Polyethylene Retail Carrier Bags from Indonesia: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 56807-56813 [E9-26431]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 211 (Tuesday, November 3, 2009)]
[Notices]
[Pages 56807-56813]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-26431]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-560-822]


Polyethylene Retail Carrier Bags from Indonesia: Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The U.S. Department of Commerce (the Department) preliminarily 
determines that polyethylene retail carrier bags (PRCBs) from Indonesia 
are being, or are 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). The estimated margins of sales at LTFV are 
listed in the ``Suspension of Liquidation'' section of this notice. 
Interested parties are invited to comment on this preliminary 
determination.
    Pursuant to requests from the respondents, we are postponing by 60 
days the final determination and extending provisional measures from a 
four-month period to not more than six months. Accordingly, we will 
make our final determination not later than 135 days after publication 
of the preliminary determination.

EFFECTIVE DATE: November 3, 2009.

FOR FURTHER INFORMATION CONTACT: Thomas Schauer or Yang Jin Chun, AD/
CVD Operations, Office 5, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-0410 
or (202) 482-5760 respectively.

SUPPLEMENTARY INFORMATION:

Background

    On March 31, 2009, Hilex Poly Co., LLC, and Superbag Corporation 
(collectively, the petitioners) filed an antidumping petition 
concerning imports of PRCBs from Indonesia. See the Petition for the 
Imposition of Antidumping and Countervailing Duties on Polyethylene 
Retail Carrier Bags from Indonesia, Taiwan, and the Socialist Republic 
of Vietnam, dated March 31, 2009.
    On April 20, 2009, the Department initiated the antidumping duty 
investigation on PRCBs from Indonesia. See Polyethylene Retail Carrier 
Bags From Indonesia, Taiwan, and the Socialist Republic of Vietnam: 
Initiation of Antidumping Duty Investigations, 74 FR 19049 (April 27, 
2009) (Initiation Notice).
    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 the date of publication of the 
Initiation Notice. See Initiation Notice, 74 FR at 19049. See also 
Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 
1997). We received no comments from interested parties concerning 
product coverage. The Department also set aside a period of time for 
parties to comment on product characteristics for use in the 
antidumping duty questionnaire. See Initiation Notice, 74 FR at 19050. 
On May 11, 2009, we received comments from the petitioners. After 
reviewing the petitioners' comments, we have adopted the 
characteristics and hierarchy as explained in the ``Product 
Comparisons'' section of this notice, below.
    On May 29, 2009, the International Trade Commission (ITC) published 
its affirmative preliminary determination that there is a reasonable 
indication that imports of PRCBs from Indonesia are materially injuring 
the U.S. industry, and the ITC notified the Department of its finding. 
See Polyethylene Retail Carrier Bags From Indonesia, Taiwan, and 
Vietnam; Determinations, Investigation Nos. 701-TA-462 and 731-TA-1156-
1158 (Preliminary), 74 FR 25771 (May 29, 2009).
    On May 21, 2009, we selected P.T. Sido Bangun (SBI) and P.T. Super 
Exim Sari Ltd. and P.T. Super Makmur (collectively SESSM) as mandatory 
respondents in this investigation. See the ``Selection of Respondents'' 
section of this notice, below.
    On May 26, 2009, we issued the antidumping questionnaire to SBI and 
SESSM. On July 20, 2009, we received a questionnaire response from SBI. 
On July 22, 2009, we received a questionnaire response from SESSM. We 
issued supplemental questionnaires to the respondents and received 
responses from both respondents.
    On July 22, 2009, based on a timely request from the petitioners, 
we extended the deadline for alleging targeted dumping.
    On July 30, 2009, the petitioner alleged that SBI and SESSM made 
comparison-market sales of PRCBs at prices below the cost of production 
(COP) during the period of investigation (POI). On August 14, 2009, we 
initiated an investigation to determine whether the respondents made 
comparison-market sales of PRCBs at prices below the COP during the 
POI. See the ``Cost of Production'' section of this notice, below. In 
letters dated August 14, 2009, we requested that the respondents 
respond to the COP section of the antidumping questionnaire. On 
September 8, 2009, we received the cost response from SESSM and on 
September 11, 2009, we received the cost response from SBI.
    On August 7, 2009, the petitioners filed an allegation of targeted 
dumping by SBI and SESSM. See the ``Targeted-Dumping Allegation'' 
section below.
    On August 13, 2009, the petitioners requested that the Department 
postpone its preliminary determination by 50 days. In accordance with 
section 733(c)(1)(A) of the Act, we postponed our preliminary 
determination by 50 days. See Postponement of Preliminary Determination 
of Antidumping Duty Investigations: Polyethylene Retail Carrier Bags 
from Indonesia, Taiwan, and the Socialist Republic of Vietnam, 74 FR 
42229 (August 21, 2009).
    On September 17, 2009, the petitioners requested that, in the event 
of a negative preliminary determination in this investigation, the 
Department postpone the final determination in accordance with section 
735(a)(2)(B) of the Act and 19 CFR 351.210(b)(2)(i). The petitioners 
did not specify the number of days by which to postpone the final 
determination. On September 18, 2009, and September 23, 2009, SBI and 
SESSM requested respectively that, in the event of an affirmative 
preliminary determination in this investigation, the Department 
postpone its final determination by 60 days in accordance with section 
735(a)(2)(A) of the Act and 19 CFR 351.210(b)(2)(ii) and extend the 
application of the provisional measures prescribed under 19 CFR 
351.210(e)(2) from a four-month period to a six-month period. For 
further discussion, see the ``Postponement of Final Determination and 
Extension of Provisional Measures'' section of this notice, below.
    On October 14, 2009, and on October 21, 2009, the petitioners 
submitted comments for consideration in the preliminary determination.
    On October 21, 2009, SESSM submitted new sales databases which it 
said were necessary to correct ``data entry errors in product code 
names, work order numbers, payment dates, gross unit prices and 
quantities sold, cylinder revenue, per-unit conversion factors and 
other individual items.'' See SESSM's submission dated October 21,

