other than
Company A pursuant to the special rule.
On April 11, 2008, Polyplex filed its
second supplemental questionnaire
response regarding Sections A, B, C, and
D. Petitioners filed their targeted
dumping supplemental questionnaire
response on April 16, 2008. Also on
April 16, 2008, petitioners submitted
comments regarding the Department’s
methodology for calculating the margin
for sales made to Company A in light of
the Department’s affiliation
determination. Because there was a
need for supplemental information
regarding this allegation, we did not
have sufficient time to analyze the
targeted dumping allegation prior to the
April 25, 2008, deadline for issuance of
the preliminary determination. We
intend to address this allegation in full
upon receipt of a satisfactory response
by petitioners to our request for
additional information. Similarly, we
will address in full petitioner’s April 16,
2008, comments regarding the
Department’s methodology for
calculating the margin for sales made to
Company A in light of the Department’s
affiliation determination for the final
determination.
April 17, 2008, the Department
telephoned counsel to Polyplex and
requested that Polyplex resubmit its
April 11, 2008, section D supplemental
cost dataset to correct certain errors
identified by the Department. Polyplex
resubmitted its cost database on April
18, 2008, correcting the errors in
question. See the Department’s April 17,
2008, Memorandum to the File.
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Also on April 17, 2008, Polyplex
submitted a request for extension in
filing its response to Section E (Cost of
Further Manufacture or Assembly
Performed in the United States) of the
Department’s November 29, 2007,
antidumping questionnaire from April
21, 20008, until May 2, 2008. The
Department granted this request on
April 21, 2008. See the Department’s
April 18, 2008, Memorandum to the
File.
On April 23, 2008, the Department
requested a SAS version of the cost
dataset Polyplex originally submitted
with its April 18, 2008, section D
supplemental questionnaire response.
Polyplex submitted a SAS version of its
cost dataset on April 24, 2008. See the
Department’s April 23, 2008,
Memorandum to the File.
Period of Investigation
The period of period of investigation
(POI) is July 1, 2006, to June 30, 2007.
Scope of Investigation
The products covered by this
investigation are all gauges of raw, pre–
treated, or primed PET Film, whether
extruded or co–extruded. Excluded are
metallized films and other finished
films that have had at least one of their
surfaces modified by the application of
a performance–enhancing resinous or
inorganic layer more than 0.00001
inches thick. Also excluded is Roller
transport cleaning film which has at
least one of its surfaces modified by
application of 0.5 micrometers of SBR
latex. Tracing and drafting film is also
excluded. PET Film is classifiable under
subheading 3920.62.00.90 of the
Harmonized Tariff Schedule of the
United States (HTSUS). While HTSUS
subheadings are provided for
convenience and purposes of Customs
and Border Protection (CBP), our
written description of the scope of this
investigation is dispositive.
Party Comments on Scope and Model
Matching
On October 30, 2007, the Department
asked all parties in this investigation
and in the concurrent antidumping duty
investigations of PET Film from Brazil,
the People’s Republic of China (PRC),
and the United Arab Emirates (UAE), for
comments on the appropriate product
characteristics for defining individual
products. In addition, the Department
requested that all parties in this
investigation and in the concurrent
antidumping duty investigations of PET
Film Brazil, the PRC, and the UAE
submit comments on the appropriate
model matching methodology. See
Letter from Robert James, Program
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Manager, AD/CVD Enforcement 7, dated
October 7, 2007.
We received comments from
petitioners on November 6, 2008,
requesting that the Department include
the grade of PET Film in the model
match criteria. Additionally, petitioners
requested that the Department include a
field identifying whether PET Film has
been coextruded. In its November 29,
2007, questionnaire, the Department
requested that Polyplex report the grade
of the PET Film, but did not request a
field identifying whether the PET Film
is coextruded. For purposes of this
preliminary determination, the
Department has determined that it is
unnecessary to change the proposed
product characteristics and model
matching methodology with regard to
coextrusion. For purposes of
distinguishing subject merchandise, the
Department will take into account the
grade of the PET Film, as advocated by
petitioners in their submission.
On November 15, 2007, Avery
Dennison requested that the Department
find that ‘‘release liner,’’ a PET Film
product treated on one or both sides
with a specially–cured silicon coating,
is outside the scope of these
investigations. Petitioners filed a
submission objecting to Avery
Dennison’s request on November 29,
2007; petitioners re–submitted their
objections with amended bracketing on
December 14, 2007, and the document
was accepted for the record on that date.
Petitioners argue that release liner is
‘‘PET film that clearly falls within the
scope of these investigations.’’ See
Petitioners’ December 14, 2007,
submission at 1 and 2. Avery Dennison
responded to petitioners’ comments on
February 1, 2008.
In accordance with section 731(i) of
the Act, we have determined that the
descriptions of the merchandise
contained in the petition and in our
Notice of Initiation support the
conclusion that release film is of the
same class or kind of merchandise
covered by the scope of the proposed
antidumping duty order. See also
generally 19 CFR 351.225(k)(1). The
product descriptions in the petition and
in the Department’s Notice of Initiation
specifically exclude finished films with
a ‘‘performance enhancing resinous or
inorganic layer of more than 0.00001
inches thick.’’ There is nothing in the
proposed scope language of either the
petition or our Notice of Initiation that
excludes products bearing a
performance enhancing resinous or
inorganic layer of less than 0.00001
inches from the scope of the order.
Moreover, there is no language in either
the proposed scope language of the
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petition or our Notice of Initiation that
limits the scope of the investigation to
‘‘PET base film,’’ (i.e., PET film prior to
the application of in–line coatings), as
Avery Dennison suggests. In addition,
release liner shares the chemical
composition of PET film described in
the proposed scope of the petition and
Notice of Initiation.
One of the purposes of a less than fair
value investigation is to decide the
merchandise specifically covered by the
scope of the ultimate antidumping duty
order. Based upon the foregoing, we
have preliminarily determined that
release film is of the same class or kind
of merchandise as that described in the
Petition and in the Department’s Notice
of Initiation. Thus, we have determined
that release film is covered by the scope
of the antidumping investigation of PET
film from Thailand. For a full
discussion of this issue, see the
memorandum titled ‘‘Antidumping
Duty Investigations on Polyethylene
Terephthalate Film, Sheet, and Strip
(PET film) from Brazil, the People’s
Republic of China, Thailand, and the
United Arab Emirates,’’ from Micheal J.
Heaney, Senior Case Analyst, to
Stephen J. Claeys, Deputy Assistant
Secretary for Import Administration,
dated April 25, 2008, issued
concurrently with this notice.
We have relied on four criteria to
match U.S. sales of subject merchandise
to comparison market sales of the
foreign like product: grade,
specification, thickness, and surface
treatment. 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, we compared U.S. sales to
the next most similar foreign like
product on the basis of the
characteristics listed above.
Respondent Selection
Section 777A(c)(1) of the Act directs
the Department to calculate individual
dumping margins for each known
exporter and producer of the subject
merchandise. The Department
determined that there were six Thai
producers/exporters of PET Film that
made shipments to the United States
during the POI. In the Department’s
Respondent Selection Memorandum, we
determined that, in light of resource
constraints, it would not be practicable
in this investigation for us to examine
all known producers or exporters of
subject merchandise. See the November
28, 2007, Memorandum to Deputy
Assistant Secretary Stephen J. Claeys,
titled ‘‘Antidumping Duty Investigation
on Polyethylene Terephthalate Film,
Sheet, and Strip from Thailand (A–549–
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825): Respondent Selection’’
(Respondent Selection Memorandum).
Further, no party to this case argued for
the examination of all companies.
Accordingly, pursuant to section
777A(c)(2) of the Act, the Department
determined that it would investigate
only a limited number of exporters or
producers. Section 77A(c)(2) allows the
Department to select respondents either
through a sample of exporters,
producers, or types of products that is
statistically valid based on the
information available at the time of
selection, or by using the exporters and
producers accounting for the largest
volume of the subject merchandise that
can reasonably be examined.
In selecting the respondents in this
investigation, we determined that it is
most appropriate to choose the largest
producers/exporters in order to cover
the greatest possible export volume,
pursuant to section 777A(c)(2)(1)(B) of
the Act. The petition and the
Department identified a single producer
and exporter of PET Film from
Thailand, Polyplex, who accounted for
the overwhelming majority of subject
merchandise exported to the United
States during the POI. Therefore, we
concluded that we would review only
Polyplex’s exports for purposes of this
investigation. See Respondent Selection
Memorandum.
Date of Sale
Section 351.401(i) of the Department’s
regulations states the Department
normally will use the date of invoice, as
recorded in the producer’s or exporter’s
records kept in the ordinary course of
business, as the date of sale. The
regulations further provide that the
Department may use a date other than
the date of the invoice if the Secretary
is satisfied that a different date better
reflects the date on which the material
terms of sale are established. See 19 CFR
351.401(i).
Polyplex reported the sales invoice
date as the date of sale for all sales in
the comparison market and the U.S.
market, except for export price (EP)
sales, in which case Polyplex reported
the bill of lading date as the date of sale.
See BCQR at B–17 and C–16,
respectively.
In the comparison market, Polyplex
stated on pages 27–29 of its AQR that
changes in price and quantity
sometimes occur after the production
order is issued up until the time of
shipment, and that changes did occur
during the POI. See page 10 of
Polyplex’s April 11, 2008, submission.
Additionally, Polyplex stated that for
accounting purposes it recognizes a sale
based on date of invoice.
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For EP sales, Polyplex stated on page
6 of its April 11, 2008, submission that
changes occur between the order date
and invoice. Additionally, on page 29 of
its AQR, Polyplex stated that it issues a
commercial invoice to the Thai Customs
Department for export approval and to
obtain an export entry number. Polyplex
stated that it does not book the sale in
its accounting system until the goods
are cleared by Thai customs (i.e.,
Polyplex’s receipt of the bill of lading
from Thai customs).
For constructed export price (CEP)
sales, Polyplex provided invoice date as
the sale date based on the invoice from
its U.S. affiliate to the first unaffiliated
U.S. customer or to Company A
discussed below in the section U.S.
Sales of Further–Manufactured PET
Film. See page C–16 of Polyplex’s
sections BCQR. Similar to the
explanation for EP sales, Polyplex stated
on page 6 of its April 11, 2008,
submission that changes occur between
the order date and invoice.
Based on the responses of Polyplex,
and having no record evidence that
would indicate otherwise, we
preliminarily determine that the sales
invoice date is the appropriate date of
sale for the comparison market and for
CEP sales in the U.S. market, while bill
of lading date is the appropriate date of
sale for Polyplex’s EP sales. For a
further discussion of this issue, see
Polyplex Preliminary Analysis Memo.
Affiliation
On April 7, 2008, the Department
determined that Polyplex Thailand and
PA are affiliated with Company A
pursuant to section 771(33)(F) of the Act
and 19 CFR 351.102(b). Due to the
proprietary nature of this issue, see the
Department’s Memorandum to the File,
from Stephen Bailey, Case Analyst, and
Angelica Mendoza, Program Manager,
through Richard Weible, Director Office
7, dated April 7, 2008 (‘‘Affiliation
Memo’’).
