Purified Carboxymethylcellulose From Finland; Notice of Preliminary Results of Antidumping Duty Administrative Review, 47036-47043 [2012-19313]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 77, Number 152 (Tuesday, August 7, 2012)]
[Notices]
[Pages 47036-47043]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19313]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-405-803]


Purified Carboxymethylcellulose From Finland; Notice of 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to requests from Aqualon Company, a division of 
Hercules Inc., (Petitioner) and respondents CP Kelco Oy and CP Kelco 
U.S., Inc. (collectively, CP Kelco), the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on purified carboxymethylcellulose (CMC) from Finland. The 
review covers exports of the subject merchandise to the United States 
produced by CP Kelco. The period of review (POR) is July 1, 2010, 
through June 30, 2011.
    We preliminarily find that CP Kelco made sales at less than normal 
value (NV) during the POR. If these preliminary results are adopted in 
our final results of this review, we will instruct U.S. Customs and 
Border Protection (CBP) to assess antidumping duties based on 
differences between the export price (EP) or constructed export price 
(CEP) and NV.

DATES: Effective Date: August 7, 2012.

FOR FURTHER INFORMATION CONTACT: Tyler Weinhold or Robert James, 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-
1121 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department published the antidumping duty order on CMC from 
Finland on July 11, 2005.\1\ On July 1, 2011, the Department published 
the notice of opportunity to request an

[[Page 47037]]

administrative review of CMC from Finland for the period July 1, 2010, 
through June 30, 2011.\2\
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    \1\ See Notice of Antidumping Duty Orders: Purified 
Carboxymethylcellulose from Finland, Mexico, the Netherlands, and 
Sweden, 70 FR 39734 (July 11, 2005).
    \2\ See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity To Request Administrative 
Review, 76 FR 38609 (July 1, 2011).
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    On July 29, 2011, Petitioner requested a review of CP Kelco for the 
period July 1, 2010, through June 30, 2011. On July 29, 2011, CP Kelco 
requested an administrative review for the same period. On August 26, 
2011, the Department published in the Federal Register a notice of 
initiation of this antidumping duty administrative review.\3\
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    \3\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Requests for Revocation in Part, 76 FR 
53404 (August 26, 2011).
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    On September 28, 2011, the Department issued its standard 
antidumping questionnaire (the Antidumping Questionnaire) to CP Kelco. 
CP Kelco submitted its response to section A of the Antidumping 
Questionnaire on October 19, 2011 (CP Kelco's Section A Response). CP 
Kelco submitted its responses to sections B and C of the Antidumping 
Questionnaire on November 4, 2011 (CP Kelco's Section B Response and CP 
Kelco's Section C Response, respectively). Because the Department 
disregarded sales which were made at prices below the cost of 
production (COP) in the most recently completed administrative review 
as of the initiation of the instant review, we are conducting a sales-
below-cost investigation in this review.\4\ Accordingly, CP Kelco 
submitted its response to section D of the Antidumping Questionnaire on 
November 9, 2011 (CP Kelco's Section D Response).
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    \4\ See Purified Carboxymethylcellulose from Finland; Notice of 
Preliminary Results of Antidumping Duty Administrative Review, 75 FR 
47788 (August 9, 2010) (2008-2009 Preliminary Results) (unchanged in 
Purified Carboxymethylcellulose from Finland; Notice of Final 
Results of Antidumping Duty Administrative Review, 75 FR 73035 
(November 29, 2010) (2008-2009 Final Results)).
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    On December 16, 2011, the Department issued a supplemental 
questionnaire to CP Kelco regarding its responses to sections A, B, and 
C of the Antidumping Questionnaire. CP Kelco submitted its response to 
the Department's sections A, B, and C supplemental questionnaire on 
February 7, 2012 (CP Kelco's February 7, 2012, Response). On February 
7, 2012, the Department issued a supplemental questionnaire to CP Kelco 
regarding its response to section D of the Antidumping Questionnaire. 
CP Kelco submitted its response to the Department's supplemental 
questionnaire on March 7, 2012 (CP Kelco's March 7, 2012, Response). On 
March 15, 2012, the Department issued another supplemental 
questionnaire to CP Kelco regarding its responses to sections A, B, and 
C of the Antidumping Questionnaire. CP Kelco submitted its response to 
the Department's supplemental questionnaire on March 26, 2012 (CP 
Kelco's March 26, 2012, Response). On March 22, 2012, the Department 
issued a supplemental questionnaire to CP Kelco regarding its response 
to section C of the Antidumping Questionnaire. CP Kelco submitted its 
response to the Department's supplemental questionnaire on April 2, 
2012 (CP Kelco's April 2, 2012, Response). On April 24, 2012, the 
Department issued a supplemental questionnaire to CP Kelco regarding 
its response to section D of the Antidumping Questionnaire. CP Kelco 
submitted its response to the Department's supplemental questionnaire 
on May 8, 2012 (CP Kelco's May 8, 2012, Response). On May 25, 2012, 
Petitioner made a targeted dumping allegation (Petitioner's May 25, 
2012, Targeted Dumping Allegation). On June 4, 2012, CP Kelco submitted 
rebuttal comments regarding Petitioner's May 25, 2012, Targeted Dumping 
Allegation (CP Kelco's June 4, 2012, Targeted Dumping Rebuttal 
Comments). On June 6, 2012, Petitioner submitted rebuttal comments 
regarding CP Kelco's June 4, 2012, Targeted Dumping Rebuttal Comments 
(Petitioner's June 6, 2012, Targeted Dumping Rebuttal Comments). On 
June 15, 2012, CP Kelco submitted a corrected U.S. sales file.