[[Page 56808]]

2009, at page 3. SESSM also submitted a new cost database which it said 
was necessary to ``reflect corrections to resin and overhead cost 
calculations and certain production quantities.'' Id. We have not used 
these revised databases in this preliminary determination because they 
were submitted too late for us to evaluate and analyze in time for this 
preliminary determination and very little explanation was provided as 
to the extent and reasons for the changes. We will analyze and consider 
these databases for the final determination.

Period of Investigation

    The POI is January 1, 2008, through December 31, 2008. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of the filing of the petition, March 2009. See 19 CFR 351.204(b)(1).

Scope of the Investigation

    The merchandise subject to this investigation is PRCBs, which also 
may be referred to as t-shirt sacks, merchandise bags, grocery bags, or 
checkout bags. The subject merchandise is defined as non-sealable sacks 
and bags with handles (including drawstrings), without zippers or 
integral extruded closures, with or without gussets, with or without 
printing, of polyethylene film having a thickness no greater than 0.035 
inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm), and with no 
length or width shorter than 6 inches (15.24 cm) or longer than 40 
inches (101.6 cm). The depth of the bag may be shorter than 6 inches 
(15.24 cm) but not longer than 40 inches (101.6 cm).
    PRCBs are typically provided without any consumer packaging and 
free of charge by retail establishments, e.g., grocery, drug, 
convenience, department, specialty retail, discount stores, and 
restaurants to their customers to package and carry their purchased 
products. The scope of this investigation excludes (1) polyethylene 
bags that are not printed with logos or store names and that are 
closeable with drawstrings made of polyethylene film and (2) 
polyethylene bags that are packed in consumer packaging with printing 
that refers to specific end-uses other than packaging and carrying 
merchandise from retail establishments, e.g., garbage bags, lawn bags, 
trash-can liners.
    Imports of merchandise included within the scope of this 
investigation are currently classifiable under statistical category 
3923.21.0085 of the Harmonized Tariff Schedule of the United States 
(HTSUS). This subheading may also cover products that are outside the 
scope of this investigation. Furthermore, although the HTSUS subheading 
is provided for convenience and customs purposes, the written 
description of the scope of this investigation is dispositive.

Selection of Respondents

    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. Section 777A(c)(2) of the Act gives the Department 
discretion, when faced with a large number of exporters or producers, 
to limit its examination to a reasonable number of such companies if it 
is not practicable to examine all companies. The data on the record 
indicates that there are more than ten potential producers or exporters 
from Indonesia that exported the subject merchandise to the United 
States during the POI. In the Initiation Notice we stated that we 
intended to select respondents based on U.S. Customs and Border 
Protection (CBP) data for U.S. imports under HTSUS number 3923.21.0085 
during the POI and we invited comments on CBP data and selection of 
respondents for individual examination. See Initiation Notice, 74 FR at 
19054.
    On April 27, 2009, we released the CBP data to all parties with 
access to information protected by administrative protective order. 
Based on our review of the CBP data and our consideration of the 
comments we received from the petitioners on May 7, 2009, we determined 
that we had the resources to examine two companies. Accordingly, we 
selected SBI and SESSM as mandatory respondents. These companies are 
the two major producers/exporters of subject merchandise that account 
for the largest volume of subject merchandise during the POI that we 
can reasonably examine in accordance with the statute. See Memorandum 
to John M. Andersen entitled ``Antidumping Duty Investigation on 
Polyethylene Retail Carrier Bags from Indonesia Selection of 
Respondents'' dated May 21, 2009.

