[Federal Register Volume 63, Number 26 (Monday, February 9, 1998)]
[Notices]
[Pages 6526-6531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3210]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-583-824]
Polyvinyl Alcohol From Taiwan: 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.
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SUMMARY: In response to requests by the petitioner, Air Products and
Chemicals, Inc., and by two manufacturers/exporters and an importer of
subject merchandise, the Department of Commerce is conducting an
administrative review of the antidumping duty order on polyvinyl
alcohol from Taiwan. The period of review is May 15, 1996, through
April 30, 1997.
We have preliminarily found that sales of subject merchandise have
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 assess antidumping duties based on the difference
between the export price or constructed export price and the normal
value.
Interested parties are invited to comment on these preliminary
results. Parties who submit case briefs in this proceeding should
provide a summary of the arguments not to exceed five pages and a table
of statutes, regulations, and cases cited.
EFFECTIVE DATE: February 9, 1998.
FOR FURTHER INFORMATION CONTACT: Everett Kelly, at (202) 482-4194; or
Sunkyu Kim, at (202) 482-2613, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, Washington, D.C. 20230.
SUPPLEMENTARY INFORMATION:
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930, as amended
(``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 the provisions
codified at 19 CFR Part 353 (April 1997). Where appropriate, references
are made to the Department's final regulations at 19 CFR Part 351 (62
FR 27926), as a statement of current departmental practice.
Case History
On May 14, 1996, the Department published in the Federal Register
an antidumping duty order on polyvinyl alcohol from Taiwan. See 61 FR
24286. On May 2, 1997, the Department published a notice providing an
opportunity to request an administrative review of this order for the
period May 15, 1996, through April 30, 1997 (62 FR 24081). On May 23,
1997, we received a request for an administrative review from E.I. du
Pont de Nemours & Co. (``DuPont''). We received requests for a review
from Chang Chun Petrochemical (``Chang Chun'') and Perry Chemical
Corporation (``Perry'') on May 30, 1997. The petitioner also requested
a review of Chang Chun and Perry on May 30, 1997. We published a notice
of initiation of this review on June 19, 1997 (62 FR 33394).
On June 23, 1997, we issued an antidumping questionnaire to the
three companies. The Department received responses from Chang Chun,
DuPont and Perry in August 1997. We issued supplemental questionnaires
to these companies in October 1997. Responses to these questionnaires
were received in November 1997.
Although we initiated this review on three respondents, as a result
of facts examined during the course of the review, we are now covering
only two respondents, Chang Chun and DuPont (see Treatment of Sales of
Tolled Merchandise section of the notice below).
On October 24, 1997, the petitioner requested that we find DuPont
and Perry to be affiliated with Chang Chun. Further, the petitioner
argued that for purposes of calculating a dumping margin, DuPont and
Perry should be collapsed with Chang Chun. Alternatively, the
petitioner argued that if the Department does not collapse DuPont and
Perry with Chang Chun, the Department must consider evidence which
demonstrates that DuPont's and Perry's sales to their respective third-
country markets during the POR were made at prices below the cost of
production.
With regard to affiliation, we do not find that either Perry or
DuPont is affiliated with Chang Chun (see Treatment of Sales of Tolled
Merchandise section of the notice below for further discussion.) With
respect to the petitioner's allegation of sales below the cost of
production against Perry, we note that because the Department has
determined that Chang Chun, and not Perry, is the producer of the
tolled PVA imported by Perry under the tolling agreement with Chang
Chun, the issue of whether Perry's third-country market sale was below
its cost of production is moot for purposes of our analysis. With
regard to Dupont, based on our analysis of the petitioner's allegation,
we determine that there are reasonable grounds to believe or suspect
that DuPont sold PVA to Australia at prices which were below COP (see
Memorandum from Team to Office Director, dated January 30, 1998).
Accordingly, we are incorporating a sales-below-the-cost-of-production
analysis for DuPont in our preliminary margin calculation.
Scope of Review
The product covered by this review is polyvinyl alcohol (``PVA'').
PVA is a dry, white to cream-colored, water-soluble synthetic polymer.
