01-775. Electrolytic Manganese Dioxide From Japan: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of antidumping duty administrative review.

SUMMARY:

Based on a request by a Japanese producer, Tosoh Corporation, the Department of Commerce is conducting an administrative review of the antidumping duty order on electrolytic manganese dioxide from Japan. This review covers imports of electrolytic manganese dioxide from one producer/exporter during the period of review, April 1, 1999, through December 31, 1999.

We have preliminarily determined that sales by Tosoh Corporation have not been made below normal value. If these preliminary results are adopted in our final results of administrative review, we will instruct the Customs Service to liquidate without regard to antidumping duties all entries of electrolytic manganese dioxide from Tosoh Corporation during the period of review.

We invite interested parties to comment on these preliminary results.

EFFECTIVE DATE:

January 10, 2001.

FOR FURTHER INFORMATION CONTACT:

Karin Ryerson or Richard Rimlinger, Import Administration, International Trade Administration, U.S. Department of Commerce, Washington, D.C. 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department of Commerce's (the Department's) regulations are to 19 CFR part 351 (2000).

Background

On April 17, 1989, the Department published in the Federal Register (54 FR 15243) the antidumping duty order on electrolytic manganese dioxide (EMD) from Japan. On April 12, 2000, the Department published in the Federal Register a notice advising of the opportunity to request an administrative review of this order for the period April 1, 1999, through December 31, 1999 (65 FR 19736). Tosoh Corporation, a Japanese producer, requested an administrative review on April 27, 2000. In response to this request, the Department published a notice of initiation of administrative review on June 2, 2000, in accordance with 19 CFR 351.213(b) (65 FR 35320. The Department is conducting this administrative review in accordance with section 751 of the Act.

On April 20, 2000, the International Trade Commission (ITC), pursuant to section 751(c) of the Act, determined that revocation of the antidumping order on EMD from Japan would not be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. As a result of this determination the Department revoked the antidumping order on EMD from Japan. The Department published the revocation in the Federal Register on May 31, 2000, with an effective date of January 1, 2000 (65 FR 34661). Therefore, the period covered by this administrative review is April 1, 1999, through December 31, 1999, rather than April 1, 1999, through March 31, 2000.

Scope of Review

Imports covered by this review are shipments of EMD from Japan. EMD is manganese dioxide (MnO2) that has been refined in an electrolysis process. The subject merchandise is an intermediate product used in the production of dry-cell batteries. EMD is sold in three physical forms, powder, chip or plate, and two grades, alkaline and zinc-chloride. EMD in all three forms and both grades is included in the scope of the order. This merchandise is currently classifiable under item number 2820.10.0000 of the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS number is provided for convenience and customs purposes. It is not determinative of the products subject to the order. The written product description remains dispositive.

Constructed Export Price

In calculating the price to the United States, we used constructed export price (CEP) as defined in section 772(b) of the Act because Tosoh Corporation makes its sales of the subject merchandise through an affiliated company in the United States. We calculated CEP based on the packed, delivered price to an unaffiliated purchaser in the United States. We made deductions for any movement expenses in accordance with section 772(c)(2)(A) of the Act.

In accordance with section 772(d)(1) of the Act and the Statement of Administrative Action (SAA), H. Doc. 103-316, vol. 1, 822-825 (1994), we calculated the CEP by deducting selling expenses associated with economic activities occurring in the United States, including direct selling expenses and indirect selling expenses.

With respect to CEP profit, section 772(d)(3) of the Act requires the Department, in determining CEP, to identify and deduct from the starting price in the U.S. market an amount for profit allocable to selling and further-manufacturing activities in the United States. Section 772(f) of the Act provides the rule for determining the amount of CEP profit to deduct from the CEP starting price. Since we do not have any cost information to calculate CEP profit in this review, we determined pursuant to subsection 772(f)(2)(D), that the best available sources of profit information are the 1999 financial statements which the respondent and its U.S. affiliate submitted in their responses to our questionnaires. See Electrolytic Manganese Dioxide from Japan—Tosoh Corporation, Analysis Memo dated December 18, 2000. We made adjustments, where appropriate, for domestic inland freight, warehousing expenses, international freight, and brokerage and handling in accordance with section 772(c)(2)(A) of the Act. In accordance with 19 CFR 351.401(i), we used the invoice date as the date of sale for the U.S. market.

Finally, in accordance with section 772(d)(1)(B) of the Act, we made an additional adjustment to CEP. Because of the business-proprietary nature of the adjustment, please see our December 18, 2000, Analysis Memo.