Scope of the Order

    The merchandise covered by this order is all purified 
carboxymethylcellulose (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 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 the order is 
dispositive.

Fair Value Comparisons

    To determine whether sales of CMC in the United States were made at 
less than NV, we compared U.S. price to NV, as described in the 
``Export Price,'' ``Constructed Export Price,'' and ``Normal Value'' 
sections of this notice. Because we determined that CP Kelco made both 
EP and CEP sales during the POR, we used both EP and CEP as the basis 
for U.S. price in our comparisons. We used the invoice date, as 
recorded in CP Kelco's normal books and records, as the date of sale 
for CP Kelco's EP, CEP, and home market sales. See 19 CFR 351.401(i).

Targeted Dumping

    In Petitioner's May 25, 2012, Targeted Dumping Allegation, 
Petitioner alleges targeted dumping by CP Kelco in this POR. As 
Petitioner notes, the Department allows for the application of a 
different, exceptional or alternative price comparison method if the 
Department determines that it is more appropriate, to address case-
specific circumstances.\5\ As petitioner also points out, in Final 
Modification, the Department further explains that ``{it{time}  will 
determine on a case-by-case basis whether it is appropriate to use an 
alternative comparison methodology by examining the same criteria that 
the Department examines in original investigations pursuant to sections 
777A(d)(1)(A) and (B) of the {Tarriff Act of 1930, As amended (The 
Act){time} .'' \6\ Citing Sections 777(d)(1)(A) and (B), Petitioner 
explains that it is submitting a targeted dumping allegation, in 
accordance with the Department's practice in investigations.\7\
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    \5\ See Antidumping Proceedings: Calculation of the Weighted-
Average Dumping Margin and Assessment Rate in Certain Antidumping 
Duty Proceedings; Final Modification, 77 FR 8101 (February 14, 2012) 
(Final Modification).
    \6\ See Final Modification at 8102.
    \7\ See Petitioner's May 25, 2012, Targeted Dumping Allegation 
at 2 and 3.
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    Petitioner claims information on the record in this proceeding 
demonstrates that when the criteria pursuant to section 
777A(d)(1)(B)(i) of the Act are considered, CP Kelco's sales 
demonstrate patterns of EPs and CEPs for comparable merchandise that 
differ significantly among purchasers, regions, and periods of time.\8\ 
Petitioner asserts that CP Kelco's data ``already demonstrate an 
extremely high likelihood that application of the

[[Page 47038]]