Excluded from this review are PVAs covalently bonded with
acetoacetylate, carboxylic acid, or sulfonic acid uniformly present on
all polymer chains in a concentration equal to or greater than two mole
percent, and PVAs covalently bonded with silane uniformly present on
all polymer chains in a concentration equal to or greater than one-
tenth of one mole percent. PVA in fiber form is not included in the
scope of this review.
The merchandise under review is currently classifiable under
subheading 3905.30.00 of the Harmonized Tariff Schedule of the United
States (``HTSUS''). Although the HTSUS subheading is provided for
convenience and customs purposes, our written description of the scope
is dispositive.
Treatment of Sales of Tolled Merchandise
DuPont and Perry sold in the U.S. and third-country markets subject
merchandise tolled by the Taiwan producer, Chang Chun. Both DuPont and
Perry claim that they are the manufacturer of the tolled merchandise
under the Department's newly articulated treatment of subcontractors in
tolling arrangements. See 19 CFR 353.401(h). Accordingly, each company
claims that it is entitled to its own dumping rate.
[[Page 6527]]
Under section 351.401(h) of the new regulations, which, although
not legally in effect for this administrative review, are, at the time
of this request for review, an expression of the Department's practice,
the Department will not consider a toller or subcontractor to be a
manufacturer or producer where the toller or subcontractor does not
acquire ownership of the finished product and does not control the
relevant sale of the subject merchandise and the foreign like product.
See also Antidumping Duties; Countervailing Duties; Final Rule, 62 FR
27296, 27411 (legally effective only for segments of the proceeding
initiated based on requests filed after June 18, 1997, but nevertheless
a restatement of the Department's practice).
In determining whether a company that uses a subcontractor in a
tolling arrangement is a producer under 351.401(h), we will look at all
relevant facts surrounding a tolling agreement.
DuPont claims that under the tolling arrangement with Chang Chun,
DuPont is the producer of the PVA at issue. DuPont is a chemical
producer. It produces the main input, vinyl acetate monomer (``VAM''),
which it then ships to Taiwan. Under contract with Chang Chun, the VAM
is then converted into subject merchandise, after which DuPont exports
the PVA back to the United States and to third-country markets. DuPont
has had a tolling agreement with Chang Chun since prior to the original
less-than-fair-value (``LTFV'') investigation of PVA.
Based on this evidence, we determine that DuPont is the
manufacturer of the tolled merchandise, and hence the appropriate
respondent.
Perry has asserted that it is the producer of the PVA it imported
from Taiwan during the period covered by this review, claiming it meets
the requirements set out in 351.401(h) of the Department's new
regulations. However, based on a review of the facts, we preliminarily
determine that the tolling arrangement between Perry and Chang Chun
does not transform Perry into the producer of the PVA at issue.
Perry has been an importer and reseller of PVA produced and
exported by Chang Chun since 1978. At no time has Perry been in the
business of producing or manufacturing PVA or any other chemical. Nor
has Perry, prior to the tolling agreement with Chang Chun, been in the
business of subcontracting any kind of chemical production or
processing. Additionally, Perry does not have any production
facilities. (See January 30, 1998, Perry Verification Report at page
8.)
After the conclusion of the LTFV investigation in 1996, when Chang
Chun was found to be dumping at an estimated rate of 19.21 percent,
Perry decided to pursue a tolling arrangement. Perry then negotiated
the tolling agreement with Chang Chun, which resulted in the agreement
in effect during this review. Perry began purchasing VAM, the main
input in producing PVA, through a U.S. trading company. The trading
company, in turn, purchased the VAM from a Taiwan producer of VAM
affiliated with Chang Chun, a fact known to Perry. (See Verification
Report at page 8.) Thus, both the primary input and the final product
are produced by Chang Chun and its affiliate.
