[Federal Register Volume 69, Number 208 (Thursday, October 28, 2004)]
[Notices]
[Pages 62868-62871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24095]



[[Page 62868]]

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DEPARTMENT OF COMMERCE

International Trade Administration

(A-583-840)


Notice of Preliminary Determination of Sales at Not Less Than 
Fair Value and Postponement of Final Determination: Polyethylene 
Terephthalate (PET) Resin from Taiwan

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of negative preliminary determination of sales at less 
than fair value and extension of final determination.

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EFFECTIVE DATE: October 28, 2004.

FOR FURTHER INFORMATION CONTACT: Daniel O'Brien or Ashleigh Batton at 
(202) 482-1376 or (202) 482-6309, respectively; AD/CVD Enforcement, 
Office 1, Import Administration, Room 1870, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Preliminary Determination

    We preliminarily determine that imports of PET Resin from Taiwan 
are not being sold, or are not likely to be sold, in the United States 
at less than fair value (LTFV), as provided in section 733 of the 
Tariff Act of 1930, as amended (the Act). The estimated margins of 
sales at LTFV are shown in the Suspension of Liquidation section of 
this notice.
    Interested parties are invited to comment on this preliminary 
determination. Since we are postponing the final determination, we will 
make our final determination not later than 135 days after the date of 
publication of this preliminary determination in the Federal Register.

Petitioner

    The petitioner in this investigation is the United States PET Resin 
Producers Coalition (the petitioner).\1\
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    \1\ The petitioner in this investigation is the United States 
PET Resin Producers Coalition, an ad hoc coalition of the four 
largest U.S. PET resin producers that includes: DAK Americas, LLC; 
Nan Ya Plastics Corporation America; Voridian; and Wellman, Inc.
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Case History

    This investigation was initiated on April 13, 2004. See Notice of 
Initiation of Antidumping Duty Investigation: Bottle-Grade Polyethylene 
Terephthalate (PET) Resin from India, Indonesia, Taiwan, and Thailand, 
69 FR at 21082 (April 20, 2004) (Initiation Notice). Since the 
initiation of the investigation, the following events have occurred.
    The Department of Commerce (the Department) set aside a period for 
all interested parties to raise issues regarding product coverage. See 
Initiation Notice, 69 FR at 21083. No responses were received.
    On May 10, 2004, the Department issued a letter providing 
interested parties an opportunity to comment on the Department's 
proposed model match characteristics and its hierarchy of 
characteristics. Between May 17, 2004, and June 3, 2004, the Department 
received comments and/or rebuttal comments on model matching from the 
petitioner, Far Eastern Textiles, Reliance Industries Ltd., South Asian 
Petrochem Ltd. and P.T. Indorama Synthetics. The Department took these 
comments into consideration in developing the model matching 
characteristics and hierarchy for all of the PET Resin antidumping 
investigations.
    On May 19, 2004, the United States International Trade Commission 
(ITC) preliminarily determined that there is a reasonable indication 
that imports of the products subject to this investigation are 
materially injuring an industry in the United States producing the 
domestic like product. See Polyethylene Terephthalate (PET) Resin from 
India, Indonesia, Taiwan, and Thailand, 69 FR at 28948 (May 19, 2004) 
(ITC Preliminary Determination).
    On June 9, 2004, the Department issued its antidumping duty 
questionnaire to Far Eastern Textile Ltd. (Far Eastern), specifying 
that the responses to Section A and Sections B-C would be due on June 
30, 2004, and July 16, 2004, respectively.\2\ We received responses to 
Sections A-C of the antidumping questionnaire and issued supplemental 
questionnaires where appropriate. On August 3, 2004, we received an 
allegation of sales below cost from the petitioner. On September 1, 
2004, pursuant to section 732(e) of the Act, the Department initiated a 
cost investigation for Far Eastern's Taiwanese sales of PET Resin.\3\ 
Far Eastern submitted its response to Section D on September 24, 2004.
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    \2\ Section A of the questionnaire requests general information 
concerning the company corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales, or, if the 
home market is not viable, of sales in the most appropriate third-
country market (this section is not applicable to respondents in 
non-market economy cases). Section C requests a complete listing of 
U.S. sales. Section D requests information on the cost of production 
of the foreign like product and the constructed value of the 
merchandise under investigation. Section E requests information on 
further manufacturing.
    \3\ See Memorandum to Susan Kuhbach, Re: Investigation of 
Polyethylene Terephthalate Resin from Taiwan: Petitioner's 
Allegation of Sales Below the Cost of Production for Far Eastern 
Textile, dated August 27, 2004.
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    On June 30, 2004, the petitioner requested that the Department 
postpone the preliminary determination in this investigation. Because 
there were no compelling reasons to deny the request, we postponed the 
preliminary determination to October 20, 2004, under section 733(c)(1) 
of the Act. See Notice of Postponement of Preliminary Antidumping Duty 
Determinations: Bottle-Grade Polyethylene Terephthalate (PET) Resin 
from India, Indonesia, Taiwan, and Thailand, 69 FR 48842, (August 11, 
2004).