average-to-average calculation method will mask its targeted dumping.'' 
\9\
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    \8\ Id. at 1 and 3.
    \9\ Id. at 8.
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    Petitioner also asserts that its allegation is timely and notes 
that the Final Modification does not set a deadline for the submission 
of targeted dumping allegations. Therefore, Petitioner explains it has 
followed what it asserts is the Department's current practice in 
investigations, whereby targeted dumping allegations are to be 
submitted no later than 45 days before the ``scheduled date'' of the 
preliminary determination.
    In CP Kelco's June 4, 2012, Targeted Dumping Rebuttal Comments, CP 
Kelco argues that Petitioner's May 25, 2012, Targeted Dumping 
Allegation should be rejected by the Department as an untimely 
submission of new information. CP Kelco notes that the Department has 
not set a deadline for submitting allegations of targeted dumping in 
administrative reviews. Therefore, CP Kelco argues that section 
351.301(b)(2) of the Department's regulations governs, and that any 
factual information submitted by a party in an administrative review 
must be submitted within 140 days of the anniversary month of the 
proceeding.\10\
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    \10\ See CP Kelco's June 4, 2012, Targeted Dumping Rebuttal 
Comments at 1 to 2.
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    Alternatively, CP Kelco argues that because the Department's 
preliminary results were initially scheduled to be released on April 1, 
2012, the deadline for submitting a targeted dumping allegation was 
(and remains) 45 days prior to April 1, 2012. Therefore, CP Kelco 
argues Petitioner's allegation of targeted dumping is untimely.
    CP Kelco contends that section 751(a)(3)(A) of the Act allows the 
Department to extend the due date of the preliminary results where it 
is not practicable for the Department to complete the review within the 
original time period, not to provide additional time for the parties to 
make new targeted dumping allegations. CP Kelco argues ``Petitioner 
should not be allowed to take advantage of the Department's need for 
additional time * * * by making an untimely targeted dumping 
allegation, which will further complicate the proceeding and the burden 
on the Department.'' \11\
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    \11\ Id. at 3.
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    In Petitioner's June 6, 2012, Targeted Dumping Rebuttal Comments, 
it argues that the 140-day deadline in 19 CFR 351.301(b)(2) does not 
apply because that deadline pertains to new factual information, and 
because Petitioner's May 25, 2012, Targeted Dumping Allegation is not 
new factual information.
    Citing CP Kelco's rebuttal comments, Petitioner describes CP 
Kelco's alternative arguments as two-fold: That ``the `45 days prior to 
the preliminary determination' deadline for investigations does not 
apply to reviews,'' or, alternatively, that any extension of the 
deadline ``may not rebound to the benefit of the parties.'' \12\ 
Petitioner further argues that CP Kelco provides nothing in support 
except to argue that ``the Department has not set a deadline for 
submitting allegations of targeted dumping in administrative reviews,'' 
and ``{a{time} s a result,'' the Department should apply the 140-day 
rule found in section 351.301(b)(2) of the Department's 
regulations.\13\ Petitioner further contends that CP Kelco's argument 
that ``{Petitioner's targeted dumping allegation{time}  will further 
complicate the proceeding and the burden on the Department'' \14\ is 
specious because, as Petitioners put it, ``the date for the preliminary 
determination is the date for the preliminary determination, no matter 
how the Department arrives at it.'' \15\ Petitioner further argues that 
``there is no reason why the Department's practice of setting a 45-day 
deadline for targeted dumping allegations should be limited to un-
extended preliminary determination dates.'' \16\
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    \12\ See Petitioner's June 6, 2012, Targeted Dumping Rebuttal 
Comments at 2.
    \13\ See CP Kelco's June 4, 2012, Targeted Dumping Rebuttal 
Comments at 1 to 2.
    \14\ Id. 2.
    \15\ See Petitioner's June 6, 2012, Targeted Dumping Rebuttal 
Comments at 2.
    \16\ Id. at 2.
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    The Department has not established a deadline for targeted dumping 
allegations in administrative reviews, and so it would be unreasonable 
to reject this allegation as ``untimely'' where no such time limit was 
established. In addition, if we apply the 45-day deadline applicable in 
investigations, the allegation is timely. In the initiation notice of 
investigations, we only state that targeted dumping allegations are due 
no later than 45 days before the scheduled date of the preliminary 
determination, and our normal practice is to consider the 45-day period 
in light of the extended preliminary determination in investigations. 
As petitioner filed its targeted dumping analysis on May 25, 2012, the 
filing was 45-days prior to the extended preliminary deadline. Thus, 
the Department has accepted the allegation as timely filed, based on 
our extended deadline for the preliminary results. The Department also 
agrees with petitioner that the submission is merely an analysis of 
data previously placed upon the record by CP Kelco and, therefore, does 
not constitute untimely new factual information debarred under 19 CFR 
351.302(b)(2).
    For the purposes of these preliminary results, the Department has 
not conducted a targeted dumping analysis.\17\ This is consistent with 
our approach to the identical issue in concurrent administrative 
reviews.\18\ Application of this methodology in these preliminary 
results affords parties an opportunity to meaningfully comment on the 
Department's implementation of this recently adopted methodology in the 
context of this administrative review. The Department intends to 
continue to consider, pursuant to 19 CFR 351.414(c), whether another 
method is appropriate in this administrative review in light of the 
parties' pre-preliminary comments and any comments on the issue that 
parties may include in their case and rebuttal briefs.
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    \17\ In these preliminary results, the Department applied the 
weighted-average dumping margin calculation method adopted in Final 
Modification. In particular, the Department compared monthly 
weighted-average EPs (or CEPs) with monthly weighted-average NVs and 
granted offsets for non-dumped comparisons in the calculation of the 
weighted-average dumping margin.
    \18\ See, e.g., Tapered Roller Bearings from China, 77 FR 40579 
(July 10, 2012).
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Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by CP Kelco covered by the ``scope of the order'' 
section and sold in the home market during the POR to be foreign like 
products for purposes of determining appropriate product comparisons to 
U.S. sales. We relied on five characteristics to match U.S. sales of 
subject merchandise to home market sales of the foreign like product 
(listed in order of priority): (1) Grade; (2) viscosity; (3) degree of 
substitution; (4) particle size; and (5) solution gel characteristics. 
Where there were no sales of identical merchandise in the home market 
to compare to U.S. sales, we compared U.S. sales to the next most 
similar foreign like product on the basis of these product 
characteristics and the reporting instructions listed in the 
antidumping questionnaire. When there were no appropriate home market 
sales of comparable merchandise, we compared the merchandise sold in 
the United States to constructed value (CV), in accordance with section 
773(a)(4) of the Act. For these preliminary results, we did base NV on 
constructed value (CV) in some instances. See ``Constructed Value'' 
section, below.