Targeted-Dumping Allegation

    The statute allows the Department to employ the average-to-
transaction margin-calculation methodology under the following 
circumstances: 1) there is a pattern of export prices that differ 
significantly among purchasers, regions, or periods of time; 2) the 
Department explains why such differences cannot be taken into account 
using the average-to-average or transaction-to-transaction methodology. 
See section 777A(d)(1)(B) of the Act.
    On August 7, 2009, the petitioners submitted an allegation of 
targeted dumping with respect to SBI and SESSM and asserted that the 
Department should apply the average-to-transaction methodology in 
calculating the margin for SBI and SESSM. In their allegation, the 
petitioners assert that there are patterns of export prices (EPs) for 
comparable merchandise that differ significantly among purchasers, 
regions, and time periods for SBI and among time periods for SESSM. The 
petitioners relied on the Department's targeted-dumping test in Notice 
of Final Determination of Sales at Less Than Fair Value: Coated Free 
Sheet Paper from the Republic of Korea, 72 FR 60630 (October 25, 2007) 
(CFS); the petitioners also made their allegations using the 
Department's test in Certain Steel Nails from the United Arab Emirates: 
Notice of Final Determination of Sales at Not Less Than Fair Value, 73 
FR 33985 (June 16, 2008), and Certain Steel Nails from the People's 
Republic of China: Final Determination of Sales at Less Than Fair Value 
and Partial Affirmative Determination of Critical Circumstances, 73 FR 
33977 (June 16, 2008) (collectively, Nails).
    Because our analysis includes business-proprietary information, for 
a full discussion see Memoranda to John M. Anderson entitled ``Less-
Than-Fair-Value Investigation on Polyethylene Retail Carrier Bags from 
Indonesia: Targeted Dumping PT Sido Bangun Indonesia,'' dated October 
27, 2009 (SBI Targeted-Dumping Memo) and ``Less-Than-Fair-Value 
Investigation on Polyethylene Retail Carrier Bags from Indonesia: 
Targeted Dumping P.T. Super Exim Sari Ltd.,'' dated October 27, 2009 
(SESSM Targeted-Dumping Memo) (collectively Targeted-Dumping 
Memoranda).
    In our letter to the petitioners dated September 4, 2009, we stated 
that the petitioners' allegation using the CFS methodology lacked 
certain analysis for appropriately establishing the significance of 
differences in pricing patterns between targeted and non-targeted 
sales. In that letter we also stated that, because the methodology in 
Nails is our current targeted-dumping methodology, we planned to 
evaluate any targeted-dumping allegation concerning SBI and SESSM only 
in the context of the determination we made in Nails. We also 
identified certain ministerial errors we had found in the computer 
program that was used in Nails and alerted the petitioners that they 
could re-submit their allegation which incorporates these corrections. 
The petitioners did not submit a revised

[[Page 56809]]

allegation of targeted dumping with respect to either respondent.
    On October 1, 2009, the petitioners submitted comments for 
consideration in the preliminary determination. Specifically, the 
petitioners' comments relate to the issue of determining the proper 
rounding of prices in the targeting-dumping test and the issue of 
application of the average-to-transaction comparison method to all 
sales (not just to targeted sales) in an effort to unmask dumping 
associated with targeted sales.

A. Targeted-Dumping Test

    After correcting certain ministerial errors mentioned above and 
described in detail in our September 4, 2009, letter, we conducted 
customer, regional, and time-period targeted-dumping analyses for SBI 
and time-period targeted-dumping analysis for SESSM using the 
methodology we adopted in Nails and used most recently in Certain New 
Pneumatic Off-The-Road Tires from the People's Republic of China: Final 
Affirmative Determination of Sales at Less Than Fair Value and Partial 
Affirmative Determination of Critical Circumstances, 73 FR 40485 (July 
15, 2008).
    The methodology we employed involves a two-stage test; the first 
stage addresses the pattern requirement and the second stage addresses 
the significant-difference requirement. See section 777A(d)(1)(B)(i) of 
the Act and Nails. In this test we made all price comparisons on the 
basis of identical merchandise (i.e., by control number or CONNUM). The 
test procedures are the same for the customer, region, and time-period 
targeted-dumping allegations. We based all of our targeted-dumping 
calculations on the U.S. net price which we determined for U.S. sales 
by SBI and SESSM in our standard margin calculations. For further 
discussion of the test and the results, see the Targeted-Dumping 
Memoranda.
    As a result of our analysis, we preliminarily determine that there 
is a pattern of EPs for comparable merchandise that differ 
significantly among certain customers and time periods for SBI and 
among time periods for SESSM in accordance with section 
777A(d)(1)(B)(i) of the Act and our practice as discussed in Nails.

