02-19985. Notice of Preliminary Results of Antidumping Duty Administrative Review: Furfuryl Alcohol from Thailand

AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

SUMMARY:

In response to a request by a U.S. producer, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on furfuryl alcohol from Thailand. This review covers one producer/exporter of the subject merchandise, Indorama Chemicals (Thailand) Limited (Indorama). The period of review (POR) is July 1, 2000, through June 30, 2001.

We preliminarily determine that sales have been made below normal value (NV). If these preliminary results are adopted in our final results, we will instruct the U.S. Customs Service to assess antidumping duties based on the difference between the export price (EP) and the NV.

EFFECTIVE DATE:

August 7, 2002.

FOR FURTHER INFORMATION CONTACT:

Charles Riggle or Tisha Loeper-Viti at [phone] and [phone], respectively; AD/CVD Enforcement Office 5, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

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 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR Part 351 (April 2002).

Case History

On July 25, 1995, the Department issued an antidumping duty order on furfuryl alcohol from Thailand. See Notice of Amended Final Antidumping Duty Determination and Order: Furfuryl Alcohol from Thailand, 60 FR 38035 (July 25, 1995). On July 2, 2001, we published in the Federal Register the notice of opportunity to request an administrative review of this order. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 66 FR 34910 (July 2, 2001).

On July 31, 2001, a U.S. producer of furfuryl alcohol, Penn Specialty Chemicals, Inc., in accordance with 19 CFR 351.213(b)(1), requested a review of Indorama. On August 20, 2001, we published the notice of initiation of this antidumping duty administrative review, covering the period July 1, 1999, through June 30, 2000. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 66 FR 43570 (August 20, 2001).

Scope of the Review

The merchandise covered by this review is furfuryl alcohol (C⁴ H³ OCH² OH). Furfuryl alcohol is a primary alcohol, and is colorless or pale yellow in appearance. It is used in the manufacture of resins and as a wetting agent and solvent for coating resins, nitrocellulose, cellulose acetate, and other soluble dyes.

The product subject to this order is classifiable under subheading 2932.13.00 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 of this proceeding is dispositive.

Fair Value Comparisons

We compared the EP to the NV, as described in the Export Price and Normal Value sections of this notice. We were able to compare all sales of furfuryl alcohol made by Indorama to the United States to contemporaneous sales of identical merchandise in the home market.

Export Price

For the price to the United States, we used EP as defined in sections 772(a) of the Act, because all merchandise was sold by Indorama to the first unaffiliated purchaser in the United States outside the United States prior to importation, and CEP was not otherwise indicated. 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 the 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 subsection (c).

We calculated EP based on the packed CIF destination price to unaffiliated purchasers. In accordance with section 772(c)(2)(A) of the Act, we made additions to the starting price for duty drawback, and deductions from the starting price for foreign movement expenses (i.e., inland freight and inland insurance), U.S. movement expenses (i.e., international freight and marine insurance), and U.S. brokerage and handling. See Analysis Memorandum for Indorama Chemicals (Thailand) Ltd., dated July 31, 2002 (Indorama Analysis Memo), on file in the Central Records Unit (CRU), Room B-099 of the Herbert C. Hoover Building, 14th Street and Constitution Avenue, NW, Washington, DC.

Normal Value

A. Selection of Comparison Market

Based on a comparison of the aggregate quantity of home market sales and U.S. sales, we determined that the quantity of foreign like product Indorama sold in Thailand is more than 5 percent of the quantity of its sales to the U.S. market and permits a proper comparison with the sales of the subject merchandise to the United States. See section 773(a)(1) of the Act. Therefore, in accordance with section 773(a)(1)(B)(ii) of the Act, we based NV on the price at which the foreign like product was first sold for consumption in the home market.

B. Calculation of Normal Value Based on Comparison Market Prices

We determined price-based NVs for Indorama as follows. We made adjustments for differences in packing in accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act, and we deducted movement expenses (i.e., foreign inland freight and foreign inland insurance) consistent with section 773(a)(6)(B)(ii) of the Act. We also made circumstance of sale (COS) adjustments by deducting direct selling expenses (i.e., credit expenses) incurred on home market sales and adding direct selling expenses (i.e., credit expenses) incurred on U.S. sales. See Indorama Analysis Memo.

