Purified Carboxymethylcellulose From the Netherlands; Preliminary Results of Antidumping Duty Administrative Review, 48310-48319 [2010-19730]

Download as PDF 48310 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices 2010, from 9 a.m. to 5 p.m., and the Administrative Committee will meet from 5:15 p.m. to 6 p.m. The Council will reconvene on Wednesday, September 8, 2010, from 9 a.m. to 5 p.m. ADDRESSES: The meetings will be held at the Carambola Beach Resort and Spa, Estate Davis, Kingshill,St. Croix, USVI. FOR FURTHER INFORMATION CONTACT: Caribbean Fishery Management Council, 268 Munoz Rivera Avenue, Suite 1108, San Juan, Puerto Rico 00918–1920; telephone: (787) 766–5926. 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[FR Doc. 2010–19600 Filed 8–9–10; 8:45 am] BILLING CODE 3510–22–S September 8, 2010 DEPARTMENT OF COMMERCE Continuation of Council Meeting sroberts on DSKB9S0YB1PROD with NOTICES 9 a.m. - 10 a.m. - Public Comment Period on Queen Conch Amendment International Trade Administration •Queen Conch Amendment Final Action •Report on Status of Setting a Federal Permit Program - Carolyn Sramek •Trap Reduction Program - Anthony Iarocci •Administrative Committee Recommendations •Meetings Attended by Council Members and Staff •PUBLIC COMMENT PERIOD (5MINUTES PRESENTATIONS) •Other Business [A–421–811] VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 Purified Carboxymethylcellulose From the Netherlands; Preliminary Results of Antidumping Duty Administrative Review Import Administration, International Trade Administration, Department of Commerce. SUMMARY: In response to requests from petitioner Aqualon Company (Aqualon), a division of Hercules Incorporated and a U.S. manufacturer of purified AGENCY: PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 carboxymethylcellulose (CMC), Akzo Nobel Functional Chemicals B.V. (ANFC) and its U.S. affiliate, Akzo Nobel Functional Chemicals LLC (AN– US), and CP Kelco B.V. (CP Kelco) and its U.S. affiliates, CP Kelco U.S. Inc. (CP Kelco US) and J.M. Huber Corporation, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on purified CMC from the Netherlands. This administrative review covers imports of subject merchandise produced and exported by ANFC and CP Kelco during the period of review (POR) beginning July 1, 2008, through June 30, 2009. We preliminarily determine that ANFC is the successor-in-interest to Akzo Nobel Surface Chemistry B.V. and that sales of subject merchandise by ANFC and CP Kelco were made at less than normal value during the POR. If these preliminary results are adopted in our final results, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on appropriate entries based on the difference between the export price and normal value or the constructed-exportprice (CEP) and normal value. All interested parties are invited to comment on these preliminary results. DATES: Effective Date: August 10, 2010. FOR FURTHER INFORMATION CONTACT: Edythe Artman or Olga Carter, 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) 482–3931 or (202) 482– 8221, respectively. SUPPLEMENTARY INFORMATION: Background On July 11, 2005, the Department published the antidumping duty order on purified CMC from the Netherlands. See Notice of Antidumping Duty Orders: Purified Carboxymethylcellulose from Finland, Mexico, the Netherlands, and Sweden, 70 FR 39734 (July 11, 2005) (CMC Order). On July 1, 2009, the Department published an opportunity to request an administrative review of this order for the period July 1, 2008, through June 30, 2009. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 74 FR 31406 (July 1, 2009). Pursuant to 19 CFR 351.213(b)(1), Aqualon filed a July 20, 2009, request that the Department conduct an administrative review of the sales of subject merchandise made by ANFC and E:\FR\FM\10AUN1.SGM 10AUN1 sroberts on DSKB9S0YB1PROD with NOTICES Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices CP Kelco during the POR. On July 29, 2009, CP Kelco and its U.S. affiliates, CP Kelco US and J.M. Huber Corporation, requested a review of CP Kelco’s sales of subject merchandise and, on July 31, 2009, ANFC and its U.S. affiliate, AN– US, similarly requested a review of ANFC’s sales of subject merchandise made during the POR. On August 25, 2009, the Department published a notice of initiation of this administrative review, covering sales, entries and/or shipments of purified CMC from ANFC and CP Kelco, in the Federal Register. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 74 FR 42873 (August 25, 2009). The Department issued its antidumping duty questionnaire to the respondent parties on September 4, 2009. ANFC responded to the questionnaire on October 13, 2009 (response to section A), and on October 27, 2009 (sections B and C responses). CP Kelco filed its questionnaire responses on September 28, 2009 (section A) and October 26, 2009 (sections B–D).1 On November 12, 2009, Aqualon filed comments on CP Kelco’s questionnaire responses, as well as a request for a sales-below-cost investigation of ANFC, in which the petitioner alleged that ANFC had made home-market sales of purified CMC at prices below the cost of production (COP) during the POR. After reviewing the allegation, the Department initiated a cost investigation of ANFC on January 8, 2010, and requested that the company respond to section D of the questionnaire. ANFC filed its section D response on February 19, 2010. Aqualon submitted comments to this response on March 3, 2010, and, in response to these comments and to clarify portions of ANFC’s section D response, the Department issued supplemental questionnaires, to which ANFC responded on June 1, 2010, June 23, 2010, and July 15, 2010. In the meanwhile, ANFC responded to supplemental questionnaires concerning sections A–C on March 11, 2010, and April 29, 2010. Aqualon provided additional comments on CP Kelco’s section D response on March 18, 2010, and CP Kelco filed responses to supplemental questionnaires concerning sections A–D on the following dates: February 17, 2010; March 15, 2010; April 26, 2010; May 5, 2010; July 2, 2010; and July 21, 2010. On July 1, 1 As discussed in the ‘‘Cost of Production Analysis’’ section below, we requested that CP Kelco provide a response to section D of the questionnaire, pursuant to section 773(b)(2)(A)(ii) of the Tariff Act of 1930, as amended (the Act). VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 2010, Aqualon provided comments on ANFC’s June 23, 2010 response to the Section D supplemental questionnaire. On March 22, 2010, the Department extended the deadline for the preliminary results of review from April 2, 2010, until August 2, 2010. See Certain Purified Carboxymethylcellulose from the Netherlands; Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review, 75 FR 15678 (March 30, 2010). As described in the ‘‘Verification’’ section below, we conducted sales verifications of ANFC’s questionnaire responses at the company’s production and sales facility in the Netherlands from May 17, 2010, through May 21, 2010, and at its U.S. affiliate’s CMC sales office from June 22, 2010, through June 24, 2010. As a result of minor corrections and findings at the verifications, ANFC submitted revised databases for sections B and C on July 6, 2010 per the Department’s request.2 Period of Review The POR is July 1, 2008, through June 30, 2009. Scope of the Order The merchandise covered by this order is all purified CMC, sometimes also referred to as purified sodium CMC, polyanionic cellulose, or cellulose gum, which is a white to off-white, non-toxic, odorless, biodegradable powder, comprising sodium CMC that has been refined and purified to a minimum assay of 90 percent. Purified CMC does not include unpurified or crude CMC, CMC Fluidized Polymer Suspensions, and CMC that is cross-linked through heat treatment. Purified CMC is CMC that has undergone one or more purification operations, which, at a minimum, reduce the remaining salt and other by-product portion of the product to less than ten percent. The merchandise subject to this order is currently classified in the Harmonized Tariff Schedule of the United States at subheading 3912.31.00. This tariff classification is provided for convenience and Customs purposes; however, the written description of the scope of this order is dispositive. Verification As provided in section 782(i) of the Act, and 19 CFR 351.307, we conducted a sales verification of the questionnaire responses provided by ANFC from May 17, 2010, through May 21, 2010, in the Netherlands. We further verified 2 See Memorandum to The File through Angelica L. Mendoza, Program Manager, AD/CVD Operations, Office 7, ‘‘Submission of Revised Sales Databases’’ dated July 6, 2010. PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 48311 ANFC’s U.S. affiliates’ sales information from June 22, 2010, through June 24, 2010 at AN–US’ sales office located in Brewster, New York. We used standard verification procedures, including onsite inspection of ANFC’s production facility in the Netherlands. Because there was insufficient time to complete the verification memoranda for the preliminary results of review, these memoranda will be forthcoming. However, ANFC submitted sales data on July 6, 2010, based on revisions discussed at the verifications and we have used this data in our margin calculations for ANFC. Interested parties will have an opportunity to comment on the verification memoranda in their case briefs (see ‘‘Disclosure and Public Comment’’ section below). Successor-in-Interest In this review, ANFC requests to be treated as the successor-in-interest to Akzo Nobel Surface Chemistry B.V. (ANSC), a company for which the Department calculated an antidumping duty margin in the less-than-fair-value investigation of the order on purified CMC from the Netherlands. See Notice of Final Determination of Sales at Less Than Fair Value: Purified Carboxymethylcellulose from the Netherlands, 70 FR 28275 (May 17, 2005). We have not completed a review of sales of subject merchandise of an Akzo Nobel group company since the investigation. As ANFC explained in its submissions, all CMC activities are embedded in the sub-business unit Cellulosic Specialties (CS), which, until November 1, 2005, was part of the business unit Akzo Nobel Surface Chemistry—a business unit that was associated with ANSC within the Netherlands.3 See ANFC’s section A questionnaire response, date-stamped October 13, 2009 (ANFC’s section A response), at 7; ANFC’s supplemental questionnaire response, dated-stamped March 11, 2010, at 4–5. In November 2005, the CS sub-business unit was moved from the ANSC business unit to the ANFC business unit. See ANFC’s section A response at 7. Thus, activities of the CS sub-business unit became 3 Business units and sub-business units in the Akzo Nobel group represent purely organizational structures that have no legal status and exist across national boundaries. Hence, the CS sub-business unit, which is part of the ANFC business unit, utilizes the legal Dutch entity of Akzo Nobel Functional Chemicals B.V. to accomplish its activities within the Netherlands. Both the ANFC business unit and CS sub-business unit have associations with other ANFC legal entities throughout the world as necessitated by their unit activities. E:\FR\FM\10AUN1.SGM 10AUN1 sroberts on DSKB9S0YB1PROD with NOTICES 48312 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices associated through its new business unit with the ANFC legal entity. This portfolio realignment was part of a global restructuring of Akzo Nobel N.V., the parent of ANFC and ANSC. See ANFC’s supplemental questionnaire response at 5. As an additional part of the restructuring, the Netherlands branch of ANSC was legally merged into ANFC in the Netherlands in December 2005. Id. at 4–5. ANFC provided a copy of the merger documents in exhibit 7 of its March 11, 2010, supplemental response. It also stated that the realignment of the CS sub-business unit had not resulted in any changes to CMC production facilities, sales services, or the customer base for CMC sales. See ANFC’s section A response at 7; ANFC’s supplemental response at 5. Thus, the Department is conducting a successor-in-interest analysis to determine whether ANFC is the successor-in-interest to ANSC for purposes of treatment under the antidumping law. In making such a determination, the Department examines a number of factors including, but not limited to, changes in: (1) Management, (2) production facilities, (3) suppliers, and (4) customer base. See, e.g., Certain Hot-Rolled Carbon Steel Flat Products from Thailand: Preliminary Results of Antidumping Duty Administrative Review, 74 FR 39047, 39051 (August 5, 2009), unchanged in final, Certain Hot-Rolled Carbon Steel Flat Products from Thailand: Final Results of Antidumping Duty Administrative Review, 74 FR 65518 (December 10, 2009). While examining these factors alone will not necessarily provide a dispositive indication of succession, the Department will generally consider one company to have succeeded another if that company’s operations are not materially dissimilar to the predecessor’s operations. See Stainless Steel Bar from France: Preliminary Results of Antidumping Duty Administrative Review, 70 FR 17411 (April 6, 2005) (unchanged in final, Stainless Steel Bar from France: Final Results of Antidumping Duty Administrative Review, 70 FR 46492 (August 10, 2005)). Thus, if the evidence demonstrates, with respect to the production and sale of the subject merchandise, that the new company is essentially the same business operation as the former company, the Department will assign the new company the cash deposit rate of its predecessor. The record shows that the subbusiness unit responsible for the production and sales of CMC in the Netherlands remains unchanged as a result of the corporate restructuring. It VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 was moved from an organizational standpoint, as it is now aligned under a different business unit. However, the physical attributes and operations of the CS sub-business unit remain the same— it continues to produce purified CMC at its facility in Arnhem, the Netherlands, and to sell the subject merchandise through its U.S. affiliate located in Brewster, New York. See ANFC’s section A response at 10. Furthermore, ANFC has stated that there were no changes to CMC production facilities, its sales services, or its customer base as a result of the re-alignment. It clarified that there had been no changes to the production capacity or product lines of CMC due to the re-alignment and that, administratively, the sub-business unit performed the same services at the same facilities as before the merger of ANSC with ANFC. See ANFC’s March 11, 2010, supplemental response at 5. In light of these findings, we conclude that, from an operational standpoint, there have been no changes to the CS sub-business unit as a result of the corporate restructuring. Hence, we preliminarily find that ANFC’s operations are not materially dissimilar from ANSC’s operations and that, for purposes of this review and the antidumping duty proceeding, we find that ANFC is the successor-in-interest to ANSC. Date of Sale For its home-market sales, ANFC reported its date of sale to be the invoice date, which coincided with the loading and shipment date of the merchandise. It stated that, until the time that the merchandise is loaded, changes can occur in the material terms of sale. See ANFC’s section B questionnaire response, date-stamped October 27, 2010 (ANFC’s section B response), at 11. Similarly, for its warehouse sales in the United States, ANFC reported the date of sale to be the invoice date, which is the date that merchandise is loaded for shipment from the warehouse and, because material changes can take place prior to loading, the invoice date is the date on which the terms of sale are set. See ANFC’s section C questionnaire response, date-stamped October 27, 2010 (ANFC’s section C response), at 11. However, for sales in which the product was shipped directly from the Netherlands to the United States, ANFC reported the date of shipment as the date of sale as this date preceded the invoice date. See ANFC’s section C response at 11–12. In its description of the sales process for these sales, ANFC stated that material terms, such as the quantity or price of the merchandise, could change prior to invoicing. See PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 ANFC’s section A response, at 29. But the description further shows that the unaffiliated customer is not invoiced by AN–US until the customer receives the merchandise from the Netherlands. CP Kelco reported the date of invoice as the date of sale for its comparisonmarket and U.S. sales. It explained that, in most instances, invoicing occurred on the ‘‘post goods issue’’ date, i.e., the date on which the