[Federal Register Volume 69, Number 208 (Thursday, October 28, 2004)]
[Notices]
[Pages 62850-62856]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-24094]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-823]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Bottle-Grade 
Polyethylene Terephthalate (PET) Resin From Thailand

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

EFFECTIVE DATE: October 28, 2004.

FOR FURTHER INFORMATION CONTACT: Audrey Twyman or Natalie Kempkey (202) 
482-3534 or (202) 482-1698, respectively; AD/CVD Operations Office I, 
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 bottle-grade polyethylene 
terephthalate resin (``PET resin'') from Thailand is being sold, or is 
likely to be sold, in the United States at less than fair value, as 
provided in section 733 of the Tariff Act of 1930, as amended (``the 
Act''). The preliminary margin assigned to Thai Shinkong Industry 
Corporation Ltd. (``Thai Shinkong'') is based on adverse facts 
available (``AFA''). The estimated margins of sales at less than fair 
value

[[Page 62851]]

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'').

Case History

    On April 20, 2004, the Department of Commerce (``the Department'') 
published the initiation of the antidumping duty investigations of 
imports of PET resin from India, Indonesia, Taiwan, and Thailand. See 
Notice of Initiation of Antidumping Duty Investigations: Bottle-Grade 
Polyethylene Terephthalate (PET) Resin from India, Indonesia, Taiwan, 
and Thailand, 69 FR 21082 (April 20, 2004) (``Initiation Notice''). 
Since the initiation of the investigation, the following events have 
occurred.
    On May 17, 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 United States International Trade Commission 
Report on Polyethylene Terephthalate Resin from India, Indonesia, 
Taiwan, and Thailand, Nos. 701-TA-439-440 and 731-TA-1077-1080 (May 17, 
2004).
    On May 10, 2004, the Department solicited comments from interested 
parties in all of the concurrent PET Resin antidumping investigations, 
providing an opportunity to comment on the criteria to be used for 
model matching. Between May 17 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 by the Department in developing the model 
matching characteristics and hierarchy for all of the PET Resin 
antidumping investigations. See June 9, 2004, memorandum to Susan 
Kuhbach, Senior Office Director, ``Selection of Model Matching Criteria 
for Purposes of the Antidumping Questionnaire'' (``Model Match 
Memorandum'').
    On May 20, 2004, the Department selected the two largest producers/
exporters of PET resin from Thailand, Bangkok Polyester Public Company 
Ltd. (``Bangkok Polyester'') and Thai Shinkong, as mandatory 
respondents in this investigation.\1\
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    \1\ See Memorandum to Susan Kuhbach, dated May 20, 2004, 
entitled ``Antidumping Duty Investigation of Bottle-Grade 
Polyethylene Teraphthalate (``PET) Resin from Thailand, Selection of 
Respondents'' (``Respondent Selection Memorandum''
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    On June 9, 2004, the antidumping questionnaire \2\ was issued to 
Thai Shinkong and Bangkok Polyester. During the period July through 
October 2004, the Department received responses to sections A, B and C 
of the Department's original and supplemental questionnaires from 
Bangkok Polyester and Thai Shinkong. See the Use of Facts Otherwise 
Available section of this notice regarding the Department's rejection 
of Thai Shinkong's responses. On May 18, 2004, Indo Pet (Thailand) Ltd. 
(``Indo Pet'') formally requested to be treated as a voluntary 
respondent in this investigation in response to the Department's 
invitation to do so in the Respondent Selection Memorandum. On July 26, 
2004, Indo Pet withdrew its request for individual examination as a 
voluntary respondent.
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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.
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    On July 30, 2004, pursuant to 19 CFR 351.205(e), the petitioner 
made a timely request to postpone the preliminary determination. We 
granted this request and postponed the preliminary determination until 
no later than October 20, 2004. 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).
    On August 10, 2004, the petitioner made an allegation that sales by 
Bangkok Polyester in Thailand were below the cost of production 
(``COP''). On August 26, 2004, pursuant to section 7773(b) of the Act, 
the Department initiated a cost investigation for Bangkok Polyester's 
Thailand sales of PET Resin.\3\ On August 26, 2004, the Department 
issued a section D questionnaire to Bangkok Polyester. Responses to the 
questionnaire and supplemental questionnaires were received in 
September and October 2004.
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    \3\ See Memorandum to Susan Kuhbach, dated August 26, 2004, 
entitled ``Antidumping Duty Investigation of Bottle-Grade 
Polyethylene Terephthalate (PET) Resin from Thailand: United States 
PET Resin Producers Coalition's Allegation of Sales Below the Cost 
of Production for Bangkok Polyester Public Company Limited.''
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    On October 6, 2004, pursuant to 19 CFR 351.210(b)(2)(i), the 
petitioner requested that the Department postpone the final 
determination in the investigation of PET Resin from Thailand in the 
event of a negative preliminary determination.

Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2) 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 an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise. In accordance with 19 CFR 
351.210(e)(2), the Department requires that exporters requesting 
postponement of the final determination also request an extension of 
the provisional measures referred to in section 733(d) of the Act from 
a four-month period until not more than six months.
    On September 29, 2004, we received a request to postpone the final 
determination from Bangkok Polyester. In its request, Bangkok Polyester 
consented to the extension of provisional measures to no longer than 
six months. Since this preliminary determination is affirmative, and 
the request for postponement is made by an exporter that accounts for a 
significant proportion of exports of the subject merchandise, and there 
is no compelling reason to deny the respondent'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 and have extended provisional 
measures to no longer than six months.

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 in accordance with 19 CFR 351.204(b)(1).

[[Page 62852]]

Scope of Investigation

    The merchandise covered by this investigation is bottle-grade 
polyethylene terephthalate (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 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 this investigation. 
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.

Use of Facts Otherwise Available

    Sections 776(a)(2)(A), (B), (C), and (D) of the Act provide that 
the Department shall use facts available when a party withholds 
information that has been requested by the administering authority 
under this subtitle; does not provide the Department with information 
by the established deadline or in the form and manner requested by the 
Department; significantly impedes a proceeding; or provides such 
information but the information cannot be verified. In addition, 
section 776(b) of the Act provides that, if the Department finds that 
an interested party ``has failed to cooperate by not acting to the best 
of its ability to comply with a request for information,'' the 
Department may use information that is adverse to the interests of that 
party as facts otherwise available in selecting from among the facts 
available. Such adverse inference may include reliance on information 
derived from: (1) The petition; (2) A final determination in the 
investigation under this title; (3) Any previous review under section 
751 or determination under 753; or (4) Any other information placed on 
the record. See 19 CFR 351.308(c).
    On June 9, 2004, the Department sent an antidumping questionnaire 
to Thai Shinkong. Although Thai Shinkong did, as discussed below, 
submit several questionnaire responses in July and August 2004, on 
August 31, 2004, the Department informed Thai Shinkong that it was 
rejecting Thai Shinkong's latest attempt to submit a response to the 
Department's questionnaire because Thai Shinkong's submission was not 
in compliance with the filing requirements of the statute and 
regulations. See letter to Thai Shinkong from John Brinkmann dated 
August 31, 2004. On the basis of our findings in this investigation, 
which are detailed below, we have determined that the use of facts 
otherwise available is appropriate for Thai Shinkong because it has not 
provided certain information in the form and manner requested.
    The Department received Thai Shinkong's first section A response on 
July 1, 2004. This submission was rejected by the Department because: 
(1) It was not filed by the Department's deadline of June 30, 2004; (2) 
The submission was not properly bracketed and marked as either a public 
or proprietary version; and (3) Thai Shinkong did not include with its 
submission the correct number of copies of the public and proprietary 
versions of the submission and the required certificates of service and 
accuracy. The Department extended the deadline for submitting the 
section A response until July 16, 2004.
    Thai Shinkong resubmitted its section A response on July 16, 2004. 
This submission was also rejected by the Department because: (1) It was 
filed under the incorrect case number; (2) It did not contain the 
correct number of proprietary versions; (3) It did not contain the 
required public version of section A; (4) Bracketing of business 
proprietary information was incorrectly identified both on the top of 
the page and in the text of the actual document; and (5) The 
Certificate of Service did not list the names of the parties on whom 
the response was served. The Department further extended the deadline 
for the section A response to July 26, 2004, to coincide with the due 
date for Thai Shinkong's responses to sections B and C of the 
questionnaire.
    The Department did not receive an official submission of sections 
A-C from Thai Shinkong until July 30, 2004, four days after the July 26 
deadline. While the Department did receive e-mails on July 24 and 26, 
2004, from Thai Shinkong with attached copies of the section A-C 
submissions, e-mailing is not an acceptable format for filing 
submissions. The sections A-C responses received by the Department on 
July 30, 2004, had further problems with correct filing and formatting 
procedures. While the Department notes that some earlier problems had 
been corrected, such as filing the correct number of proprietary 
versions for section A and fixing previously noted bracketing errors, 
we noted that there were still several consistent errors with the 
filing of sections A-C: (1) There was no cover page to each section (A, 
B or C) identifying the case number and whether the attached section 
was public or proprietary; (2) The Certificates of Service and Accuracy 
were not provided; (3) Only one copy each of both the public version 
and proprietary version of Thai Shinkong's responses were submitted to 
the Department for sections B and C; (4) Page C-32 of what appears to 
be the public version of section C contained bracketed proprietary 
information; and (5) The required electronic databases for sections B 
and C sales were not submitted.
    On August 4, 2004, the Department advised Thai Shinkong that it was 
rejecting Thai Shinkong's July 30, 2004, sections A-C submission as 
improperly filed, and that it would not be able to consider a revised 
response in the preliminary determination, then scheduled for August 
31, 2004. The Department also informed Thai Shinkong that it would not 
be able to consider a revised response in the final determination 
unless received by August 16, 2004. The Department's August 4 letter 
did note that if the preliminary determination were to be postponed, it 
may be possible for the Department to consider Thai Shinkong's factual 
information in that postponed preliminary determination, if any factual 
information was properly filed with the Department no later than August 
16, 2004.
    On August 13, 2004, the Department received a timely submission of 
the sections A-C response from Thai Shinkong. Since the Department had 
extended the preliminary determination on August 11, 2004, to October 
20, 2004,

[[Page 62853]]