Based on these facts, we find that Perry is not the producer of the
PVA it imports into the United States. Prior to the tolling agreement,
Perry had never, as part of its normal business practice, been engaged
in any research and development (``R&D''), production, processing or
subcontracting of production. Moreover, there is no evidence that
suggests that Perry's decision to enter into a tolling arrangement with
Chang Chun was for the purpose of expanding its operations to begin
producing PVA or any other chemical. To the contrary, after the tolling
agreement, Perry's normal course of conducting business has not
substantively changed; it remains for all intents and purposes an
importer and reseller. The only change resulting from the tolling
arrangement is that now Perry makes two payments to Chang Chun for
Chang Chun's PVA--one for the VAM and one for the conversion of VAM
into PVA. This minor change in the contractual relationship between
Perry and Chang Chun is insufficient to conclude that Perry has moved
from reselling to producing.
The facts presented in this review demonstrate that Perry's
circumstance is fundamentally different from that of DuPont. While
DuPont is a chemical producer in its own right with substantial
production and R&D facilities, Perry has no production or R&D
facilities. DuPont has had a tolling agreement with Chang Chun for
several years before the antidumping duty order on PVA from Taiwan was
issued, while Perry entered into its contract with Chang Chun after the
LFTV investigation. DuPont produces the VAM which it exports to Taiwan
where Chang Chun processes it into PVA in accordance with DuPont's
instructions; Perry purchased VAM produced by an affiliate of Chang
Chun. Based on these facts, we find that DuPont is the producer of
Taiwan PVA, through a subcontract with Chang Chun, and Perry is not a
producer of subject merchandise. See Chrome-Plated Lug Nuts From
Taiwan, 56 FR 36130, 131 (1991).
Because we have preliminarily determined that Perry is not a
producer of PVA, Perry is treated in this review as an importer and
reseller. Chang Chun is the producer and original seller. Because Chang
Chun had knowledge that the PVA it sold to Perry was for export to the
United States, we have determined the export price based on the sale
from Chang Chun to Perry. Normal value was determined using Chang
Chun's home market price or constructed value.
In considering a request from Perry for a new shipper review,
(November 27, 1996), the Department determined that Perry was not a
``new shipper'' because it was affiliated with Chang Chun through its
tolling contract. In this review, we have reexamined this issue and
have preliminarily determined that neither Perry nor DuPont is
affiliated with Chang Chun. The tolling contracts do not establish
legal or operational control over Chang Chun within the meaning of
section 771(33)(G) of the Act. Rather, the tolling agreements set out
contractual obligations under which Chang Chun has agreed to produce
PVA for Perry and DuPont at the specified grades in specific quantities
at specified times. Such agreements do not grant Perry or DuPont
control over the manner in which Chang Chun operates (e.g., Perry and
DuPont have no ability to direct or restrain financial or operational
decisions such as which suppliers Chang Chun must buy from, prices
Chang Chun will charge or what other customers Chang Chun will serve).
Therefore, it cannot be said that, based solely on the tolling
agreements, Perry or DuPont is affiliated with Chang Chun.
Verification
As provided in Section 782(i) of the Act, we verified information
provided by the respondents. We used standard verification procedures,
including on-site inspection of the respondents' facilities, the
examination of relevant sales and financial records, and selection of
original documentation containing relevant information. Based on
verification, we made certain changes to the data in the sales listings
submitted by the respondents used to calculate the preliminary margins
(see Calculation Memorandum to File dated February 2, 1997). Our
verification results are outlined in the verification reports placed on
file in the Central
[[Page 6528]]
Records Unit (CRU) in room B-099 of the Main Commerce Building.
Fair Value Comparisons
To determine whether sales of the subject merchandise by the
respondents to the United States were made at below normal value, we
compared, where appropriate, the export (``EP'') and constructed export
price (``CEP'') to the normal value (``NV'') as described below. In
accordance with section 777A(d)(2) of the Act, we compared, where
appropriate, the EPs and CEPs of individual transactions to the monthly
weighted-average price of sales of the foreign like product.
Export Price and Constructed Export Price
For the price to the United States, we used EP or CEP as defined in
sections 772(a) and 772(b) of the Act, as appropriate.