We note that Indorama, in its November 28 and December 18, 2001, submissions, argued that certain home market sales were outside the ordinary course of trade. Upon examining the information provided, we have preliminarily determined that these sales are within the ordinary course of trade and have, therefore, included these sales in our margin calculation. For further details, see Indorama Analysis Memo.

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 CV, that of the sales from which we derive SG&A expenses and profit. For EP sales, the U.S. level of trade is also the level of the starting-price sale, which is usually from exporter to importer.

To determine whether NV sales are at a different LOT than the U.S. transactions, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If comparison-market sales are at different LOTs, and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and the comparison-market sales which are at the same LOT as the export transactions, we make a level-of-trade adjustment under section 773(a)(7)(A) of the Act. See Final Determination of Sales at Less Than Fair Value: Greenhouse Tomatoes From Canada, 67 FR 8781 (February 26, 2002).

In implementing these principles in this review, we obtained information from Indorama about the marketing stage involved in the reported U.S. and home-market sales, including a description of the selling activities performed for each channel of distribution. In identifying levels of trade for EP and home-market sales, we considered the selling functions reflected in the starting price before any adjustments. We expect that, if claimed LOTs are the same,

the functions and activities of the seller should be similar. Conversely, if a party claims that LOTs are different for different groups of sales, the functions and activities of the seller should be dissimilar.

Indorama reported that all of its sales made to the United States were to unaffiliated trading companies. For its sales in the home market, Indorama reported two different channels of distribution, reflecting its two different categories of customers: (1) sales through unaffiliated trading companies, and (2) direct sales to end-users. Indorama claimed that the sales to the trading companies in the United States and to the trading companies in Thailand were at the same level of trade, while sales to end-users in the home market were at a different level of trade.

We examined the selling functions for Indorama in Thailand and the United States and found that sales activities were substantially the same in both markets. We also determined that, while there exist two customer categories in the home market, trading companies and end-users, there is only one channel of distribution, i.e., direct sales from the factory to the unaffiliated customer. Our examination of the selling activities, selling expenses, and customer categories involved in this channel of distribution indicates that it constitutes a single LOT, and, furthermore, that this LOT is equivalent to that of Indorama's U.S. sales.

Currency Conversion

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

Preliminary Results of Review

As a result of this review, we preliminarily determine that the following weighted-average margin exists for the period July 1, 2000, through June 30, 2001:

Manufacturer/Exporter	Margin (percent)
Indorama Chemicals ­(Thailand) Ltd.	0.91

We will disclose the calculations used in our analysis to parties to this proceeding within five days of the publication date of this notice. See 19 CFR 351.224(b). Interested parties are invited to comment on the preliminary results. Interested parties may submit case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, limited to issues raised in the case briefs, may be filed not later than 37 days after the date of publication. Parties who submit arguments are requested to submit with each argument: (1) a statement of the issue, (2) a brief summary of the argument and (3) a table of authorities. Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on a diskette. Any interested party may request a hearing within 30 days of publication. See 19 CFR 351.310(c). If requested, a hearing will be held 44 days after the publication of this notice, or the first workday thereafter. The Department will publish a notice of the final results of this administrative review, which will include the results of its analysis of issues raised in any such written comments or hearing, within 120 days from publication of this notice.

Assessment

Pursuant to 19 CFR 351.212(b), the Department calculated an assessment rate for each importer of subject merchandise. We have calculated each importer's duty assessment rate based on the ratio of the total amount of antidumping duties calculated for the examined sales to the total entered value of examined sales. Upon completion of this review, the Department will instruct the U.S. Customs Service to assess antidumping duties on all entries of subject merchandise by that importer, where the assessment rate is above de minimis.

Cash Deposit Requirements

The following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of furfuryl alcohol from Thailand entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(1) of the Act: (1) the cash deposit rate for Indorama will be the rate established in the final results of this review, except if the rate is less than 0.5 percent and, therefore, de minimis, the cash deposit will be zero; (2) for previously reviewed or investigated companies not listed above, 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 less than fair value (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) if neither the exporter nor the manufacturer is a firm covered in this or any previous review or the LTFV investigation conducted by the Department, the cash deposit rate will be 7.82 percent, the “all others” rate established in the LTFV investigation.

These cash deposit 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 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 Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

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

Dated: July 31, 2002.

Faryar Shirzad,

Assistant Secretary for Import Administration.