Postponement of Final Determination

    Section 735(a)(2)(B) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of a 
negative preliminary determination, a request for such postponement is 
made by the petitioner. On October 6, 2004, we received a request to 
postpone the final determination from the petitioner, the United States 
PET Resin Producers Coalition. Since this preliminary determination is 
negative, and there is no compelling reason to deny the petitioner's 
request, we have extended the deadline for issuance of the final 
determination until the 135th day after the date of publication of this 
preliminary determination in the Federal Register.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. Where it is not practicable to examine all known 
producers/exporters of subject merchandise, section 777A(c)(2) of the 
Act permits the Department to investigate either: 1) a sample of 
exporters, producers, or types of products that is statistically valid, 
based on the information available at the time of selection; or 2) 
exporters and producers accounting for the largest volume of the 
subject merchandise that can reasonably be examined. In the petition, 
the petitioner identified three potential producers and exporters of 
PET Resin in Taiwan: Shinkong Synthetic Fibers Corporation, Far 
Eastern, and Hualon Corporation.

[[Page 62869]]

    Based on statistics obtained from U.S. Customs and Border 
Protection (CBP), the Department selected Far Eastern as the mandatory 
respondent.\4\ On June 9, 2004, the Department issued an antidumping 
questionnaire to Far Eastern.
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    \4\ See Memorandum from Constance Handley, Program Manager, to 
Susan Kuhbach, Director of Office 1, RE: Selection of Respondents, 
dated May 12, 2004.
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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 month of filing of the petition in March 
2004.

Scope of Investigation

    For the purpose of this investigation, the product covered by this 
scope is bottle-grade PET 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 is 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 
investigation.
    The bottle-grade PET resin products subject to this investigation 
are currently classifiable in the Harmonized Tariff Schedule of the 
United States (HTSUS) at subheadings 3907.60.0100 and 3907.60.0050. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, the written description of the merchandise under 
investigation is dispositive.

Scope Comments

    In accordance with the preamble to our regulations (see Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 
1997)), we set aside a period of time for parties to raise issues 
regarding product coverage and encouraged all parties to submit 
comments within 20 calendar days of publication of the Initiation 
Notice. We did not receive any scope comments from interested parties 
within the comment period.

Product Comparisons

    In accordance with section 771(16) of the Act, all products 
produced by the respondents covered by the description in the Scope of 
Investigation section, above, and sold in Taiwan during the POI, are 
considered to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We have relied on four 
criteria to match U.S. sales of subject merchandise to comparison-
market sales of the foreign like product: 1) Intrinsic Viscosity; 2) 
Blend; 3) Copolymer/Homopolymer; and 4) Additives. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the next most similar foreign like 
product made in the ordinary course of trade.

Date of Sale

    In its questionnaire responses, Far Eastern reported home market 
sales using shipping date as the date of sale because the ship date 
precedes the invoice date; invoices are issued in the home market after 
the product has shipped. Based on the description of the sales process 
provided by Far Eastern, and in keeping with Department practice, we 
used the date of shipment as the date of sale for all home market 
sales. \5\ For U. S. sales, Far Eastern reported the customs clearance 
date as date of sale. The customs clearance date precedes the invoice 
date by 2 to 4 days; again, the product is invoiced once it has left 
the factory. For sales where the ship date occurred before the customs 
clearance date, we used the shipping date as the date of sale.
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    \5\ See, e.g., Synthetic Indigo From the People's Republic of 
China; Notice of Final Determination of Sales at Less Than Fair 
Value, 65 FR 25706 (May 3, 2000) and accompanying Decision 
Memorandum at Comment 11; Final Results of Antidumping 
Administrative Review: Stainless Steel Bar From Japan, 65 FR 13717 
(March 14, 2000) and accompanying Decision Memorandum at Comment 1.
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Fair Value Comparisons

    To determine whether sales of PET resin were made in the United 
States at LTFV, we compared the export price (EP) to the normal value 
(NV), as described in the Export Price and Normal Value sections of 
this notice. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
calculated weighted-average EPs. We compared these to weighted-average 
home market prices in Taiwan.

Export Price

    For the price to the United States, we used EP, as defined in 
section 772(a) of the Act. Section 772(a) of the Act defines EP as the 
price at which the subject merchandise is first sold before the date of 
importation by the producer or exporter 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 772(c) of the Act.
    In accordance with section 772(c)(2) of the Act, for EP sales, we 
made deductions from the starting price for movement expenses, 
discounts, billing adjustments, export taxes, duties, and rebates, 
where appropriate.
    We deducted inland freight from the plant/warehouse to port of 
exit, brokerage and handling, harbor construction fee in the country of 
manufacture, trade promotion fee in the country of manufacture, 
international freight, marine insurance, brokerage and handling 
incurred in the United States, U.S. inland freight from port to 
warehouse, U.S. warehousing expense, and U.S. customs duty.