B. Price-Comparison Method

    Section 777A(d)(1)(B)(ii) of the Act states that the Department may 
compare the weighted average of the normal value to EPs of individual 
transactions for comparable merchandise if the Department explains why 
differences in the patterns of EPs cannot be taken into account using 
the average-to-average methodology. As described above, we have 
preliminarily determined that, with respect to sales by SBI for certain 
customers or time-periods and sales by SESSM for a certain time period, 
there was a pattern of prices that differ significantly. We find that 
these differences cannot be taken into account using the average-to-
average methodology because the average-to-average methodology conceals 
differences in the patterns of prices between the targeted and non-
targeted groups by averaging low-priced sales to the targeted group 
with high-priced sales to the non-targeted group.
    In December 2008, the Department withdrew the regulation concerning 
targeted dumping. See Withdrawal of the Regulatory Provisions Governing 
Targeted Dumping in Antidumping Duty Investigations, 72 FR 74930 
(December 10, 2008). The withdrawn targeted-dumping regulation normally 
would have limited the application of the average-to-transaction 
methodology to just those sales that constitute targeted dumping. In 
light of the withdrawn regulation and the petitioners' comments in this 
case, we have considered the following options:
    1. Apply the average-to-transaction methodology just to sales found 
to be targeted as the withdrawn regulation directed and, consistent 
with our average-to-transaction practice, do not offset any margins 
found on these transactions.
    2. Apply the average-to-transaction methodology to all sales to the 
customer or time period found to be targeted (not just those specific 
sales found to be targeted) and, consistent with our average-to-
transaction practice, do not offset any margins found on these 
transactions.
    3. Apply the average-to-transaction methodology to all sales by SBI 
and SESSM and, consistent with our average-to-transaction practice, do 
not offset any margins found on these transactions.
    The Department received comments on the price-comparison 
methodology in response to the Withdrawal of Regulation. Because 
consideration of those comments is still underway, for purposes of this 
preliminary determination and consistent with our practice in the Nails 
investigations, we have applied the average-to-transaction methodology 
to any targeted sales and applied the average-to-average methodology to 
the remaining non-targeted sales. When calculating the weighted-average 
margin, we combined the margin we calculated for the targeted sales 
with the margin we calculated for the non-targeted sales without 
offsetting any margins found among the targeted sales. See Targeted-
Dumping Memoranda.
    We invite interested parties to comment on the issue of the 
appropriate price-comparison methodology to use for the final 
determination in this investigation. Further, given the timing and 
complexity of the petitioners' October 1, 2009, comments, we intend to 
address such comments fully in the context of the final determination.

Date of Sale

    Section 351.401(i) of the Department's regulations states that 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 regulation provides further 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. The Department has 
a long-standing practice of finding that, where shipment date precedes 
invoice date, shipment date better reflects the date on which the 
material terms of sale are established. See Notice of Final 
Determination of Sales at Less Than Fair Value and Negative Final 
Determination of Critical Circumstances: Certain Frozen and Canned 
Warmwater Shrimp From Thailand, 69 FR 76918 (December 23, 2004), and 
the accompanying Issues and Decision Memorandum (I&D Memo) at Comment 
10; see also Notice of Final Determination of Sales at Less Than Fair 
Value: Structural Steel Beams From Germany, 67 FR 35497 (May 20, 2002), 
and the accompanying I&D Memo at Comment 2.
    SESSM reported that the date of sale is the earlier date of the 
sales invoice date or the date of shipment for both home-market and 
U.S. sales. Based on record evidence, we preliminarily determine that 
it is appropriate to use the earlier date of the sales invoice date or 
the shipment date as the date of sale for SESSM's home-market and U.S. 
sales. Consistent with our practice, we used the earlier date of the 
sales invoice date or the shipment date as the date of sale for SESSM's 
home-market and U.S. sales.
    SBI reported the date of sale as the invoice date. Pursuant to 19 
CFR 351.401(i), we used the invoice date as the date of sale for SBI's 
comparison-market and U.S. sales because SBI's response demonstrated 
that the material

[[Page 56810]]

terms of sale were established at the date of invoice.

Fair-Value Comparisons

    To determine whether sales of PRCBs to the United States by SBI and 
SESSM were made at LTFV during the POI, we compared EP to normal value, 
as described in the ``U.S. Price'' and ``Normal Value'' sections of 
this notice. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
calculated POI-wide weighted-average EPs except for those sales 
discussed above in the ``Targeted-Dumping Allegation'' section of this 
notice.