Due to this affiliation, as noted above,
on April 7, 2008, the Department
requested that Polyplex Thailand and
Company A respond to Section E (Cost
of Further Manufacture or Assembly
Performed in the United States) of the
Department’s November 29, 2007,
questionnaire for purchases of PET Film
from Polyplex Thailand and PA.
U.S. Sales of Further–Manufactured
PET Film
During the POI, Polyplex Thailand
and its U.S. affiliate, PA, sold PET Film
to Company A, which further
manufactured the PET Film into non–
subject merchandise. Company A did
not sell PET Film directly acquired from
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Polyplex Thailand or PA in the United
States during the POI, but rather further
processed the material and resold it as
non–subject merchandise. After
examining the various relationships
between Polyplex Thailand, PA, and
Company A, the Department, as noted
above, has preliminarily determined
that Company A is affiliated with both
Polyplex Thailand and PA. As noted
above, on April 9, 2008, Polyplex
requested that the Department not
collect section E information because
the value added by Company A
substantially exceeds the value of the
PET Film input. Polyplex requested that
the Department instead apply the
special rule found at section 772(e) of
the Act and base the margin for
Company A’s sales of further–
manufactured goods on prices of other
subject merchandise sold by Polyplex
Thailand and PA to companies other
than Company A.
Polyplex’s Argument For Use of the
Special Rule
Polyplex notes that the special rule, as
discussed in 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, the Department
shall determine the CEP for such
merchandise using either 1) the price of
identical subject merchandise sold by
the exporter or producer to an
unaffiliated person, or 2) the price of
other subject merchandise sold by the
exporter or producer to an unaffiliated
person. If there is not a sufficient
quantity of sales to provide a reasonable
basis for comparison under subsets 1 or
2, or the Department determines that
neither of the prices described is
appropriate, then the CEP may be
determined on any other reasonable
basis.1
1With respect to the specified alternative methods
the Department may use after invoking the special
rule, the Statement of Administrative Action notes:
The alternative methods for establishing export
price are: (1) the price of identical subject
merchandise sold by the exporter or producer to an
unaffiliated person; or (2) the price of other subject
merchandise sold by the exporter or producer to an
unaffiliated person. There is no hierarchy between
these alternative methods of establishing the export
price. If there is not a sufficient quantity of sales
under either of these alternatives to provide a
reasonable basis for comparison, or if the
Department determines that neither of these
alternatives is appropriate, it may use any other
reasonable method to determine constructed export
price, provided that it provides to interested parties
a description of the method chosen and an
explanation of the basis for its selection. Such a
method may be based upon the price paid to the
exporter or producer by the affiliated person for the
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In arguing for application of the
special rule, Polyplex notes the
following: 1) Company A’s value–added
substantially exceeds the value of the
PET Film input, 2) Company A made a
‘‘very substantial’’ number of further
manufactured products that contained
PET Film (both subject and non–subject
merchandise) during the POI, 3)
Company A sold further manufactured
products containing PET Film in a very
high number of invoices and line items
during the POI, 4) Company A
manufactured the further manufactured
product at many plants in the United
States, and 5) Company A purchased
PET Film from many producers during
the POI, and cannot identify the
producer of the PET Film used in the
further manufactured product based on
its books and records. See page 4 of
Polyplex’s April 9, 2008, submission.
Polyplex maintains that all of the
above–mentioned facts were present in
the Indian investigation of PET Film, of
which Polyplex Corporation, Ltd.
(India) (Polyplex India), was the
respondent. See Notice of Final
Determination of Sales at Less Than
Fair Value: Polyethylene Terephthalate
Film, Sheet, and Strip From India, 67
FR 34899 (May 16, 2002) and
accompanying Issues and Decision
Memorandum at Comment 13 (PET Film
from India Decision Memo).
Polyplex contends that the facts in the
instant investigation are similar to the
facts in Silicon Metal from Brazil, where
the Department also applied the special
rule. See Silicon Metal From Brazil:
Preliminary Results of Antidumping
Duty Administrative Review and Notice
of Intent Not To Revoke Order in Part,
66 FR 40980 (August 6, 2001) (Silicon
Metal from Brazil). In Silicon Metal from
Brazil: 1) the U.S. affiliate of the
respondent also further manufactured
the subject merchandise it purchased
from respondent into numerous
products; 2) the respondent was unable
to trace the subject merchandise
purchased by the affiliate to the
manufactured product since the subject
merchandise was purchased from
different producers and commingled in
the production process; and 3) products
containing subject merchandise were
processed at a variety of plants both in
the United States and overseas, making
it difficult to assess the value added
solely in the united States. Polyplex
notes that in Silicon Metal from Brazil,
the Department applied the special rule
due to the burden placed on the
subject merchandise, if the Department determines
that such a price is appropriate.
See URAA, Statement of Administrative Action,
H. Doc 316, Vol. 1, 103d Cong., (1994) (SAA) at 826.
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Department in calculating a dumping
margin for the subject merchandise
imported by the U.S. affiliate.
Polyplex argues that the Department
has also applied the special rule in
Lemon Juice from Mexico. See Notice of
Preliminary Determinations of Sales at
Less Than Fair Value and of Critical
Circumstances in Part: Lemon Juice
from Mexico, 72 FR 20830 (April 26,
2007). In Lemon Juice from Mexico,
Polyplex maintains that the Department
applied the special rule because ‘‘the
value added in the United States is
likely to exceed substantially the value
of the subject merchandise and that is
a sufficient quantity of U.S. sales of
non–further-processed merchandise to
provide a reasonable basis for
comparison to normal value.’’ See
Lemon Juice from Mexico, 72 FR 20833.
Polyplex contends that similar to Lemon
Juice from Mexico, the Department
should apply the special rule for
Company A’s purchases of subject
merchandise from Polyplex Thailand
and PA.
Polyplex proposes two alternate
special rule methodologies. First,
Polyplex suggests that the Department
base the margin for further
manufactured sales on the price of other
subject merchandise sold to unaffiliated
U.S. customers, i.e., all other sales
excluding sales to Company A. Polyplex
contends that this methodology was
used by the Department in other special
rule decisions in the past. Alternatively,
Polyplex suggests that Department rely
on the ‘‘arm’s length prices’’ from
Polyplex and PA (Polyplex’s U.S. sales
affiliate) to Company A.
Petitioner’s Comments on Use of the
Special Rule
In its April 16, 2008, comments,
petitioners argue that the Department
should asses the dumping margin on
sales to Company A using the margin
calculated on sales of the identical grade
of merchandise sold to customers in the
targeted group of customers. Because of
the timing of petitioner’s comments so
close to the preliminary determination
date, we did not have sufficient time to
analyze petitioner’s comments prior to
the April 25, 2008, deadline for issuance
of the preliminary determination. We
intend to address this allegation in full
for purposes of the final determination.
Department’s Analysis For Use of the
Special Rule
The information on the record
indicates that the value added in the
United States substantially exceeds the
value of the subject merchandise and
that any potential accuracy gained by
applying the standard methodology is
likely outweighed by the burden of its
application. Specifically, the significant
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number of models of further
manufactured products produced and
sold by Company A during the POI and
the inability of Company A to identify
the source of the PET film used in a
particular further manufactured product
greatly complicates the analysis
required to apply the standard
methodology. Furthermore, the fact that
Company A is unable to identify the
source of the PET film used in a
particular further manufactured
product, and both Polyplex Thailand
and PA sold PET film to Company A,
further complicates the analysis by
requiring the Department to develop
assumptions about the adjustments that
need to be made in order to calculate
net U.S. price.
Given the forgoing, and the fact that
there is a sufficient quantity of non–
further processed subject merchandise
sales to unaffiliated parties in the
United States to provide a reasonable
basis for comparison under the special
rule, we have determined that it is
appropriate to apply the special rule of
section 772(e) of the Act in this case.
In this proceeding, we have
determined that it is appropriate to base
the dumping margins for Polyplex’s
further manufactured sales on the
weighted–average dumping margins
calculated on sales of other subject
merchandise sold to unaffiliated U.S.
customers.
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Fair Value Comparisons
To determine whether sales of PET
Film from Thailand were made in the
United States at less than normal value
(NV), we compared the EP or CEP to the
NV, as described in the ‘‘Export Price
and Constructed Export Price’’ and
‘‘Normal Value’’ sections below. In
accordance with section 777A(d)(i) of
the Act, we calculated the weighted–
average prices for NV and compared
these to the weighted–average of EP
(and CEP), when appropriate.
Export Price and Constructed Export
Price
For the price to the United States, we
used, as appropriate, EP or CEP, in
accordance with sections 772(a) and (b)
of the Act. Pursuant to section 772(a) of
the Act, we used the EP methodology
when the merchandise was sold by the
producer or exporter outside the United
States directly to the first unaffiliated
purchaser in the United States prior to
importation and when CEP was not
otherwise warranted based on the facts
on the record. We calculated CEP for
those sales where a person in the United
States, affiliated with the foreign
exporter or acting for the account of the
exporter, made the sale to the first
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Jkt 214001
unaffiliated purchaser in the United
States of the subject merchandise. See
section 772(b) of the Act. We based EP
and CEP on the packed prices charged
to the first unaffiliated customer in the
United States and the applicable terms
of sale, where appropriate.
We calculated EP based on prices
charged to the first unaffiliated U.S.
customer. We used the bill of lading
date as the date of sale.2 We based EP
on the packed free on board (FOB)
prices to the first unaffiliated purchasers
outside Thailand. We made deductions
for movement expenses in accordance
with section 772(c)(2)(A) of the Act,
including foreign inland freight, foreign
inland insurance, and foreign brokerage
and handling.
We calculated CEP based on prices
charged to the first unaffiliated U.S.
customer after importation, where
appropriate. We used the sale invoice
date as the date of sale. We based CEP
on the gross unit price from PA to its
unaffiliated U.S. customers, making
adjustments where necessary for billing
adjustments, pursuant to section
772(c)(1) of the Act. Where applicable,
the Department made deductions for
movement expenses (foreign inland
freight, foreign inland insurance, foreign
brokerage and handling, international
freight, U.S. movement from warehouse
to customer, U.S. customs duty and
brokerage, marine insurance and
warehousing), in accordance with
section 772(c)(2) of the Act and section
351.401(e) of the Department’s
regulations. In accordance with sections
772(d)(1) and (2) of the Act, we also
deducted, where applicable, U.S. direct
selling expenses, including credit
expenses, U.S. indirect selling expenses,
and U.S. inventory carrying costs
incurred in the United States and
Thailand associated with economic
activities in the United States. We also
deducted CEP profit in accordance with
section 772(d)(3) of the Act.
Normal Value
A. Home Market Viability and
Comparison Market Selection
To determine whether there was a
sufficient volume of sales in the home
market to serve as a viable basis for
calculating NV, we compared
respondent’s volume of home market
sales of the foreign like product to the
volume of its U.S. sales of the subject
merchandise. Pursuant to section
773(a)(1)(B)(i) of the Act, because
Polyplex Thailand had an aggregate
volume of home market sales of the
foreign like product that was greater
2 See the Department’s Sales Analysis
Memorandum for a further discussion of this issue.
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24569
than five percent of its aggregate volume
of U.S. sales of the subject merchandise,
we determined that the home market is
viable for comparison purposes.