merchandise was removed from the finished-goods inventory, its removal was posted in the SAP accounting system, and the goods were prepared for shipment. See CP Kelco’s section B questionnaire response, dated October 26, 2009 (section B response), at 15–16; its section C questionnaire response, dated October 26, 2009 (section C response), at 16–17. It reported the ‘‘post goods issue’’ date as the shipment date for all sales and explained that, because invoicing should have been triggered within SAP by this date, the invoice date should have been the same as the shipment date except in instances of manual override of the SAP system. Id. at 16. In a later response, CP Kelco acknowledged that, for one sale, the date of shipment preceded the reported sale date because the merchandise had been shipped prior to a holiday weekend and the warehouse did not post the ‘‘goods issue’’ until after the weekend. See CP Kelco’s February 17, 2010, supplemental questionnaire response, at 5–6. Normally, the Department considers invoice date as the date of sale in accordance with 19 CFR 351.401(i). However, it is the Department’s practice to use shipment date as the date of sale when shipment date precedes invoice date. See Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products From Korea: Final Results of Antidumping Duty Administrative Reviews, 63 FR 13170, 13172–73 (March 18, 1998); see also Stainless Steel Sheet and Strip in Coils from the Republic of Korea; Final Results and Rescission of Antidumping Duty Administrative Review in Part, 72 FR 4486 (January 31, 2007), and the accompanying Issues and Decision Memorandum at Comments 4 and 5. Although ANFC asserts that material terms of sale for its direct sales may change between the time of shipment of the goods from the Netherlands and the issuance of an invoice by AN–US, we find that the quantity and price for these sales are established at the time the merchandise was shipped from the Netherlands. See ANFC’s section C response, at 11. Therefore, we preliminarily determine that the shipment date is the appropriate date of E:\FR\FM\10AUN1.SGM 10AUN1 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices sale for these sales and that, for all other ANFC sales, the invoice date is the appropriate date of sale. For CP Kelco, we preliminarily determine that it is appropriate to use invoice date as the date of sale except in instances where the shipment date precedes the invoice date. In those instances, we will use the shipment date as the date of sale, in keeping with our past practice. sroberts on DSKB9S0YB1PROD with NOTICES Fair Value Comparisons To determine whether sales of purified CMC from the Netherlands to the United States were made at less than fair value, we compared the export price or CEP of each sale to the normal value, as described in the ‘‘Export Price and Constructed Export Price’’ and ‘‘Normal Value’’ sections of this notice below. In accordance with section 777A(d)(2) of the Act, we compared the export prices and the CEPs of individual U.S. transactions to monthly weightedaverage normal values. Product Comparisons In accordance with section 771(16) of the Act, we considered all purified CMC, that fit the description in the ‘‘Scope of the Order’’ section above and that was either produced and sold by ANFC in the Netherlands during the POR or produced by CP Kelco in the Netherlands and sold by that company in the comparison market of Taiwan during the POR, to be foreign like product for the purpose of determining appropriate product comparisons to purified CMC sold by respondents in the United States. For our discussion of market viability and the selection of comparison markets, see the ‘‘Normal Value’’ section of this notice below. We compared the U.S. sales with the sales of the foreign like products in the appropriate comparison markets. Specifically, in making our comparisons, we used the following methodology. If sales of an identical comparison-market model were reported, we compared the export prices or CEPs of the U.S. sales to the weighted-average, comparison-market prices of all sales that passed the COP test of the identical product during the relevant or contemporary month. See sections 771(16) and (35) of the Act; see also 773(b)(1) of the Act. If there were no contemporaneous sales of an identical model, we identified sales of the most similar comparison-market model. See section 771(16) of the Act. To determine the most similar model, we matched the physical characteristics of the foreign like products, as reported by the respondents, to the characteristics of the subject VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 merchandise in the following order of importance: (1) Grade, (2) viscosity, (3) degree of substitution, (4) particle size, and (5) solution characteristics. Where there were no sales of identical or similar foreign like product in the ordinary course of trade with which to compare to a U.S. sale, we made product comparisons using constructed value. CP Kelco reported that it sold material which was suitable for pharmaceutical grade applications and for other regulated applications as well (i.e., food, cosmetic, personal care). See CP Kelco’s section B response at 9–10; see also CP Kelco’s section A Response at exhibit A–31. In its responses to sections B, C, and D of our antidumping duty questionnaire, CP Kelco reported these sales as sales of grade ‘‘2’’ material, ‘‘regulated-other (food).’’ However, CP Kelco clarified in a supplemental questionnaire response that all of the purified CMC products it produced met the standards of the U.S. Pharmacopeia and that, therefore, any of the products that can be used in food, personal care, or cosmetic applications can also be used in pharmaceutical applications, and vice versa. See CP Kelco’s Supplemental Questionnaire Response, dated February 17, 2010, at 4–5. In other words, all of the company’s products are manufactured to meet grade ‘‘1’’ requirements. It has been the Department’s past practice to consider a product, which meets multiple specifications, to be identified according to the strictest requirements of subject merchandise. In this case, all of the relevant commercial products were manufactured to be suitable both for the strictest specifications, that of regulated pharmaceutical-grade CMC, and for a less-strict specification, that of regulated-other (food) grade CMC. In accordance with our past practice, we treated these sales as sales of products which met the strictest specification to which the material was manufactured: regulated pharmaceutical grade material.4 See Memorandum to the File, 4 See, e.g., Rautaruukki Oy v. United States, 23 C.I.T. 257 (CT. Int’l Trade 1998), in which the court found that the Department should have considered all steel plate products graded as ‘‘A’’ under different national classification standards to be identical merchandise in the absence of a showing of any significant physical distinction between the products. See also, Certain Cut-to-Length Carbon Steel Plate From Finland; Notice of Amended Final Results of Administrative Review in Accordance With Final Court Decision, 64 FR 68669 (December 8, 1999). Further, it is the Department’s practice to consider the strictest requirements of subject merchandise which has multiple specifications (i.e., the strictest specifications). See, e.g., Certain Small Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe From Romania: Final PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 48313 through Angelica Mendoza, Program Manager, Office 7, regarding ‘‘CP Kelco B.V.—Analysis Memorandum for the Preliminary Results of the 2008/2009 Antidumping Duty Administrative Review of Purified Carboxymethylcellulose from the Netherlands’’ (CP Kelco’s Preliminary Analysis Memorandum), dated August 2, 2010, at 2–3. Export Price and Constructed Export Price In accordance with section 772 of the Act, we calculate either an export price or a CEP, depending on the nature of each sale. Section 772(a) of the Act defines export price as the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the foreign producer or exporter to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States. Section 772(b) of the Act defines CEP as the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise, or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. ANFC classified all of its sales to the United States as sales made through its U.S. affiliate, AN–US, to end-users and distributors (i.e., CEP sales). CP Kelco classified its sales to the United States as: (1) Direct sales to end-users and distributors (i.e., export-price sales); and (2) sales via its U.S. affiliate, CP Kelco US, to end-users and distributors (i.e., CEP sales). For purposes of these preliminary results, we have accepted these classifications. We calculated export price based on prices charged to the first unaffiliated U.S. customer. As described in the ‘‘Date of Sale’’ section above, we used invoice date as the date of sale for export-price sales except where CP Kelco reported a date of shipment that preceded the invoice date. We based export price on the packed, delivered prices to unaffiliated purchasers in the United States, making adjustments where necessary for billing adjustments. See 19 CFR 351.401(c). We made deductions for movement expenses in accordance Results of Antidumping Duty Administrative Review and Final Determination Not To Revoke Order in Part, 70 FR 7237 (February 11, 2005) and the accompanying Issues and Decision Memorandum at Comment 13, where the Department states: ‘‘To establish the most appropriate match for the triple-certified pipe in the comparison market, we looked for products that met most closely the strictest requirements of the subject merchandise with multiple specifications.’’ E:\FR\FM\10AUN1.SGM 10AUN1 48314 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices sroberts on DSKB9S0YB1PROD with NOTICES with section 772(c)(2)(A) of the Act, which included deductions for foreign inland freight, international freight, marine insurance, brokerage and handling expenses incurred in the United States, U.S. inland freight (offset by reported freight revenue), and U.S. customs duties. In accordance with our practice, we capped the amount of freight revenue permitted to offset gross unit price at no greater than the amount of corresponding inland freight expenses incurred by CP Kelco and its U.S. affiliate. See Certain Orange Juice From Brazil: Final Results of Antidumping Duty Administrative Review, 74 FR 40167 (Aug. 11, 2009), and accompanying Issues and Decision Memorandum at Comment 3; Certain Orange Juice From Brazil: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 74 FR 46584 (Aug. 11, 2008), and accompanying Issues and Decision Memorandum at Comment 7; Polyethylene Retail Carrier Bags From the People’s Republic of China: Final Results of Antidumping Duty Administrative Review, 74 FR 6857 (February 11, 2009), and the accompanying Issues and Decision Memorandum at Comment 6. We did not adjust export price for certain ‘‘factoring’’ expenses that CP Kelco reported to have incurred on U.S. sales. Although we have accepted this adjustment in prior reviews, we found it inappropriate to include this adjustment in this review because CP Kelco could not provide us with sufficient evidence that its factoring activity, which involves affiliated parties, was of an arm’s-length nature.5 For a detailed discussion of this matter, see CP Kelco’s Preliminary Analysis Memorandum at 6–7. We calculated CEP based on prices charged to the first unaffiliated U.S. customer after importation. As discussed in the ‘‘Date of Sale’’ section above, we used invoice date as the date of sale for CEP sales, except in instances where the date of shipment preceded the invoice date. We based CEP on the gross unit price to the first unaffiliated U.S. customer, making adjustments where necessary for billing adjustments and rebates. See 19 CFR 351.401(c). Where applicable, and pursuant to sections 772(c)(2)(A) and (d)(1) of the 5 See Purified Carboxymethylcellulose from the Netherlands; Preliminary Results of Antidumping Duty Administrative Review, 74 FR 24823 (May 26, 2009) at 24827, where we stated our intent to reexamine the appropriateness of including the factoring expenses, arising from affiliated transactions, in our margin calculations in subsequent reviews of this proceeding. VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 Act, the Department made deductions for movement expenses, including deductions for domestic foreign inland freight and warehousing expenses, domestic insurance, domestic brokerage and handling expenses, international freight, marine insurance, U.S. insurance, brokerage and handling expenses incurred in the United States, U.S. warehousing expenses, U.S. inland freight (offset by reported freight revenue), and U.S. customs duties. In accordance with section 772(d)(1) of the Act, we also deducted, where applicable, U.S. direct selling expenses (including credit expenses) and indirect selling expenses and inventory carrying costs incurred in the Netherlands and the United States and associated with economic activities in the United States. As noted for the calculation of export price above, we did not made an adjustment to CEP for factoring expenses that CP Kelco reported to have incurred on U.S. sales, since we could not establish the arm’s-length nature of the affiliated factoring transactions. We deducted an amount for CEP profit in accordance with section 772(d)(3) of the Act. Normal Value A. Home Market Viability and Comparison Market Selection In order 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., whether 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 respondent’s volume of home-market sales of the foreign like product to the volume of U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(C) of the Act. Section 773(a)(1)(C)(ii) of the Act provides that the Department may determine that home-market sales are inappropriate as a basis for determining normal value if the Department determines that the aggregate quantity of the foreign like product sold in the exporting country is insufficient to permit a proper comparison with the sales of the subject merchandise to the United States. When sales in the home market are not viable, section 773(a)(1)(B)(ii) of the Act provides that sales to a particular third-country market may be utilized if: (1) The prices in such market are representative; (2) the aggregate quantity of the foreign like product sold by the producer or exporter in that third-country market is five percent or more of the aggregate quantity of the subject merchandise sold PO 00000 Frm 00013 Fmt 4703 Sfmt 4703 in or to the United States; and (3) the Department does not determine that a particular market situation in the thirdcountry market prevents a proper comparison with the U.S. price. A review of the record shows that ANFC’s home-market sales were viable, for purposes of comparing them to U.S. sales. See ANFC’s Section A response at 4. Thus, we based normal value on this company’s home-market sales made in the usual commercial quantities and in the ordinary course of trade. CP Kelco reported, and we have preliminary determined, that its aggregate volume of home-market sales of the foreign like product was not greater than five percent of the aggregate volume of U.S. sales of subject merchandise and, thus, its home-market sales did not provide a viable basis for calculating normal value. See CP Kelco’s section A response at A2–A3. Accordingly, CP Kelco reported the POR sales of foreign like product to its three largest third-country markets—Taiwan, Germany, and South Africa. Id. In reviewing this information of these three markets, the Department found that exports of the foreign like product to Taiwan were similar to those exported to the United States, that the aggregate quantity of the exports of the foreign like product to Taiwan was five percent or more of the subject merchandise sold in the United States, and that there was no evidence of a particular market situation in Taiwan that prevented a proper comparison between sales prices in that market and the U.S. price. For a detailed discussion of these findings, see CP Kelco’s Preliminary Analysis Memorandum at 7–8. Therefore, based on our findings and pursuant to section 773(a)(1)(B)(ii) of the Act, we selected Taiwan as the appropriate third-country market on which to base our calculation of normal value for CP Kelco in these preliminary results. We also used constructed value as the basis for calculating normal value, in accordance with section 773(a)(4) of the Act, for U.S. sales by CP Kelco that did not have identical or similar product matches where appropriate. B. Cost of Production Analysis Based on Aqualon’s cost allegation, the Department had reasonable grounds to believe or