Normal Value

A. Selection of Comparison Markets
    Section 773(a)(1) of the Act directs the Department to calculate NV 
based on the price at which the foreign like product is sold in the 
home market, provided that the merchandise is sold in sufficient 
quantities (or value, if quantity is inappropriate), and that there is 
no particular market situation that prevents a proper comparison with 
the EP or CEP. Under the statute, the Department will normally consider 
quantity (or value) insufficient if it is less than five percent of the 
aggregate quantity (or value) of sales of the subject merchandise to 
the United States. We found that Far Eastern had a viable home market 
for PET resin. As such, Far Eastern submitted home market sales data 
for the calculation of NV.
    In deriving NV, we made adjustments as detailed in the following 
Calculation of Normal Value Based on Home Market Prices section.
B. Cost of Production Analysis
    Based on allegations contained in the petition, and in accordance 
with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to 
believe or suspect that PET resin sales were made in Taiwan at prices 
below the cost of production (COP). See Memorandum to Susan Kuhbach 
from Ashleigh Batton and Daniel O'Brien re. Petitioner's Allegation of 
Sales Below the Cost of Production for Far Eastern Textile, dated 
August 27, 2004. As a result, the Department is conducting an

[[Page 62870]]

investigation to determine whether Far Eastern made home market sales 
at prices below their respective COPs during the POI within the meaning 
of section 773(b) of the Act. We conducted the COP analysis described 
below.
1. Calculation of Cost of Production
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for the home 
market G&A expenses, including interest expenses and packing expenses. 
We relied on the COP data submitted by Far Eastern in its cost 
questionnaire responses except for the following adjustments:
a. We adjusted the reported cost of manufacture (COM) to reflect the 
highest of transfer price, market price and affiliated suppliers' COP 
for the inputs purchased from affiliated suppliers;
b. We based Far Eastern's G&A expense ratio on Far Eastern's company-
wide data rather than its divisional data as submitted.
2. Test of Home Market Sales Prices
    We compared the weighted-average COP for Far Eastern to its home-
market sales prices of the foreign like product, as required under 
section 773(b) of the Act, to determine whether these sales had been 
made at prices below the COP within an extended period of time (i.e., a 
period of one year) in substantial quantities and whether such prices 
were sufficient to permit the recovery of all costs within a reasonable 
period of time.
    On a model-specific basis, we compared the revised COP to the home 
market prices, less any applicable movement charges, discounts, 
rebates, and direct and indirect selling expenses.
3. Results of the COP Test
    Where 20 percent or more of a respondent's sales of a given product 
during the POI were at prices less than the COP, we determined such 
sales to have been made in ``substantial quantities'' within an 
extended period of time in accordance with section 773(b)(2)(B) of the 
Act. In such cases, because we compared prices to POI average costs, 
pursuant to section 773(b)(2)(D) of the Act, we also determined that 
such sales were not made at prices that would permit recovery of all 
costs within a reasonable period of time. We found that Far Eastern 
made sales below cost and we disregarded such sales where appropriate.
C. Level of Trade
    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (LOT) as the EP. Sales are made at different LOTs 
if they are made at different marketing stages (or their equivalent). 
See 19 CFR 351.412(c)(2). Substantial differences in selling activities 
are a necessary, but not sufficient, condition for determining that 
there is a difference in the stages of marketing. Id.; see also Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Cut-
to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732 
(November 19, 1997). In order to determine whether the comparison sales 
were at different stages in the marketing process than the U.S. sales, 
we reviewed the distribution system in each market (i.e., the ``chain 
of distribution''),\6\ including selling functions,\7\ class of 
customer (``customer category''), and the level of selling expenses for 
each type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales (i.e., NV based on 
either home market or third country prices\8\) we consider the starting 
prices before any adjustments.
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    \6\ The marketing process in the United States and home market 
begins with the producer and extends to the sale to the final user 
or customer. The chain of distribution between the two may have many 
or few links, and the respondent's sales occur somewhere along this 
chain. In performing this evaluation, we considered the respondent's 
narrative response to properly determine where in the chain of 
distribution the sale occurs.
    \7\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of this preliminary determination, 
we have organized the common selling functions into four major 
categories: sales process and marketing support, freight and 
delivery, inventory and warehousing, and quality assurance/warranty 
services.
    \8\ Where NV is based on constructed value (CV), we determine 
the NV LOT based on the LOT of the sales from which we derive 
selling expenses, G&A and profit for CV, where possible.
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    When the Department is unable to match U.S. sales to sales of the 
foreign like product in the comparison market at the same LOT as the 
EP, the Department may compare the U.S. sale to sales at a different 
LOT in the comparison market. In comparing EP sales at a different LOT 
in the comparison market, where available data make it practicable, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act.
    We obtained information from Far Eastern regarding the marketing 
stages involved in making the reported home market and U.S. sales, 
including a description of the selling activities performed by Far 
Eastern for each channel of distribution. Our LOT findings are 
summarized below.
    Far Eastern reported that it sells to end users and traders in the 
home market, and to U.S. end users and wholesalers. Far Eastern 
reported a single LOT in the home market and has not requested an LOT 
adjustment. We examined the information reported by Far Eastern and 
found that home market sales to both customer categories were identical 
with respect to sales process, freight services, warehouse/inventory 
maintenance, advertising activities, technical service, and warranty 
service. Accordingly, we preliminarily find that Far Eastern had only 
one LOT for its home market sales.
    Far Eastern made only EP sales to the United States during the POI. 
The EP sales were all made through the same channel of distribution 
(i.e., sales from the manufacturer directly to the customer). The EP 
selling activities differ slightly from the home market selling 
activities. In determining whether separate LOTs exist between U.S. EP 
sales and home-market sales, we examined the selling functions in the 
distribution chains and customer categories reported in both markets. 
Far Eastern's sales to end-users and traders in the homemarket and in 
the U.S. market do not involve significantly different selling 
functions. Therefore, we find that the U.S. LOT is similar to the home 
market LOT and an LOT adjustment is not necessary. See section 
773(a)(7)(A) of the Act.
D. Calculation of Normal Value Based on Home Market Prices
    We determined NV for Far Eastern as follows. We made adjustments 
for any differences in packing and deducted home market movement 
expenses, rebates, and discounts pursuant to sections 773(a)(6)(A) and 
773(a)(6)(B)(ii) of the Act. In addition, where applicable in 
comparison to EP transactions, we made adjustments for differences in 
circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii) of 
the Act. We made COS adjustments for Far Eastern's EP transactions by 
deducting direct selling expenses incurred for home market sales (e.g., 
credit expense and warranty expenses) and adding U.S. direct selling 
expenses (e.g., credit expenses, and bank charges).