[[Page 47039]]

Export Price

    Section 772(a) of the Act defines EP as ``the price at which the 
subject merchandise is first sold (or agreed to be sold) before the 
date of importation by the producer or exporter of subject merchandise 
outside of the United States to an unaffiliated purchaser in the United 
States or to an unaffiliated purchaser for exportation to the United 
States,'' as adjusted under section 772(c) of the Act. In accordance 
with section 772(a) of the Act, we used EP for a number of CP Kelco's 
U.S. sales. We preliminarily find that these sales are properly 
classified as EP sales because these sales were made before the date of 
importation and because our CEP methodology was not otherwise 
warranted.
    We based EP on the prices to unaffiliated customers in the United 
States. We made adjustments for price or billing adjustments and 
discounts, where applicable. We also made deductions for movement 
expenses in accordance with section 772(c)(2)(A) of the Act, which 
included, where appropriate: foreign inland freight; international 
freight; marine insurance; U.S. brokerage and handling; and direct 
selling expenses (credit expenses).
    We reduced movement expenses, where appropriate, by the amount of 
freight revenue paid by the customer to CP Kelco in reimbursement for 
CP Kelco arranging and initially paying for freight.\19\ We limited the 
amount of freight revenue deducted to no greater than the amount of 
movement expenses in the home market, in accordance with the 
Department's past practice.\20\ As the Department explained in Bags 
from the PRC, section 772 (c)(1) of the Act provides that the 
Department shall increase the price used to establish either EP or CEP 
in only the following three instances: (A) When not included in such 
price, the cost of all containers and coverings and all other costs, 
charges, and expenses incident to placing the subject merchandise in 
condition packed ready for shipment to the United States; (B) the 
amount of any import duties imposed by the country of exportation which 
have been rebated, or which have not been collected, by reason of the 
exportation of the subject merchandise to the United States; and (C) 
the amount of any countervailing duty imposed on the subject 
merchandise under subtitle A to offset an export subsidy. In addition, 
section 351.401(c) of the Department's regulations directs the 
Department to use a price in the calculation of U.S. price which is net 
of any price adjustments that are reasonably attributable to the 
subject merchandise. The term ``price adjustments'' is defined under 19 
CFR 351.102(b)(38) as ``any change in the price charged for subject 
merchandise or the foreign like product, such as discounts, rebates, 
and post-sale adjustments, that are reflected in the purchaser's net 
outlay.''
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    \19\ See CP Kelco's Section B Response at B-25; CP Kelco's 
Section C Response at C-28; and CP Kelco's January 28, 2012, 
Response, Section B, at 9 to 11, and Section C, at 11 to 14.
    \20\ See, e.g., 2008-2009 Preliminary Results (unchanged in 
2008-2009 Final Results) and Polyethylene Retail Carrier Bags from 
the People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 74 FR 6857 (February 11, 2009) (Bags from the 
PRC), and the accompanying Issues and Decision Memorandum at Comment 
6; Purified Carboxymethylcellulose from Finland; Notice of Final 
Results of Antidumping Duty Administrative Review, 72 FR 44106 
(August 7, 2007); Purified Carboxymethylcellulose from Finland; 
Notice of Final Results of Antidumping Duty Administrative Review, 
74 FR 28886 (June 18, 2009); Purified Carboxymethylcellulose from 
Finland; Notice of Final Results of Antidumping Duty Administrative 
Review, 73 FR 75397 (December 11, 2008); and Purified 
Carboxymethylcellulose from Finland; Notice of Final Results of 
Antidumping Duty Administrative Review, 72 FR 70568 (December 12, 
2007).
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    In past cases, we have declined to treat freight-related revenues 
as either an addition to U.S. price under section 772(c) of the Act or 
as price adjustments under 19 CFR 351.102(b). Rather, we have 
incorporated these revenues as offsets to movement expenses because 
they relate to the transportation of subject merchandise.\21\ Our 
offset practice limits the granting of an offset to situations where a 
respondent incurs expenses and realizes revenue for the same type of 
activity.\22\ According to CP Kelco's responses, CP Kelco arranges and 
pre-pays for transportation and bills the freight expenses in question 
as a separate line on the product invoice.\23\ Further, CP Kelco 
reports that these fees charged to the customer which generate freight 
revenues are based upon estimates of actual freight, not actual freight 
expenses. Therefore, we have limited the amount of the freight revenue 
used to offset CP Kelco's movement expenses to the amount of movement 
expenses incurred on the sale of subject merchandise.\24\
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    \21\ See, e.g., Stainless Steel Wire Rod from Sweden: 
Preliminary Results of Antidumping Duty Administrative Review, 72 FR 
51414 (September 7, 2007) (Steel Wire Rod Preliminary Results) 
(unchanged in Stainless Steel Wire Rod from Sweden: Final Results of 
Antidumping Duty Administrative Review, 72 FR 12950 (March 1, 
2008)).
    \22\ Id.
    \23\ See CP Kelco's Section A response at A-26; CP Kelco's 
Section C response at C-27 to C-28; and CP Kelco's February 7, 2012, 
Response at A-39 to A-41.
    \24\ See Preliminary Analysis Memorandum at 3 and 8.
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Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is ``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,'' as adjusted under sections 772(c) and 
(d) of the Act. In accordance with section 772(b) of the Act, we used 
CEP for a number of CP Kelco's U.S. sales because CP Kelco sold 
merchandise to its affiliate CP Kelco U.S., Inc. in the United States; 
and CP Kelco U.S., Inc., in turn, sold the subject merchandise to 
unaffiliated U.S. customers. We preliminarily find that these U.S. 
sales are properly classified as CEP sales because they occurred in the 
United States after importation and were made through CP Kelco U.S. 
Inc. to unaffiliated U.S. customers.
    We based CEP on the prices to unaffiliated purchasers in the United 
States. We made adjustments for price or billing adjustments, and early 
payment discounts, where applicable. We also made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act, 
which included, where appropriate: foreign inland freight; foreign 
brokerage and handling; international freight; marine insurance; 
customs duties; U.S. brokerage; U.S. inland freight; and U.S. 
warehousing expenses. We also reduced movement expenses, where 
appropriate, by the amount of freight revenue paid by the customer to 
CP Kelco. In accordance with our treatment of freight revenue on U.S. 
sales of subject merchandise (see ``Export Price'' section, above), we 
capped the amount of freight revenue deducted at no greater than the 
amount of movement expenses in the home market. In accordance with 
section 772(d)(1) of the Act, we deducted those selling expenses 
associated with economic activities occurring in the United States, 
including direct selling expenses (imputed credit expenses), inventory 
carrying costs, and indirect selling expenses. We also made an 
adjustment for profit in accordance with section 772(d)(3) of the Act.