suspect that ANFC had made below-cost sales of foreign like product. See Section 773(b)(2)(A)(i) of the Act. Therefore, the Department initiated a cost investigation of ANFC on January 8, 2010, and requested that ANFC file a response to section D of the antidumping duty questionnaire on that date. Also, pursuant to section E:\FR\FM\10AUN1.SGM 10AUN1 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices sroberts on DSKB9S0YB1PROD with NOTICES 773(b)(2)(A)(ii) of the Act, we had reasonable grounds to believe or suspect that CP Kelco sold the foreign like product below the COP in this review because, in the most recently completed review of the company, we had disregarded sales found to be made below the cost of production. See Purified Carboxymethylcellulose From the Netherlands; Preliminary Results of Antidumping Duty Administrative Review, 74 FR at 24823 (May 26, 2009) (unchanged in final, Purified Carboxymethylcellulose from the Netherlands: Final Results of Antidumping Duty Administrative Review, 74 FR 52742 (Oct. 14, 2009)). Thus, the Department also requested that CP Kelco respond to section D of the questionnaire. C. Calculation of Cost of Production We have preliminarily relied upon the COP information provided by ANFC and CP Kelco in their section D submissions, except as noted below. In accordance with section 773(b)(3) of the Act, we calculated the weighted-average COP for each foreign like product based on the sum of the respondents’ material and fabrication costs for the product, plus amounts for selling, general, and administrative (SG&A) expenses, as well as packing costs. For ANFC, we relied on the COP data provided in its June 22, 2010, submission, except for the following instances: a. We subtracted the reported research and development (R&D) expenses from fixed overhead and we reclassified them as general and administrative (G&A). b. We added amortization of intangible assets, certain non-operating expenses, and certain R&D expenses net of the technical service component reported as an indirect selling expense to the general and administrative (G&A) expense calculation in accordance with the Department’s practice of including non-operating accounts which relate to the general operations of the company as a whole. See Magnesium Metal From the Russian Federation: Notice of Final Determination at Less than Fair Value, 70 FR 9041 (February 24, 2005), and accompanying I&D Memo at Comment 10. c. We subtracted net exchange losses from ANFC’s reported G&A expense calculation. Exchange gains and losses (G&L) are included by the Department as part of financial expense, which is calculated at the parent level. For further discussion of these adjustments, see the memorandum from Frederick W. Mines, Accountant, to Neal M. Halper, Director, Office of Accounting, regarding ‘‘Cost of Production and Constructed Value VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 Calculation Adjustments for the Preliminary Results—Akzo Nobel Functional Chemicals B.V.,’’ dated August 2, 2010. For CP Kelco, we relied on the COP data provided in its July 27, 2010 submission, except for two changes. First, we made a downward adjustment to the cost of manufacturing to reflect an adjustment made by the auditor to CP Kelco’s books for the 2008 fiscal year. The auditor found that certain incentive plan wages had been overstated and, because these wages were paid to CMC plant personnel, we found that they directly related to the cost of manufacturing and we thus applied an adjustment, reflecting overstated costs for the POR, to this cost. For a discussion and calculation of this adjustment, see CP Kelco’s Preliminary Analysis Memorandum at 15–16. Second, we included certain factoring expenses in CP Kelco’s financial expense calculation, since we did not adjust the third-country market or U.S. sales prices for these expenses. For a more detailed discussion of this matter, see CP Kelco’s Preliminary Analysis Memorandum at 6–7. D. Test of Comparison Market Prices As required under section 773(b) of the Act, we compared the respondents’ weighted-average COP figures to their comparison-market sales prices (net of billing adjustments, any applicable movement expenses, direct and indirect selling expenses, and packing) of the foreign like product in order to determine whether sales in the comparison market had been made at prices below COP. In determining whether to disregard such sales, we examined, in accordance with sections 773(b)(1)(A) and (B) of the Act, whether such sales were made within an extended period of time in substantial quantities and whether the sales were made at prices which would not permit the recovery of all costs within a reasonable period of time. E. Results of Cost Test Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of the sales of a given product were at prices less than the COP, we did not disregard any of the below-cost sales of that product because they were not made in substantial quantities. However, where 20 percent or more of the respondents’ comparison-market sales of a model were made at prices below the COP, we disregarded these sales because they were made: (1) In substantial quantities within the POR (i.e., within an extended period of time), in accordance with sections 773(b)(2)(B) and (C) of the Act; PO 00000 Frm 00014 Fmt 4703 Sfmt 4703 48315 and (2) at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. We used the remaining comparison-market sales, if such sales existed and were made in the ordinary course of trade, as the basis for determining normal value, in accordance with section 773(b)(1) of the Act. In the current review, we found sales by ANFC made below the COP for 20 percent or more of certain models and, therefore, we disregarded these belowcost sales from our margin calculations. See ANFC’s Preliminary Analysis Memorandum at 8. F. Price-to-Price Comparisons We calculated normal value based on prices to unaffiliated customers in the comparison markets. In these markets, we used invoice date as the date of sale. See 19 CFR 351.401(i). We increased or decreased price, as appropriate, for certain billing adjustments and rebates. We made deductions, where appropriate, for foreign inland freight and international freight pursuant to section 773(a)(6)(B) of the Act. We did not deduct certain factoring expenses from normal value that CP Kelco reported to have incurred on thirdcountry sales, as we found did not find sufficient evidence of the arm’s-length nature of the affiliated factoring transactions. See CP Kelco’s Preliminary Analysis Memorandum at 6–7. In addition, when comparing sales of similar merchandise to U.S. sales, we made adjustments in normal value for differences in cost attributable to differences in physical characteristics of the merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411, as well as for differences in circumstances of sale, as appropriate (i.e., commissions and credit), in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We also made an adjustment, where appropriate, for a CEP offset, in accordance with section 773(a)(7)(B) of the Act. See the ‘‘Level of Trade’’ section below. Finally, we deducted comparison-market packing costs and added U.S. packing costs to normal value, in accordance with sections 773(a)(6)(A) and (B) of the Act. G. Price-to-Constructed-Value Comparisons Section 773(a)(4) of the Act provides that, if we are unable to find a contemporaneous comparison-market match of identical or similar merchandise for a U.S. sale, then we base normal value on constructed value. Section 773(e) of the Act provides that E:\FR\FM\10AUN1.SGM 10AUN1 48316 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices constructed value shall be based on the sum of the cost of materials and fabrication employed in producing the merchandise, SG&A expenses, and profit. We calculated the cost of materials and fabrication based on the methodology described above in the ‘‘Calculation of Cost of Production’’ section. In accordance with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit on the amounts incurred and realized by CP Kelco in connection with the production and sale of the foreign like product, in the ordinary course of trade, for consumption in the foreign country (i.e., Taiwan). See 19 CFR 351.405(b)(1). sroberts on DSKB9S0YB1PROD with NOTICES Level of Trade In accordance with section 773(a)(1)(B)(i) 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 export price or CEP transaction. The level of trade in the comparison market is the level of trade of the starting-price sales in the comparison market or, when normal value is based on constructed value, the level of trade of the sales from which we derive SG&A expenses and profit. See 19 CFR 351.412(c). With respect to U.S. price for export-price transactions, the level of trade is also that of the starting-price sale, which is usually from the exporter to the importer. Id. For CEP, the level of trade is that of the constructed sale from the exporter to the importer. Id. To determine whether comparison market sales are at a different level of trade from U.S. sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison market sales are at different levels of trade, and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which normal value is based and comparison market sales at the level of trade of the export transaction, the Department makes a level-of-trade 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 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 level of trade between the CEP and normal value. See 773(a)(7)(A) of the Act. VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 Under section 773(a)(7)(A) of the Act, we make an upward or downward adjustment to normal value for level of trade if the difference in level of trade 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 levels of trade in the country in which normal value is determined. Finally, if the normal-value level of trade is at a more advanced stage of distribution than the level of trade of the CEP, but the data available do not provide an appropriate basis to determine a level-of-trade adjustment, we reduce normal value by the amount of indirect selling expenses incurred in the 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 CEPoffset provision). In analyzing differences in selling functions, we determine whether the levels of trade identified by the respondent are meaningful. See Antidumping Duties: Countervailing Duties, 62 FR 27296, 27371 (May 19, 1997). If the claimed levels of trade are the same, we expect that the functions and activities of the seller should be similar. Conversely, if a party claims that levels of trade 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 Antidumping Duty Administrative Review, 65 FR 30068 (May 10, 2000), and accompanying Issues and Decision Memorandum at Comment 6. In the present review, both ANFC and CP Kelco claimed that a CEP offset was required because the CEP level of trade was less advanced than levels of trade in the comparison markets. See ANFC’s section C questionnaire response at 52 and CP Kelco’s section A questionnaire response at 33–34. 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 ‘‘chain of distribution’’),6 including selling functions, class of customer (customer category), and the 6 The marketing process in the United States and comparison markets begins with the producers and extends to the sale to the final user or customer. The chain of distribution involved in the two markets may have many or few links, and the respondents’ sales occur somewhere along this chain. In performing this evaluation, we considered the respondents’ narrative responses to properly determine where in the chain of distribution the sale occurs. PO 00000 Frm 00015 Fmt 4703 Sfmt 4703 level of selling functions for each type of sale. ANFC reported one level of trade in the home market, the Netherlands, with one channel of distribution to two classes of customers: (1) Direct sales from the warehouse located near the ANFC manufacturing plant to end users, and (2) direct sales from the warehouse located near the ANFC manufacturing plant to distributors. See ANFC’s section B questionnaire response at 10. ANFC reported one level of trade in the home market, the Netherlands, with one channel of distribution to two classes of customers: (1) Direct sales from the warehouse located near the ANFC manufacturing plant to end users, and (2) direct sales from the warehouse located near the ANFC manufacturing plant to distributors. See ANFC’s section B questionnaire response at 10. Based on our review of evidence on the record, we find that the homemarket sales to both customer categories through the one channel of distribution were substantially similar with respect to selling functions and stages of marketing. ANFC performed the same selling functions for sales in a single home-market channel of distribution, including sales forecasting, strategic planning, advertising, distributor training, packing, warehousing, inventory management, order processing, direct sales crew, market research, providing guarantees, after sales services, freight and delivery, and invoicing. See ANFC’s section A questionnaire response at 17–25. Each of these selling functions was identical in the intensity of their provision or only differed minimally, the exception being that ANFC provided competitive discounts and technical assistance to a different degree of involvement to different customers’ types. See ANFC’s section A questionnaire response at exhibit 8. See also Preliminary Analysis Memorandum—ANFC at 4. Thus, after considering all of the above, we preliminarily find that ANFC had only one LOT for its home market sales. ANFC reported one CEP LOT, with two separate channels of distribution in the United States. CEP Channel 1 sales were made to two classes of customers, i.e., end users and distributors, either from inventory or made to order and CEP Channel 2 sales were also made to two classes of customers, i.e., end users and distributors from inventory. For CEP Channel 1 sales, the U.S. customer orders merchandise from AN–US and the merchandise is shipped directly to the U.S. customer from ANFC’s warehouse. These sales are classified as CEP Channel 1 sales because the agreement to sell occurred in the United E:\FR\FM\10AUN1.SGM 10AUN1 sroberts on DSKB9S0YB1PROD with NOTICES Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices States, the sale contract was executed in the United States, and the title passed directly from the AN–US to the unaffiliated customer in the United States. For the CEP Channel 2 sales, the U.S. customer orders merchandise from AN–US, which is shipped out of stock of materials maintained at AN–US’s unaffiliated warehouses. Upon examining ANFC’s questionnaire responses, we preliminarily find that it has two channels of distribution for its CEP sales in the United States. See ANFC’s supplemental questionnaire response, dated March 11, 2010 at 22 through 26. See also ANFC’s section C questionnaire response at 10 through 11. 