Currency Conversions

    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. sale, as obtained from the Federal Reserve Bank (the 
Department's preferred source for exchange rates).

[[Page 62871]]

Verification

    In accordance with section 782(i) of the Act, we intend to verify 
all information relied upon in making our final determination for Far 
Eastern.
    The weighted-average dumping margins are provided below:

------------------------------------------------------------------------
                                                            Weighted-
                   Producer/Exporter                      Average Margin
                                                           (Percentage)
------------------------------------------------------------------------
Far Eastern............................................            0.09
All Others.............................................            0.09
------------------------------------------------------------------------

Suspension of Liquidation

    Pursuant to Section 733(b)(3) of the Act, because the estimated 
weighted-average dumping margin for the examined company is de minimis, 
we are not directing CBP to suspend liquidation of entries of PET resin 
from Taiwan.

Disclosure

    The Department will disclose its calculations in accordance with 19 
CFR 351.224(b).

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of the Department's preliminary negative determination. If the 
final determination in this proceeding is affirmative, the ITC will 
determine before the later of 120 days after the date of this 
preliminary determination or 45 days after the final determination 
whether imports of PET resin from Taiwan is materially injuring, or 
threatens material injury to, the U.S. industry.

Public Comment

    Interested parties are invited to comment on the preliminary 
determination. Interested parties may submit case briefs on the later 
of 50 days after the date of publication of this notice or one week 
after the issuance of the verification reports. See 19 CFR 
351.309(c)(1)(i). Rebuttal briefs, the content of which is limited to 
the issues raised in the case briefs, must be filed within five days 
after the deadline for the submission of case briefs. See 19 CFR 
351.309(d). A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes. Further, we request that parties submitting 
briefs and rebuttal briefs provide the Department with a copy of the 
public version of such briefs on diskette.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. If a request 
for a hearing is made, we will tentatively hold the hearing two days 
after the deadline for submission of rebuttal briefs at the U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230, at a time and in a room to be determined. Parties 
should confirm by telephone the date, time, and location of the hearing 
48 hours before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
in a hearing if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, within 30 days of the date of publication of this 
notice. Requests should contain: 1) the party's name, address, and 
telephone number; 2) the number of participants; and 3) a list of the 
issues to be discussed. At the hearing, oral presentations will be 
limited to issues raised in the briefs. See 19 CFR 351.310(c). The 
Department will make its final determination no later than 135 days 
after the date of publication of this preliminary determination.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: October 20, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-24095 Filed 10-27-04; 8:45 am]
BILLING CODE 3510-DS-S