Normal Value

A. Selection of Comparison Market

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV 
(i.e., the aggregate volume of home market sales of the foreign like 
product was equal to or

[[Page 47040]]

greater than five percent of the aggregate volume of U.S. sales), we 
compared the respondent's volume of home market sales of the foreign 
like product to the volume of U.S. sales of the subject merchandise in 
accordance with section 773(a)(1) of the Act. As CP Kelco's aggregate 
volume of home market sales of the foreign like product was greater 
than five percent of its aggregate volume of U.S. sales of the subject 
merchandise, we determined the home market was viable. Therefore, we 
have based NV on home market sales in the usual commercial quantities 
and in the ordinary course of trade.

B. Cost of Production Analysis

    In accordance with section 773(b)(2)(A)(ii) of the Act, we are 
conducting a sales-below-cost investigation in this review because the 
Department disregarded some of CP Kelco's sales as having been made at 
prices below the cost of production in the previous administrative 
review.\25\
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    \25\ See 2008-2009 Preliminary Results (unchanged in 2008-2009 
Final Results).
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C. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP for each model based on the sum of CP Kelco's 
materials and fabrication costs for the foreign like product, plus an 
amount for home market selling, general, and administrative (SG&A) 
expenses, financial expenses, and packing costs. We examined the cost 
data and determined that our quarterly cost methodology is not 
warranted and, therefore, we have applied our standard methodology of 
using annual costs based on the reported data as adjusted below. We 
relied on the COP data submitted by CP Kelco except as follows. We 
adjusted COM, in accordance with the major input rule at section 
773(f)(3) of the Act.\26\
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    \26\ See Memorandum from Angie Sepulveda, Accountant, to Neal 
Halper, Director, Office of Accounting, regarding ``Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results--CP Kelco Oy'' dated July 30, 2012 (Cost 
Calculation Memorandum)).
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    We compared the weighted-average COP of CP Kelco's home market 
sales to home market sales prices of the foreign like product (net of 
billing adjustments, discounts, any applicable movement expenses, 
direct and indirect selling expenses, and packing), as required under 
section 773(b) of the Act, in order to determine whether these sales 
had been made at prices below the COP. Based on our review of the 
record evidence, it appears that CP Kelco did not experience 
significant changes in the cost of manufacturing during the POR. 
Therefore, we followed our normal methodology of calculating an annual 
weighted-average cost.
    In determining whether to disregard home market sales made at 
prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) of the Act, whether such sales were made in 
substantial quantities within an extended period of time and whether 
such sales were made at prices which would permit recovery of all costs 
within a reasonable period of time.

D. Results of the Cost Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of CP Kelco's sales of a given model were at prices less than 
the COP, we did not disregard any below-cost sales of that model 
because these below-cost sales were not made in substantial quantities. 
Where 20 percent or more of CP Kelco's home market sales of a given 
model were at prices less than the COP, we disregarded the below-cost 
sales because such sales were made: (1) within an extended period of 
time and in ``substantial quantities'' within the POR, in accordance 
with section 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 (i.e., the 
sales were made at prices below the weighted-average per-unit COP for 
the POR). We disregarded some of CP Kelco's sales as having been made 
at prices below the cost of production in accordance with 773(b)(2)(C) 
of the Act. We used the remaining sales as the basis for determining NV 
in accordance with section 773(b)(1) of the Act.

E. Price-to-Price Comparisons

    We calculated NV based on prices to unaffiliated customers. We made 
adjustments for billing adjustments, early payment discounts, and 
rebates, where appropriate. We made deductions, where appropriate, for 
foreign inland freight, pursuant to section 773(a)(6)(B) of the Act. We 
also reduced foreign inland freight, where appropriate, by the amount 
of freight revenue paid by the customer to CP Kelco. In accordance with 
our treatment of freight revenue on U.S. sales of subject merchandise 
(see ``Export Price'' section, above), we capped the amount of freight 
revenue deducted at no greater than the amount of movement expenses in 
the home market. In addition, when comparing sales of similar 
merchandise, we made adjustments for differences in cost (i.e., 
DIFMER), where those differences were attributable to differences in 
physical characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act and section 351.411 of the Department's 
regulations. We also made adjustments for differences in circumstances 
of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Act 
and Section 351.410 of the Department's regulations. We made COS 
adjustments for imputed credit expenses. We also made an adjustment, 
where appropriate, for the CEP offset in accordance with section 
773(a)(7)(B) of the Act. See ``Level of Trade and CEP Offset'' section 
below. Finally, we deducted home market packing costs and added U.S. 
packing costs in accordance with sections 773(a)(6)(A) and (B) of the 
Act.