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 Tech. Inc. v. United States, 243 F.3d 1301, 1314–15 (Fed. Cir. 2001). We reviewed the selling functions and services performed by ANFC on CEP sales as described in its questionnaire responses, after these deductions. We found that selling functions performed by ANFC to its U.S. affiliate in support of the CEP sales were almost identical regardless of class of customers or channel of trade. ANFC reported that the only services it provided for the CEP Channel 1 sales, to a different degree of performance comparatively to a degree of performance provided for Channel 2 sales, were logistics for freight and delivery, warehousing, and inventory management. See ANFC’s section A questionnaire response at exhibit 8. Therefore, we found that selling functions performed by ANFC for both channels are at the same level. Next, we compared the stages in the marketing process and selling functions along the chain of distribution for homemarket and CEP sales. ANFC’s homemarket and CEP sales were both made to end users and distributors. We found that ANFC performs an additional layer of selling functions at a greater degree of involvement in the home market than it provided on CEP Channel 1 and Channel 2 sales (e.g., sales forecasting, advertising, distributor training, market research, sales and marketing support and competitive discounts). See ANFC supplemental questionnaire response at 10 through 16. Because these additional selling functions are significant, we find that ANFC’s CEP sales are at a different level of trade than its home-market sales. According to section 773(a)(7)(B) of the Act, a CEP offset is appropriate when the level of trade in the home market is at a more advanced stage than the level of trade of the CEP sales and there is no basis for determining VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 whether the difference in levels of trade between normal value and CEP affects price comparability. ANFC reported that it provided minimal selling functions and services for the CEP level of trade and that, therefore, the home-market level of trade is more advanced than the CEP level of trade. Based on our analysis of the channels of distribution and selling functions performed by ANFC for sales in the home market and CEP sales in the U.S. market (i.e., sales support and activities provided by ANFC for sales to its U.S. affiliate), we preliminarily find that the home market level of trade is at a more advanced stage when compared to CEP sales because ANFC provides many selling functions in the home market at a different level of service (i.e., sales forecasting, advertising, distributor training, market research, sales and marketing support and competitive discounts, etc.) as compared to selling functions performed for its CEP sales (i.e., ANFC reported that the only services it provided for the CEP sales were logistics for freight and delivery, packing, warehousing, limited strategic planning, inventory maintenance and technical assistance). See ANFC’s supplemental questionnaire response, dated March 11, 2010 at 10–18 and its second supplemental questionnaire response, dated April 29, 2010 at 3. Thus, we find that ANFC’s home-market sales are at a more advanced level of trade than its CEP sales. As there was only one level of trade in the home market, there were no data available to determine the existence of a pattern of price differences, and we do not have any other information that provides an appropriate basis for determining a level-of-trade adjustment; therefore, we applied a CEP offset to normal value for CEP comparisons. CP Kelco reported sales through two channels of distribution in the thirdcountry market, identified as: (1) Channel 1—sales to an unaffiliated end user; and (2) Channel 2—sales to an unaffiliated distributor. A review of the record shows that CP Kelco continues to perform substantially similar selling functions and activities for the two channels of distribution and customer categories. Specifically, it performed activities relating to customer service, logistics, inventory maintenance, packing, freight/delivery, sales promotion, and guarantees to the same degree for each channel. See CP Kelco’s section A response at A18–A30; CP Kelco’s supplemental questionnaire response, dated April 23, 2010, at exhibit A–51. The company also provided, to slightly differing degrees, PO 00000 Frm 00016 Fmt 4703 Sfmt 4703 48317 sales negotiations, credit risk management, direct sales personnel and technical support functions in both channels. Id. Consequently, we conclude that, as in prior reviews, CP Kelco only made sales at one level of trade in the Taiwanese market. In the U.S. market, CP Kelco reported two channels of distribution, identified as: (1) Channel 1—CEP sales to unaffiliated end users and distributors; and (2) Channel 2—EP sales to unaffiliated end users and distributors. Turning to a review of the selling functions the company performed for U.S. sales, we considered only those reflected in the price after the deduction of expenses and CEP profit under section 772(d) of the Act. For its CEP sales, we found that CP Kelco performed functions related to logistics, inventory maintenance, packing, and freight/ delivery to a high degree. See supplemental questionnaire response, dated April 26, 2010, at exhibit A–51. For its EP sales, we found that it performed logistics, packing and freight/ delivery functions to a high degree but also assisted the U.S. affiliate with customer service, inventory maintenance, sales promotion, direct sales personnel and guarantees activities to lesser degrees. Id. Because of the significant differences in selling functions performed for the two types of sales, we concluded that CP Kelco’s EP sales were made at a different level of trade than its CEP sales. We next examined the third-country sales compared to the EP sales. CP Kelco’s Taiwanese sales and EP sales were both made to end users and distributors and the selling functions performed by CP Kelco for these two groups of sales were almost identical. It performed functions relating to sales negotiations, credit-risk management, inventory maintenance, packing, freight/delivery, collection, sales promotion, direct sales personnel, technical support, and guarantees to nearly the same degrees in both markets. Id. Because the selling functions and channels of distribution were substantially similar, we preliminarily determined that the Taiwanese sales were made at the same level of trade as the EP sales in the U.S. market. Therefore, it was not necessary to make a level-of-trade adjustment for the EP sales. According to section 773(a)(7)(B) of the Act, a CEP offset is appropriate when the level of trade in the home- or third-country market is at a more advanced stage than the level of trade of the CEP sales and there is no basis for determining whether the difference in these levels effects price comparability. E:\FR\FM\10AUN1.SGM 10AUN1 48318 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices CP Kelco reported that it provided few selling functions and activities for the CEP level of trade; consequently, the Taiwanese level of trade is more advanced than the CEP level of trade. Furthermore, because there was only one level of trade in the third-country market and no data were available to determine the existence of a pattern of price differences within that market, and because we do not have any other information that provides an appropriate basis for determining a level-of-trade adjustment, we applied a CEP offset to normal value for CEP comparisons pursuant to section 773(a)(7)(B) of the Act. To calculate a CEP offset for ANFC and CP Kelco, we deducted the comparison-market indirect selling expenses from normal value for sales that were compared to U.S. CEP sales. We limited the deduction by the amount of the indirect selling expenses deducted in calculating the CEP under section 772(d)(1)(D) of the Act. See section 773(a)(7)(B) of the Act. Currency Conversion We made foreign-currency conversions into U.S. dollars in accordance with section 773A(a) of the Act and 19 CFR 351.415 based on exchange rates in effect on the dates of the U.S. sales, as certified by the Federal Reserve Bank. See Import Administration Web site at: http:// ia.ita.doc.gov/exchange/index.html. Preliminary Results of Review We preliminarily determine that, for the period July 1, 2008, through June 30, 2009, the following dumping margins exist: Manufacturer/ exporter sroberts on DSKB9S0YB1PROD with NOTICES Akzo Nobel Functional Chemicals B.V ................................. CP Kelco B.V ............................ Weightedaverage margin (percent) 13.71 2.77 Disclosure and Public Comment Pursuant to 19 CFR 351.224(b) of the Department’s regulations, the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within five days after the date of publication of this notice. Pursuant to 19 CFR 351.309(c)(1)(ii), interested parties may submit written comments in response to these preliminary results. As stated in the ‘‘Verification’’ section above, the Department will release the sales verification memoranda to parties for comment after the publication of these VerDate Mar<15>2010 16:26 Aug 09, 2010 Jkt 220001 preliminary results in the Federal Register. Therefore, interested parties may submit case briefs to the Department no later than 30 days after the publication of the preliminary results of review or, if later, seven days after the date of the issuance of the last verification report in this proceeding. See 19 CFR 351.309(c)(1)(ii). 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)(1) and (2). Parties who submit arguments in this proceeding are requested to submit with the argument: (1) A statement of the issues; (2) a brief summary of the argument; and (3) a table of authorities. See 19 CFR 351.309(c)(2). Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f). Executive summaries should be limited to five pages total, including footnotes. Furthermore, we request that parties, when submitting briefs and rebuttal briefs, provide the Department with a copy of the public versions of the briefs on diskette. Within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments raised in the case and rebuttal briefs, pursuant to 19 CFR 351.310(c). Unless the Department specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs. See 19 CFR 351.310(d)(1). Parties will be notified of the time and location of the hearing. The Department will publish the final results of the administrative review, including the results of its analysis of issues addressed in any case or rebuttal brief, no later than 120 days after publication of the preliminary results, unless extended. See section 751(a)(3)(A) of the Act; 19 CFR 351.213(h). Assessment Rates The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated, whenever possible, an exporter/importer (or customer)-specific assessment rate or value for merchandise subject to this review as described below. With respect to export-price sales, for these preliminary results, we divided the total dumping margins (calculated as the difference between normal value and export price) for each exporter’s importer or customer by the total number of units the exporter sold to that importer or customer. We will direct PO 00000 Frm 00017 Fmt 4703 Sfmt 4703 CBP to assess the resulting per-unit dollar amount against each unit of merchandise in each of that importer’s/ customer’s POR entries. For CEP sales, we divided the total dumping margins for the reviewed sales by the total entered value of those reviewed sales for each importer. We will direct CBP to assess the resulting percentage margin against the entered customs values for the subject merchandise on each of that importer’s POR entries. See 19 CFR 351.212(b). The Department clarified its ‘‘automatic assessment’’ regulation on May 6, 2003. This clarification will apply to entries of subject merchandise during the POR produced by companies in these preliminary results of review for which the reviewed companies did not know their merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the allothers rate if there is no rate for the intermediate company(ies) involved in the transaction. For a full discussion of this clarification, see Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). We intend to issue liquidation instructions to CBP 15 days after publication of the final results of this review. Cash Deposit Requirements The following cash-deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for the companies covered by this review will be the rate established in the final results of review; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review or in the investigation but the manufacturer is, the cash-deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cashdeposit rate for all other manufacturers or exporters will continue to be the allothers rate of 14.57 percent, which is the all-others rate established in the investigation. See CMC Order, 70 FR at 39735. These deposit requirements, when imposed, shall remain in effect until further notice. E:\FR\FM\10AUN1.SGM 10AUN1 Federal Register / Vol. 75, No. 153 / Tuesday, August 10, 2010 / Notices Notification to Importers This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Department’s presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties. We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act. Dated: August 5, 2010. James Hyler, Acting Director, Information Collection Clearance Division, Regulatory Information Management Services, Office of Management. Dated: August 2, 2010. Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration. [FR Doc. 2010–19730 Filed 8–9–10; 8:45 am] Institute of Education Sciences BILLING CODE 3510–DS–P DEPARTMENT OF EDUCATION Submission for OMB Review; Comment Request Department of Education. The Acting Director, Information Collection Clearance Division, Regulatory Information Management Services, Office of Management invites comments on the submission for OMB review as required by the Paperwork Reduction Act of 1995 (Pub. L. 104–13). DATES: Interested persons are invited to submit comments on or before September 9, 2010. ADDRESSES: Written comments should be addressed to the Office of Information and Regulatory Affairs, Attention: Education Desk Officer, Office of Management and Budget, 725 17th Street, NW., Room 10222, New Executive Office Building, Washington, DC 20503, be faxed to (202) 395–5806 or e-mailed to oira_submission@omb.eop.gov with a cc: to ICDocketMgr@ed.gov. SUPPLEMENTARY INFORMATION: Section 3506 of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35) requires that the Office of Management and Budget (OMB) provide interested Federal agencies and the public an early opportunity to comment on information collection requests. The OMB is particularly interested in comments which: • Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including AGENCY: sroberts on DSKB9S0YB1PROD with NOTICES SUMMARY: VerDate Mar<15>2010 16:26 Aug 09, 2010 whether the information will have practical utility; • Evaluate the accuracy of the agency’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; • Enhance the quality, utility, and clarity of the information to be collected; and • Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology. Jkt 220001 Type of Review: Extension. Title of Collection: NCES Cognitive, Pilot, and Field Test Studies System Clearance. OMB #: 1850–0803. Agency Form Number(s): N/A. Frequency of Responses: Once. Affected Public: Individuals or household; Not-for-profit institutions; State, Local, or Tribal Gov’t, State Educational Agencies (SEAs) or Local Educational Agencies (LEAs). Estimated Number of Annual Responses: 45,000. Estimated Annual Burden Hours: 9,000. Abstract: This is a request for a 3-year renewal of the generic clearance for the National Center for Education Statistics (NCES) that will allow it to continue to develop, test, and improve its survey and assessment instruments and methodologies. The procedures utilized to this effect include but, are not limited to, experiments with levels of incentives for various types of survey operations, focus groups, cognitive laboratory activities, pilot testing, exploratory interviews, experiments with questionnaire design, and usability testing of electronic data collection instruments. Requests for copies of the information collection submission for OMB review may be accessed from the RegInfo.gov Web site at http://www.reginfo.gov/ public/do/PRAMain or from the Department’s Web site at http:// edicsweb.ed.gov, by selecting the ‘‘Browse Pending Collections’’ link and by clicking on link number 4319. When you access the information collection, click on ‘‘Download Attachments’’ to view. Written requests for information PO 00000 Frm 00018 Fmt 4703 Sfmt 4703 48319 should be addressed to U.S. Department of Education, 400 Maryland Avenue, SW., LBJ, Washington, DC 20202–4537. Requests may also be electronically mailed to the Internet address ICDocketMgr@ed.gov or faxed to 202– 401–0920. Please specify the complete title and OMB Control Number of the information collection when making your request. Individuals who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1–800–877– 8339. [FR Doc. 2010–19733 Filed 8–9–10; 8:45 am] BILLING CODE 4000–01–P DEPARTMENT OF EDUCATION Notice of Proposed Information Collection Requests; Comment Request Department of Education. Correction notice. AGENCY: ACTION: On August 5, 2010, the Department of Education published a comment period notice in the Federal Register (Page 47282, Column 3) for the information collection, ‘‘Application for Grants under the Talent Search Program.’’ This notice hereby corrects the 60-day notice to a 30-day notice. The Acting Director, Information Collection Clearance Division, Regulatory Information Management Services, Office of Management, hereby issues a correction notice as required by the Paperwork Reduction Act of 1995. SUMMARY: Dated: August 5, 2010. James Hyler, Acting Director, Information Collection Clearance Division, Regulatory Information Management Services, Office of Management. [FR Doc. 2010–19732 Filed 8–9–10; 8:45 am] BILLING CODE 4000–01–P DEPARTMENT OF ENERGY Ultra-Deepwater Advisory Committee Department of Energy, Office of Fossil Energy. ACTION: Notice of open meeting. AGENCY: This notice announces a meeting of the Ultra-Deepwater Advisory Committee. The Federal Advisory Committee Act (Pub. L. 92– 463, 86 Stat. 770) requires that public notice of this meeting be announced in the Federal Register. DATES: Wednesday, September 8, 2010, 8 a.m.–5 p.m. (CDT). SUMMARY: E:\FR\FM\10AUN1.SGM 10AUN1