Accordingly, we calculated NV for
Polyplex based on sales prices to Thai
customers.
B. Cost of Production Analysis
Based on our analysis of the
petitioners’ allegation, we found that
there were reasonable grounds to
believe or suspect that Polyplex
Thailand’s sales of PET Film in the
home market were made at prices below
its COP. Accordingly, pursuant to
section 773(b) of the Act, we initiated a
sales–below-cost investigation to
determine whether Polyplex Thailand’s
sales were made at prices below its
COP. See Memorandum to Richard
Weible, Director, Office 7, AD/CVD
Operations, from The Team entitled
‘‘The Petitioners’ Allegation of Sales
Below the Cost of Production for
Polyplex Public Company Ltd. and
Polyplex Americas, Inc.’’ dated
February 19, 2008.
1. Calculation of Cost of Production
In accordance with section 773(b)(3)
of the Act, we calculated the
respondent’s COP based on the sum of
its costs of materials and conversion for
the foreign like product, plus an amount
for general and administrative (G&A)
expenses and financial expenses. See
the ‘‘Test of Comparison Market Sales
Prices’’ section below for the treatment
of comparison market selling expenses.
The Department relied on the COP
data submitted by Polyplex in its
section D questionnaire and
supplemental questionnaire responses
for the COP calculation with the
exception of the financial expense ratio.
We have recalculated the financial
expense ratio to include the net amount
of the foreign exchange gains and losses
recognized by Polyplex’s parent
company in its 2006–2007 consolidated
financial statements and exclude the
interest income offset related to interest
charges collected from customers for
late payment.
For a complete discussion of the
changes made to the cost information
submitted by Polyplex, see
Memorandum to Neal M. Halper,
Director, Office of Accounting, titled
‘‘Cost of Production and Constructed
Value Calculation Adjustments for the
Preliminary Determination - Polyplex
(Thailand) Public Company Ltd. and
Polyplex (Americas) Inc.,’’ dated April
25, 2008 (Polyplex Cost Calculation
Memo).
2. Test of Comparison Market Sales
Prices
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On a product–specific basis, we
compared the adjusted weighted–
average COP to the comparison market
sales of the foreign like product, as
required under section 773(b) of the Act,
in order to determine whether the sale
prices were below the COP. For
purposes of this comparison, we used
the COP exclusive of selling and
packing expenses. The prices were
exclusive of any applicable movement
charges, direct and indirect selling
expenses, and packing expenses.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C)(i) of
the Act, where less than 20 percent of
a respondent’s sales of a given product
were at prices less than the COP, we did
not disregard any below–cost sales of
that product because we determined
that the below–cost sales were not made
in ‘‘substantial quantities.’’ Where 20
percent or more of a respondent’s sales
of a given product during the POI were
at prices less than COP, we determined
that such sales have been made in
‘‘substantial quantities.’’ See section
773(b)(2)(C) of the Act. Further, the
sales were made within an extended
period of time, in accordance with
section 773(b)(2)(B) of the Act, because
we examined below–cost sales
occurring during the entire POI. In such
cases, because we compared prices to
POI–average costs, we also determined
that such sales were not made at prices
which would permit recovery of all
costs within a reasonable period of time,
in accordance with section 773(b)(2)(D)
of the Act.
We found that, for certain products,
more than 20 percent of Polyplex’s 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.
C. Calculation of Normal Value Based
on Comparison Market Prices
We calculated NV based on packed
prices to unaffiliated customers in
Thailand and matched U.S. sales to NV.
We made deductions, where
appropriate, for discounts, rebates,
movement expenses, and packing
pursuant to section 773(a)(6)(B) of the
Act. When comparing U.S. sales with
comparison market sales of similar, but
not identical, merchandise, we also
made adjustments for physical
differences in the merchandise in
accordance with section 773(a)(6)(C)(ii)
of the Act and 19 CFR 351.411(a) and
(b). We based this adjustment on the
difference in the variable cost of
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15:16 May 02, 2008
Jkt 214001
manufacturing for the foreign like
product and subject merchandise. See
19 CFR 351.411(b). We also made
adjustments for differences in
circumstances of sale (COS) as
appropriate (i.e., commissions and
credit), in accordance with section
773(a)(6)(C)(iii) of the Act and 19 CFR
351.410.
In addition, for comparisons made to
CEP sales, we only deducted Thai credit
expenses from comparison market
prices, because U.S. credit expenses
were deducted from U.S. price, as noted
above and in accordance with section
772(c)(2) of the Act.
D. Calculation of Normal Value Based
on Constructed Value
Section 773(a)(4) of the Act provides
that where NV cannot be based on
comparison–market sales, NV may be
based on constructed value (CV).
Accordingly, for PET Film for which we
could not determine the NV based on
comparison–market sales, either
because there were no useable sales of
a comparable product or all sales of the
comparable products failed the COP
test, we based NV on the CV.
Section 773(e) of the Act provides that
the CV shall be based on the sum of the
cost of materials and fabrication for the
imported merchandise, plus amounts
for SG&A expenses, profit, and U.S.
packing costs. We calculated the cost of
materials and fabrication, selling and
administrative (SG&A), and interest
based on the methodology described in
the ‘‘Cost of Production Analysis’’
section, above.
We based profit on the actual amounts
incurred and realized by Polyplex in
connection with the production and sale
of the foreign like product in the
ordinary course of trade for
consumption in the comparison market,
in accordance with section 773(e)(2)A)
of the
Act.
We made adjustments to CV for
differences in COS in accordance with
section 773(a)(8) of the Act and 19 CFR
351.410. For comparisons to EP, we
made COS adjustments by deducting
direct selling expenses incurred on
home market sales from, and adding
U.S. direct selling expenses to, CV.
E. Level of Trade/Constructed Export
Price Offset
In accordance with section
773(a)(1)(B)(i) of the Act, to the extent
practicable, we determine NV based on
sales in the comparison market at the
same level of trade (LOT) as the EP or
CEP transaction. The LOT in the
comparison market is the LOT of the
starting–price sales in the comparison
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Sfmt 4703
market or, when NV is based on CV, the
LOT of the sales from which we derive
SG&A expenses and profit. With respect
to U.S. prices for EP transactions, the
LOT is also that of the starting–price
sale, which is usually from the exporter
to the first unaffiliated importer. See
section 351.412(c)(i) of the Department’s
regulations. For CEP, the LOT is that of
the constructed sale from the exporter to
the affiliated importer. See section
351.412(c)(ii) of the Department’s
regulations. See also Micron
Technology, Inc. v. United States, 243
F.3d 1301, 1314 (Fed. Cir. 2001) (Micron
Technology).
To determine whether comparison
market sales were at a different LOT
from U.S. sales, we examined stages in
the marketing process and selling
functions along the chain of distribution
between the producer and the
unaffiliated customer. Under the
Department’s LOT practice, if the
comparison market sales are at different
LOTs, and the difference affects price
comparability, as manifested in a
pattern of consistent price differences
between the sales on which NV is based
and comparison market sales at the LOT
of the export transaction, the
Department makes an LOT adjustment
in accordance with section 773(a)(7)(A)
of the Act. For CEP sales, we examine
stages in the marketing process and
selling functions along the chain of
distribution between the producer and
the customer. We also analyze whether
different selling activities are
performed, and whether any price
differences (other than those for which
other allowances are made under the
Act) are shown to be wholly or partly
due to a difference in LOT between the
CEP and NV. Under section 773(a)(7)(A)
of the Act, we further make an upward
or downward adjustment to NV for LOT
if the difference in LOT involves the
performance of different selling
activities and is demonstrated to affect
price comparability, based on a pattern
of consistent price differences between
sales at different LOTs in the country in
which NV is determined. Finally, if the
NV LOT is at a more advanced stage of
distribution than the LOT of the CEP,
but the data available do not provide an
appropriate basis to determine a LOT
adjustment, we reduce NV by the
amount of indirect selling expenses
incurred in the foreign comparison
market on sales of the foreign like
product, but by no more than the
amount of the indirect selling expenses
incurred for CEP sales. See section
773(a)(7)(B) of the Act (the CEP offset
provision).
In analyzing differences in selling
functions, we determine whether the
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LOTs identified by the respondent are
meaningful. See Antidumping Duties;
Countervailing Duties, Final Rule, 62 FR
27296, 27371 (May 19, 1997). If the
claimed LOTs are the same, we expect
that the functions and activities of the
seller should be similar. Conversely, if
a party claims that LOTs are different
for different groups of sales, the
functions and activities of the seller
should be dissimilar. See Porcelain–onSteel Cookware from Mexico: Final
Results of Administrative Review, 65 FR
30068 (May 10, 2000) and
accompanying Issues and Decision
Memorandum at Comment 6.
In the present investigation, Polyplex
did not request a LOT adjustment. See
BCQR at B–28. In order to determine
whether the comparison market sales
were at different stages in the marketing
process than the U.S. sales, we reviewed
the distribution system in each market
(i.e., the ‘‘channel of distribution’’),
including selling functions, class of
customer (customer category), and the
level of selling expenses for each type
of sale.
Polyplex reported two channels of
distribution in the comparison market
(i.e., Thailand), distributors and end–
users. Polyplex reported its selling
functions to both distributors and end–
users in the comparison market as:
technical services/support, customer
interaction, sales calls, marketing
research, order processing, price
negotiation, credit/payment collection,
delivery/freight, inventory maintenance
(non–consignment sales), inventory
maintenance (consignment sales), sales
forecasting, sales promotion, and
warranty. We examined the selling
activities reported for each channel of
distribution and found that Polyplex’s
level of selling functions to its
comparison market customers did not
vary significantly by channel of
distribution. Specifically, Polyplex
performed the same selling functions at
a similar level of performance for sales
in both comparison market channels of
distribution (e.g., price negotiation,
credit/payment collection, delivery/
freight, inventory maintenance (non–
consignment sales), sales forecasting,
sales promotion, and warranty). See
AQR at Exhibit 8 (i.e., selling functions
chart) and Exhibit S1 of the SABCQR.
We find that the only meaningful
difference between the two channels in
terms of the services provided in the
stages of marketing (and the degree of
performance of those services) is that
Polyplex provides customer interaction,
sales calls, and order processing
services at a higher degree for its end–
use customers than distributors. Id. We
do not find these differences alone to be
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15:16 May 02, 2008
Jkt 214001
sufficient for finding more than one
LOT. Therefore, we preliminarily find
that the selling functions for the
reported channels of distribution
constitute one LOT in the comparison
market.
Polyplex reported that its EP and CEP
sales to the United States were made
through four channels of distribution: 1)
CEP PA direct to customer drop ship
sales (no warehousing) (channel 1); 2)
CEP PA warehousing in customer’s
warehouse (consignment sales) (channel
2); 3) CEP PA warehousing in PA’s
warehouse (from inventory) (channel 3);
and 4) EP direct sales on an FOB basis
(channel 4). For EP and CEP sales, we
examined the selling activities related to
each of the selling functions between
Polyplex and its U.S. customers.