We made company-specific adjustments as follows:
Chang Chun
In accordance with sections 772(a) and (c) of the Act, we
calculated an EP for all of Chang Chun's sales, since the merchandise
was sold to the first unaffiliated purchaser in the United States prior
to importation, and CEP was not otherwise warranted based on the facts
of record. We calculated EP based on the packed CIF price to
unaffiliated purchasers in, or for exportation to, the United States.
We made deductions from the starting price for movement expenses in
accordance with section 772(c)(2)(A) of the Act; these included
domestic inland freight, foreign brokerage and handling, international
freight, and marine insurance.
DuPont
We calculated EP for some of DuPont's sales where the merchandise
was sold to the first unaffiliated purchaser in the United States prior
to importation. We calculated CEP for the remaining sales of
merchandise, which were made in the United States after importation.
We based EP and CEP on packed FOB or delivered prices to
unaffiliated purchasers in the United States. As appropriate, we made
deductions for discounts and rebates. We also made deductions, where
appropriate, for movement expenses in accordance with section
772(c)(2)(A) of the Act; these included U.S. brokerage and handling
expenses, U.S. Customs duties (which include harbor maintenance and
merchandise processing fees), and U.S. inland freight expenses (freight
from port to warehouse and freight from warehouse to the customer).
In accordance with section 772(d)(1) of the Act, we deducted from
CEP selling expenses associated with DuPont's economic activities
occurring in the United States, including direct selling expenses and
indirect selling expenses. We also deducted from CEP an amount for
profit and further manufacturing costs in accordance with section
772(d)(3) and section 772(d)(2) of the Act.
Normal Value
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,
we compared each 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. For Chang
Chun, we determined that the quantity of foreign like product sold in
the exporting country was sufficient to permit a proper comparison with
the sales of the subject merchandise to the United States because Chang
Chun had sales in its home market which were greater than five percent
of its sales in the U.S. market. Therefore, in accordance with section
773(a)(1) of the Act, we based NV on sales in Taiwan.
For DuPont, in accordance with section 773(a)(1) of the Act, and
consistent with our practice, we based NV on the prices at which the
foreign like products were first sold for consumption in the
respondent's largest third-country market (i.e., Australia) because
DuPont did not have sales of foreign like product in the exporting
country during the POR and because Australia was a viable market with
respect to DuPont's sales of PVA.
We made company-specific adjustments as follows:
Chang Chun
We calculated NV based on packed, FOB or delivered prices to
unaffiliated purchasers in Taiwan. We made adjustments for differences
in packing in accordance with section 773(a)(6)(A) of the Act. We also
made adjustments, where appropriate, for movement expenses consistent
with section 773(a)(6)(B) of the Act; these included inland freight
from plant to customer. In addition, we made adjustments for
differences in cost attributable to differences in physical
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii)
of the Act, as well as for differences in circumstances of sale
(``COS'') in accordance with section 773(a)(6)(C)(iii) of the Act and
19 CFR 353.56. We made COS adjustments by deducting direct selling
expenses incurred for home market sales (i.e., credit expenses) and
adding U.S. direct selling expenses (i.e., credit expenses and bank
charges).
DuPont
We calculated NV based on packed delivered prices to unaffiliated
purchasers in Australia. We made adjustments for movement expenses
(i.e., brokerage and handling fees) consistent with section
773(a)(6)(B) of the Act. We disallowed DuPont's claim for an inland
freight expense from Australian port to warehouse (INLFPWT) because the
company failed to provide support documentation for the claimed amount
at verification. In addition, we made adjustments for differences in
cost attributable to differences in physical characteristics of the
merchandise pursuant to section 773(a)(6)(C)(ii) of the Act, as well as
for differences in COS in accordance with section 773(a)(6)(C)(iii) of
the Act and 19 CFR 353.56. We made COS adjustments by deducting direct
selling expenses incurred for third-country market sales and adding
U.S. direct selling expenses, where appropriate. Since DuPont was
unable to separate packing expenses from its reported tolling costs, we
made no adjustment for a difference in packing expenses. As discussed
below in the Level of Trade section, we allowed a CEP offset for
comparisons made at different levels of trade. To calculate the CEP
offset, we deducted from NV the third-country market indirect selling
expenses, capped by the amount of the indirect selling expenses
deducted in calculating the CEP under section 772(d)(1)(D) of the Act.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (``LOT'') as the EP or CEP transaction. The NV
LOT is that of the starting-price sales in the comparison market or,
when NV is based on constructed value, that of the sales from which we
derive selling, general and administrative expenses and profit. For EP,
the LOT is also the level of the starting-price sale, which is usually
from exporter to importer. For CEP, it is the level of the constructed
sale from the exporter to the importer.