the Department reviewed Thai Shinkong's August 13, 2004, submission for 
consideration in the extended preliminary determination. While this 
submission appeared to have corrected some of the filing and bracketing 
problems previously identified by the Department, several filing 
problems still remained. Most significantly, while Thai Shinkong did 
certify that the public version of sections A-C was served to those 
parties on the administrative protective order service list, it failed 
to certify that the proprietary version had been served to the parties 
on that list. The Department was also unable to ascertain by what means 
these parties had been served, i.e., first class mail or express mail.
    On August 16, 2004, the Department sent an e-mail to Thai Shinkong 
inquiring whether the parties on the APO service list had been served 
with the August 13 submission and how these documents were sent.\4\ The 
Department received an e-mail response \5\ from Thai Shinkong on August 
23, 2004, in which Thai Shinkong stated that it only sent the public 
version of the response to interested parties because its proprietary 
version contained confidential information. It stated that for that 
reason, Thai Shinkong only provided the public version of its August 
13, 2004, submission to the parties. Thai Shinkong also asserted that 
it sent the public version of that submission to the petitioner. 
However, we note that as of August 26, 2004, the petitioner stated it 
had not received any service of Thai Shinkong's sections A-C response. 
On August 31, 2004, the Department advised Thai Shinkong that it was 
rejecting Thai Shinkong's August 13, 2004, submission because of its 
failure to serve parties on the administrative protective order service 
list with a proprietary version of the response. The Department also 
advised Thai Shinkong that it was unable to further extend the deadline 
for filing the questionnaire responses due to the statutorily mandated 
deadlines that govern the investigation.
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    \4\ See Memo to File dated August 23, 2004, entitled ``Bottle 
Grade Polyethylene Terephthalate (PET) Resin from Thailand: E-mail 
Regarding Sections A-C Submissions.''
    \5\ See Id.
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    The Department is applying facts available to calculate a dumping 
margin for Thai Shinkong because Thai Shinkong failed to serve the 
Proprietary Version of its most recent submission on parties to this 
proceeding that were authorized to receive this information under an 
administrative protective order. By failing to provide this information 
to the interested parties, Thai Shinkong has not provided the requested 
information in the form and manner requested by the Department's August 
16 due date for filing factual information. As a consequence, the 
petitioner would not have had adequate time to conduct its own analysis 
and submit comments on Thai Shinkong's factual submission. Moreover, 
the Department was unable to further extend the filing deadline because 
there was no longer sufficient time to evaluate interested party 
comments on Thai Shinkong's response, follow-up with supplemental 
questions, and conduct a margin analysis by the October 20, 2004, 
preliminary determination. Therefore, we determine that the 
Department's calculation of an antidumping margin for Thai Shinkong 
should be based on facts otherwise available, in accordance with 
section 776(a)(2) of the Act.
    In applying facts otherwise available, section 776(b) of the Act 
provides that the Department may use an inference adverse to the 
interests of a party that has failed to cooperate by not acting to the 
best of its ability to comply with the Department's requests for 