Agencies

[Federal Register Volume 75, Number 153 (Tuesday, August 10, 2010)]
[Notices]
[Pages 48310-48319]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-19730]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-421-811]


Purified Carboxymethylcellulose From the Netherlands; Preliminary 
Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests from petitioner Aqualon Company 
(Aqualon), a division of Hercules Incorporated and a U.S. manufacturer 
of purified carboxymethylcellulose (CMC), Akzo Nobel Functional 
Chemicals B.V. (ANFC) and its U.S. affiliate, Akzo Nobel Functional 
Chemicals LLC (AN-US), and CP Kelco B.V. (CP Kelco) and its U.S. 
affiliates, CP Kelco U.S. Inc. (CP Kelco US) and J.M. Huber 
Corporation, the Department of Commerce (the Department) is conducting 
an administrative review of the antidumping duty order on purified CMC 
from the Netherlands. This administrative review covers imports of 
subject merchandise produced and exported by ANFC and CP Kelco during 
the period of review (POR) beginning July 1, 2008, through June 30, 
2009.
    We preliminarily determine that ANFC is the successor-in-interest 
to Akzo Nobel Surface Chemistry B.V. and that sales of subject 
merchandise by ANFC and CP Kelco were made at less than normal value 
during the POR. If these preliminary results are adopted in our final 
results, we will instruct U.S. Customs and Border Protection (CBP) to 
assess antidumping duties on appropriate entries based on the 
difference between the export price and normal value or the 
constructed-export-price (CEP) and normal value. All interested parties 
are invited to comment on these preliminary results.

DATES: Effective Date: August 10, 2010.

FOR FURTHER INFORMATION CONTACT: Edythe Artman or Olga Carter, 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-
3931 or (202) 482-8221, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On July 11, 2005, the Department published the antidumping duty 
order on purified CMC from the Netherlands. See Notice of Antidumping 
Duty Orders: Purified Carboxymethylcellulose from Finland, Mexico, the 
Netherlands, and Sweden, 70 FR 39734 (July 11, 2005) (CMC Order). On 
July 1, 2009, the Department published an opportunity to request an 
administrative review of this order for the period July 1, 2008, 
through June 30, 2009. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 74 FR 31406 (July 1, 2009).
    Pursuant to 19 CFR 351.213(b)(1), Aqualon filed a July 20, 2009, 
request that the Department conduct an administrative review of the 
sales of subject merchandise made by ANFC and

[[Page 48311]]

CP Kelco during the POR. On July 29, 2009, CP Kelco and its U.S. 
affiliates, CP Kelco US and J.M. Huber Corporation, requested a review 
of CP Kelco's sales of subject merchandise and, on July 31, 2009, ANFC 
and its U.S. affiliate, AN-US, similarly requested a review of ANFC's 
sales of subject merchandise made during the POR.
    On August 25, 2009, the Department published a notice of initiation 
of this administrative review, covering sales, entries and/or shipments 
of purified CMC from ANFC and CP Kelco, in the Federal Register. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 74 FR 42873 (August 25, 
2009).
    The Department issued its antidumping duty questionnaire to the 
respondent parties on September 4, 2009. ANFC responded to the 
questionnaire on October 13, 2009 (response to section A), and on 
October 27, 2009 (sections B and C responses). CP Kelco filed its 
questionnaire responses on September 28, 2009 (section A) and October 
26, 2009 (sections B-D).\1\
---------------------------------------------------------------------------

    \1\ As discussed in the ``Cost of Production Analysis'' section 
below, we requested that CP Kelco provide a response to section D of 
the questionnaire, pursuant to section 773(b)(2)(A)(ii) of the 
Tariff Act of 1930, as amended (the Act).
---------------------------------------------------------------------------

    On November 12, 2009, Aqualon filed comments on CP Kelco's 
questionnaire responses, as well as a request for a sales-below-cost 
investigation of ANFC, in which the petitioner alleged that ANFC had 
made home-market sales of purified CMC at prices below the cost of 
production (COP) during the POR. After reviewing the allegation, the 
Department initiated a cost investigation of ANFC on January 8, 2010, 
and requested that the company respond to section D of the 
questionnaire. ANFC filed its section D response on February 19, 2010. 
Aqualon submitted comments to this response on March 3, 2010, and, in 
response to these comments and to clarify portions of ANFC's section D 
response, the Department issued supplemental questionnaires, to which 
ANFC responded on June 1, 2010, June 23, 2010, and July 15, 2010.
    In the meanwhile, ANFC responded to supplemental questionnaires 
concerning sections A-C on March 11, 2010, and April 29, 2010. Aqualon 
provided additional comments on CP Kelco's section D response on March 
18, 2010, and CP Kelco filed responses to supplemental questionnaires 
concerning sections A-D on the following dates: February 17, 2010; 
March 15, 2010; April 26, 2010; May 5, 2010; July 2, 2010; and July 21, 
2010. On July 1, 2010, Aqualon provided comments on ANFC's June 23, 
2010 response to the Section D supplemental questionnaire.
    On March 22, 2010, the Department extended the deadline for the 
preliminary results of review from April 2, 2010, until August 2, 2010. 
See Certain Purified Carboxymethylcellulose from the Netherlands; 
Extension of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 75 FR 15678 (March 30, 2010).
    As described in the ``Verification'' section below, we conducted 
sales verifications of ANFC's questionnaire responses at the company's 
production and sales facility in the Netherlands from May 17, 2010, 
through May 21, 2010, and at its U.S. affiliate's CMC sales office from 
June 22, 2010, through June 24, 2010. As a result of minor corrections 
and findings at the verifications, ANFC submitted revised databases for 
sections B and C on July 6, 2010 per the Department's request.\2\
---------------------------------------------------------------------------

    \2\ See Memorandum to The File through Angelica L. Mendoza, 
Program Manager, AD/CVD Operations, Office 7, ``Submission of 
Revised Sales Databases'' dated July 6, 2010.
---------------------------------------------------------------------------

Period of Review

    The POR is July 1, 2008, through June 30, 2009.

Scope of the Order

    The merchandise covered by this order is all purified CMC, 
sometimes also referred to as purified sodium CMC, polyanionic 
cellulose, or cellulose gum, which is a white to off-white, non-toxic, 
odorless, biodegradable powder, comprising sodium CMC that has been 
refined and purified to a minimum assay of 90 percent. Purified CMC 
does not include unpurified or crude CMC, CMC Fluidized Polymer 
Suspensions, and CMC that is cross-linked through heat treatment. 
Purified CMC is CMC that has undergone one or more purification 
operations, which, at a minimum, reduce the remaining salt and other 
by-product portion of the product to less than ten percent. The 
merchandise subject to this order is currently classified in the 
Harmonized Tariff Schedule of the United States at subheading 
3912.31.00. This tariff classification is provided for convenience and 
Customs purposes; however, the written description of the scope of this 
order is dispositive.

Verification

    As provided in section 782(i) of the Act, and 19 CFR 351.307, we 
conducted a sales verification of the questionnaire responses provided 
by ANFC from May 17, 2010, through May 21, 2010, in the Netherlands. We 
further verified ANFC's U.S. affiliates' sales information from June 
22, 2010, through June 24, 2010 at AN-US' sales office located in 
Brewster, New York. We used standard verification procedures, including 
on-site inspection of ANFC's production facility in the Netherlands. 
Because there was insufficient time to complete the verification 
memoranda for the preliminary results of review, these memoranda will 
be forthcoming. However, ANFC submitted sales data on July 6, 2010, 
based on revisions discussed at the verifications and we have used this 
data in our margin calculations for ANFC. Interested parties will have 
an opportunity to comment on the verification memoranda in their case 
briefs (see ``Disclosure and Public Comment'' section below).

Successor-in-Interest

    In this review, ANFC requests to be treated as the successor-in-
interest to Akzo Nobel Surface Chemistry B.V. (ANSC), a company for 
which the Department calculated an antidumping duty margin in the less-
than-fair-value investigation of the order on purified CMC from the 
Netherlands. See Notice of Final Determination of Sales at Less Than 
Fair Value: Purified Carboxymethylcellulose from the Netherlands, 70 FR 
28275 (May 17, 2005). We have not completed a review of sales of 
subject merchandise of an Akzo Nobel group company since the 
investigation.
    As ANFC explained in its submissions, all CMC activities are 
embedded in the sub-business unit Cellulosic Specialties (CS), which, 
until November 1, 2005, was part of the business unit Akzo Nobel 
Surface Chemistry--a business unit that was associated with ANSC within 
the Netherlands.\3\ See ANFC's section A questionnaire response, date-
stamped October 13, 2009 (ANFC's section A response), at 7; ANFC's 
supplemental questionnaire response, dated-stamped March 11, 2010, at 
4-5. In November 2005, the CS sub-business unit was moved from the ANSC 
business unit to the ANFC business unit. See ANFC's section A response 
at 7. Thus, activities of the CS sub-business unit became

[[Page 48312]]

associated through its new business unit with the ANFC legal entity. 
This portfolio realignment was part of a global restructuring of Akzo 
Nobel N.V., the parent of ANFC and ANSC. See ANFC's supplemental 
questionnaire response at 5. As an additional part of the 
restructuring, the Netherlands branch of ANSC was legally merged into 
ANFC in the Netherlands in December 2005. Id. at 4-5. ANFC provided a 
copy of the merger documents in exhibit 7 of its March 11, 2010, 
supplemental response. It also stated that the realignment of the CS 
sub-business unit had not resulted in any changes to CMC production 
facilities, sales services, or the customer base for CMC sales. See 
ANFC's section A response at 7; ANFC's supplemental response at 5.
---------------------------------------------------------------------------

    \3\ Business units and sub-business units in the Akzo Nobel 
group represent purely organizational structures that have no legal 
status and exist across national boundaries. Hence, the CS sub-
business unit, which is part of the ANFC business unit, utilizes the 
legal Dutch entity of Akzo Nobel Functional Chemicals B.V. to 
accomplish its activities within the Netherlands. Both the ANFC 
business unit and CS sub-business unit have associations with other 
ANFC legal entities throughout the world as necessitated by their 
unit activities.
---------------------------------------------------------------------------

    Thus, the Department is conducting a successor-in-interest analysis 
to determine whether ANFC is the successor-in-interest to ANSC for 
purposes of treatment under the antidumping law. In making such a 
determination, the Department examines a number of factors including, 
but not limited to, changes in: (1) Management, (2) production 
facilities, (3) suppliers, and (4) customer base. See, e.g., Certain 
Hot-Rolled Carbon Steel Flat Products from Thailand: Preliminary 
Results of Antidumping Duty Administrative Review, 74 FR 39047, 39051 
(August 5, 2009), unchanged in final, Certain Hot-Rolled Carbon Steel 
Flat Products from Thailand: Final Results of Antidumping Duty 
Administrative Review, 74 FR 65518 (December 10, 2009). While examining 
these factors alone will not necessarily provide a dispositive 
indication of succession, the Department will generally consider one 
company to have succeeded another if that company's operations are not 
materially dissimilar to the predecessor's operations. See Stainless 
Steel Bar from France: Preliminary Results of Antidumping Duty 
Administrative Review, 70 FR 17411 (April 6, 2005) (unchanged in final, 
Stainless Steel Bar from France: Final Results of Antidumping Duty 
Administrative Review, 70 FR 46492 (August 10, 2005)). Thus, if the 
evidence demonstrates, with respect to the production and sale of the 
subject merchandise, that the new company is essentially the same 
business operation as the former company, the Department will assign 
the new company the cash deposit rate of its predecessor.
    The record shows that the sub-business unit responsible for the 
production and sales of CMC in the Netherlands remains unchanged as a 
result of the corporate restructuring. It was moved from an 
organizational standpoint, as it is now aligned under a different 
business unit. However, the physical attributes and operations of the 
CS sub-business unit remain the same--it continues to produce purified 
CMC at its facility in Arnhem, the Netherlands, and to sell the subject 
merchandise through its U.S. affiliate located in Brewster, New York. 
See ANFC's section A response at 10. Furthermore, ANFC has stated that 
there were no changes to CMC production facilities, its sales services, 
or its customer base as a result of the re-alignment. It clarified that 
there had been no changes to the production capacity or product lines 
of CMC due to the re-alignment and that, administratively, the sub-
business unit performed the same services at the same facilities as 
before the merger of ANSC with ANFC. See ANFC's March 11, 2010, 
supplemental response at 5.
    In light of these findings, we conclude that, from an operational 
standpoint, there have been no changes to the CS sub-business unit as a 
result of the corporate restructuring. Hence, we preliminarily find 
that ANFC's operations are not materially dissimilar from ANSC's 
operations and that, for purposes of this review and the antidumping 
duty proceeding, we find that ANFC is the successor-in-interest to 
ANSC.