Product Comparisons

    We have taken into account the comments that were submitted by the 
interested parties concerning product-comparison criteria. In 
accordance with section 771(16) of the Act, all products produced by 
the respondents that are covered by the description in the ``Scope of 
the Investigation'' section, above, and sold in the respective 
comparison markets during the POI are considered to be foreign like 
product for purposes of determining appropriate product comparisons to 
U.S. sales. We have relied on thirteen criteria to match U.S. sales of 
subject merchandise to comparison-market sales of the foreign like 
product: quality, bag type, length, width, gusset, thickness, 
percentage of high-density polyethylene resin, percentage of low-
density polyethylene resin, percentage of low linear-density 
polyethylene resin, percentage of color concentrate, percentage of ink 
coverage, number of ink colors, and number of sides printed. Where 
there were no sales of identical merchandise in the comparison market 
made in the ordinary course of trade for comparison to U.S. sales, we 
matched U.S. sales to the next most similar foreign like product on the 
basis of the characteristics listed above.

Export Price

    In accordance with section 772(a) of the Act, we used EP for SBI's 
U.S. sales and SESSM's U.S. sales because the subject merchandise was 
sold directly to unaffiliated customers in the United States prior to 
importation. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
compared POI-wide weighted-average EPs to the weighted-average normal 
values.
    We calculated EP based on the packed F.O.B., C&F, or C.F.R. price 
to unaffiliated purchasers in the United States. We made deductions, as 
appropriate, for discounts. We also made deductions for any movement 
expenses in accordance with section 772(c)(2)(A) of the Act. See the 
October 27, 2009, preliminary analysis memoranda for SBI and SESSM for 
additional information.
    SESSM received freight revenue from the customer for certain U.S. 
sales. It is the Department's practice to treat such revenues as an 
offset to the specific expenses for which they were intended to 
compensate. See Certain Orange Juice from Brazil: Final Results and 
Partial Rescission of Antidumping Duty Administrative Review, 73 FR 
46584 (August 11, 2008) (OJ Brazil), and the accompanying I&D Memo at 
Comment 7, and Polyethylene Retail Carrier Bags from the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review, 74 FR 6857 (February 11, 2009) (PRC Bags), and the accompanying 
I&D Memo at Comment 6. Accordingly, we have used SESSM's freight 
revenue as an offset to its international freight expenses.
    In their October 14, 2009, pre-preliminary comments, the 
petitioners argue that we should not make an adjustment to U.S. price 
for interest revenue on the grounds that SBI did not demonstrate that 
the customer was liable for interest charges nor did it demonstrate 
that the customer actually paid the interest charges. We have made the 
adjustment because we have not yet asked SBI to make such 
demonstrations. We intend to examine this issue further at verification 
and will consider the issue in the context of the final determination.

Normal Value

A. Home-Market Viability and Comparison-Market Selection

    To determine whether there is a sufficient volume of sales in the 
home market to serve as a viable basis for calculating normal value 
(i.e., the aggregate volume of home-market sales of the foreign like 
product is equal to or greater than five percent of the aggregate 
volume of U.S. sales), we compared each respondent's volume of home-
market sales of the foreign like product to its volume of U.S. sales of 
the subject merchandise. See section 773(a)(1)(B) of the Act. Based on 
this comparison, we determined that SESSM had a viable home market 
during the POI but SBI did not. Consequently, with respect to SESSM, we 
based normal value on home-market sales in accordance with section 
773(a)(1)(B) of the Act. With respect to SBI, we based normal value on 
third-country sales in accordance with section 773(a)(1)(C) of the Act. 
We selected SBI's largest third-country market, the United Kingdom, as 
the comparison market because it was the only comparison market that 
was viable. See SBI's section A response dated July 20, 2009, at page 
A-2 and Exhibit A-1. Consequently, with respect to SBI, we based normal 
value on sales to the United Kingdom.

B. Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine normal value based on sales in the comparison 
market at the same level of trade as the EP sales in the U.S. market. 
Pursuant to 19 CFR 351.412(c)(1), the normal-value level of trade is 
based on the starting price of the sales in the comparison market or, 
when normal value is based on constructed value, the starting price of 
the sales from which we derive selling, general and administrative 
expenses and profit. For EP sales, the U.S. level of trade is based on 
the starting price of the sales in the U.S. market, which is usually 
from the exporter to the importer.
    To determine whether comparison-market sales are at a different 
level of trade than EP sales, we examine stages in the marketing 
process and selling functions along the chain of distribution between 
the producer and the unaffiliated customer. See 19 CFR 351.412(c)(2). 
If the comparison-market sales are at a different level of trade and 
the difference affects price comparability, as manifested in a pattern 
of consistent price differences between the sales on which normal value 
is based and the comparison-market sales at the level of trade of the 
export transaction, we make a level-of-trade adjustment under section 
773(a)(7)(A) of the Act. See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From 
South Africa, 62 FR 61731, 61733 (November 19, 1997).
    In this investigation, we obtained information from the respondents 
regarding the marketing stages involved in making their reported 
comparison-market and U.S. sales, including a description of the 
selling activities the respondents performed for each channel of 
distribution.
    During the POI, SBI reported that it sold PRCBs in the comparison 
market to distributors through a single channel of distribution. We 
found that the selling activities associated with all sales through 
this channel of distribution did not differ. Accordingly, we found that 
the comparison-market channels of distribution constituted a single 
level of trade.
    SBI reported that its EP sales were made to distributors through a 
single

[[Page 56811]]

channel of distribution. We found that the selling activities 
associated with all sales through this channel of distribution did not 
differ. Accordingly, we found that the EP channels of distribution 
constituted a single level of trade. We found that EP level of trade 
was identical to the comparison-market level of trade in terms of 
selling activities. Thus, we matched SBI's EP sales at the same level 
of trade in the comparison market and made no level-of-trade 
adjustment.
    SESSM reported two channels of distribution in the home market: 
retail end-users and distributors. We found that the selling activities 
associated with sales to retail end-users differed significantly from 
the selling activities associated with sales to distributors in several 
areas. Based on these differences and other factors, we found that the 
two home-market channels constitute two different levels of trade.
    SESSM reported that it made its EP sales to distributors only 
during the POI and reported only one channel of trade in the U.S. 
market: distributors. Because we found that the level of selling 
activities associated with EP sales were identical with the level of 
selling activities associated with home-market sales to distributors in 
several areas, we found that SESSM's EP sales were made at the same 
level of trade as its home-market sales to distributors. As such, we 
matched the sales at the same level of trade as much as possible. If we 
found no contemporaneous home-market distributor sales of the relevant 
product, we matched the EP sale to home-market retail end-user sales.
    Because we compared SESSM's sales at different levels of trade in 
some instances, we examined whether a level-of-trade adjustment was 
appropriate and determined that there was a pattern of consistent price 
differences between the retail end-users and distributors levels of 
trade in the home market. Therefore, when we matched an EP sale to a 
retail end-user sale, we made a level-of-trade adjustment to the home-
market price for these differences in the level of trade in accordance 
with section 773(a)(7)(A) of the Act. This adjustment represents the 
weighted-average difference in prices between these two levels of trade 
in the home market. We calculated the amount of the level-of-trade 
adjustment by applying this weighted-average percentage price 
difference to the normal value determined at the different level of 
trade.
    In their October 21, 2009, pre-preliminary comments, the 
petitioners argue that we should not make a level-of-trade adjustment 
on the grounds that SESSM did not demonstrate that it is entitled to a 
level-of-trade adjustment. We have not had time to consider the 
petitioners' arguments on this issue adequately and, based on the 
analysis above, we have made a level-of-trade adjustment for SESSM in 
this preliminary determination. We intend to examine this issue further 
at verification and will consider the issue in the context of the final 
determination.

C. Cost of Production

    Based on our analysis of the petitioners' allegations, we found 
that there were reasonable grounds to believe or suspect that SBI's and 
SESSM's sales of PRCBs in the respective comparison markets were made 
at prices below their COP. Accordingly, pursuant to section 773(b) of 
the Act, we initiated sales-below-cost investigations to determine 
whether these companies had sales that were made at prices below their 
respective COP. See Memorandum to John M. Andersen entitled ``Less-
Than-Fair-Value Investigation on Polyethylene Retail Carrier Bags from 
Indonesia: Request to Initiate Cost Investigation for P.T. Sido Bangun 
Indonesia'' dated August 14, 2009, and Memorandum to John M. Andersen 
entitled ``Less-Than-Fair-Value Investigation on Polyethylene Retail 
Carrier Bags from Indonesia: Request to Initiate Cost Investigation for 
P.T. Super Exim Sari Ltd. and P.T. Super Makmur'' dated August 14, 
2009.

1. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product plus an amount for selling, general and 
administrative expenses (SG&A), financial expenses, and comparison-
market packing costs (see the ``Test of Comparison-Market Sales 
Prices'' section below for treatment of comparison-market selling 
expenses and packing costs). We relied on the COP data submitted by the 
respondents except as indicated below with respect to SBI:

    a. We increased SBI's reported cost of manufacturing (COM) to 
account for the unreconciled difference between the COM from the 
company's normal books and records and reported COM.
    b. In accordance with the ``transactions disregarded'' rule of 
section 773(f)(2) of the Act, we adjusted SBI's COM to reflect the 
higher of the market price or transfer price of materials that were 
purchased from an affiliate.
    c. We adjusted SBI's reported material cost to allocate the cost 
offset for internally generated and consumed scrap to products produced 
from both resin and purchased plastic rolls.