Polyplex reported its selling functions
to distributors (i.e., PA) and end–users
in the United States as: technical
services/support, customer interaction,
sales calls, marketing research, order
processing, price negotiation, credit/
payment collection, delivery/freight,
inventory maintenance (non–
consignment sales), inventory
maintenance (consignment sales), sales
forecasting, sales promotion, and
warranty. We examined Polyplex’s
selling functions for its U.S. sales and
found that channels 1, 2, and 3 (i.e., CEP
sales to PA) are essentially the same
channel with the same selling functions
performed.3
For CEP sales, we consider only the
selling activities reflected in the price
after the deduction of expenses and CEP
profit under section 772(d) of the Act.
See Micron Technology, 243 F.3d at
1314–1315. We reviewed the selling
functions and services performed by
Polyplex on CEP sales for the three
channels of distribution relating to the
CEP LOT, as described by Polyplex in
its questionnaire response, after these
deductions. Exhibit 8 of the AQR and
Exhibit S1 of the SABCQR detail the
selling functions performed for sales
from Polyplex to PA and, then to
distributors and end use customers. All
three channels are included in the same
selling function columns. Therefore, the
Department finds that there are two
channels of distribution in the United
States, consisting of Polyplex’s EP sales
3 The Department notes that Polyplex’s U.S. sales
to Company A are being excluded from our analysis
pursuant to the Department’s Analysis For Use of
the Special Rule section above. As such, Polyplex
Thailand’s EP sales, and certain CEP sales to
Company A, will not be used in the margin
analysis. The Department has conducted an LOT
analysis for this preliminary determination because
removing the sales in question is a preliminary
decision and removing the sales in question does
not affect the ultimate conclusion reached by the
LOT analysis.
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24571
(i.e., channel 4) and Polyplex’s CEP
sales (i.e., channels 1, 2, and 3). We then
compared the selling functions between
Polyplex’s CEP sales and Polyplex’s EP
direct U.S. sales.
The Department finds that the two
channels of distribution in the U.S. vary
significantly. For instance, the selling
functions provided by Polyplex to
unaffiliated customers in the U.S. (i.e.,
EP direct sales to end–users) were
usually at a medium level, while
providing a high level of technical
support. Polyplex provided a minimum
level of sales calls, marketing research,
inventory maintenance (non–
consignment sales), while providing no
sales promotion and warranty services.
However, Polyplex usually provided no
selling functions for sales to PA; only
providing a minimum of technical
services, order processing, delivery
services, and moderate sales forecasting.
See Exhibit A1 of Polyplex’s March 12,
2008, supplemental questionnaire
response. Therefore, we preliminary
determine that Polyplex’s U.S. sales are
made at two LOTs (i.e., CEP and EP).
We then compared the selling
functions Polyplex provided in the
comparison market LOT with the selling
functions provided for the two U.S.
LOTs. On this basis, we determined that
the comparison market LOT is similar to
Polyplex’s U.S. LOT for EP sales. We
made this determination based upon the
minor differences that exist between
Polyplex’s comparison and U.S. EP
sales, specifically the minimum level of
sales calls and market research provided
in the U.S. compared to medium to high
level provided in the comparison
market. See Exhibit A1 of Polyplex’s
March 12, 2008, supplemental
questionnaire response. Moreover, we
find that the degree to which Polyplex
provides these identical selling
functions for its customers in both
markets to be the same or similar (i.e.,
technical services, customer interaction,
order processing, price negotiation,
credit/payment collection, delivery/
freight, inventory maintenance (non–
consignment sales), sales forecasting,
and warranty). Therefore, we
preliminarily determine that Polyplex is
not entitled to a LOT adjustment with
respect to these sales.
According to section 773(a)(7)(B) of
the Act, a CEP offset is appropriate
when the LOT in the comparison market
is at a more advanced stage than the
LOT of the CEP sales and there are no
data available to determine the
existence of a pattern of price
difference. Polyplex reported that it
provided minimal selling functions and
services for the one (CEP) LOT in the
United States and that, therefore, the
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comparison market LOT is more
advanced than the CEP LOT. Based on
our analysis of the channels of
distribution and selling functions
performed by Polyplex for sales in the
comparison market and CEP sales in the
U.S. market, we preliminarily find that
the comparison market LOT is at a more
advanced stage of distribution when
compared to CEP sales because Polyplex
provides many more selling functions in
the comparison market at a higher level
of service as compared to selling
functions performed for its CEP sales
(i.e., technical services/support,
customer interaction, sales calls,
marketing research, order processing,
price negotiation, credit/payment
collection, delivery/freight, inventory
maintenance (non–consignment sales),
inventory maintenance (consignment
sales), and sales promotion). See Exhibit
S1 of Polyplex’s SABCQR. Thus, we
find that Polyplex’s comparison market
sales are at a more advanced LOT than
its CEP sales. There is one LOT in the
comparison market, and there are no
data available to determine the
existence of a pattern of price
difference, and we do not have any
other information that provides an
appropriate basis for determining a LOT
adjustment. Therefore, consistent with
section 773(a)(7)(B) of the Act, we
applied a CEP offset to NV for CEP
comparisons.
To calculate the CEP offset, we
deducted from NV the comparison
market indirect selling expenses from
NV for comparison market sales that
were compared to U.S. CEP sales. As
such, we limited the comparison market
indirect selling expense deduction by
the amount of the indirect selling
expenses deducted in calculating the
CEP as required under section
772(d)(1)(D) of the Act.
Currency Conversion
We made currency conversions into
U.S. dollars in accordance with section
773A of the Act and 19 CFR 351.415
based on the exchange rates in effect on
the dates of the U.S. sales as certified by
the Federal Reserve Bank.
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Verification
As provided in section 782(i) of the
Act, we intend to verify all information
upon which we will rely in making our
final determination.
Preliminary Determination
The weighted–average dumping
margin in the preliminary determination
is as follows:
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Jkt 214001
Producer/Exporter
Weighted–Average
Margin (Percentage)
Polyplex (Thailand)
Public Company Ltd.
0.00
Suspension of Liquidation
In accordance with section 733(b)(3)
of the Act, the Department will
disregard any weighted–average
dumping margin that is zero or de
minimis, i.e. less than 2 percent ad
valorem. Based on our preliminary
margin calculation, we will not direct
the U.S. CBP to suspend liquidation of
any entries of PET Film from Thailand
as described in the ‘‘Scope of
Investigation’’ section that are entered,
or withdrawn from warehouse, for
consumption on or after the date of
publication of this notice in the Federal
Register. The Department does not
require any cash deposit or posting of a
bond for this preliminary determination.
ITC Notification
In accordance with section 733(f) of
the Act, we have notified the ITC of the
Department’s preliminary
determination. If the Department’s final
determination is affirmative, the ITC
will determine before the later of 120
days after the date of this preliminary
determination or 45 days after our final
determination whether imports of PET
Film from Thailand are materially
injuring, or threaten material injury to,
the U.S. industry. We will disclose the
calculations used in our analysis to
parties in this proceeding in accordance
with 19 CFR 351.224(b).
Public Comment
Interested parties are invited to
comment on the preliminary
determination. Interested parties may
submit case briefs to the Department no
later than seven days after the date of
the issuance of the final verification
report in this proceeding. See 19 CFR
351.309(c)(1)(i). Rebuttal briefs, the
content of which is limited to the issues
raised in the case briefs, must be filed
within five days of the deadline date for
the submission of case briefs. See 19
CFR 351.309(d)(1) and (2). 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. Further, we request
that parties submitting briefs and
rebuttal briefs provide the Department
with a copy of the public version of
such briefs on diskette. In accordance
with section 774 of the Act, and 19 CFR
351.310, the Department will hold a
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public hearing, if requested, to afford
interested parties an opportunity to
comment on arguments raised in case or
rebuttal briefs, provided that such a
hearing is requested by an interested
party. If a request for a hearing is made
in this investigation, pursuant to 19 CFR
351.310(c) the hearing will tentatively
be held two days after the rebuttal brief
deadline date at the U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW, Washington, DC 20230, at
a time and in a room to be determined.
Parties should confirm by telephone,
the date, time, and location of the
hearing 48 hours before the scheduled
date.
Interested parties, who wish to
request a hearing, or to participate in a
hearing if one is requested, must submit
a written request to the Secretary of
Commerce, Attention Assistant
Secretary for Import Administration,
U.S. Department of Commerce, APO/
Dockets Unit Room 1870, within 30
days of the publication of this notice.
Requests should contain: (1) the party’s
name, address, and telephone number;
(2) the number of participants; and (3)
a list of the issues to be discussed. See
19 CFR 351.310(c). At the hearing, oral
presentations will be limited to issues
raised in the case and rebuttal briefs.
This determination is issued and
published pursuant to sections 733(f)
and 777(i)(1) of the Act and 19 CFR
351.205(c).
Dated: April 25, 2008.
David M. Spooner,
Assistant Secretary for Import
Administration.
[FR Doc. E8–9840 Filed 5–2–08; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
A–570–832
Pure Magnesium from the People’s
Republic of China: Extension of Time
for the Preliminary Results of the
Antidumping Duty Administrative
Review
Import Administration,
International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: May 5, 2008.
FOR FURTHER INFORMATION CONTACT: Hua
Lu, AD/CVD Operations, Office 8,
Import Administration, International
Trade Administration, U.S. Department
of Commerce, 14th Street and
Constitution Avenue, NW, Washington,
DC 20230; telephone: (202) 482–6478.
SUPPLEMENTARY INFORMATION:
AGENCY:
E:\FR\FM\05MYN1.SGM
05MYN1
Agencies
[Federal Register Volume 73, Number 87 (Monday, May 5, 2008)]
[Notices]
[Pages 24565-24572]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-9840]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
(A-549-825)
Notice of Preliminary Determination of Sales at Not Less Than
Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip from
Thailand
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: May 5, 2008.
SUMMARY: The U.S. Department of Commerce (the Department) preliminarily
determines that polyethylene terephthalate film, sheet, and strip (PET
Film) from Thailand is not being, nor likely to be, sold in the United
States at less than fair value (LTFV), as provided in section 733(b) of
the Tariff Act of 1930, as amended (the Act). Interested parties are
invited to comment on this preliminary determination.
FOR FURTHER INFORMATION CONTACT: Stephen Bailey or Angelica Mendoza,
AD/CVD Operations, Office 7, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0193, or (202) 482-3019, respectively.
SUPPLEMENTARY INFORMATION:
Background
On July 17, 2007, the Department initiated the antidumping duty
investigation of PET Film from Thailand. See Polyethylene Terephthalate
Film, Sheet, and Strip (PET Film) from Brazil, the People's Republic of
China, Thailand, and the United Arab Emirates: Initiation of
Antidumping Duty Investigations, 72 FR 60801 (October 26, 2007) (Notice
of Initiation).
The Department set aside a period of time for parties to raise
issues regarding product coverage and encouraged all parties to submit
comments within 20 calendar days of publication of the Notice of
Initiation. See Notice of Initiation. On November 15, 2007, Avery
Dennison Fasson Roll North America (Avery Dennison) requested that the
Department find ``release liner,'' a PET film product treated on one or
both sides with a specially-cured silicon coating, is outside the scope
of these investigations. Petitioners (DuPont Teijin Films, Mitsubishi
Polyester Film of America, Inc., SKC, Inc. and Toray Plastics
(America), Inc. (collectively, petitioners)) objected to Avery
Dennison's request on November 29, 2007; petitioners re-submitted their
objections with amended bracketing on December 14, 2007, and the
document was accepted for the record on that date.