Date of Sale

    For its home-market sales, ANFC reported its date of sale to be the 
invoice date, which coincided with the loading and shipment date of the 
merchandise. It stated that, until the time that the merchandise is 
loaded, changes can occur in the material terms of sale. See ANFC's 
section B questionnaire response, date-stamped October 27, 2010 (ANFC's 
section B response), at 11. Similarly, for its warehouse sales in the 
United States, ANFC reported the date of sale to be the invoice date, 
which is the date that merchandise is loaded for shipment from the 
warehouse and, because material changes can take place prior to 
loading, the invoice date is the date on which the terms of sale are 
set. See ANFC's section C questionnaire response, date-stamped October 
27, 2010 (ANFC's section C response), at 11. However, for sales in 
which the product was shipped directly from the Netherlands to the 
United States, ANFC reported the date of shipment as the date of sale 
as this date preceded the invoice date. See ANFC's section C response 
at 11-12. In its description of the sales process for these sales, ANFC 
stated that material terms, such as the quantity or price of the 
merchandise, could change prior to invoicing. See ANFC's section A 
response, at 29. But the description further shows that the 
unaffiliated customer is not invoiced by AN-US until the customer 
receives the merchandise from the Netherlands.
    CP Kelco reported the date of invoice as the date of sale for its 
comparison-market and U.S. sales. It explained that, in most instances, 
invoicing occurred on the ``post goods issue'' date, i.e., the date on 
which the merchandise was removed from the finished-goods inventory, 
its removal was posted in the SAP accounting system, and the goods were 
prepared for shipment. See CP Kelco's section B questionnaire response, 
dated October 26, 2009 (section B response), at 15-16; its section C 
questionnaire response, dated October 26, 2009 (section C response), at 
16-17. It reported the ``post goods issue'' date as the shipment date 
for all sales and explained that, because invoicing should have been 
triggered within SAP by this date, the invoice date should have been 
the same as the shipment date except in instances of manual override of 
the SAP system. Id. at 16. In a later response, CP Kelco acknowledged 
that, for one sale, the date of shipment preceded the reported sale 
date because the merchandise had been shipped prior to a holiday 
weekend and the warehouse did not post the ``goods issue'' until after 
the weekend. See CP Kelco's February 17, 2010, supplemental 
questionnaire response, at 5-6.
    Normally, the Department considers invoice date as the date of sale 
in accordance with 19 CFR 351.401(i). However, it is the Department's 
practice to use shipment date as the date of sale when shipment date 
precedes invoice date. See Certain Cold-Rolled and Corrosion-Resistant 
Carbon Steel Flat Products From Korea: Final Results of Antidumping 
Duty Administrative Reviews, 63 FR 13170, 13172-73 (March 18, 1998); 
see also Stainless Steel Sheet and Strip in Coils from the Republic of 
Korea; Final Results and Rescission of Antidumping Duty Administrative 
Review in Part, 72 FR 4486 (January 31, 2007), and the accompanying 
Issues and Decision Memorandum at Comments 4 and 5.
    Although ANFC asserts that material terms of sale for its direct 
sales may change between the time of shipment of the goods from the 
Netherlands and the issuance of an invoice by AN-US, we find that the 
quantity and price for these sales are established at the time the 
merchandise was shipped from the Netherlands. See ANFC's section C 
response, at 11. Therefore, we preliminarily determine that the 
shipment date is the appropriate date of

[[Page 48313]]

sale for these sales and that, for all other ANFC sales, the invoice 
date is the appropriate date of sale.
    For CP Kelco, we preliminarily determine that it is appropriate to 
use invoice date as the date of sale except in instances where the 
shipment date precedes the invoice date. In those instances, we will 
use the shipment date as the date of sale, in keeping with our past 
practice.

Fair Value Comparisons

    To determine whether sales of purified CMC from the Netherlands to 
the United States were made at less than fair value, we compared the 
export price or CEP of each sale to the normal value, as described in 
the ``Export Price and Constructed Export Price'' and ``Normal Value'' 
sections of this notice below. In accordance with section 777A(d)(2) of 
the Act, we compared the export prices and the CEPs of individual U.S. 
transactions to monthly weighted-average normal values.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
purified CMC, that fit the description in the ``Scope of the Order'' 
section above and that was either produced and sold by ANFC in the 
Netherlands during the POR or produced by CP Kelco in the Netherlands 
and sold by that company in the comparison market of Taiwan during the 
POR, to be foreign like product for the purpose of determining 
appropriate product comparisons to purified CMC sold by respondents in 
the United States. For our discussion of market viability and the 
selection of comparison markets, see the ``Normal Value'' section of 
this notice below. We compared the U.S. sales with the sales of the 
foreign like products in the appropriate comparison markets.
    Specifically, in making our comparisons, we used the following 
methodology. If sales of an identical comparison-market model were 
reported, we compared the export prices or CEPs of the U.S. sales to 
the weighted-average, comparison-market prices of all sales that passed 
the COP test of the identical product during the relevant or 
contemporary month. See sections 771(16) and (35) of the Act; see also 
773(b)(1) of the Act. If there were no contemporaneous sales of an 
identical model, we identified sales of the most similar comparison-
market model. See section 771(16) of the Act. To determine the most 
similar model, we matched the physical characteristics of the foreign 
like products, as reported by the respondents, to the characteristics 
of the subject merchandise in the following order of importance: (1) 
Grade, (2) viscosity, (3) degree of substitution, (4) particle size, 
and (5) solution characteristics. Where there were no sales of 
identical or similar foreign like product in the ordinary course of 
trade with which to compare to a U.S. sale, we made product comparisons 
using constructed value.
    CP Kelco reported that it sold material which was suitable for 
pharmaceutical grade applications and for other regulated applications 
as well (i.e., food, cosmetic, personal care). See CP Kelco's section B 
response at 9-10; see also CP Kelco's section A Response at exhibit A-
31. In its responses to sections B, C, and D of our antidumping duty 
questionnaire, CP Kelco reported these sales as sales of grade ``2'' 
material, ``regulated-other (food).'' However, CP Kelco clarified in a 
supplemental questionnaire response that all of the purified CMC 
products it produced met the standards of the U.S. Pharmacopeia and 
that, therefore, any of the products that can be used in food, personal 
care, or cosmetic applications can also be used in pharmaceutical 
applications, and vice versa. See CP Kelco's Supplemental Questionnaire 
Response, dated February 17, 2010, at 4-5. In other words, all of the 
company's products are manufactured to meet grade ``1'' requirements.
    It has been the Department's past practice to consider a product, 
which meets multiple specifications, to be identified according to the 
strictest requirements of subject merchandise. In this case, all of the 
relevant commercial products were manufactured to be suitable both for 
the strictest specifications, that of regulated pharmaceutical-grade 
CMC, and for a less-strict specification, that of regulated-other 
(food) grade CMC. In accordance with our past practice, we treated 
these sales as sales of products which met the strictest specification 
to which the material was manufactured: regulated pharmaceutical grade 
material.\4\ See Memorandum to the File, through Angelica Mendoza, 
Program Manager, Office 7, regarding ``CP Kelco B.V.--Analysis 
Memorandum for the Preliminary Results of the 2008/2009 Antidumping 
Duty Administrative Review of Purified Carboxymethylcellulose from the 
Netherlands'' (CP Kelco's Preliminary Analysis Memorandum), dated 
August 2, 2010, at 2-3.
---------------------------------------------------------------------------

    \4\ See, e.g., Rautaruukki Oy v. United States, 23 C.I.T. 257 
(CT. Int'l Trade 1998), in which the court found that the Department 
should have considered all steel plate products graded as ``A'' 
under different national classification standards to be identical 
merchandise in the absence of a showing of any significant physical 
distinction between the products. See also, Certain Cut-to-Length 
Carbon Steel Plate From Finland; Notice of Amended Final Results of 
Administrative Review in Accordance With Final Court Decision, 64 FR 
68669 (December 8, 1999). Further, it is the Department's practice 
to consider the strictest requirements of subject merchandise which 
has multiple specifications (i.e., the strictest specifications). 
See, e.g., Certain Small Diameter Carbon and Alloy Seamless 
Standard, Line, and Pressure Pipe From Romania: Final Results of 
Antidumping Duty Administrative Review and Final Determination Not 
To Revoke Order in Part, 70 FR 7237 (February 11, 2005) and the 
accompanying Issues and Decision Memorandum at Comment 13, where the 
Department states: ``To establish the most appropriate match for the 
triple-certified pipe in the comparison market, we looked for 
products that met most closely the strictest requirements of the 
subject merchandise with multiple specifications.''
---------------------------------------------------------------------------

Export Price and Constructed Export Price

    In accordance with section 772 of the Act, we calculate either an 
export price or a CEP, depending on the nature of each sale. Section 
772(a) of the Act defines export price as the price at which the 
subject merchandise is first sold (or agreed to be sold) before the 
date of importation by the foreign producer or exporter to an 
unaffiliated purchaser in the United States or to an unaffiliated 
purchaser for exportation to the United States. Section 772(b) of the 
Act defines CEP as the price at which the subject merchandise is first 
sold (or agreed to be sold) in the United States before or after the 
date of importation by or for the account of the producer or exporter 
of such merchandise, or by a seller affiliated with the producer or 
exporter, to a purchaser not affiliated with the producer or exporter.
    ANFC classified all of its sales to the United States as sales made 
through its U.S. affiliate, AN-US, to end-users and distributors (i.e., 
CEP sales). CP Kelco classified its sales to the United States as: (1) 
Direct sales to end-users and distributors (i.e., export-price sales); 
and (2) sales via its U.S. affiliate, CP Kelco US, to end-users and 
distributors (i.e., CEP sales). For purposes of these preliminary 
results, we have accepted these classifications.
    We calculated export price based on prices charged to the first 
unaffiliated U.S. customer. As described in the ``Date of Sale'' 
section above, we used invoice date as the date of sale for export-
price sales except where CP Kelco reported a date of shipment that 
preceded the invoice date. We based export price on the packed, 
delivered prices to unaffiliated purchasers in the United States, 
making adjustments where necessary for billing adjustments. See 19 CFR 
351.401(c). We made deductions for movement expenses in accordance

[[Page 48314]]

with section 772(c)(2)(A) of the Act, which included deductions for 
foreign inland freight, international freight, marine insurance, 
brokerage and handling expenses incurred in the United States, U.S. 
inland freight (offset by reported freight revenue), and U.S. customs 
duties.
    In accordance with our practice, we capped the amount of freight 
revenue permitted to offset gross unit price at no greater than the 
amount of corresponding inland freight expenses incurred by CP Kelco 
and its U.S. affiliate. See Certain Orange Juice From Brazil: Final 
Results of Antidumping Duty Administrative Review, 74 FR 40167 (Aug. 
11, 2009), and accompanying Issues and Decision Memorandum at Comment 
3; Certain Orange Juice From Brazil: Final Results and Partial 
Rescission of Antidumping Duty Administrative Review, 74 FR 46584 (Aug. 
11, 2008), and accompanying Issues and Decision Memorandum at Comment 
7; Polyethylene Retail Carrier Bags From the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 74 FR 
6857 (February 11, 2009), and the accompanying Issues and Decision 
Memorandum at Comment 6.
    We did not adjust export price for certain ``factoring'' expenses 
that CP Kelco reported to have incurred on U.S. sales. Although we have 
accepted this adjustment in prior reviews, we found it inappropriate to 
include this adjustment in this review because CP Kelco could not 
provide us with sufficient evidence that its factoring activity, which 
involves affiliated parties, was of an arm's-length nature.\5\ For a 
detailed discussion of this matter, see CP Kelco's Preliminary Analysis 
Memorandum at 6-7.
---------------------------------------------------------------------------

    \5\ See Purified Carboxymethylcellulose from the Netherlands; 
Preliminary Results of Antidumping Duty Administrative Review, 74 FR 
24823 (May 26, 2009) at 24827, where we stated our intent to re-
examine the appropriateness of including the factoring expenses, 
arising from affiliated transactions, in our margin calculations in 
subsequent reviews of this proceeding.
---------------------------------------------------------------------------

    We calculated CEP based on prices charged to the first unaffiliated 
U.S. customer after importation. As discussed in the ``Date of Sale'' 
section above, we used invoice date as the date of sale for CEP sales, 
except in instances where the date of shipment preceded the invoice 
date. We based CEP on the gross unit price to the first unaffiliated 
U.S. customer, making adjustments where necessary for billing 
adjustments and rebates. See 19 CFR 351.401(c). Where applicable, and 
pursuant to sections 772(c)(2)(A) and (d)(1) of the Act, the Department 
made deductions for movement expenses, including deductions for 
domestic foreign inland freight and warehousing expenses, domestic 
insurance, domestic brokerage and handling expenses, international 
freight, marine insurance, U.S. insurance, brokerage and handling 
expenses incurred in the United States, U.S. warehousing expenses, U.S. 
inland freight (offset by reported freight revenue), and U.S. customs 
duties.
    In accordance with section 772(d)(1) of the Act, we also deducted, 
where applicable, U.S. direct selling expenses (including credit 
expenses) and indirect selling expenses and inventory carrying costs 
incurred in the Netherlands and the United States and associated with 
economic activities in the United States. As noted for the calculation 
of export price above, we did not made an adjustment to CEP for 
factoring expenses that CP Kelco reported to have incurred on U.S. 
sales, since we could not establish the arm's-length nature of the 
affiliated factoring transactions.
    We deducted an amount for CEP profit in accordance with section 
772(d)(3) of the Act.