information. See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value and Final Negative Critical Circumstances: Carbon and 
Certain Alloy Steel Wire Rod from Brazil, 67 FR 55792, 55794-96 (August 
30, 2002). Adverse inferences are appropriate ``to ensure that the 
party does not obtain a more favorable result by failing to cooperate 
than if it had cooperated fully.'' See Statement of Administrative 
Action accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 
103-316, at 870 (1994) (``SAA''). Furthermore, ``{a{time} ffirmative 
evidence of bad faith on the part of a respondent is not required 
before the Department may make an adverse inference.'' See Antidumping 
Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 1997).
    We find that the application of adverse facts available is 
appropriate because Thai Shinkong has failed to comply with the 
Department's requests for information and has not acted to the best of 
its ability. After each of the submissions by Thai Shinkong, the 
Department sent a detailed letter to Thai Shinkong, which not only 
specified the deficiencies in the filing, but also provided examples 
and citations to appropriate sources for rectifying the deficiencies. 
Filing deadlines were also extended to the maximum extent practicable. 
However, as described in detail above, each subsequent filing by Thai 
Shinkong contained significant deficiencies that caused the Department 
to reject each submission. Therefore, we find that, despite being 
provided ample opportunities to do so, by not remedying the 
deficiencies in its responses, Thai Shinkong failed to act to the best 
of its ability to provide the information requested by the Department.
    Where the Department applies adverse facts available because a 
respondent failed to cooperate by not acting to the best of its ability 
to comply with a request for information, section 776(b) of the Act 
authorizes the Department to rely on information derived from the 
petition, a final determination, a previous administrative review, or 
other information placed on the record. See also 19 CFR 351.308(c); SAA 
at 829-831. Because there are no prior administrative reviews and no 
other information has been placed on the record, as adverse facts 
available, we are assigning Thai Shinkong the higher of: (1) The 
highest margin listed in the notice of initiation; or (2) The margin 
calculated for any respondent in this investigation.
    For adverse facts available, we have selected the margin from the 
petition, since the margin derived from information in the petition 
exceed the margin calculated for the mandatory respondent. When using 
facts otherwise available, section 776(c) of the Act provides that, 
when the Department relies on secondary information (such as the 
petition) in using facts otherwise available, it must, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. The SAA clarifies that ``corroborate'' 
means that the Department will satisfy itself that the secondary 
information to be used has probative value. See SAA at 870. The 
Department's regulations state that independent sources used to 
corroborate such evidence may include, for example, published price 
lists, official import statistics and customs data, and information 
obtained from interested parties during the particular investigation. 
See 19 CFR 351.308(d); see also SAA at 870. As discussed in the October 
20, 2004, memorandum from Susan Kuhbach, Senior Office Director to 
Jeffrey May, Deputy Assistant Secretary, ``Preliminary Determination of 
Polyethylene Terephthalate (``PET'') Resin from Thailand: Corroboration 
Memorandum'' (``Corroboration Memorandum'') regarding the corroboration 
of facts available, we find that the margin of 41.28 percent has 
probative value. Accordingly, we find that the highest margin, based on 
petition information and adjusted as