To determine whether NV sales are at a different LOT than EP or
CEP, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and
[[Page 6529]]
the unaffiliated customer. If the comparison-market sales are at a
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 an LOT adjustment under section
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is
more remote from the factory than the CEP level 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). See, Notice of Final Determination
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel
Plate from South Africa, 62 FR 61731 (November 19, 1997).
With respect to Chang Chun, Chang Chun reported one channel of
distribution for its U.S. and home market sales. Based on our analysis
of the selling functions, we found that the selling activities in both
the home market and the United States were not different. Therefore, we
have found that sales in both markets are at the same LOT and
consequently no LOT adjustment is warranted.
With respect to DuPont, DuPont reported one customer category and
one channel of distribution for its third-country market sales. For its
sales to the United States, it reported three customer categories and
three channels of distribution corresponding to each customer category.
Based on our analysis, we found that the three U.S. channels of
distribution did not differ with respect to selling activities. Similar
services, such as freight and delivery, inventory maintenance and sales
support activities, were offered to all or some portion of customers in
each channel. Based on this analysis, we find that the three U.S.
channels of distribution comprise a single level of trade.
DuPont reported both EP and CEP sales in the U.S. market. We noted
that EP sales involved basically the same selling functions associated
with the third-country market sales. Therefore, based upon this
information, we determined that the level of trade for all EP sales is
the same as that of the third-country sales, and thus no LOT adjustment
is warranted.
For CEP sales, based on our analysis, after the section 772(d)
deductions, we find that there are no selling activities reflected in
the CEP price, as the CEP is exclusive of all selling expenses. In
contrast, the NV sales prices include the indirect selling expenses
attributable to selling activities such as sales support functions.
Accordingly, we have concluded that CEP is at a different level of
trade from the third-country market level of trade.
We then examined whether a LOT adjustment or CEP offset may be
appropriate. In this case, DuPont only sold at one LOT in the third-
country market; therefore, there is no information available to
determine a LOT adjustment between LOTs with respect to the foreign
like product. Further, we do not have information which would allow us
to examine pricing patterns based on respondent's sales of other
products, and there are no other respondents or other record
information on which such an analysis could be based. Accordingly,
because the data available do not provide an appropriate basis for
making a LOT adjustment, but the LOT in the third-country is at a more
advanced stage of distribution than the LOT of the CEP, we made a CEP
offset adjustment in accordance with section 773(a)(7)(B) of the Act.
Cost of Production Analysis
As stated above, based on a timely allegation filed by the
petitioner, the Department initiated a cost of production investigation
of DuPont to determine whether sales were made at prices below the COP.
For Chang Chun, because we disregarded sales below the COP in the last
completed segment of the proceeding (i.e., the less-than-fair-value
investigation), we had reasonable grounds to believe or suspect that
sales of the foreign product under consideration for the determination
of NV in this review may have been made at prices below the COP, as
provided by section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to
section 773(b)(1) of the Act, we initiated a COP investigation of sales
by Chang Chun in the home market.
We conducted the COP analysis described below.
A. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated the
weighted-average COP, by grade, based on the sum of the cost of
materials, fabrication and general expenses, and packing costs. For
Chang Chun, we relied on the submitted COPs.
Chang Chun purchased a major input (i.e., VAM) for PVA from an
affiliated party. Section 773(f)(3) of the Act indicates that, if
transactions between affiliated parties involve a major input, then the
Department may value the major input based on the COP if the cost is
greater than the amount (higher of transfer price or market price) that
would be determined under section 773(f)(2). Section 773(f)(3) applies
if the Department ``has reasonable grounds to believe or suspect that
an amount represented as the value of such input is less than the COP
of such input.'' The Department generally finds that such ``reasonable
grounds'' exist where it has initiated a COP investigation of the
subject merchandise.