Normal Value

A. Home Market Viability and Comparison Market Selection

    In order 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., whether 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 respondent's volume of 
home-market sales of the foreign like product to the volume of U.S. 
sales of the subject merchandise, in accordance with section 
773(a)(1)(C) of the Act.
    Section 773(a)(1)(C)(ii) of the Act provides that the Department 
may determine that home-market sales are inappropriate as a basis for 
determining normal value if the Department determines that the 
aggregate quantity of the foreign like product sold in the exporting 
country is insufficient to permit a proper comparison with the sales of 
the subject merchandise to the United States. When sales in the home 
market are not viable, section 773(a)(1)(B)(ii) of the Act provides 
that sales to a particular third-country market may be utilized if: (1) 
The prices in such market are representative; (2) the aggregate 
quantity of the foreign like product sold by the producer or exporter 
in that third-country market is five percent or more of the aggregate 
quantity of the subject merchandise sold in or to the United States; 
and (3) the Department does not determine that a particular market 
situation in the third-country market prevents a proper comparison with 
the U.S. price.
    A review of the record shows that ANFC's home-market sales were 
viable, for purposes of comparing them to U.S. sales. See ANFC's 
Section A response at 4. Thus, we based normal value on this company's 
home-market sales made in the usual commercial quantities and in the 
ordinary course of trade.
    CP Kelco reported, and we have preliminary determined, that its 
aggregate volume of home-market sales of the foreign like product was 
not greater than five percent of the aggregate volume of U.S. sales of 
subject merchandise and, thus, its home-market sales did not provide a 
viable basis for calculating normal value. See CP Kelco's section A 
response at A2-A3. Accordingly, CP Kelco reported the POR sales of 
foreign like product to its three largest third-country markets--
Taiwan, Germany, and South Africa. Id. In reviewing this information of 
these three markets, the Department found that exports of the foreign 
like product to Taiwan were similar to those exported to the United 
States, that the aggregate quantity of the exports of the foreign like 
product to Taiwan was five percent or more of the subject merchandise 
sold in the United States, and that there was no evidence of a 
particular market situation in Taiwan that prevented a proper 
comparison between sales prices in that market and the U.S. price. For 
a detailed discussion of these findings, see CP Kelco's Preliminary 
Analysis Memorandum at 7-8. Therefore, based on our findings and 
pursuant to section 773(a)(1)(B)(ii) of the Act, we selected Taiwan as 
the appropriate third-country market on which to base our calculation 
of normal value for CP Kelco in these preliminary results.
    We also used constructed value as the basis for calculating normal 
value, in accordance with section 773(a)(4) of the Act, for U.S. sales 
by CP Kelco that did not have identical or similar product matches 
where appropriate.

B. Cost of Production Analysis

    Based on Aqualon's cost allegation, the Department had reasonable 
grounds to believe or suspect that ANFC had made below-cost sales of 
foreign like product. See Section 773(b)(2)(A)(i) of the Act. 
Therefore, the Department initiated a cost investigation of ANFC on 
January 8, 2010, and requested that ANFC file a response to section D 
of the antidumping duty questionnaire on that date. Also, pursuant to 
section

[[Page 48315]]

773(b)(2)(A)(ii) of the Act, we had reasonable grounds to believe or 
suspect that CP Kelco sold the foreign like product below the COP in 
this review because, in the most recently completed review of the 
company, we had disregarded sales found to be made below the cost of 
production. See Purified Carboxymethylcellulose From the Netherlands; 
Preliminary Results of Antidumping Duty Administrative Review, 74 FR at 
24823 (May 26, 2009) (unchanged in final, Purified 
Carboxymethylcellulose from the Netherlands: Final Results of 
Antidumping Duty Administrative Review, 74 FR 52742 (Oct. 14, 2009)). 
Thus, the Department also requested that CP Kelco respond to section D 
of the questionnaire.

C. Calculation of Cost of Production

    We have preliminarily relied upon the COP information provided by 
ANFC and CP Kelco in their section D submissions, except as noted 
below. In accordance with section 773(b)(3) of the Act, we calculated 
the weighted-average COP for each foreign like product based on the sum 
of the respondents' material and fabrication costs for the product, 
plus amounts for selling, general, and administrative (SG&A) expenses, 
as well as packing costs. For ANFC, we relied on the COP data provided 
in its June 22, 2010, submission, except for the following instances:
    a. We subtracted the reported research and development (R&D) 
expenses from fixed overhead and we reclassified them as general and 
administrative (G&A).
    b. We added amortization of intangible assets, certain non-
operating expenses, and certain R&D expenses net of the technical 
service component reported as an indirect selling expense to the 
general and administrative (G&A) expense calculation in accordance with 
the Department's practice of including non-operating accounts which 
relate to the general operations of the company as a whole. See 
Magnesium Metal From the Russian Federation: Notice of Final 
Determination at Less than Fair Value, 70 FR 9041 (February 24, 2005), 
and accompanying I&D Memo at Comment 10.
    c. We subtracted net exchange losses from ANFC's reported G&A 
expense calculation. Exchange gains and losses (G&L) are included by 
the Department as part of financial expense, which is calculated at the 
parent level.
    For further discussion of these adjustments, see the memorandum 
from Frederick W. Mines, Accountant, to Neal M. Halper, Director, 
Office of Accounting, regarding ``Cost of Production and Constructed 
Value Calculation Adjustments for the Preliminary Results--Akzo Nobel 
Functional Chemicals B.V.,'' dated August 2, 2010.

For CP Kelco, we relied on the COP data provided in its July 27, 2010 
submission, except for two changes. First, we made a downward 
adjustment to the cost of manufacturing to reflect an adjustment made 
by the auditor to CP Kelco's books for the 2008 fiscal year. The 
auditor found that certain incentive plan wages had been overstated 
and, because these wages were paid to CMC plant personnel, we found 
that they directly related to the cost of manufacturing and we thus 
applied an adjustment, reflecting overstated costs for the POR, to this 
cost. For a discussion and calculation of this adjustment, see CP 
Kelco's Preliminary Analysis Memorandum at 15-16. Second, we included 
certain factoring expenses in CP Kelco's financial expense calculation, 
since we did not adjust the third-country market or U.S. sales prices 
for these expenses. For a more detailed discussion of this matter, see 
CP Kelco's Preliminary Analysis Memorandum at 6-7.

D. Test of Comparison Market Prices

    As required under section 773(b) of the Act, we compared the 
respondents' weighted-average COP figures to their comparison-market 
sales prices (net of billing adjustments, any applicable movement 
expenses, direct and indirect selling expenses, and packing) of the 
foreign like product in order to determine whether sales in the 
comparison market had been made at prices below COP. In determining 
whether to disregard such sales, we examined, in accordance with 
sections 773(b)(1)(A) and (B) of the Act, whether such sales were made 
within an extended period of time in substantial quantities and whether 
the sales were made at prices which would not permit the recovery of 
all costs within a reasonable period of time.

E. Results of Cost Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the sales of a given product were at prices less than the 
COP, we did not disregard any of the below-cost sales of that product 
because they were not made in substantial quantities. However, where 20 
percent or more of the respondents' comparison-market sales of a model 
were made at prices below the COP, we disregarded these sales because 
they were made: (1) In substantial quantities within the POR (i.e., 
within an extended period of time), in accordance with sections 
773(b)(2)(B) and (C) of the Act; and (2) at prices which would not 
permit recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(2)(D) of the Act. We used the remaining 
comparison-market sales, if such sales existed and were made in the 
ordinary course of trade, as the basis for determining normal value, in 
accordance with section 773(b)(1) of the Act.
    In the current review, we found sales by ANFC made below the COP 
for 20 percent or more of certain models and, therefore, we disregarded 
these below-cost sales from our margin calculations. See ANFC's 
Preliminary Analysis Memorandum at 8.

F. Price-to-Price Comparisons

    We calculated normal value based on prices to unaffiliated 
customers in the comparison markets. In these markets, we used invoice 
date as the date of sale. See 19 CFR 351.401(i). We increased or 
decreased price, as appropriate, for certain billing adjustments and 
rebates. We made deductions, where appropriate, for foreign inland 
freight and international freight pursuant to section 773(a)(6)(B) of 
the Act. We did not deduct certain factoring expenses from normal value 
that CP Kelco reported to have incurred on third-country sales, as we 
found did not find sufficient evidence of the arm's-length nature of 
the affiliated factoring transactions. See CP Kelco's Preliminary 
Analysis Memorandum at 6-7. In addition, when comparing sales of 
similar merchandise to U.S. sales, we made adjustments in normal value 
for differences in cost attributable to differences in physical 
characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411, as well as for 
differences in circumstances of sale, as appropriate (i.e., commissions 
and credit), in accordance with section 773(a)(6)(C)(iii) of the Act 
and 19 CFR 351.410. We also made an adjustment, where appropriate, for 
a CEP offset, in accordance with section 773(a)(7)(B) of the Act. See 
the ``Level of Trade'' section below. Finally, we deducted comparison-
market packing costs and added U.S. packing costs to normal value, in 
accordance with sections 773(a)(6)(A) and (B) of the Act.

G. Price-to-Constructed-Value Comparisons

    Section 773(a)(4) of the Act provides that, if we are unable to 
find a contemporaneous comparison-market match of identical or similar 
merchandise for a U.S. sale, then we base normal value on constructed 
value. Section 773(e) of the Act provides that

[[Page 48316]]

constructed value shall be based on the sum of the cost of materials 
and fabrication employed in producing the merchandise, SG&A expenses, 
and profit. We calculated the cost of materials and fabrication based 
on the methodology described above in the ``Calculation of Cost of 
Production'' section. In accordance with section 773(e)(2)(A) of the 
Act, we based SG&A expenses and profit on the amounts incurred and 
realized by CP Kelco in connection with the production and sale of the 
foreign like product, in the ordinary course of trade, for consumption 
in the foreign country (i.e., Taiwan). See 19 CFR 351.405(b)(1).

Level of Trade

    In accordance with section 773(a)(1)(B)(i) 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 export price or CEP 
transaction. The level of trade in the comparison market is the level 
of trade of the starting-price sales in the comparison market or, when 
normal value is based on constructed value, the level of trade of the 
sales from which we derive SG&A expenses and profit. See 19 CFR 
351.412(c). With respect to U.S. price for export-price transactions, 
the level of trade is also that of the starting-price sale, which is 
usually from the exporter to the importer. Id. For CEP, the level of 
trade is that of the constructed sale from the exporter to the 
importer. Id.
    To determine whether comparison market sales are at a different 
level of trade from U.S. sales, we examine stages in the marketing 
process and selling functions along the chain of distribution between 
the producer and the unaffiliated customer. If the comparison market 
sales are at different levels of trade, and the difference affects 
price comparability, as manifested in a pattern of consistent price 
differences between the sales on which normal value is based and 
comparison market sales at the level of trade of the export 
transaction, the Department makes a level-of-trade 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 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 
level of trade between the CEP and normal value. See 773(a)(7)(A) of 
the Act.
    Under section 773(a)(7)(A) of the Act, we make an upward or 
downward adjustment to normal value for level of trade if the 
difference in level of trade 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 levels of trade in the country in which normal value is 
determined. Finally, if the normal-value level of trade is at a more 
advanced stage of distribution than the level of trade of the CEP, but 
the data available do not provide an appropriate basis to determine a 
level-of-trade adjustment, we reduce normal value by the amount of 
indirect selling expenses incurred in the 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 levels of trade identified by the respondent are meaningful. See 
Antidumping Duties: Countervailing Duties, 62 FR 27296, 27371 (May 19, 
1997). If the claimed levels of trade are the same, we expect that the 
functions and activities of the seller should be similar. Conversely, 
if a party claims that levels of trade 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 Antidumping Duty Administrative Review, 65 FR 30068 (May 10, 2000), 
and accompanying Issues and Decision Memorandum at Comment 6.
    In the present review, both ANFC and CP Kelco claimed that a CEP 
offset was required because the CEP level of trade was less advanced 
than levels of trade in the comparison markets. See ANFC's section C 
questionnaire response at 52 and CP Kelco's section A questionnaire 
response at 33-34. 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 
``chain of distribution''),\6\ including selling functions, class of 
customer (customer category), and the level of selling functions for 
each type of sale.
---------------------------------------------------------------------------

    \6\ The marketing process in the United States and comparison 
markets begins with the producers and extends to the sale to the 
final user or customer. The chain of distribution involved in the 
two markets may have many or few links, and the respondents' sales 
occur somewhere along this chain. In performing this evaluation, we 
considered the respondents' narrative responses to properly 
determine where in the chain of distribution the sale occurs.
---------------------------------------------------------------------------