    For additional details, see Memorandum to Neal M. Halper entitled 
``Cost of Production and Constructed Value Calculation Adjustments for 
the Preliminary Determination PT Sido Bangun Indonesia'' dated October 
27, 2009.

2. Test of Comparison-Market Sales Prices

    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, to determine whether the 
sales were made at prices below the COP. For purposes of this 
comparison, we used the COP exclusive of selling and packing expenses. 
The prices were adjusted for discounts and 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 the respondent's sales of a given product are at prices less 
than the COP, we do not disregard any below-cost sales of that product 
because we determine that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of the 
respondent's sales of a given product during the POI were at prices 
less than COP, we determine that such sales have been made in 
``substantial quantities'' and, thus, we disregard below-cost sales. 
See section 773(b)(2)(C) of the Act. Further, we determine that the 
sales were made within an extended period of time, in accordance with 
section 773(b)(2)(B) of the Act, because we examine below-cost sales 
occurring during the entire POI. In such cases, because we compare 
prices to POI-average costs, we also determine 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.
    In this case, we found that, for certain specific products, more 
than 20 percent of SBI's and SESSM's comparison-market sales were at 
prices less than the COP and, in addition, such sales did not provide 
for the recovery of costs within a reasonable period of time. 
Therefore, we disregarded these sales and used the

[[Page 56812]]

remaining sales as the basis for determining normal value in accordance 
with section 773(b)(1) of the Act with respect to both SBI and SESSM.

D. Calculation of Normal Value Based on Comparison-Market Prices

    We based normal value on packed, delivered prices to unaffiliated 
customers in the respective comparison market. We made an adjustment to 
the starting price, where appropriate, for discounts in accordance with 
19 CFR 351.401(c). We made deductions, where appropriate, for movement 
expenses under section 773(a)(6)(B)(ii) of the Act.
    For comparisons to EP, we made circumstance-of-sale adjustments by 
deducting comparison-market direct selling expenses from, and adding 
U.S. direct selling expenses to, normal value.
    We made adjustments for differences in cost attributable to 
differences in physical characteristics of the merchandise pursuant to 
section 773(a)(6)(C)(ii) of the Act. We deducted comparison-market 
packing costs and added U.S. packing costs in accordance with sections 
773(a)(6)(A) and (B) of the Act.
    SESSM received freight revenues from the customer for certain home-
market sales. As explained above, the Department treats such revenues 
as an offset to the specific expenses for which they were intended to 
compensate. Accordingly, we have used SESSM's freight revenues as an 
offset to its inland-freight expenses incurred to deliver products to 
its home-market customers.

E. Calculation of Normal Value Based on Constructed Value

    In accordance with section 773(a)(4) of the Act, we used 
constructed value as the basis for normal value for SESSM where there 
were no usable sales of the foreign like product in the home market. We 
calculated constructed value in accordance with section 773(e) of the 
Act. We included the cost of materials and fabrication, SG&A expenses, 
financial expenses, U.S. packing expenses, and profit in the 
calculation of constructed value. In accordance with section 
773(e)(2)(A) of the Act, we based selling expenses and profit on the 
amounts incurred and realized by SESSM in connection with the 
production and sale of the foreign like product in the ordinary course 
of trade for consumption in the home market. We made the same 
adjustments to constructed value as outlined in the ``Calculation of 
Cost of Production'' section above.
    When appropriate, we made adjustments to constructed value in 
accordance with section 773(a)(8) of the Act, 19 CFR 351.410, and 19 
CFR 351.412 for circumstance-of-sale differences and level-of-trade 
differences. For comparisons to EP, we made circumstance-of-sale 
adjustments by deducting home-market direct selling expenses from and 
adding U.S. direct selling expenses to constructed value. We also made 
adjustments in EP comparisons, when applicable, for home-market 
indirect selling expenses incurred for U.S. sales to offset home-market 
commissions.
    When possible, we calculated constructed value at the same level of 
trade as the EP. If constructed value was calculated at a different we 
made an adjustment, if appropriate and if possible, in accordance with 
sections 773(a)(7) and (8) of the Act.