F. Constructed Value

    In accordance with section 773(a)(4) of the Act, we base NV on CV 
if we are unable to find a contemporaneous comparison market match of 
identical or similar merchandise for the U.S. sale. Section 773(e) of 
the Act provides that CV shall be based on the sum of the cost of 
materials and fabrication employed in making the subject merchandise, 
selling, general, and administrative expenses (SG&A expenses), profit, 
and U.S. packing costs. We calculated the cost of materials and 
fabrication for CP Kelco based on the methodology described in the COP 
section of this notice. 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. For these preliminary results, we based NV on 
CV in some instances.

Level of Trade and CEP Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we base NV on sales made in the comparison market at the 
same level of trade (LOT) as the export transaction. The NV LOT is 
based on the starting price of sales in the home market or, when NV is 
based on CV, on the LOT of the sales from which SG&A expenses and 
profit are derived. With respect to CEP transactions in the U.S. 
market, the CEP LOT is defined as the level of trade of the constructed 
sale from the exporter to the importer. See section 773(a)(7)(A) of the 
Act.
    To determine whether NV sales are at a different LOT than CEP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the customer. 
See 19 CFR 351.412(c)(2). If the comparison-market sales are at a

[[Page 47041]]

different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the Act. For CEP sales, if the NV LOT is more remote 
from the factory than the CEP LOT and there is no basis for determining 
whether the difference in the levels between NV and CEP affects price 
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the 
CEP offset provision).\27\ For CEP sales, we consider only the selling 
activities reflected in the U.S. price after the deduction of expenses 
incurred in the U.S. and CEP profit under section 772(d) of the 
Act.\28\ We expect that if the claimed LOTs are the same, the functions 
and activities of the seller should be similar. Conversely, if a party 
claims the LOTs are different for different groups of sales, the 
functions and activities of the seller should be dissimilar.\29\
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    \27\ See, e.g., Final Determination of Sales at Less Than Fair 
Value: Greenhouse Tomatoes From Canada, 67 FR 8781 (February 26, 
2002), and accompanying Issues and Decision Memorandum at Comment 8; 
see also Certain Hot-Rolled Flat-Rolled Carbon Quality Steel 
Products from Brazil; Preliminary Results of Antidumping Duty 
Administrative Review, 70 FR 17406, 17410 (April 6, 2005) (unchanged 
in final results of review, 70 FR 58683 (October 7, 2005)).
    \28\ See Micron Technology, Inc. v. United States, 243 F.3d 
1301, 1314-1315 (Fed. Cir. 2001).
    \29\ 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.
---------------------------------------------------------------------------

    CP Kelco reported two levels of trade for its U.S. sales, an EP 
level of trade (based on the selling activities associated with the 
transactions between CP Kelco Oy and its customers in the U.S.) and a 
CEP LOT (which is based on the selling activities associated with the 
transaction between CP Kelco and its affiliated importer, CP Kelco 
U.S., Inc.).\30\ We obtained information on CP Kelco's marketing 
process and selling functions along the chain of distribution between 
the producer and the customer in the U.S.\31\ Our analysis indicates 
the selling functions performed in the EP channel of distribution are 
either performed at a higher degree of intensity or are greater in 
number than the selling functions performed for CEP sales to CP Kelco 
U.S., Inc. For example, in comparing CP Kelco's selling activities, we 
find most of the reported selling functions performed in the EP channel 
of distribution are not a part of CEP transactions (i.e., sales 
negotiation, credit risk management, collection, sales promotion, 
direct sales personnel, technical support, and guarantees). For those 
selling activities performed for both EP sales and CEP sales (i.e., 
customer service, logistics, inventory maintenance, packing, and 
freight/delivery), CP Kelco reported it performed each activity at 
either the same or at a higher level of intensity in the EP channel of 
distribution, with the sole exception of the inventory maintenance 
selling function.
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    \30\ See CP Kelco's Section C Response at pages C-24 to C-25.
    \31\ See CP Kelco's Section A response at A-16 to A-37.
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    We further note that CEP sales from CP Kelco to CP Kelco U.S., 
Inc., generally occur at the beginning of the distribution chain, 
representing essentially a logistical transfer of inventory. In 
contrast, all sales made through the EP channel of distribution occur 
closer to the end of the distribution chain, involve smaller volumes. 
They also require more customer interaction and consequently the 
performance of more selling functions. Accordingly, we preliminarily 
determine that CP Kelco's EP sales and CEP sales were made at separate 
and distinct LOTs, and that the EP LOT is at a more advanced stage than 
the CEP LOT.
    In the current review, CP Kelco reported only one level of trade in 
the home market.\32\ We obtained information from CP Kelco regarding 
the marketing process and selling functions along the chain of 
distribution between the producer and the customer in the home market. 
In the home market, our analysis indicates the selling functions 
performed for home market end user customers are performed at similar 
degree of intensity and are similar in number to the selling functions 
performed for home market distributor customers. For example, in 
comparing CP Kelco's selling activities, CP Kelco reported that all of 
the selling functions performed in the home market distributor channel 
of distribution are also performed in the home market end user channel 
of distribution (i.e., sales negotiation, credit risk management, 
customer service, logistics, inventory maintenance, packing, freight/
delivery, collection, sales promotion, direct sales personnel, 
technical support, and guarantees).
---------------------------------------------------------------------------