Because a COP investigation is being conducted in this case, the
Department requested in its Section D questionnaire that Chang Chun
provide cost of production information for VAM. That cost information
was provided by Chang Chun in its Section D response. For purposes of
our analysis, we used the per-unit costs as reported by Chang Chun,
which included the cost of VAM based on the highest of the transfer
price, the market price, or its affiliate's cost of production.
For DuPont, we calculated the weighted-average COP based on the sum
of its cost of producing VAM and the tolling fee paid to Chang Chun and
SG&A expenses. We recalculated DuPont's general and administrative
expenses based on verification findings. See Verification Report at
page 18.
B. Test of Home Market and Third-Country Comparison Market Sales Prices
We compared the weighted-average COP for each respondent, adjusted
where appropriate, to the comparison market sales of the foreign like
product as required under section 773(b) of the Act, in order to
determine whether these sales had been made at prices below the COP
within an extended period of time in substantial quantities, and
whether such prices were sufficient to permit the recovery of all costs
within a reasonable period of time. On a grade-specific basis, we
compared the revised COP to the comparison market prices, less any
applicable movement charges, discounts, rebates, commissions and other
direct and indirect selling expenses.
C. Results of the COP Test
Pursuant to section 773(b)(2)(C), where less than 20 percent of a
respondent's sales of a given product were made at prices below the
COP, we did not disregard any below-cost sales of that product because
we determined that the below-cost sales were not made in ``substantial
quantities.'' Where 20 percent or more of a respondent's sales of a
given product were made at prices below the COP, we disregarded the
below-cost sales because such sales were found to be made within an
[[Page 6530]]
extended period of time in ``substantial quantities'' in accordance
with sections 773(b)(2)(B) and (C) of the Act, and because the below
cost sales of the product were 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. Where all contemporaneous sales
of a specific product were made at prices below the COP, we calculated
NV based on CV, in accordance with section 773(a)(4) of the Act.
For both Chang Chun and DuPont, we did not find that comparison
market sales of PVA products were made at below COP prices within the
POR.
Constructed Value
For DuPont's PVA products for which we could not determine the NV
based on comparison market sales because there were no contemporaneous
sales of a comparable product, we compared export prices to CV.
On January 8, 1998, the Court of Appeals for the Federal Circuit
issued a decision in Cemex v. United States, 1998 WL 3626 (Fed Cir.).
In that case, based on the pre-URAA version of the Act, the Court
discussed the appropriateness of using CV as the basis for foreign
market value when the Department finds home market sales to be outside
the ordinary course of trade. This issue was not raised by any party in
this review. However, the URAA amended the definition of sales outside
the ``ordinary course of trade'' to include sales below cost. See
Section 771(15) of the Act. Because the Court's decision was issued so
close to the deadline for completing this preliminary results, we have
not had sufficient time to evaluate and apply (if appropriate and if
there are adequate facts on the record) the decision to the facts of
this post-URAA review. For these reasons, we have determined to
continue to apply our policy regarding the use of CV when we have
disregarded below-cost sales from the calculation of NV; however, we
invite interested parties to comment, in their case briefs, on the
applicability of the Cemex decision to this review.
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of the COM of the product sold in the United States,
plus amounts for third-country comparison market SG&A expenses, and
profit and U.S. packing costs. We calculated CV based on the
methodology described in the ``Calculation of COP'' section of this
notice, above, plus an amount for profit. In accordance with section
773(e)(2)(A), we used the actual amounts incurred and realized by
DuPont in connection with the production and sale of the foreign like
product, in the ordinary course of trade, for consumption in the
foreign country to calculate SG&A expenses and profit.
