E5-1222. Notice of Final Determination of Sales at Less Than Fair Value: Bottle-Grade Polyethylene Terephthalate (PET) Resin From Indonesia

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

Final Determination: The Department of Commerce (“the Department”) determines that PET resin from Indonesia is being, or is likely to be, sold in the United States at less than fair value, as provided in section 735 of the Tariff Act of 1930, as amended (“the Act”). The final weighted-average dumping margins are listed below in the section entitled “Continuation of Suspension of Liquidation.”

DATES:

Effective Date: March 21, 2005.

FOR FURTHER INFORMATION CONTACT:

Andrew McAllister or Scott Holland, AD/CVD Operations, Office 1, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone [phone] and [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

Since the publication of the preliminary results of this review (see Notice of Preliminary Determination of Sales at Less Than Fair Value: Bottle-Grade Polyethylene Terephthalate (PET) Resin from Indonesia, 69 FR 62861 (October 28, 2004) (“Preliminary Determination”)), the following events have occurred:

On November 3, 2004, the Department published in the Federal Register an extension of the time limit for the final determination in the antidumping duty investigation to no later than March 14, 2005, in accordance with the Act. See Notice of Postponement of Final Antidumping Duty Determination: Bottle-Grade Polyethylene Terephthalate (PET) Resin from Indonesia, 69 FR 64026 (November 3, 2004).

In October and November 2004, we conducted verifications of the sales and cost of production (“COP”) questionnaire responses submitted by P.T. Indorama Synthetics Tbk (“Indorama”). The sales and cost verification reports were issued on January 6 and 7, 2005, respectively. See Memoranda to the File, “Verification of the Sales Responses of P.T. Indorama Synthetics, Tbk in the Antidumping Duty Investigation of Bottle-Grade Polyethylene Terephthalate (“PET”) Resin from Indonesia,” (“Indorama SVR”) dated January 6, 2005; and “Verification Report on the Cost of Production and Constructed Value Data Submitted by P.T. Indorama Synthetics, Tbk,” (“Indorama CVR”) dated January 7, 2005. These reports are on file in the Central Records Unit, Room B-099 of the main Department building (“CRU”).

On January 25, 2005, we received case briefs from the United States PET Resin Producers Coalition (“the petitioner”) and Indorama. On January 31, 2005, we received rebuttal briefs from the petitioner and Indorama. At the request of interested parties, the Department held a public hearing on February 3, 2005.

Scope of Investigation

The merchandise covered by this investigation is polyethylene terephthalate (“PET”) bottle-grade resin, defined as having an intrinsic viscosity of at least 0.68 deciliters per gram but not more than 0.86 deciliters per gram. The scope includes bottle-grade PET resin that contains various additives introduced in the manufacturing process. The scope does not include post-consumer recycle (“PCR”) or post-industrial recycle (“PIR”) PET resin; however, included in the scope is any bottle-grade PET resin blend of virgin PET bottle-grade resin and recycled PET (“RPET”). Waste and scrap PET are outside the scope of the investigation. Fiber-grade PET resin, which has an intrinsic viscosity of less than 0.68 deciliters per gram, is also outside the scope of the investigations.

The merchandise subject to this investigation is properly classified under subheading 3907.60.0010 of the Harmonized Tariff Schedule of the United States (“HTSUS”); however, merchandise classified under HTSUS subheading 3907.60.0050 that otherwise meets the written description of the scope is also subject to these investigations. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.

Period of Investigation

The period of investigation (“POI”) is January 1, 2003, through December 31, 2003. This period corresponds to the four most recent fiscal quarters prior to the filing of the petition on March 24, 2004.

Verification

As provided in section 782(i) of the Act, we conducted verification of the sales and cost information submitted by Indorama. We used standard verification procedures, including examination of the relevant sales, cost, and financial records.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this review are addressed in the “Issues and Decision Memorandum for the Final Determination in the Antidumping Duty Investigation of Bottle-Grade Polyethylene Terephthalate (PET) Resin from Indonesia” from Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration, to Joseph A. Spetrini, Acting Assistant Secretary for Import Administration, dated March 14, 2005 (“Decision Memorandum”), which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Department's CRU. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/​frn/​index.html. The paper copy and electronic version of the Decision Memorandum are identical in content.

Facts Otherwise Available

For the final determination, the Department continues to find that P.T. SK Keris (“SK Keris”) and P.T. Polypet Karyapersada (“Polypet”), both producers/exporters of PET resin from Indonesia, and mandatory respondents in these proceedings, did not act to the best of their abilities by failing to provide information requested by the Department. Thus, the Department continues to find that the use of adverse facts available (“AFA”) is warranted under section 776(a)(2) of the Act. See Preliminary Determination at 62861-62863.