On August 28, 2007, the United States International Trade
Commission (ITC) preliminarily determined that there is a reasonable
indication that imports of PET Film from Brazil, China, Thailand, and
the United Arab Emirates (UAE) are materially injuring the U.S.
industry and the ITC notified the Department of its findings. See
Polyethylene Terephthalate Film, Sheet, and Strip From Brazil, China,
Thailand, and the United Arab Emirates Case Number: 731-TA-1131-1134,
72 FR 67756, (November 30, 2007) (Preliminary ITC Determination).
Polyplex (Thailand) Public Company Ltd. (Polyplex Thailand) and
Polyplex (Americas) Inc. (PA) (collectively Polyplex) was issued an
antidumping duty questionnaire on November 29, 2007. The Department
received the Section A response from Polyplex on January 4, 2008 (AQR),
and received the Sections B and C responses from Polyplex on January
18, 2008 (BCQR).
On January 23, 2008, petitioners requested that the Department
postpone the preliminary determination by 50 days. The Department
published an extension notice on February 11, 2008, which set the new
deadline for the preliminary determination at April 25, 2008. See
Polyethylene Terephthalate Film, Sheet, and Strip from Brazil, the
People's Republic of China, Thailand, and the United Arab Emirates:
Postponement of Preliminary Determinations of Antidumping Duty
Investigations, 73 FR 7710 (February 11, 2008).
Petitioners filed comments on Polyplex's Sections A, B and C
responses on February 13, 2008. The Department issued a supplemental
questionnaire regarding Polyplex's Sections A, B and C responses on
February 19, 2008. Also on February 19, 2008, based on a timely
allegation filed by petitioners on February 6, 2008, the Department
initiated a sales-below-cost investigation for Polyplex, finding
reasonable grounds to believe that Polyplex made comparison market
sales of PET Film at prices below its cost of production (COP). See
``Sales Below Cost of Production'' section below for further
information. Consequently, the Department requested that Polyplex
respond to Section D of the Department's antidumping duty
questionnaire. We received Polyplex's Section D response on March 11,
2008.
On March 12, 2008, Polyplex filed its response to the Department's
supplemental questionnaire regarding Sections A-C (SABCQR).
Additionally on March 12, 2008, a U.S. customer of Polyplex filed a
response to Department questions regarding this U.S. customer's
relationship with Polyplex Thailand.
On March 14, 2008, the Department requested a SAS version of
Polyplex's comparison market, United States market, and cost datasets
submitted with its SABCQR, which Polyplex did on March 17, 2008. See
the Department's March 17, 2008, Memorandum to the File.
On March 21, 2008, petitioners filed a targeted dumping allegation
on sales made by Polyplex in the U.S., and also filed section D
comments. On March 24, 2008, the Department issued a section D
supplemental questionnaire to Polyplex. On March 31, 2008, Polyplex
filed comments on petitioners' targeted dumping allegation.
The Department issued a second supplemental questionnaire to
Polyplex concerning the company's Sections A, B, C, and D responses and
information regarding the value added to PET Film by one U.S. customer
on April 1, 2008.
On April 7, 2008, the Department issued a memorandum in which it
determined that Polyplex Thailand was affiliated with one of Polyplex
Thailand's U.S. customers that produces non-subject merchandise using
PET Film. See Affiliation section below. Because the name of this
customer is proprietary we will refer to it here as ``Company A.''
In light of our finding of affiliation, on April 7, 2008, the
Department requested that Polyplex Thailand and Company A respond to
Section E (Cost of Further Manufacture or Assembly Performed in the
United States) of the Department's November 29, 2007, antidumping
questionnaire in regard to the PET Film
[[Page 24566]]
further processed by the U.S. customer after importation.
On April 8, 2008, Polyplex submitted its section D supplemental
questionnaire response.
Upon review of petitioners' targeted dumping allegation, we
determined that further information was needed in order to adequately
analyze petitioners' allegation, and issued a targeted dumping
supplemental questionnaire to petitioners on April 8, 2008.
On April 9, 2008, Polyplex submitted a letter requesting that the
Department not collect section E information because the value added by
Company A substantially exceeds the value of the PET Film input.
Because the application of the Department's standard further
manufacture methodology pursuant to section 772(d)(2) of the Act would
be particularly burdensome based on the special facts of this case,
Polyplex requested that the Department apply section 772(e) of the Act
(the ``special rule'') and base the margin for Company A sales on
prices of other subject merchandise sold by Polyplex Thailand and PA to
companies other than Company A pursuant to the special rule.
On April 11, 2008, Polyplex filed its second supplemental
questionnaire response regarding Sections A, B, C, and D. Petitioners
filed their targeted dumping supplemental questionnaire response on
April 16, 2008. Also on April 16, 2008, petitioners submitted comments
regarding the Department's methodology for calculating the margin for
sales made to Company A in light of the Department's affiliation
determination. Because there was a need for supplemental information
regarding this allegation, we did not have sufficient time to analyze
the targeted dumping allegation prior to the April 25, 2008, deadline
for issuance of the preliminary determination. We intend to address
this allegation in full upon receipt of a satisfactory response by
petitioners to our request for additional information. Similarly, we
will address in full petitioner's April 16, 2008, comments regarding
the Department's methodology for calculating the margin for sales made
to Company A in light of the Department's affiliation determination for
the final determination.
April 17, 2008, the Department telephoned counsel to Polyplex and
requested that Polyplex resubmit its April 11, 2008, section D
supplemental cost dataset to correct certain errors identified by the
Department. Polyplex resubmitted its cost database on April 18, 2008,
correcting the errors in question. See the Department's April 17, 2008,
Memorandum to the File.
Also on April 17, 2008, Polyplex submitted a request for extension
in filing its response to Section E (Cost of Further Manufacture or
Assembly Performed in the United States) of the Department's November
29, 2007, antidumping questionnaire from April 21, 20008, until May 2,
2008. The Department granted this request on April 21, 2008. See the
Department's April 18, 2008, Memorandum to the File.
On April 23, 2008, the Department requested a SAS version of the
cost dataset Polyplex originally submitted with its April 18, 2008,
section D supplemental questionnaire response. Polyplex submitted a SAS
version of its cost dataset on April 24, 2008. See the Department's
April 23, 2008, Memorandum to the File.
Period of Investigation
The period of period of investigation (POI) is July 1, 2006, to
June 30, 2007.
Scope of Investigation
The products covered by this investigation are all gauges of raw,
pre-treated, or primed PET Film, whether extruded or co-extruded.
Excluded are metallized films and other finished films that have had at
least one of their surfaces modified by the application of a
performance-enhancing resinous or inorganic layer more than 0.00001
inches thick. Also excluded is Roller transport cleaning film which has
at least one of its surfaces modified by application of 0.5 micrometers
of SBR latex. Tracing and drafting film is also excluded. PET Film is
classifiable under subheading 3920.62.00.90 of the Harmonized Tariff
Schedule of the United States (HTSUS). While HTSUS subheadings are
provided for convenience and purposes of Customs and Border Protection
(CBP), our written description of the scope of this investigation is
dispositive.
Party Comments on Scope and Model Matching
On October 30, 2007, the Department asked all parties in this
investigation and in the concurrent antidumping duty investigations of
PET Film from Brazil, the People's Republic of China (PRC), and the
United Arab Emirates (UAE), for comments on the appropriate product
characteristics for defining individual products. In addition, the
Department requested that all parties in this investigation and in the
concurrent antidumping duty investigations of PET Film Brazil, the PRC,
and the UAE submit comments on the appropriate model matching
methodology. See Letter from Robert James, Program Manager, AD/CVD
Enforcement 7, dated October 7, 2007.
We received comments from petitioners on November 6, 2008,
requesting that the Department include the grade of PET Film in the
model match criteria. Additionally, petitioners requested that the
Department include a field identifying whether PET Film has been
coextruded. In its November 29, 2007, questionnaire, the Department
requested that Polyplex report the grade of the PET Film, but did not
request a field identifying whether the PET Film is coextruded. For
purposes of this preliminary determination, the Department has
determined that it is unnecessary to change the proposed product
characteristics and model matching methodology with regard to
coextrusion. For purposes of distinguishing subject merchandise, the
Department will take into account the grade of the PET Film, as
advocated by petitioners in their submission.
On November 15, 2007, Avery Dennison requested that the Department
find that ``release liner,'' a PET Film product treated on one or both
sides with a specially-cured silicon coating, is outside the scope of
these investigations. Petitioners filed a submission objecting to Avery
Dennison's request on November 29, 2007; petitioners re-submitted their
objections with amended bracketing on December 14, 2007, and the
document was accepted for the record on that date. Petitioners argue
that release liner is ``PET film that clearly falls within the scope of
these investigations.'' See Petitioners' December 14, 2007, submission
at 1 and 2. Avery Dennison responded to petitioners' comments on
February 1, 2008.
In accordance with section 731(i) of the Act, we have determined
that the descriptions of the merchandise contained in the petition and
in our Notice of Initiation support the conclusion that release film is
of the same class or kind of merchandise covered by the scope of the
proposed antidumping duty order. See also generally 19 CFR
351.225(k)(1). The product descriptions in the petition and in the
Department's Notice of Initiation specifically exclude finished films
with a ``performance enhancing resinous or inorganic layer of more than
0.00001 inches thick.'' There is nothing in the proposed scope language
of either the petition or our Notice of Initiation that excludes
products bearing a performance enhancing resinous or inorganic layer of
less than 0.00001 inches from the scope of the order. Moreover, there
is no language in either the proposed scope language of the
[[Page 24567]]
petition or our Notice of Initiation that limits the scope of the
investigation to ``PET base film,'' (i.e., PET film prior to the
application of in-line coatings), as Avery Dennison suggests. In
addition, release liner shares the chemical composition of PET film
described in the proposed scope of the petition and Notice of
Initiation.
One of the purposes of a less than fair value investigation is to
decide the merchandise specifically covered by the scope of the
ultimate antidumping duty order. Based upon the foregoing, we have
preliminarily determined that release film is of the same class or kind
of merchandise as that described in the Petition and in the
Department's Notice of Initiation. Thus, we have determined that
release film is covered by the scope of the antidumping investigation
of PET film from Thailand. For a full discussion of this issue, see the
memorandum titled ``Antidumping Duty Investigations on Polyethylene
Terephthalate Film, Sheet, and Strip (PET film) from Brazil, the
People's Republic of China, Thailand, and the United Arab Emirates,''
from Micheal J. Heaney, Senior Case Analyst, to Stephen J. Claeys,
Deputy Assistant Secretary for Import Administration, dated April 25,
2008, issued concurrently with this notice.
We have relied on four criteria to match U.S. sales of subject
merchandise to comparison market sales of the foreign like product:
grade, specification, thickness, and surface treatment. 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, we compared U.S.
sales to the next most similar foreign like product on the basis of the
characteristics listed above.