[[Page 62854]]

described in the Corroboration Memorandum, of 41.28 percent is 
corroborated within the meaning of section 776(c) of the Act.

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 Thailand 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: Intrinsic viscosity, blend, 
copolymer/homopolymer, and additives. See Model Match Memorandum. 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 on the basis of the characteristics listed above.

Fair Value Comparisons

    To determine whether sales of PET resin from Thailand were made in 
the United States at less than fair value (``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 Thailand. For Bangkok Polyester, we compared all U.S. and home 
market sales made during the POI, based on the date of issuance of 
Bangkok Polyester's invoices. We determined this to be the appropriate 
date of sale because, based on the description of the sales process 
provided by Bangkok Polyester, the quantity, sales price, and product 
specifications were frequently renegotiated after the purchase order.

Export Price

    For Bangkok Polyester's price to the United States, we used EP. 
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 722(c) 
of the Act. We calculated Bangkok Polyester's EP based on the packed 
prices charged to the first unaffiliated customer in the United States. 
These sales are properly classified as EP sales because they were made 
outside the United States by the exporter or producer to unaffiliated 
customers in the United States prior to the date of importation.
    In accordance with section 772(c)(2) of the Act, we made deductions 
from the starting price for movement expenses where appropriate. These 
included inland freight and brokerage and handling fees. In accordance 
with section 772(c)(1)(B) of the Act, we have preliminarily added to 
the starting price the amount of import duties imposed by the 
Government of Thailand that were rebated upon export of the subject 
merchandise to the United States. We will verify the terms and 
conditions of this duty drawback claim for the final determination.

Normal Value

A. Selection of Comparison Markets

    Section 773(a)(1) of the Act directs that NV be 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), that the time of the sales reasonably 
corresponds to the time of the sale used to determine EP, and that 
there is no particular market situation that prevents a proper 
comparison with the EP or CEP. The statute contemplates that quantities 
(or value) will normally be considered insufficient if they are less 
than five percent of the aggregate quantity (or value) of sales of the 
subject merchandise to the United States.
    We found that Bangkok Polyester had a viable home market for PET 
resin. As such, Bangkok Polyester submitted home market sales data for 
purposes calculating NV.
    In deriving NV, we made adjustments as detailed in the Calculation 
of Normal Value Based on Home Market Prices section, below.

B. Cost of Production Analysis

    Based on allegations contained in the petitioner's August 10, 2004, 
sales-below-cost allegation with respect to Bangkok Polyester (See 
August 10, 2004, letter from the petitioner, ``Bangkok Polyester Public 
Company Limited Sales Below Cost Allegation''), 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 Thailand at prices 
below the cost of production (``COP''). See August 26, 2004, memorandum 
to Susan Kubach, Senior Office Director, ``Petitioner's Allegation of 
Sales Below the Cost of Production for Bangkok Polyester Public Company 
Limited.'' As a result, the Department has conducted an investigation 
to determine whether Bangkok Polyester 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 general administrative (``G&A'') expenses, including interest 
expenses, and packing expenses. We relied on the COP data submitted by 
Bangkok Polyester in its cost questionnaire response, with the 
following adjustments: (1) We revised the financial expense ratio to 
include the net exchange gains; (2) For both the G&A and financial 
expense ratios, we subtracted Bangkok Polyester's packing expenses from 
the cost of goods sold denominator. See ``Bangkok Polyester Cost 
Calculation Memorandum,'' from Gina Lee to Neal Halper, dated October 
20, 2004.
2. Test of Home Market Sales Prices
    We compared the adjusted weighted-average COP for Bangkok Polyester 
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, and direct and 
indirect selling expenses (which were also deducted from COP).
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. Therefore, we disregarded 
these home-market sales for Bangkok Polyester.