Normal Value

In order to determine whether there is a sufficient volume of sales in the home market to serve as a basis for calculating normal value, we compare 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) of the Act. Because the aggregate volume of home-market sales of the foreign like product is greater than five percent of the aggregate volume of U.S. sales of the subject merchandise, we determined that the home market provides a viable basis for calculating normal value. Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we based normal value on the price at which the foreign like product was first sold to unaffiliated customers for consumption in the exporting country in the usual commercial quantities and in the ordinary course of trade. We matched CEP to normal value at the same level of trade in the home market and made no level-of-trade adjustment (see Level of Trade discussion below).

We calculated monthly weighted-average normal values based on the packed, delivered prices of the foreign like product to unaffiliated purchasers in the exporting country. Where applicable, we made adjustments for differences in packing and for movement expenses in accordance with sections 773(a)(6)(A) and (B) of the Act. We also made adjustments for differences in circumstances of sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. With respect to our comparisons to CEP, we made COS adjustments by deducting home-market direct selling expenses from normal value.

Level of Trade

To the extent practicable, we determine normal value for sales at the same level of trade as that in the United States in accordance with section 773(a)(1)(B) of the Act. The normal value level of trade is that of the starting-price for sales in the home market. See 19 CFR 351.412(c)(iii). For CEP sales, the U.S. level of trade is the level of the constructed sale from the exporter to the importer.

To determine whether home-market sales are at a different level of trade than those in the United States, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. Tosoh Corporation reported two channels of distribution (trading company/distributor and end user) in the home market. We examined the differences in selling activities Tosoh Corporation reported in its responses to our requests for information. We found that the selling activities associated with sales to trading companies/distributors were not fewer and did not differ from activities associated with sales to end-users in terms of various selling activities. For example, Tosoh Corporation reported that under distribution channel 1, (sales to trading company/distributor) and channel 2 (sales to end users), it provided sales strategy and information on market potential and customers. In addition, Tosoh Corporation reported that it provided selling activities such as scheduling production and delivery, analyzing and producing orders, and pricing for both channels 1 and 2. According to the respondent's submission, there were no differences between the two channels in terms of technical service, administrative support, and freight/delivery to customer. Based on these sales activities, we found that the two home-market channels constitute one level of trade.

Because Tosoh Corporation made CEP sales in the United States, we identified the level of trade based on the price after the deduction of expenses and profit under section 772(d) of the Act and pursuant to 19 CFR 351.412(c)(ii). As a result of our examination of the record, we found that the respondent's information did not indicate that there were significant differences between the selling activities associated with the home-market level of trade and those associated with the CEP level of trade. Moreover, the respondent indicated in its June 30, 2000, submission that it was not requesting a level-of-trade adjustment. Therefore, we have determined that the U.S. sale was made at the same level of trade as the home-market level of trade and, therefore, no level-of-trade or CEP-offset adjustment was necessary.

Preliminary Results of Review

As a result of our review, we preliminarily determine a weighted-average dumping margin of 0.00 percent for the period April 1, 1999, through December 31, 1999, for Tosoh Corporation.

Any interested party may request a hearing within 30 days of publication of this notice. Hearing requests should specify the number of participants and provide a list of the issues to be discussed. Any hearing, if requested, will be held 40 days after the date of publication of this notice, or the first workday thereafter. Issues raised in hearings will be limited to those raised in the respective case and rebuttal briefs. Interested parties may submit case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than 37 days after the date of publication of this notice.

Parties who submit arguments are requested to submit with the arguments (1) a table of contents, (2) a statement of the issue, (3) a list of authorities used, and (4) an executive summary of issues. Executive summaries should be limited to five pages total, including footnotes.

All memoranda to which we refer in this notice can be found in the public reading room located in the Central Records unit, room B-099 of the main Department of Commerce building.

The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs or hearing. The Department will issue final results of this review within 120 days of publication of these preliminary results.

Upon completion of the final results of this administrative review, if there is no change from our preliminary results, we will instruct the Customs Service to liquidate all appropriate entries without regard to antidumping duties.

Effective January 1, 2000, this order was revoked. (65 FR 26570, May 8, 2000). As a result, no cash deposits of estimated antidumping duties are required on imports of EMD from Japan after January 1, 2000.

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 determination in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: January 2, 2001.

Troy H. Cribb,

Assistant Secretary for Import Administration.