For price-to-CV comparisons, we made adjustments to CV in
accordance with section 773(a)(8) of the Act and 19 C.F.R. 353.56 for
COS differences. For comparisons to EP, we made COS adjustments by
deducting direct selling expenses incurred on third-country market
sales and adding U.S. direct selling expenses. For comparisons to CEP,
we made deductions for direct selling expenses incurred on third-
country market sales.
Currency Conversion
For purposes of the preliminary results, we made currency
conversions based on the official exchange rates published by the
Federal Reserve in effect on the dates of the U.S. sales. Section
773A(a) of the Act directs the Department to use a daily exchange rate
in effect on the date of sale of subject merchandise in order to
convert foreign currencies into U.S. dollars, unless the daily rate
involves a ``fluctuation.'' In accordance with the Department's
practice, we have determined as a general matter that a fluctuation
exists when the daily exchange rate differs from a benchmark by 2.25
percent (For a detailed explanation, see Policy Bulletin 96-1: Currency
Conversions, 61 FR 9434, March 8, 1996). The benchmark is defined as
the rolling average of rates for the past 40 business days. When we
determine that a fluctuation exists, we substitute the benchmark for
the daily rate.
Preliminary Results of Review
As a result of this review, we preliminarily determine that the
following margin exists for the period May 15, 1996, through April 30,
1997:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Chang Chun Petrochemical Corporation........................ 0.55
E.I. du Pont de Nemours & Co................................ .54
Perry Chemical Corporation * ...............................
------------------------------------------------------------------------
* We did not calculate a dumping margin for Perry because we
preliminarily determined that Perry is not the producer of subject
merchandise it imported into the United States during the POR (see
Treatment of Sales of Tolled Merchandise section of the notice above).
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44 days after the date of publication or the
first business day thereafter.
Issues raised in hearings will be limited to those raised in the
respective case briefs and rebuttal briefs. Case briefs from interested
parties and rebuttal briefs, limited to the issues raised in the
respective case briefs, may be submitted not later than 30 days and 37
days, respectively, from the date of publication of these preliminary
results. Parties who submit case briefs or rebuttal briefs in this
proceeding are requested to submit with each argument (1) a statement
of the issue and (2) a brief summary of the argument.
The Department will subsequently issue the final results of this
administrative review, including the results of its analysis of issues
raised in any such written briefs or at the hearing, if held, not later
than 120 days after the date of publication of this notice.
The Department shall determine and the Customs Service shall assess
antidumping duties on all appropriate entries. The Department will
issue appropriate appraisement instructions directly to the Customs
Service upon completion of this review. The final results of this
review shall be the basis for the assessment of antidumping duties on
entries of merchandise covered by this review and for future deposits
of estimated duties. For Chang Chun, for duty assessment purposes, we
calculated an importer-specific assessment rate by aggregating the
dumping margins calculated for all U.S. sales to each importer and
dividing this amount by the total value of subject merchandise entered
during the POR for each importer. In order to estimate the entered
value, we subtracted international movement expenses from the gross
sales value. For DuPont, we calculated an assessment rate by
aggregating the dumping margins calculated for all U.S. sales and
dividing this amount by the total value of subject merchandise entered
during the POR.
Furthermore, the following deposit requirements will be effective
upon publication of the final results of this antidumping duty review
for all shipments of PVA from Taiwan, entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a) of the Tariff Act: (1) The cash deposit
rates for the reviewed companies will be those established in the final
results of this review; (2) for exporters not covered in this review,
but covered in the LTFV investigation or prior reviews, the cash
deposit rate will continue to be the company-specific rate from the
LTFV investigation or the prior review; (3) if the exporter is not a
firm
[[Page 6531]]
covered in this review, a prior review, or the original LTFV
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 cash deposit rate for all other
manufacturers or exporters will continue to be 19.21 percent, the ``All
Others'' rate made effective by the LTFV investigation. These
requirements, when imposed, shall remain in effect until publication of
the final results of the next administrative review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 353.26 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 antidumping duties.
This administrative review and notice are in accordance with
sections 751(a)(1) of the Act and 19 CFR 353.22(5).
Dated: February 2, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-3210 Filed 2-6-98; 8:45 am]
BILLING CODE 3510-DS-P