Respondent Selection
Section 777A(c)(1) of the Act directs the Department to calculate
individual dumping margins for each known exporter and producer of the
subject merchandise. The Department determined that there were six Thai
producers/exporters of PET Film that made shipments to the United
States during the POI. In the Department's Respondent Selection
Memorandum, we determined that, in light of resource constraints, it
would not be practicable in this investigation for us to examine all
known producers or exporters of subject merchandise. See the November
28, 2007, Memorandum to Deputy Assistant Secretary Stephen J. Claeys,
titled ``Antidumping Duty Investigation on Polyethylene Terephthalate
Film, Sheet, and Strip from Thailand (A-549-825): Respondent
Selection'' (Respondent Selection Memorandum). Further, no party to
this case argued for the examination of all companies. Accordingly,
pursuant to section 777A(c)(2) of the Act, the Department determined
that it would investigate only a limited number of exporters or
producers. Section 77A(c)(2) allows the Department to select
respondents either through a sample of exporters, producers, or types
of products that is statistically valid based on the information
available at the time of selection, or by using the exporters and
producers accounting for the largest volume of the subject merchandise
that can reasonably be examined.
In selecting the respondents in this investigation, we determined
that it is most appropriate to choose the largest producers/exporters
in order to cover the greatest possible export volume, pursuant to
section 777A(c)(2)(1)(B) of the Act. The petition and the Department
identified a single producer and exporter of PET Film from Thailand,
Polyplex, who accounted for the overwhelming majority of subject
merchandise exported to the United States during the POI. Therefore, we
concluded that we would review only Polyplex's exports for purposes of
this investigation. See Respondent Selection Memorandum.
Date of Sale
Section 351.401(i) of the Department's regulations states the
Department normally will use the date of invoice, as recorded in the
producer's or exporter's records kept in the ordinary course of
business, as the date of sale. The regulations further provide that the
Department may use a date other than the date of the invoice if the
Secretary is satisfied that a different date better reflects the date
on which the material terms of sale are established. See 19 CFR
351.401(i).
Polyplex reported the sales invoice date as the date of sale for
all sales in the comparison market and the U.S. market, except for
export price (EP) sales, in which case Polyplex reported the bill of
lading date as the date of sale. See BCQR at B-17 and C-16,
respectively.
In the comparison market, Polyplex stated on pages 27-29 of its AQR
that changes in price and quantity sometimes occur after the production
order is issued up until the time of shipment, and that changes did
occur during the POI. See page 10 of Polyplex's April 11, 2008,
submission. Additionally, Polyplex stated that for accounting purposes
it recognizes a sale based on date of invoice.
For EP sales, Polyplex stated on page 6 of its April 11, 2008,
submission that changes occur between the order date and invoice.
Additionally, on page 29 of its AQR, Polyplex stated that it issues a
commercial invoice to the Thai Customs Department for export approval
and to obtain an export entry number. Polyplex stated that it does not
book the sale in its accounting system until the goods are cleared by
Thai customs (i.e., Polyplex's receipt of the bill of lading from Thai
customs).
For constructed export price (CEP) sales, Polyplex provided invoice
date as the sale date based on the invoice from its U.S. affiliate to
the first unaffiliated U.S. customer or to Company A discussed below in
the section U.S. Sales of Further-Manufactured PET Film. See page C-16
of Polyplex's sections BCQR. Similar to the explanation for EP sales,
Polyplex stated on page 6 of its April 11, 2008, submission that
changes occur between the order date and invoice.
Based on the responses of Polyplex, and having no record evidence
that would indicate otherwise, we preliminarily determine that the
sales invoice date is the appropriate date of sale for the comparison
market and for CEP sales in the U.S. market, while bill of lading date
is the appropriate date of sale for Polyplex's EP sales. For a further
discussion of this issue, see Polyplex Preliminary Analysis Memo.
Affiliation
On April 7, 2008, the Department determined that Polyplex Thailand
and PA are affiliated with Company A pursuant to section 771(33)(F) of
the Act and 19 CFR 351.102(b). Due to the proprietary nature of this
issue, see the Department's Memorandum to the File, from Stephen
Bailey, Case Analyst, and Angelica Mendoza, Program Manager, through
Richard Weible, Director Office 7, dated April 7, 2008 (``Affiliation
Memo'').
Due to this affiliation, as noted above, on April 7, 2008, the
Department requested that Polyplex Thailand and Company A respond to
Section E (Cost of Further Manufacture or Assembly Performed in the
United States) of the Department's November 29, 2007, questionnaire for
purchases of PET Film from Polyplex Thailand and PA.
U.S. Sales of Further-Manufactured PET Film
During the POI, Polyplex Thailand and its U.S. affiliate, PA, sold
PET Film to Company A, which further manufactured the PET Film into
non-subject merchandise. Company A did not sell PET Film directly
acquired from
[[Page 24568]]
Polyplex Thailand or PA in the United States during the POI, but rather
further processed the material and resold it as non-subject
merchandise. After examining the various relationships between Polyplex
Thailand, PA, and Company A, the Department, as noted above, has
preliminarily determined that Company A is affiliated with both
Polyplex Thailand and PA. As noted above, on April 9, 2008, Polyplex
requested that the Department not collect section E information because
the value added by Company A substantially exceeds the value of the PET
Film input. Polyplex requested that the Department instead apply the
special rule found at section 772(e) of the Act and base the margin for
Company A's sales of further-manufactured goods on prices of other
subject merchandise sold by Polyplex Thailand and PA to companies other
than Company A.
Polyplex's Argument For Use of the Special Rule
Polyplex notes that the special rule, as discussed in 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, the
Department shall determine the CEP for such merchandise using either 1)
the price of identical subject merchandise sold by the exporter or
producer to an unaffiliated person, or 2) the price of other subject
merchandise sold by the exporter or producer to an unaffiliated person.
If there is not a sufficient quantity of sales to provide a reasonable
basis for comparison under subsets 1 or 2, or the Department determines
that neither of the prices described is appropriate, then the CEP may
be determined on any other reasonable basis.\1\
---------------------------------------------------------------------------
\1\With respect to the specified alternative methods the
Department may use after invoking the special rule, the Statement of
Administrative Action notes:
The alternative methods for establishing export price are: (1)
the price of identical subject merchandise sold by the exporter or
producer to an unaffiliated person; or (2) the price of other
subject merchandise sold by the exporter or producer to an
unaffiliated person. There is no hierarchy between these alternative
methods of establishing the export price. If there is not a
sufficient quantity of sales under either of these alternatives to
provide a reasonable basis for comparison, or if the Department
determines that neither of these alternatives is appropriate, it may
use any other reasonable method to determine constructed export
price, provided that it provides to interested parties a description
of the method chosen and an explanation of the basis for its
selection. Such a method may be based upon the price paid to the
exporter or producer by the affiliated person for the subject
merchandise, if the Department determines that such a price is
appropriate.
See URAA, Statement of Administrative Action, H. Doc 316, Vol.
1, 103d Cong., (1994) (SAA) at 826.
---------------------------------------------------------------------------
In arguing for application of the special rule, Polyplex notes the
following: 1) Company A's value-added substantially exceeds the value
of the PET Film input, 2) Company A made a ``very substantial'' number
of further manufactured products that contained PET Film (both subject
and non-subject merchandise) during the POI, 3) Company A sold further
manufactured products containing PET Film in a very high number of
invoices and line items during the POI, 4) Company A manufactured the
further manufactured product at many plants in the United States, and
5) Company A purchased PET Film from many producers during the POI, and
cannot identify the producer of the PET Film used in the further
manufactured product based on its books and records. See page 4 of
Polyplex's April 9, 2008, submission. Polyplex maintains that all of
the above-mentioned facts were present in the Indian investigation of
PET Film, of which Polyplex Corporation, Ltd. (India) (Polyplex India),
was the respondent. See Notice of Final Determination of Sales at Less
Than Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip From
India, 67 FR 34899 (May 16, 2002) and accompanying Issues and Decision
Memorandum at Comment 13 (PET Film from India Decision Memo).
Polyplex contends that the facts in the instant investigation are
similar to the facts in Silicon Metal from Brazil, where the Department
also applied the special rule. See Silicon Metal From Brazil:
Preliminary Results of Antidumping Duty Administrative Review and
Notice of Intent Not To Revoke Order in Part, 66 FR 40980 (August 6,
2001) (Silicon Metal from Brazil). In Silicon Metal from Brazil: 1) the
U.S. affiliate of the respondent also further manufactured the subject
merchandise it purchased from respondent into numerous products; 2) the
respondent was unable to trace the subject merchandise purchased by the
affiliate to the manufactured product since the subject merchandise was
purchased from different producers and commingled in the production
process; and 3) products containing subject merchandise were processed
at a variety of plants both in the United States and overseas, making
it difficult to assess the value added solely in the united States.
Polyplex notes that in Silicon Metal from Brazil, the Department
applied the special rule due to the burden placed on the Department in
calculating a dumping margin for the subject merchandise imported by
the U.S. affiliate.
Polyplex argues that the Department has also applied the special
rule in Lemon Juice from Mexico. See Notice of Preliminary
Determinations of Sales at Less Than Fair Value and of Critical
Circumstances in Part: Lemon Juice from Mexico, 72 FR 20830 (April 26,
2007). In Lemon Juice from Mexico, Polyplex maintains that the
Department applied the special rule because ``the value added in the
United States is likely to exceed substantially the value of the
subject merchandise and that is a sufficient quantity of U.S. sales of
non-further-processed merchandise to provide a reasonable basis for
comparison to normal value.'' See Lemon Juice from Mexico, 72 FR 20833.
Polyplex contends that similar to Lemon Juice from Mexico, the
Department should apply the special rule for Company A's purchases of
subject merchandise from Polyplex Thailand and PA.
Polyplex proposes two alternate special rule methodologies. First,
Polyplex suggests that the Department base the margin for further
manufactured sales on the price of other subject merchandise sold to
unaffiliated U.S. customers, i.e., all other sales excluding sales to
Company A. Polyplex contends that this methodology was used by the
Department in other special rule decisions in the past. Alternatively,
Polyplex suggests that Department rely on the ``arm's length prices''
from Polyplex and PA (Polyplex's U.S. sales affiliate) to Company A.
Petitioner's Comments on Use of the Special Rule
In its April 16, 2008, comments, petitioners argue that the
Department should asses the dumping margin on sales to Company A using
the margin calculated on sales of the identical grade of merchandise
sold to customers in the targeted group of customers. Because of the
timing of petitioner's comments so close to the preliminary
determination date, we did not have sufficient time to analyze
petitioner's comments prior to the April 25, 2008, deadline for
issuance of the preliminary determination. We intend to address this
allegation in full for purposes of the final determination.
Department's Analysis For Use of the Special Rule
The information on the record indicates that the value added in the
United States substantially exceeds the value of the subject
merchandise and that any potential accuracy gained by applying the
standard methodology is likely outweighed by the burden of its
application. Specifically, the significant
[[Page 24569]]
number of models of further manufactured products produced and sold by
Company A during the POI and the inability of Company A to identify the
source of the PET film used in a particular further manufactured
product greatly complicates the analysis required to apply the standard
methodology. Furthermore, the fact that Company A is unable to identify
the source of the PET film used in a particular further manufactured
product, and both Polyplex Thailand and PA sold PET film to Company A,
further complicates the analysis by requiring the Department to develop
assumptions about the adjustments that need to be made in order to
calculate net U.S. price.