Fair Value Comparisons

We calculated export price (“EP”), constructed export price (“CEP”), normal value (“NV”), COP, and constructed value (“CV”) based on the same methodologies used in the Preliminary Determination with the following exception(s):

Indorama

• We made changes based on information in the minor corrections presented at the sales verification. See Indorama SVR.
• We revised the calculation of CEP profit. See Decision Memorandum at Comment 3.
• We revised the ratio for indirect selling expenses incurred in Indonesia for home market and U.S. sales. See Decision Memorandum at Comments 4 and 5; see also Memorandum to File, “Final Determination Calculation Memorandum for P.T. Indorama Synthetics Tbk,” dated March 14, 2005.
• We adjusted the cost for inputs obtained from an affiliated supplier at less than arm's length prices. As a result, Indorama's cost of manufacture has increased. See Memorandum to Neal Halper, “Cost of Production and Constructed Value Calculation Adjustments for the Final Determination—P.T. Indorama Synthetics, Tbk” (March 14, 2004) (“Cost Calculation Memorandum”), page 1.
• We revised Indorama's general and administrative expense (“G&A”) ratio by including scrap revenue as an offset to cost of goods sold (“COGS”). See Cost Calculation Memorandum, pages 1-2.
• We recalculated Indorama's financial expense ratio. We deducted the short-term interest income from total interest expenses and included a scrap revenue offset in the COGS. See Cost Memorandum, page 2.

Results of the COP Test

Pursuant to section 773(b)(1), where less than 20 percent of the respondent's sales of a given product are at prices less than the COP, we do not disregard any below-cost sales of that product, because we determine that in such instances the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of a respondent's sales of a given product are at prices less than the COP, we determine that the below-cost sales represent “substantial quantities” within an extended period of time, in accordance with section 773(b)(1)(A) of the Act. In such cases, we also determine whether such sales were made at prices which would not permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(1)(B) of the Act. If so, we disregard the below-cost sales.

Because less than 20 percent of Indorama's home market sales within an extended period of time were made at prices below the COP, we are not excluding any sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

Currency Conversions

We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we are directing U.S. Customs and Border Protection (“CBP”) to continue to suspend liquidation of all imports of subject merchandise from Indonesia, except imports of subject merchandise produced and exported by Indorama, that are entered, or withdrawn from warehouse, for consumption on or after October 28, 2004, the date of publication of the Preliminary Determination in the Federal Register. CBP shall continue to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP or CEP, as indicated in the chart below. These suspension-of-liquidation instructions will remain in effect until further notice. The weighted-average dumping margins are as follows:

Exporter/manufacturer	Weighted-average margin percentage
P.T. Indorama Synthetics Tbk	0.00
P.T. Polypet Karyapersada	27.61
P.T. SK Keris	27.61
All Others	18.41

All Others

All companies that we examined have either a zero margin or rates based on total AFA. Therefore, for purposes of determining the all-others rate and pursuant to section 735(c)(5)(B) of the Act, we have calculated a simple average of the three margin rates we have determined in the investigation.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our determination. As our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threatening material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury, does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order pursuant to section 736(a) of the Act.

Notification Regarding APOs

This notice also serves as the only reminder to parties subject to the administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of return/destruction of APO material or conversion to judicial protective order is hereby requested. Failure to comply with the regulation and the terms of an APO is a sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Dated: March 14, 2005.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

Appendix I—List of Comments in the Issues and Decision Memorandum

Comment 1: Date of Sale for U.S. DDP Sales

Comment 2: Classification of U.S. Sales

Comment 3: Calculation of CEP Profit

Comment 4: Allocation of Indirect Selling Expenses for Home Market and Export Sales

Comment 5: Indirect Selling Expenses Incurred by Indorama's Billing Entity

Comment 6: Indirect Selling Expenses Incurred in the United States by Indorama and its Billing Entity

Comment 7: Inclusion of Bank Charges as a Direct Selling Expense

Comment 8: Treatment of Sample Sales

Comment 9: Inclusion of Negative Imputed Credit Expenses

Comment 10: Untimely Sales Reconciliation Submission

Comment 11: Home Market Viability Test

Comment 12: Affiliated Input Purchases

Comment 13: Gains on Sale of Assets and Miscellaneous Revenue

Comment 14: Scrap Revenue Offset

Comment 15: Divisional G&A and Net Interest Expense

Comment 16: Short-Term Interest Income