[[Page 62855]]

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 or CEP. 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.
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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 respondents' sales occur somewhere along this 
chain. In performing this evaluation, we considered each 
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 these preliminary results, 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.
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    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. For CEP sales, we consider only 
the selling expenses reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F.3d 1301, 1314-1315 (Fed. Cir. 
2001).
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    \8\ Where NV is based on 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.
---------------------------------------------------------------------------

    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 
or CEP, the Department may compare the U.S. sale to sales at a 
different LOT in the comparison market. In comparing EP or CEP 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. Finally, for CEP sales only, if an NV LOT is more remote from 
the factory than the CEP LOT and we are unable to make a LOT 
adjustment, the Department shall grant a CEP offset, as provided in 
section 773(a)(7)(B) of the Act. See Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate 
from South Africa, 62 FR 61731 (November 19, 1997).
    In conducting our LOT analysis for Bangkok Polyester, we examined 
the specific types of customers, the channels of distribution, and the 
company selling practices. Generally, if the reported LOTs are the 
same, the functions and activities of the seller should be similar. 
Conversely, if a party reports LOTs that are different for different 
categories of sales, the functions and activities may be dissimilar.
    We found the following:
    Bangkok Polyester reported that it sells PET resin to trading 
companies and converters (end users) in the home market, and to 
distributors in the United States. Bangkok Polyester claims that the 
selling function it performs are limited and do not materially differ 
among channels of trade or between the U.S. and home market. We 
examined the information reported by Bangkok Polyester and found that 
home market sales in both channels of distribution were similar with 
respect to sales process, freight services, warehouse/inventory 
maintenance, advertising activities, technical service, and warranty 
service. Accordingly, we preliminarily find that Bangkok Polyester had 
only one LOT for its home market sales.
    Bangkok Polyester made only EP sales to the United States during 
the POI. All of Bangkok Polyester's EP sales were made through the same 
channel of distribution (i.e., sales from the manufacturer to 
distributors). The EP selling activities do not differ significantly 
from the home market selling activities. Therefore, we find that the 
U.S. LOT is similar to the home market LOT and a LOT adjustment is not 
appropriate. See section 773(a)(7)(A) of the Act.

D. Calculation of Normal Value Based on Home Market Prices

    We determined NV for Bangkok Polyester as follows. We made 
adjustments for any differences in packing and deducted home market 
movement expenses pursuant to sections 773(a)(6)(A) and 
773(a)(6)(B)(ii) of the Act. We also adjusted home market prices, where 
appropriate, by adding or subtracting billing adjustments to home 
market prices. 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 Bangkok Polyester's EP transactions by deducting 
direct selling expenses incurred for home market sales (i.e., credit 
expense) and adding U.S. direct selling expenses (i.e., credit 
expenses).

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).

Verification

    In accordance with section 782(i) of the Act, we intend to verify 
all information relied upon in making our final determination for 
Bangkok Polyester.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
the U. S. Customs and Border Protection (``CBP'') to suspend 
liquidation of all entries of PET resin from Thailand, that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. We are also 
instructing CBP to require a cash deposit or the posting of a bond 
equal to the weighted-average dumping margin as indicated in the chart 
below. These instructions suspending liquidation will remain in effect 
until further notice.

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                     Producer/exporter                         margin
                                                            (percentage)
------------------------------------------------------------------------
Bangkok Polyester Public Company, Ltd.....................         26.03
Thai Shinkong Industry Corporation, Ltd...................         41.28
All Others................................................         26.03
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties in this 
proceeding 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 affirmative determination. If the 
final determination

[[Page 62856]]

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 
Thailand are materially injuring, or threaten 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 by 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. 04-24094 Filed 10-27-04; 8:45 am]
BILLING CODE 3510-DS-P