    \32\ See CP Kelco's Section B Response at B-21.
---------------------------------------------------------------------------

    CP Kelco also reported that many selling functions are performed at 
the same level of intensity for all three channels of distribution 
(i.e., customer service, logistics, collection, sales promotion, and 
guarantees). Further, CP Kelco reported that the credit risk management 
and packing selling functions are performed at the same level of 
intensity for both the EP and home market distributor channel of 
distribution. CP Kelco reported differences in the level of intensity 
between the home market distributor and end user channels of 
distribution and the EP channel of distribution for the inventory 
maintenance, packing, direct sales personnel, and technical support 
selling functions. However, where there were differences reported by CP 
Kelco, these differences were minor.
    While we found differences in the levels of intensity performed for 
some of these functions between the home market and EP levels of trade, 
such differences are minor and do not establish distinct and separate 
levels of trade. We further note that home market and EP sales both 
occur closer to the end of the distribution chain and involve similar 
volumes; they require similar customer interaction and consequently the 
performance of similar selling functions at similar levels of 
intensity. Accordingly, we preliminarily determine CP Kelco's home 
market and EP sales were made at the same LOT and no LOT adjustment is 
warranted for the EP sales.
    CP Kelco claims that it did not make home market sales at a LOT 
comparable to the CEP LOT. Therefore, CP Kelco requests the Department 
make a CEP offset.\33\ Accordingly, we compared the NV LOT (based on 
the selling activities associated with the transactions between CP 
Kelco and its customers in the home market) to the CEP LOT (which is 
based on the selling activities associated with the transaction between 
CP Kelco and its affiliated importer, CP Kelco U.S., Inc.) Our analysis 
indicates the selling functions performed for home market customers are 
either performed at a higher degree of intensity or are greater in 
number than the selling functions performed for sales to CP Kelco U.S., 
Inc. For example, in comparing CP Kelco's selling activities, we find 
most of the reported selling functions performed in the home market are 
not a part of CEP transactions (i.e., sales negotiations, credit risk 
management, intermediate warehousing, collection, sales promotion, 
direct sales personnel, technical support, guarantees, and discounts). 
For those selling activities performed for both home market sales and 
CEP sales (i.e., customer service, logistics, inventory maintenance, 
packing, and freight/

[[Page 47042]]

delivery), CP Kelco reported it performed each activity at either the 
same or at a higher level of intensity in one or both of the home 
market channels of distribution. For both the packing and the freight/
delivery selling functions, each function is performed at the same 
level of intensity in one home market channel of distribution, but at a 
lower level of intensity in the other home market channel of 
distribution.
---------------------------------------------------------------------------

    \33\ See CP Kelco's Section A Response at A-33 to A-34.
---------------------------------------------------------------------------

    We further note that CEP sales from CP Kelco to CP Kelco U.S., 
Inc., generally occur at the beginning of the distribution chain, 
representing essentially a logistical transfer of inventory. In 
contrast, all sales in the home market occur closer to the end of the 
distribution chain, involve smaller volumes. They also require more 
customer interaction and consequently the performance of more selling 
functions. Based on the foregoing, we conclude that the NV LOT is at a 
more advanced stage than the CEP LOT.
    Because we found the home market and U.S. CEP sales were made at 
different LOTs, we examined whether a LOT adjustment or a CEP offset 
may be appropriate in this review. As we found only one LOT in the home 
market, it was not possible to make a LOT adjustment to home market 
sales, because such an adjustment is dependent on our ability to 
identify a pattern of consistent price differences between the home 
market sales on which NV is based and home market sales at the LOT of 
the U.S. sales. See 19 CFR 351.412(d)(1)(ii). Furthermore, we have no 
other information that provides an appropriate basis for determining a 
LOT adjustment. Because the data available do not form an appropriate 
basis for making a LOT adjustment, and because the NV LOT is at a more 
advanced stage of distribution than the CEP LOT, we have made a CEP 
offset to NV in accordance with section 773(a)(7)(B) of the Act.

Currency Conversions

    CP Kelco reported certain U.S. sales prices and certain U.S. 
expenses and adjustments in Euros. Therefore, we made Euro-U.S. dollar 
currency conversions, where appropriate. Conversions were based on the 
exchange rates in effect on the dates of the U.S. sales, as certified 
by the Federal Reserve Board, in accordance with section 773A(a) of the 
Act.