Given the forgoing, and the fact that there is a sufficient
quantity of non-further processed subject merchandise sales to
unaffiliated parties in the United States to provide a reasonable basis
for comparison under the special rule, we have determined that it is
appropriate to apply the special rule of section 772(e) of the Act in
this case.
In this proceeding, we have determined that it is appropriate to
base the dumping margins for Polyplex's further manufactured sales on
the weighted-average dumping margins calculated on sales of other
subject merchandise sold to unaffiliated U.S. customers.
Fair Value Comparisons
To determine whether sales of PET Film from Thailand were made in
the United States at less than normal value (NV), we compared the EP or
CEP to the NV, as described in the ``Export Price and Constructed
Export Price'' and ``Normal Value'' sections below. In accordance with
section 777A(d)(i) of the Act, we calculated the weighted-average
prices for NV and compared these to the weighted-average of EP (and
CEP), when appropriate.
Export Price and Constructed Export Price
For the price to the United States, we used, as appropriate, EP or
CEP, in accordance with sections 772(a) and (b) of the Act. Pursuant to
section 772(a) of the Act, we used the EP methodology when the
merchandise was sold by the producer or exporter outside the United
States directly to the first unaffiliated purchaser in the United
States prior to importation and when CEP was not otherwise warranted
based on the facts on the record. We calculated CEP for those sales
where a person in the United States, affiliated with the foreign
exporter or acting for the account of the exporter, made the sale to
the first unaffiliated purchaser in the United States of the subject
merchandise. See section 772(b) of the Act. We based EP and CEP on the
packed prices charged to the first unaffiliated customer in the United
States and the applicable terms of sale, where appropriate.
We calculated EP based on prices charged to the first unaffiliated
U.S. customer. We used the bill of lading date as the date of sale.\2\
We based EP on the packed free on board (FOB) prices to the first
unaffiliated purchasers outside Thailand. We made deductions for
movement expenses in accordance with section 772(c)(2)(A) of the Act,
including foreign inland freight, foreign inland insurance, and foreign
brokerage and handling.
---------------------------------------------------------------------------
\2\ See the Department's Sales Analysis Memorandum for a further
discussion of this issue.
---------------------------------------------------------------------------
We calculated CEP based on prices charged to the first unaffiliated
U.S. customer after importation, where appropriate. We used the sale
invoice date as the date of sale. We based CEP on the gross unit price
from PA to its unaffiliated U.S. customers, making adjustments where
necessary for billing adjustments, pursuant to section 772(c)(1) of the
Act. Where applicable, the Department made deductions for movement
expenses (foreign inland freight, foreign inland insurance, foreign
brokerage and handling, international freight, U.S. movement from
warehouse to customer, U.S. customs duty and brokerage, marine
insurance and warehousing), in accordance with section 772(c)(2) of the
Act and section 351.401(e) of the Department's regulations. In
accordance with sections 772(d)(1) and (2) of the Act, we also
deducted, where applicable, U.S. direct selling expenses, including
credit expenses, U.S. indirect selling expenses, and U.S. inventory
carrying costs incurred in the United States and Thailand associated
with economic activities in the United States. We also deducted CEP
profit in accordance with section 772(d)(3) of the Act.
Normal Value
A. Home Market Viability and Comparison Market Selection
To determine whether there was a sufficient volume of sales in the
home market to serve as a viable basis for calculating NV, we compared
respondent's volume of home market sales of the foreign like product to
the volume of its U.S. sales of the subject merchandise. Pursuant to
section 773(a)(1)(B)(i) of the Act, because Polyplex Thailand had an
aggregate volume of home market sales of the foreign like product that
was greater than five percent of its aggregate volume of U.S. sales of
the subject merchandise, we determined that the home market is viable
for comparison purposes. Accordingly, we calculated NV for Polyplex
based on sales prices to Thai customers.
B. Cost of Production Analysis
Based on our analysis of the petitioners' allegation, we found that
there were reasonable grounds to believe or suspect that Polyplex
Thailand's sales of PET Film in the home market were made at prices
below its COP. Accordingly, pursuant to section 773(b) of the Act, we
initiated a sales-below-cost investigation to determine whether
Polyplex Thailand's sales were made at prices below its COP. See
Memorandum to Richard Weible, Director, Office 7, AD/CVD Operations,
from The Team entitled ``The Petitioners' Allegation of Sales Below the
Cost of Production for Polyplex Public Company Ltd. and Polyplex
Americas, Inc.'' dated February 19, 2008.
1. Calculation of Cost of Production
In accordance with section 773(b)(3) of the Act, we calculated the
respondent's COP based on the sum of its costs of materials and
conversion for the foreign like product, plus an amount for general and
administrative (G&A) expenses and financial expenses. See the ``Test of
Comparison Market Sales Prices'' section below for the treatment of
comparison market selling expenses.
The Department relied on the COP data submitted by Polyplex in its
section D questionnaire and supplemental questionnaire responses for
the COP calculation with the exception of the financial expense ratio.
We have recalculated the financial expense ratio to include the net
amount of the foreign exchange gains and losses recognized by
Polyplex's parent company in its 2006-2007 consolidated financial
statements and exclude the interest income offset related to interest
charges collected from customers for late payment.
For a complete discussion of the changes made to the cost
information submitted by Polyplex, see Memorandum to Neal M. Halper,
Director, Office of Accounting, titled ``Cost of Production and
Constructed Value Calculation Adjustments for the Preliminary
Determination - Polyplex (Thailand) Public Company Ltd. and Polyplex
(Americas) Inc.,'' dated April 25, 2008 (Polyplex Cost Calculation
Memo).
2. Test of Comparison Market Sales Prices
[[Page 24570]]
On a product-specific basis, we compared the adjusted weighted-
average COP to the comparison market sales of the foreign like product,
as required under section 773(b) of the Act, in order to determine
whether the sale prices were below the COP. For purposes of this
comparison, we used the COP exclusive of selling and packing expenses.
The prices were exclusive of any applicable movement charges, direct
and indirect selling expenses, and packing expenses.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20
percent of a respondent's sales of a given product were at prices less
than the COP, we did not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
``substantial quantities.'' Where 20 percent or more of a respondent's
sales of a given product during the POI were at prices less than COP,
we determined that such sales have been made in ``substantial
quantities.'' See section 773(b)(2)(C) of the Act. Further, the sales
were made within an extended period of time, in accordance with section
773(b)(2)(B) of the Act, because we examined below-cost sales occurring
during the entire POI. In such cases, because we compared prices to
POI-average costs, we also determined that such sales were not made at
prices which would permit recovery of all costs within a reasonable
period of time, in accordance with section 773(b)(2)(D) of the Act.
We found that, for certain products, more than 20 percent of
Polyplex's 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.
C. Calculation of Normal Value Based on Comparison Market Prices
We calculated NV based on packed prices to unaffiliated customers
in Thailand and matched U.S. sales to NV. We made deductions, where
appropriate, for discounts, rebates, movement expenses, and packing
pursuant to section 773(a)(6)(B) of the Act. When comparing U.S. sales
with comparison market sales of similar, but not identical,
merchandise, we also made adjustments for physical differences in the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and
19 CFR 351.411(a) and (b). We based this adjustment on the difference
in the variable cost of manufacturing for the foreign like product and
subject merchandise. See 19 CFR 351.411(b). We also made adjustments
for differences in circumstances of sale (COS) as appropriate (i.e.,
commissions and credit), in accordance with section 773(a)(6)(C)(iii)
of the Act and 19 CFR 351.410.
In addition, for comparisons made to CEP sales, we only deducted
Thai credit expenses from comparison market prices, because U.S. credit
expenses were deducted from U.S. price, as noted above and in
accordance with section 772(c)(2) of the Act.
D. Calculation of Normal Value Based on Constructed Value
Section 773(a)(4) of the Act provides that where NV cannot be based
on comparison-market sales, NV may be based on constructed value (CV).
Accordingly, for PET Film for which we could not determine the NV based
on comparison-market sales, either because there were no useable sales
of a comparable product or all sales of the comparable products failed
the COP test, we based NV on the CV.
Section 773(e) of the Act provides that the CV shall be based on
the sum of the cost of materials and fabrication for the imported
merchandise, plus amounts for SG&A expenses, profit, and U.S. packing
costs. We calculated the cost of materials and fabrication, selling and
administrative (SG&A), and interest based on the methodology described
in the ``Cost of Production Analysis'' section, above.
We based profit on the actual amounts incurred and realized by
Polyplex in connection with the production and sale of the foreign like
product in the ordinary course of trade for consumption in the
comparison market, in accordance with section 773(e)(2)A) of the
Act.
We made adjustments to CV for differences in COS in accordance with
section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons to EP,
we made COS adjustments by deducting direct selling expenses incurred
on home market sales from, and adding U.S. direct selling expenses to,
CV.
E. Level of Trade/Constructed Export Price Offset
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we determine NV based on sales in the comparison
market at the same level of trade (LOT) as the EP or CEP transaction.
The LOT in the comparison market is the LOT of the starting-price sales
in the comparison market or, when NV is based on CV, the LOT of the
sales from which we derive SG&A expenses and profit. With respect to
U.S. prices for EP transactions, the LOT is also that of the starting-
price sale, which is usually from the exporter to the first
unaffiliated importer. See section 351.412(c)(i) of the Department's
regulations. For CEP, the LOT is that of the constructed sale from the
exporter to the affiliated importer. See section 351.412(c)(ii) of the
Department's regulations. See also Micron Technology, Inc. v. United
States, 243 F.3d 1301, 1314 (Fed. Cir. 2001) (Micron Technology).
To determine whether comparison market sales were at a different
LOT from U.S. sales, we examined stages in the marketing process and
selling functions along the chain of distribution between the producer
and the unaffiliated customer. Under the Department's LOT practice, if
the comparison market sales are at different LOTs, and the difference
affects price comparability, as manifested in a pattern of consistent
price differences between the sales on which NV is based and comparison
market sales at the LOT of the export transaction, the Department makes
an LOT adjustment in accordance with section 773(a)(7)(A) of the Act.
For CEP sales, we examine stages in the marketing process and selling
functions along the chain of distribution between the producer and the
customer. We also analyze whether different selling activities are
performed, and whether any price differences (other than those for
which other allowances are made under the Act) are shown to be wholly
or partly due to a difference in LOT between the CEP and NV. Under
section 773(a)(7)(A) of the Act, we further make an upward or downward
adjustment to NV for LOT if the difference in LOT involves the
performance of different selling activities and is demonstrated to
affect price comparability, based on a pattern of consistent price
differences between sales at different LOTs in the country in which NV
is determined. Finally, if the NV LOT is at a more advanced stage of
distribution than the LOT of the CEP, but the data available do not
provide an appropriate basis to determine a LOT adjustment, we reduce
NV by the amount of indirect selling expenses incurred in the foreign
comparison market on sales of the foreign like product, but by no more
than the amount of the indirect selling expenses incurred for CEP
sales. See section 773(a)(7)(B) of the Act (the CEP offset provision).
