03-12463. Notice of Initiation of Antidumping Duty Changed Circumstances Review: Industrial Nitrocellulose from the United Kingdom

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In accordance with 19 CFR 351.216 (2002), Troon Investments Limited (Troon) requested that the Department of Commerce (the Department) conduct a changed circumstances review of the antidumping duty order on industrial nitrocellulose (INC) from the United Kingdom. In response to this request, the Department is initiating a changed circumstances review of the above-referenced order.

EFFECTIVE DATE:

May 19, 2003.

FOR FURTHER INFORMATION CONTACT:

Howard Smith or Michele Mire, Office of AD/CVD Enforcement, Office 4, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On March 28, 2003, Troon requested that the Department conduct an expedited changed circumstances review of the antidumping duty order on INC from the United Kingdom pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.221(c)(3)(ii). Troon claims to be the successor-in-interest to Imperial Chemical Industries PLC (ICI) based on its December 31, 2002, purchase of the nitrocellulose business division of Nobel's Explosives Company, Ltd. (NEC), a subsidiary of ICI. The signatories of the agreement for the sale of this division are Troon's parent company, Inabata & Co., Ltd. (Inabata) of Japan, and NEC's parent company, ICI. See Troon's March 28, 2003, request at Exhibit 1.

On April 11, 2003, Green Tree Chemical Technologies, Inc. (Green Tree), the sole U.S. producer of INC and the petitioner to this proceeding, notified the Department that it opposes Troon's request to be considered the successor-in-interest to ICI. In particular, Green Tree argues that differences between the management, cost of capital, distribution channels, and corporate interests and strategy of ICI/NEC and Inabata/Troon preclude Troon from being considered the successor-in-interest to ICI.

Scope of Review

Imports covered by this review are shipments of INC from the United Kingdom. INC is a dry, white amorphous synthetic chemical with a nitrogen content between 10.8 and 12.2 percent, and is produced from the reaction of cellulose with nitric acid. INC is used as a film-former in coatings, lacquers, furniture finishes, and printing inks. The scope of this order does not include explosive grade nitrocellulose, which has a nitrogen content of greater than 12.2 percent.

INC is currently classified under Harmonized Tariff Schedule of the United States (HTS) item number 3912.20.0000. While the HTS classification number is provided for convenience and Customs purposes, the written description remains dispositive as to the scope of the product coverage.

Initiation of Antidumping Duty Changed Circumstances Review

Pursuant to section 751(b)(1) of the Act, the Department will conduct a changed circumstances review upon receipt of information concerning, or a request from an interested party for a review of, an antidumping duty order which shows changed circumstances sufficient to warrant a review of the order. The information submitted by Inabata/Troon regarding a change in ownership of the nitrocellulose business division of NEC shows changed circumstances sufficient to warrant a review. See 19 CFR 351.216(c).

In antidumping duty changed circumstances reviews involving a successor-in-interest determination, the Department typically examines several factors including, but not limited to, changes in: (1) management; (2) production facilities; (3) supplier relationships; and (4) customer base. See Brass Sheet and Strip from Canada: Notice of Final Results of Antidumping Administrative Review, 57 FR 20460, 20462 (May 13, 1992) (Canadian Brass). While no single factor or combination of factors will necessarily be dispositive, the Department generally will consider the new company to be the successor to the predecessor company if the resulting operations are essentially the same as those of the predecessor company. See, e.g., Industrial Phosphoric Acid from Israel: Final Results of Changed Circumstances Review, 59 FR 6944, 6945 (February 14, 1994), and Canadian Brass, 57 FR 20460. Thus, if the record evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the predecessor company, the Department may assign the new company the cash deposit rate of its predecessor. See, e.g., Fresh and Chilled Atlantic Salmon from Norway: Final Results of Changes Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980 (March 1, 1999). Although Inabata/Troon submitted information indicating that, with respect to subject merchandise, it operates in the same manner as its predecessor, Green Tree argues that the operations of Inabata/Troon and its predecessor differ in a number of respects, and the differences affect the production cost and sales price of subject merchandise.

Concerning Inabata/Troon's request that the Department conduct an expedited antidumping duty changed circumstances review, the Department has determined that it would be inappropriate to expedite this action by combining the preliminary results of review with this notice of initiation, as permitted under 19 CFR 351.221(c)(3)(ii). Because of the parties' differing views and the Department's need for additional information, which we will address in a questionnaire to be issued in the near future to Inabata/Troon, the Department finds that expedited action is impracticable. Therefore, the Department is not issuing the preliminary results of its antidumping duty changed circumstances review at this time.

The Department will publish in the Federal Register a notice of preliminary results of antidumping duty changed circumstances review, in accordance with 19 CFR 351.221(b)(4) and 19 CFR 351.221(c)(3)(i). This notice will set forth the factual and legal conclusions upon which our preliminary results are based and a description of any action proposed based on those results. Pursuant to 19 CFR 351.221(b)(4)(ii), interested parties will have an opportunity to comment on the preliminary results of review. In accordance with 19 CFR 351.216(e), the Department will issue the final results of its antidumping duty changed circumstances review not later than 270 days after the date on which the review is initiated.

During the course of this antidumping duty changed circumstances review, we will not change the cash deposit requirements for the merchandise subject to review, unless a change is determined to be warranted pursuant to the final results of this review.

This notice of initiation is in accordance with sections 751(b)(1) of the Act and 19 CFR 351.221(b)(1) of the Department's regulations.

Dated: May 8, 2003.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.