01-29148. Notice of Initiation and Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review: Polychloroprene Rubber From Japan

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) has received information sufficient to warrant initiation of a changed circumstances administrative review of the antidumping duty finding on polychloroprene rubber from Japan. Based on this information, we preliminarily determine that the restructured manufacturing and marketing joint ventures, Showa DDE Manufacturing KK (SDEM) and DDE Japan Kabushiki Kaisha (DDE Japan), are the successor-in-interest companies to Dupont Showa Denko (SDP) and its predecessor, Showa Neoprene, for purposes of determining antidumping liability in this proceeding. Interested parties are invited to comment on these preliminary results.

EFFECTIVE DATE:

November 21, 2001.

FOR FURTHER INFORMATION CONTACT:

Ron Trentham or Tom Futtner, AD/DVD Enforcement, Group II, Office 4, 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:

Applicable Statute and Regulations

Unless otherwise stated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions as of 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 references to the regulations of the Department are to 19 CFR part 351 (2001).

Background

On December 6, 1973, the Department published in the Federal Register (38 FR 33593) the antidumping finding on polychloroprene rubber from Japan. On September 27, 2001, DuPont Dow Elastomers L.L.C. (Dupont Dow) and DDE Japan submitted a letter stating that SDEM and DDE Japan are the successor-in-interest companies to SDP and Showa Neoprene, and, as such, entitled to receive the same antidumping treatment as these companies have been accorded.

Scope of Review

Imports covered by this review are shipments of polychloroprene rubber, an oil resistant synthetic rubber also known as polymerized chlorobutadiene or neoprene, currently classifiable under items 4002.42.00, 4002.49.00, 4003.00.00, 4462.15.21 and 4462.00.00 of the Harmonized Tariff Schedule of the United States (HTSUS). HTSUS item numbers are provided for convenience and for U.S. Customs Service purposes. The written descriptions remain dispositive.

Initiation and Preliminary Results of Review

In a letter dated September 27, 2001, Dupont Dow and DDE Japan advised the Department that in 1998, SDP was restructured. The production portion of SDP was renamed SDEM. Further, the marketing end of SDP's business was separated from SDEM and renamed DDE Japan. According to Dupont Dow and DDE Japan, these entities were renamed to reflect Dupont Dow's participation in the joint ventures and to make the companies more globally competitive. Nevertheless, like SDP and similar to Showa Neoprene, the two firms, SDEM and DDE Japan, remained jointly owned ventures of Dupont Dow and Showa Denko KK. For further discussion of the SDP restructuring, see Memorandum from Bernard T. Carreau to Faryar Shirzad, dated concurrently with this notice, regarding Polychloroprene Rubber from Japan: Request for Changed Circumstances Review.

Thus, in accordance with section 751(b) of the Act and sections 351.216 and 351.221(a) of the Department's regulations, the Department is initiating a changed circumstances review to determine whether SDEM and DDE Japan are the successor-in-interest companies to SDP and its predecessor, Showa Neoprene, for purposes of determining antidumping duty liability in this proceeding. In making a successor-in-interest determination, the Department 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 one or several of these factors will necessarily provide a dispositive indication, the Department will generally consider the new company to be the successor to the previous company if its resulting operation is not materially dissimilar to that of its predecessor. 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. Therefore, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company essentially operates as the same business entity as the former company, the Department will assign the new company the cash deposit rate of its predecessor.

Dupont Dow and DDE Japan have presented evidence to establish a prima facie case of SDEM's and DDE Japan's successorship status. As a consequence, we find that it is appropriate to issue the preliminary results of our review in combination with the notice of initiation of the changed circumstances review in accordance with section 351.221(c)(3)(ii). Although SDP has become two separate companies, SDEM and DDE Japan, and this restructuring has precipitated some changes, the management, production facilities, supplier relationships, sales facilities and customer base are essentially unchanged from those of SDP, and before that, Showa Neoprene. Therefore, the record evidence demonstrates that the new joint venture entities essentially operate in the same manner as the predecessor companies of SDP and Showa Neoprene. As DDE Japan sells and distributes all the polychloroprene rubber for the newly restructured joint venture entities, we preliminarily determine that DDE Japan should be given the same antidumping duty treatment as SDP and its predecessor, Showa Neoprene, i.e., 0 percent antidumping duty cash deposit rate.

The cash deposit determination from this changed circumstances review will apply to all entries of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this changed circumstances review. This deposit rate shall remain in effect until publication of the final results of the next relevant administrative review.

Interested parties are invited to comment on these preliminary results. Any written comments may be submitted no later than 21 days after date of publication of this notice. Rebuttal briefs, limited to arguments raised in case briefs, are due five days after the case brief deadline. Case briefs and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.209. The Department will publish the final results of the changed circumstances review including the results of its analysis of any issues raised in any such comments.

This initiation of review, preliminary results of review and notice are in accordance with sections 751(b) and 777(i)(1) of the Act.

Dated: November 13, 2001.

Faryar Shirzad,

Assistant Secretary for Import Administration.