In analyzing differences in selling functions, we determine whether
the
[[Page 24571]]
LOTs identified by the respondent are meaningful. See Antidumping
Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27371 (May 19,
1997). If the claimed LOTs are the same, we expect that the functions
and activities of the seller should be similar. Conversely, if a party
claims that LOTs are different for different groups of sales, the
functions and activities of the seller should be dissimilar. See
Porcelain-on-Steel Cookware from Mexico: Final Results of
Administrative Review, 65 FR 30068 (May 10, 2000) and accompanying
Issues and Decision Memorandum at Comment 6.
In the present investigation, Polyplex did not request a LOT
adjustment. See BCQR at B-28. In order to determine whether the
comparison market sales were at different stages in the marketing
process than the U.S. sales, we reviewed the distribution system in
each market (i.e., the ``channel of distribution''), including selling
functions, class of customer (customer category), and the level of
selling expenses for each type of sale.
Polyplex reported two channels of distribution in the comparison
market (i.e., Thailand), distributors and end-users. Polyplex reported
its selling functions to both distributors and end-users in the
comparison market as: technical services/support, customer interaction,
sales calls, marketing research, order processing, price negotiation,
credit/payment collection, delivery/freight, inventory maintenance
(non-consignment sales), inventory maintenance (consignment sales),
sales forecasting, sales promotion, and warranty. We examined the
selling activities reported for each channel of distribution and found
that Polyplex's level of selling functions to its comparison market
customers did not vary significantly by channel of distribution.
Specifically, Polyplex performed the same selling functions at a
similar level of performance for sales in both comparison market
channels of distribution (e.g., price negotiation, credit/payment
collection, delivery/freight, inventory maintenance (non-consignment
sales), sales forecasting, sales promotion, and warranty). See AQR at
Exhibit 8 (i.e., selling functions chart) and Exhibit S1 of the SABCQR.
We find that the only meaningful difference between the two channels in
terms of the services provided in the stages of marketing (and the
degree of performance of those services) is that Polyplex provides
customer interaction, sales calls, and order processing services at a
higher degree for its end-use customers than distributors. Id. We do
not find these differences alone to be sufficient for finding more than
one LOT. Therefore, we preliminarily find that the selling functions
for the reported channels of distribution constitute one LOT in the
comparison market.
Polyplex reported that its EP and CEP sales to the United States
were made through four channels of distribution: 1) CEP PA direct to
customer drop ship sales (no warehousing) (channel 1); 2) CEP PA
warehousing in customer's warehouse (consignment sales) (channel 2); 3)
CEP PA warehousing in PA's warehouse (from inventory) (channel 3); and
4) EP direct sales on an FOB basis (channel 4). For EP and CEP sales,
we examined the selling activities related to each of the selling
functions between Polyplex and its U.S. customers. Polyplex reported
its selling functions to distributors (i.e., PA) and end-users in the
United States as: technical services/support, customer interaction,
sales calls, marketing research, order processing, price negotiation,
credit/payment collection, delivery/freight, inventory maintenance
(non-consignment sales), inventory maintenance (consignment sales),
sales forecasting, sales promotion, and warranty. We examined
Polyplex's selling functions for its U.S. sales and found that channels
1, 2, and 3 (i.e., CEP sales to PA) are essentially the same channel
with the same selling functions performed.\3\
---------------------------------------------------------------------------
\3\ The Department notes that Polyplex's U.S. sales to Company A
are being excluded from our analysis pursuant to the Department's
Analysis For Use of the Special Rule section above. As such,
Polyplex Thailand's EP sales, and certain CEP sales to Company A,
will not be used in the margin analysis. The Department has
conducted an LOT analysis for this preliminary determination because
removing the sales in question is a preliminary decision and
removing the sales in question does not affect the ultimate
conclusion reached by the LOT analysis.
---------------------------------------------------------------------------
For CEP sales, we consider only the selling activities reflected in
the price after the deduction of expenses and CEP profit under section
772(d) of the Act. See Micron Technology, 243 F.3d at 1314-1315. We
reviewed the selling functions and services performed by Polyplex on
CEP sales for the three channels of distribution relating to the CEP
LOT, as described by Polyplex in its questionnaire response, after
these deductions. Exhibit 8 of the AQR and Exhibit S1 of the SABCQR
detail the selling functions performed for sales from Polyplex to PA
and, then to distributors and end use customers. All three channels are
included in the same selling function columns. Therefore, the
Department finds that there are two channels of distribution in the
United States, consisting of Polyplex's EP sales (i.e., channel 4) and
Polyplex's CEP sales (i.e., channels 1, 2, and 3). We then compared the
selling functions between Polyplex's CEP sales and Polyplex's EP direct
U.S. sales.
The Department finds that the two channels of distribution in the
U.S. vary significantly. For instance, the selling functions provided
by Polyplex to unaffiliated customers in the U.S. (i.e., EP direct
sales to end-users) were usually at a medium level, while providing a
high level of technical support. Polyplex provided a minimum level of
sales calls, marketing research, inventory maintenance (non-consignment
sales), while providing no sales promotion and warranty services.
However, Polyplex usually provided no selling functions for sales to
PA; only providing a minimum of technical services, order processing,
delivery services, and moderate sales forecasting. See Exhibit A1 of
Polyplex's March 12, 2008, supplemental questionnaire response.
Therefore, we preliminary determine that Polyplex's U.S. sales are made
at two LOTs (i.e., CEP and EP).
We then compared the selling functions Polyplex provided in the
comparison market LOT with the selling functions provided for the two
U.S. LOTs. On this basis, we determined that the comparison market LOT
is similar to Polyplex's U.S. LOT for EP sales. We made this
determination based upon the minor differences that exist between
Polyplex's comparison and U.S. EP sales, specifically the minimum level
of sales calls and market research provided in the U.S. compared to
medium to high level provided in the comparison market. See Exhibit A1
of Polyplex's March 12, 2008, supplemental questionnaire response.
Moreover, we find that the degree to which Polyplex provides these
identical selling functions for its customers in both markets to be the
same or similar (i.e., technical services, customer interaction, order
processing, price negotiation, credit/payment collection, delivery/
freight, inventory maintenance (non-consignment sales), sales
forecasting, and warranty). Therefore, we preliminarily determine that
Polyplex is not entitled to a LOT adjustment with respect to these
sales.
According to section 773(a)(7)(B) of the Act, a CEP offset is
appropriate when the LOT in the comparison market is at a more advanced
stage than the LOT of the CEP sales and there are no data available to
determine the existence of a pattern of price difference. Polyplex
reported that it provided minimal selling functions and services for
the one (CEP) LOT in the United States and that, therefore, the
[[Page 24572]]
comparison market LOT is more advanced than the CEP LOT. Based on our
analysis of the channels of distribution and selling functions
performed by Polyplex for sales in the comparison market and CEP sales
in the U.S. market, we preliminarily find that the comparison market
LOT is at a more advanced stage of distribution when compared to CEP
sales because Polyplex provides many more selling functions in the
comparison market at a higher level of service as compared to selling
functions performed for its CEP sales (i.e., technical services/
support, customer interaction, sales calls, marketing research, order
processing, price negotiation, credit/payment collection, delivery/
freight, inventory maintenance (non-consignment sales), inventory
maintenance (consignment sales), and sales promotion). See Exhibit S1
of Polyplex's SABCQR. Thus, we find that Polyplex's comparison market
sales are at a more advanced LOT than its CEP sales. There is one LOT
in the comparison market, and there are no data available to determine
the existence of a pattern of price difference, and we do not have any
other information that provides an appropriate basis for determining a
LOT adjustment. Therefore, consistent with section 773(a)(7)(B) of the
Act, we applied a CEP offset to NV for CEP comparisons.
To calculate the CEP offset, we deducted from NV the comparison
market indirect selling expenses from NV for comparison market sales
that were compared to U.S. CEP sales. As such, we limited the
comparison market indirect selling expense deduction by the amount of
the indirect selling expenses deducted in calculating the CEP as
required under section 772(d)(1)(D) of the Act.
Currency Conversion
We made currency conversions into U.S. dollars in accordance with
section 773A of the Act and 19 CFR 351.415 based on the exchange rates
in effect on the dates of the U.S. sales as certified by the Federal
Reserve Bank.
Verification
As provided in section 782(i) of the Act, we intend to verify all
information upon which we will rely in making our final determination.
Preliminary Determination
The weighted-average dumping margin in the preliminary
determination is as follows:
------------------------------------------------------------------------
Weighted-Average
Producer/Exporter Margin
(Percentage)
------------------------------------------------------------------------
Polyplex (Thailand) Public Company Ltd.............. 0.00
------------------------------------------------------------------------
Suspension of Liquidation
In accordance with section 733(b)(3) of the Act, the Department
will disregard any weighted-average dumping margin that is zero or de
minimis, i.e. less than 2 percent ad valorem. Based on our preliminary
margin calculation, we will not direct the U.S. CBP to suspend
liquidation of any entries of PET Film from Thailand as described in
the ``Scope of Investigation'' section that are entered, or withdrawn
from warehouse, for consumption on or after the date of publication of
this notice in the Federal Register. The Department does not require
any cash deposit or posting of a bond for this preliminary
determination.
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of the Department's preliminary determination. If the Department's
final determination is affirmative, the ITC will determine before the
later of 120 days after the date of this preliminary determination or
45 days after our final determination whether imports of PET Film from
Thailand are materially injuring, or threaten material injury to, the
U.S. industry. We will disclose the calculations used in our analysis
to parties in this proceeding in accordance with 19 CFR 351.224(b).
Public Comment
Interested parties are invited to comment on the preliminary
determination. Interested parties may submit case briefs to the
Department no later than seven days after the date of the issuance of
the final verification report in this proceeding. See 19 CFR
351.309(c)(1)(i). Rebuttal briefs, the content of which is limited to
the issues raised in the case briefs, must be filed within five days of
the deadline date for the submission of case briefs. See 19 CFR
351.309(d)(1) and (2). 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. Further, we request that parties
submitting briefs and rebuttal briefs provide the Department with a
copy of the public version of such briefs on diskette. In accordance
with section 774 of the Act, and 19 CFR 351.310, the Department will
hold a public hearing, if requested, to afford interested parties an
opportunity to comment on arguments raised in case or rebuttal briefs,
provided that such a hearing is requested by an interested party. If a
request for a hearing is made in this investigation, pursuant to 19 CFR
351.310(c) the hearing will tentatively be held two days after the
rebuttal brief deadline date at the U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 20230, at a time and
in a room to be determined.
Parties should confirm by telephone, the date, time, and location
of the hearing 48 hours before the scheduled date.
Interested parties, who wish to request a hearing, or to
participate in a hearing if one is requested, must submit a written
request to the Secretary of Commerce, Attention Assistant Secretary for
Import Administration, U.S. Department of Commerce, APO/Dockets Unit
Room 1870, within 30 days of the publication of this notice. Requests
should contain: (1) the party's name, address, and telephone number;
(2) the number of participants; and (3) a list of the issues to be
discussed. See 19 CFR 351.310(c). At the hearing, oral presentations
will be limited to issues raised in the case and rebuttal briefs.
This determination is issued and published pursuant to sections
733(f) and 777(i)(1) of the Act and 19 CFR 351.205(c).
Dated: April 25, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-9840 Filed 5-2-08; 8:45 am]
BILLING CODE 3510-DS-S