Preliminary Results of Review

    As a result of our review, we preliminarily find the following 
weighted-average dumping margin exists for the period July 1, 2010, 
through June 30, 2011:

------------------------------------------------------------------------
                                                             Weighted
                  Manufacturer/exporter                   average margin
                                                            (percentage)
------------------------------------------------------------------------
CP Kelco................................................            5.86
------------------------------------------------------------------------

    The Department intends to disclose the calculations used in our 
analysis to parties in this review within five days of the date of 
publication of this notice in accordance with Section 351.224(b) of the 
Department's regulations.\34\ An interested party may. Interested 
parties, who wish to request a hearing, or to participate if one is 
requested, must submit a written request to the Assistant Secretary for 
Import Administration, U.S. Department of Commerce, filed 
electronically using Import Administration's Antidumping and 
Countervailing Duty Centralized Electronic Service System (IA ACCESS). 
An electronically filed document must be received successfully in its 
entirety by the Department's electronic records system, IA ACCESS, by 5 
p.m. Eastern Time within 30 days after the date of publication of this 
notice.\35\ Requests should contain the party's name, address, and 
telephone number, the number of participants, and a list of the issues 
to be discussed. If a request for a hearing is made, the Department 
will inform parties of the scheduled date for the hearing which will be 
held at the U.S. Department of Commerce, 14th Street and Constitution 
Avenue NW., Washington, DC 20230, at a time and location to be 
determined.\36\ Parties should confirm by telephone the date, time, and 
location of the hearing.
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    \34\
    \35\ See 19 CFR 351.303(b).
    \36\ See 19 CFR 351.310.
---------------------------------------------------------------------------

Comments

    Interested parties are invited to comment on the preliminary 
results of this review. The Department will consider case briefs filed 
by interested parties within 30 days after the date of publication of 
this notice in the Federal Register.\37\ Interested parties may file 
rebuttal briefs, limited to issues raised in the case briefs. The 
Department will consider rebuttal briefs filed not later than five days 
after the time limit for filing case briefs.\38\ Parties who submit 
arguments are requested to submit with each argument a statement of the 
issue, a brief summary of the argument, and a table of authorities 
cited. The Department intends to issue the final results of this 
administrative review, including the results of our analysis of issues 
raised in the written comments, within 120 days of publication of these 
preliminary results in the Federal Register.
---------------------------------------------------------------------------

    \37\ See 19 CFR 351.309(c).
    \38\ See 19 CFR 351.309(d).
---------------------------------------------------------------------------

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Upon completion of this 
administrative review, pursuant to section 351.212(b) of the 
Department's regulations, the Department will calculate an assessment 
rate on all appropriate entries. CP Kelco has reported entered values 
for all of its sales of subject merchandise to the U.S. during the POR. 
If CP Kelco's weighted-average dumping margin is above de minimis in 
the final results of this review, we will calculate importer-specific 
duty assessment rates on the basis of the ratio of the total amount of 
antidumping duties calculated for the importer's examined sales to the 
total entered value of the examined sales of that importer, in 
accordance with section 351.212(b)(1) of the Department's 
regulations.\39\ These rates will be assessed uniformly on all entries 
the respective importers made during the POR. The Department will issue 
appropriate assessment instructions directly to CBP fifteen days after 
publication of the final results of review.
---------------------------------------------------------------------------

    \39\ In these preliminary results, the Department applied the 
assessment rate calculation method adopted in Final Modification, 
i.e., on the basis of monthly average-to-average comparisons using 
only the transactions associated with that importer with offsets 
being provided for non-dumped comparisons.
---------------------------------------------------------------------------

    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003.\40\ This clarification will apply to entries of subject 
merchandise during the POR produced by the respondent for which it did 
not know its merchandise was destined for the United States. In such 
instances, we will instruct CBP to liquidate un-reviewed entries at the 
all-others rate if there is no rate for the intermediate company(ies) 
involved in the transaction.
---------------------------------------------------------------------------

    \40\ See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003).
---------------------------------------------------------------------------

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
publication of the notice of final results of this administrative 
review for all shipments of CMC from Finland entered, or withdrawn from 
warehouse, for consumption on or after the date of publication as 
provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate 
for CP Kelco will be the rate established in the final results of this 
administrative review; (2) for merchandise exported by manufacturers

[[Page 47043]]

or exporters not covered in this review but covered in a prior segment 
of the proceeding, the cash deposit rate will continue to be the 
company-specific rate published for the most recent period; (3) if the 
exporter is not a firm covered in this review, a prior review, or the 
original 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; (4) if neither the exporter nor the 
manufacturer is a firm covered in this review, the cash deposit rate 
will be the all-others rate of 6.65 percent ad valorem established in 
the LTFV investigation.\41\ These cash deposit requirements, when 
imposed, shall remain in effect until further notice.
---------------------------------------------------------------------------

    \41\ See Notice of Antidumping Duty Orders: Purified 
Carboxymethylcellulose from Finland, Mexico, the Netherlands and 
Sweden, 70 FR 39734 (July 11, 2005).
---------------------------------------------------------------------------

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double the antidumping duties.

Authority and Publication

    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 30, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2012-19313 Filed 8-6-12; 8:45 am]
BILLING CODE 3510-DS-P