    ANFC reported one level of trade in the home market, the 
Netherlands, with one channel of distribution to two classes of 
customers: (1) Direct sales from the warehouse located near the ANFC 
manufacturing plant to end users, and (2) direct sales from the 
warehouse located near the ANFC manufacturing plant to distributors. 
See ANFC's section B questionnaire response at 10.
    ANFC reported one level of trade in the home market, the 
Netherlands, with one channel of distribution to two classes of 
customers: (1) Direct sales from the warehouse located near the ANFC 
manufacturing plant to end users, and (2) direct sales from the 
warehouse located near the ANFC manufacturing plant to distributors. 
See ANFC's section B questionnaire response at 10.
    Based on our review of evidence on the record, we find that the 
home-market sales to both customer categories through the one channel 
of distribution were substantially similar with respect to selling 
functions and stages of marketing. ANFC performed the same selling 
functions for sales in a single home-market channel of distribution, 
including sales forecasting, strategic planning, advertising, 
distributor training, packing, warehousing, inventory management, order 
processing, direct sales crew, market research, providing guarantees, 
after sales services, freight and delivery, and invoicing. See ANFC's 
section A questionnaire response at 17-25. Each of these selling 
functions was identical in the intensity of their provision or only 
differed minimally, the exception being that ANFC provided competitive 
discounts and technical assistance to a different degree of involvement 
to different customers' types. See ANFC's section A questionnaire 
response at exhibit 8. See also Preliminary Analysis Memorandum--ANFC 
at 4. Thus, after considering all of the above, we preliminarily find 
that ANFC had only one LOT for its home market sales.
    ANFC reported one CEP LOT, with two separate channels of 
distribution in the United States. CEP Channel 1 sales were made to two 
classes of customers, i.e., end users and distributors, either from 
inventory or made to order and CEP Channel 2 sales were also made to 
two classes of customers, i.e., end users and distributors from 
inventory. For CEP Channel 1 sales, the U.S. customer orders 
merchandise from AN-US and the merchandise is shipped directly to the 
U.S. customer from ANFC's warehouse. These sales are classified as CEP 
Channel 1 sales because the agreement to sell occurred in the United

[[Page 48317]]

States, the sale contract was executed in the United States, and the 
title passed directly from the AN-US to the unaffiliated customer in 
the United States. For the CEP Channel 2 sales, the U.S. customer 
orders merchandise from AN-US, which is shipped out of stock of 
materials maintained at AN-US's unaffiliated warehouses. Upon examining 
ANFC's questionnaire responses, we preliminarily find that it has two 
channels of distribution for its CEP sales in the United States. See 
ANFC's supplemental questionnaire response, dated March 11, 2010 at 22 
through 26. See also ANFC's section C questionnaire response at 10 
through 11.
    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 Tech. Inc. v. United States, 243 F.3d 
1301, 1314-15 (Fed. Cir. 2001). We reviewed the selling functions and 
services performed by ANFC on CEP sales as described in its 
questionnaire responses, after these deductions. We found that selling 
functions performed by ANFC to its U.S. affiliate in support of the CEP 
sales were almost identical regardless of class of customers or channel 
of trade. ANFC reported that the only services it provided for the CEP 
Channel 1 sales, to a different degree of performance comparatively to 
a degree of performance provided for Channel 2 sales, were logistics 
for freight and delivery, warehousing, and inventory management. See 
ANFC's section A questionnaire response at exhibit 8. Therefore, we 
found that selling functions performed by ANFC for both channels are at 
the same level.
    Next, we compared the stages in the marketing process and selling 
functions along the chain of distribution for home-market and CEP 
sales. ANFC's home-market and CEP sales were both made to end users and 
distributors. We found that ANFC performs an additional layer of 
selling functions at a greater degree of involvement in the home market 
than it provided on CEP Channel 1 and Channel 2 sales (e.g., sales 
forecasting, advertising, distributor training, market research, sales 
and marketing support and competitive discounts). See ANFC supplemental 
questionnaire response at 10 through 16. Because these additional 
selling functions are significant, we find that ANFC's CEP sales are at 
a different level of trade than its home-market sales.
    According to section 773(a)(7)(B) of the Act, a CEP offset is 
appropriate when the level of trade in the home market is at a more 
advanced stage than the level of trade of the CEP sales and there is no 
basis for determining whether the difference in levels of trade between 
normal value and CEP affects price comparability. ANFC reported that it 
provided minimal selling functions and services for the CEP level of 
trade and that, therefore, the home-market level of trade is more 
advanced than the CEP level of trade. Based on our analysis of the 
channels of distribution and selling functions performed by ANFC for 
sales in the home market and CEP sales in the U.S. market (i.e., sales 
support and activities provided by ANFC for sales to its U.S. 
affiliate), we preliminarily find that the home market level of trade 
is at a more advanced stage when compared to CEP sales because ANFC 
provides many selling functions in the home market at a different level 
of service (i.e., sales forecasting, advertising, distributor training, 
market research, sales and marketing support and competitive discounts, 
etc.) as compared to selling functions performed for its CEP sales 
(i.e., ANFC reported that the only services it provided for the CEP 
sales were logistics for freight and delivery, packing, warehousing, 
limited strategic planning, inventory maintenance and technical 
assistance). See ANFC's supplemental questionnaire response, dated 
March 11, 2010 at 10-18 and its second supplemental questionnaire 
response, dated April 29, 2010 at 3. Thus, we find that ANFC's home-
market sales are at a more advanced level of trade than its CEP sales. 
As there was only one level of trade in the home market, there were no 
data available to determine the existence of a pattern of price 
differences, and we do not have any other information that provides an 
appropriate basis for determining a level-of-trade adjustment; 
therefore, we applied a CEP offset to normal value for CEP comparisons.
    CP Kelco reported sales through two channels of distribution in the 
third-country market, identified as: (1) Channel 1--sales to an 
unaffiliated end user; and (2) Channel 2--sales to an unaffiliated 
distributor. A review of the record shows that CP Kelco continues to 
perform substantially similar selling functions and activities for the 
two channels of distribution and customer categories. Specifically, it 
performed activities relating to customer service, logistics, inventory 
maintenance, packing, freight/delivery, sales promotion, and guarantees 
to the same degree for each channel. See CP Kelco's section A response 
at A18-A30; CP Kelco's supplemental questionnaire response, dated April 
23, 2010, at exhibit A-51. The company also provided, to slightly 
differing degrees, sales negotiations, credit risk management, direct 
sales personnel and technical support functions in both channels. Id. 
Consequently, we conclude that, as in prior reviews, CP Kelco only made 
sales at one level of trade in the Taiwanese market.
    In the U.S. market, CP Kelco reported two channels of distribution, 
identified as: (1) Channel 1--CEP sales to unaffiliated end users and 
distributors; and (2) Channel 2--EP sales to unaffiliated end users and 
distributors. Turning to a review of the selling functions the company 
performed for U.S. sales, we considered only those reflected in the 
price after the deduction of expenses and CEP profit under section 
772(d) of the Act. For its CEP sales, we found that CP Kelco performed 
functions related to logistics, inventory maintenance, packing, and 
freight/delivery to a high degree. See supplemental questionnaire 
response, dated April 26, 2010, at exhibit A-51. For its EP sales, we 
found that it performed logistics, packing and freight/delivery 
functions to a high degree but also assisted the U.S. affiliate with 
customer service, inventory maintenance, sales promotion, direct sales 
personnel and guarantees activities to lesser degrees. Id. Because of 
the significant differences in selling functions performed for the two 
types of sales, we concluded that CP Kelco's EP sales were made at a 
different level of trade than its CEP sales.
    We next examined the third-country sales compared to the EP sales. 
CP Kelco's Taiwanese sales and EP sales were both made to end users and 
distributors and the selling functions performed by CP Kelco for these 
two groups of sales were almost identical. It performed functions 
relating to sales negotiations, credit-risk management, inventory 
maintenance, packing, freight/delivery, collection, sales promotion, 
direct sales personnel, technical support, and guarantees to nearly the 
same degrees in both markets. Id. Because the selling functions and 
channels of distribution were substantially similar, we preliminarily 
determined that the Taiwanese sales were made at the same level of 
trade as the EP sales in the U.S. market. Therefore, it was not 
necessary to make a level-of-trade adjustment for the EP sales.
    According to section 773(a)(7)(B) of the Act, a CEP offset is 
appropriate when the level of trade in the home- or third-country 
market is at a more advanced stage than the level of trade of the CEP 
sales and there is no basis for determining whether the difference in 
these levels effects price comparability.

[[Page 48318]]

CP Kelco reported that it provided few selling functions and activities 
for the CEP level of trade; consequently, the Taiwanese level of trade 
is more advanced than the CEP level of trade. Furthermore, because 
there was only one level of trade in the third-country market and no 
data were available to determine the existence of a pattern of price 
differences within that market, and because we do not have any other 
information that provides an appropriate basis for determining a level-
of-trade adjustment, we applied a CEP offset to normal value for CEP 
comparisons pursuant to section 773(a)(7)(B) of the Act.
    To calculate a CEP offset for ANFC and CP Kelco, we deducted the 
comparison-market indirect selling expenses from normal value for sales 
that were compared to U.S. CEP sales. We limited the deduction by the 
amount of the indirect selling expenses deducted in calculating the CEP 
under section 772(d)(1)(D) of the Act. See section 773(a)(7)(B) of the 
Act.

Currency Conversion

    We made foreign-currency conversions into U.S. dollars in 
accordance with section 773A(a) of the Act and 19 CFR 351.415 based on 
exchange rates in effect on the dates of the U.S. sales, as certified 
by the Federal Reserve Bank. See Import Administration Web site at: 
http://ia.ita.doc.gov/exchange/index.html.

Preliminary Results of Review

    We preliminarily determine that, for the period July 1, 2008, 
through June 30, 2009, the following dumping margins exist:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/ exporter                       margin
                                                              (percent)
------------------------------------------------------------------------
Akzo Nobel Functional Chemicals B.V........................        13.71
CP Kelco B.V...............................................         2.77
------------------------------------------------------------------------

Disclosure and Public Comment

    Pursuant to 19 CFR 351.224(b) of the Department's regulations, the 
Department will disclose to parties to the proceeding any calculations 
performed in connection with these preliminary results within five days 
after the date of publication of this notice. Pursuant to 19 CFR 
351.309(c)(1)(ii), interested parties may submit written comments in 
response to these preliminary results. As stated in the 
``Verification'' section above, the Department will release the sales 
verification memoranda to parties for comment after the publication of 
these preliminary results in the Federal Register. Therefore, 
interested parties may submit case briefs to the Department no later 
than 30 days after the publication of the preliminary results of review 
or, if later, seven days after the date of the issuance of the last 
verification report in this proceeding. See 19 CFR 351.309(c)(1)(ii). 
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)(1) and 
(2).
    Parties who submit arguments in this proceeding are requested to 
submit with the argument: (1) A statement of the issues; (2) a brief 
summary of the argument; and (3) a table of authorities. See 19 CFR 
351.309(c)(2). Case and rebuttal briefs must be served on interested 
parties in accordance with 19 CFR 351.303(f). Executive summaries 
should be limited to five pages total, including footnotes. 
Furthermore, we request that parties, when submitting briefs and 
rebuttal briefs, provide the Department with a copy of the public 
versions of the briefs on diskette.
    Within 30 days of the date of publication of this notice, 
interested parties may request a public hearing on arguments raised in 
the case and rebuttal briefs, pursuant to 19 CFR 351.310(c). Unless the 
Department specifies otherwise, the hearing, if requested, will be held 
two days after the date for submission of rebuttal briefs. See 19 CFR 
351.310(d)(1). Parties will be notified of the time and location of the 
hearing.
    The Department will publish the final results of the administrative 
review, including the results of its analysis of issues addressed in 
any case or rebuttal brief, no later than 120 days after publication of 
the preliminary results, unless extended. See section 751(a)(3)(A) of 
the Act; 19 CFR 351.213(h).

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. In accordance with 19 CFR 
351.212(b)(1), we have calculated, whenever possible, an exporter/
importer (or customer)-specific assessment rate or value for 
merchandise subject to this review as described below.
    With respect to export-price sales, for these preliminary results, 
we divided the total dumping margins (calculated as the difference 
between normal value and export price) for each exporter's importer or 
customer by the total number of units the exporter sold to that 
importer or customer. We will direct CBP to assess the resulting per-
unit dollar amount against each unit of merchandise in each of that 
importer's/customer's POR entries.
    For CEP sales, we divided the total dumping margins for the 
reviewed sales by the total entered value of those reviewed sales for 
each importer. We will direct CBP to assess the resulting percentage 
margin against the entered customs values for the subject merchandise 
on each of that importer's POR entries. See 19 CFR 351.212(b).
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. This clarification will apply to entries of subject 
merchandise during the POR produced by companies in these preliminary 
results of review for which the reviewed companies did not know their 
merchandise was destined for the United States. In such instances, we 
will instruct CBP to liquidate unreviewed entries at the all-others 
rate if there is no rate for the intermediate company(ies) involved in 
the transaction. For a full discussion of this clarification, see 
Antidumping and Countervailing Duty Proceedings: Assessment of 
Antidumping Duties, 68 FR 23954 (May 6, 2003).
    We intend to issue liquidation instructions to CBP 15 days after 
publication of the final results of this review.

Cash Deposit Requirements

    The following cash-deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(2)(C) of the Act: (1) The cash deposit rate for the companies 
covered by this review will be the rate established in the final 
results of review; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review or in the 
investigation but