Currency Conversion

    It is our normal practice to make currency conversions into U.S. 
dollars in accordance with section 773A(a) of the Act based on 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)(1) of the Act, we intend to verify 
the information relied upon in making our final determination for SBI 
and SESSM.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we will direct 
U.S. Customs and Border Protection (CBP) to suspend liquidation of all 
entries of PRCBs from Indonesia that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. We will instruct CBP to require a cash 
deposit or the posting of a bond equal to the weighted-average margins, 
as indicated below, as follows: (1) the rates for SBI and SESSM will be 
the rates we have determined in this preliminary determination; (2) if 
the exporter is not a firm identified in this investigation but the 
producer is, the rate will be the rate established for the producer of 
the subject merchandise; (3) the rate for all other producers or 
exporters will be 67.40 percent, as discussed in the ``All-Others 
Rate'' section, below. These suspension-of-liquidation instructions 
will remain in effect until further notice.

------------------------------------------------------------------------
                                                       Weighted-Average
                Manufacturer/Exporter                  Margin  (percent)
------------------------------------------------------------------------
P.T. Sido Bangun Indonesia..........................               67.62
P.T. Super Exim Sari Ltd. and P.T. Super Makmur.....               67.18
------------------------------------------------------------------------

All-Others Rate

    Section 735(c)(5)(A) of the Act provides that the estimated all-
others rate shall be an amount equal to the weighted-average of the 
estimated weighted-average dumping margins established for exporters 
and producers individually investigated, excluding any zero and de 
minimis margins and any margins determined entirely under section 776 
of the Act. For this preliminary determination, we have calculated 
margins for SBI and SESSM that are both above de minimis. We have not 
calculated the all-others rate by using the weighted average of the 
rates for SBI and SESSM because doing so risks disclosure of 
proprietary information. Therefore, for purposes of determining the 
all-others rate and pursuant to section 735(c)(5)(A) of the Act, we are 
using the simple-average rate of the dumping margins calculated for SBI 
and SESSM, i.e., 67.40 percent. This is consistent with our practice in 
Notice of Amended Final Determination of Sales at Less Than Fair Value: 
Light-Walled Rectangular Pipe and Tube From Mexico, 73 FR 45400, 450401 
(August 5, 2008).

Disclosure

    We will disclose the calculations performed in our preliminary 
determination to interested parties in this proceeding in accordance 
with 19 CFR 351.224(b).

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary affirmative determination. If the Department's 
final determination

[[Page 56813]]

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 PRCBs from Indonesia are 
materially injuring, or threatening material injury to, the U.S. 
industry (see section 735(b)(2) of the Act). Because we are postponing 
the deadline for our final determination to 135 days from the date of 
the publication of this preliminary determination, as discussed below, 
the ITC will make its final determination no later than 45 days after 
our final determination.

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 last verification report in this proceeding. Rebuttal briefs, the 
content of which is limited to the issues raised in the case briefs, 
must be filed within five days from the deadline date for the 
submission of case briefs. See 19 CFR 351.309(d). A list of authorities 
used, a table of contents, and an executive summary of issues should 
accompany any briefs submitted to the Department. See 19 CFR 
351.309(c)(2). 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, the Department will hold 
a public hearing, if timely requested, to afford interested parties an 
opportunity to comment on issues raised in case briefs, provided that 
such a hearing is requested by an interested party. See also 19 CFR 
351.310. If a timely request for a hearing is made in this 
investigation, we intend to hold the hearing two days after the 
deadline for filing a rebuttal brief 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 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, within 30 days of the publication of this notice. 
Requests should contain the following: (1) the party's name, address, 
and telephone number; (2) a list of participants; (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.

Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise or, in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioner. Section 351.210(e)(2) of the Department's regulations 
requires that requests by respondents for postponement of a final 
determination be accompanied by a request for extension of provisional 
measures from a four-month period to not more than six months.
    On September 18, 2009, and September 23, 2009, SBI and SESSM 
requested respectively that, in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination by 60 days. At the same time, SBI and SESSM requested 
that the Department extend the application of the provisional measures 
prescribed under section 733(d) of the Act and 19 CFR 351.210(e)(2) 
from a four-month period to a six-month period. In accordance with 
section 735(a)(2) of the Act and 19 CFR 351.210(b)(2), because (1) our 
preliminary determination is affirmative, (2) the requesting exporters 
account for a significant proportion of exports of the subject 
merchandise, and (3) no compelling reasons for denial exist, we are 
granting this request and are postponing the final determination until 
no later than 135 days after the publication of this notice in the 
Federal Register. Suspension of liquidation will be extended 
accordingly.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: October 27, 2009.
John M. Andersen,
Acting Deputy Assistant Secretary for Antidumping and Countervailing 
Duty Operations.
[FR Doc. E9-26431 Filed 11-2-09; 8:45 am]
BILLING CODE 3510-DS-S