[Federal Register Volume 69, Number 247 (Monday, December 27, 2004)]
[Notices]
[Pages 77201-77205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28117]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-834]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Purified 
Carboxymethylcellulose From Mexico

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

EFFECTIVE DATES: December 27, 2004.

FOR FURTHER INFORMATION CONTACT: Mark Flessner at (202) 482-6312 or 
Robert James at (202) 482-0649, AD/CVD Operations, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230.

Preliminary Determination

    We preliminarily determine that certain purified 
carboxymethylcellulose (CMC) from Mexico is being sold, or is 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.

Case History

    On June 9, 2004, the Department of Commerce (the Department) 
received a petition for the imposition of antidumping duties on 
purified CMC from Finland, Mexico, the Netherlands, and Sweden, filed 
in the proper form by Aqualon Company (Aqualon or petitioner), a 
division of Hercules Incorporated. See Petition for the Imposition of 
Antidumping Duties on Imports of Purified Carboxymethylcellulose (CMC) 
from Finland, Mexico, the Netherlands, and Sweden (Petition). The 
Department initiated the antidumping investigation of purified CMC from 
Finland, Mexico,

[[Page 77202]]

the Netherlands, and Sweden on June 29, 2004. See Notice of Initiation 
of Antidumping Investigations: Purified Carboxymethylcellulose (CMC) 
from Finland, Mexico, the Netherlands, and Sweden, 69 FR 40617 (July 6, 
2004) (Initiation Notice). Since the initiation of this investigation, 
the following events have occurred.
    On July 23, 2004, the International Trade Commission (the 
Commission) preliminarily determined that there is a reasonable 
indication that an industry in the United States is materially injured 
by reason of imports of purified CMC from Finland, Mexico, the 
Netherlands, and Sweden that are alleged to be sold in the United 
States at LTFV. See Purified Caarboxymethylcellulose from Finland, 
Mexico, the Netherlands, and Sweden, 69 FR 45851 (July 30, 2004).
    On July 29, 2004, the Department issued sections A, B, and C of the 
antidumping questionnaire \1\ to Quimica Amtex S.A. de C.V. of Mexico 
(Amtex), noting that appendix V concerning model match criteria was not 
enclosed. The Department stated that it would serve all parties with a 
copy of the proposed model match criteria in the near future. We did so 
on August 18, 2004.
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    \1\ Section A of the questionnaire requests information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation, and the manner in which it 
sells that merchandise in all of its markets. Section B requests a 
complete listing of all of the company's home market sales of 
foreign like product or, if the home market is not viable, of sales 
of the foreign like product 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 the 
company's U.S. sales of subject merchandise. 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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    Petitioner filed comments on the Department's proposed model match 
criteria on August 19, 2004.\2\ The Department issued appendix V to the 
questionnaire on August 30, 2004.
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    \2\ Comments were also received from Noviant OY, Noviant BV, 
Noviant AB, and Noviant Inc., respondents in the companion 
investigations involving Finland, the Netherlands, and Sweden, on 
August 25, 2004.
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    On September 1, 2004, the Department received the section A 
questionnaire response from Amtex). Responses to sections B and C were 
received on September 22, 2004.
    On September 21, 2004, the Department issued a supplemental section 
A questionnaire. A response was received on September 29, 2004.
    On October 8, 2004, the Department issued a supplemental 
questionnaire; this questionnaire contained a second set of questions 
concerning the section A response and a set of questions concerning the 
section B and C responses. Responses were received on October 21, 2004.
    On October 25, 2004, petitioner requested a 30-day postponement of 
the preliminary determination. In response to petitioner's request and 
pursuant to section 733(c)(1)(B) of the Act, on October 28, 2004, the 
Department postponed the preliminary determination of the antidumping 
duty investigation on purified CMC from Mexico until not later than 
December 16, 2004. See Postponement of Preliminary Determinations of 
Anitdumping Duty Investigations: Purified Carboxymethylcellulose from 
Finland, Mexico, the Netherlands and Sweden, 69 FR 64030 (November 3, 
2004).

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, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
petitioner. 19 CFR 351.210(e)(2) requires that requests by exporters 
for postponement of a final determination be accompanied by a request 
for an extension of the provisional measures from a four-month period 
to not more than six months.
    On November 23, 2004, amtex requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination until a date not later than 
135 days after the date on which the Department publishes its notice of 
preliminary determination. amtex also included a request to extend the 
provisional measures by an additional 60 days. Such extension is 
permitted by section 733(d) of the Act. In addition, on November 19, 
2004, petitioner requested that, in the event of a negative preliminary 
determination, the Department postpone the deadline for its final 
determination until a date not later than 135 days after the date on 
which the Department publishes its notice of preliminary determination.
    Accordingly, because we have made an affirmative preliminary 
determination in this case, the request for postponement was made by an 
exporter that accounts for a significant portion of exports of the 
subject merchandise, and there is no compelling reason to deny the 
respondent's request, we are postponing the final determination until 
not later than 135 days after the date of publication of this notice 
and are extending the provisional measures six months.

Period of Investigation (POI)

    The POI is April 1, 2003, through March 31, 2004. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of the filing of the petition, i.e., June 2004.

Scope of Investigation

    For purposes of this investigation, the products covered are all 
purified CMC, sometimes also referred to as purified sodium CMC, 
polyanionic cellulose, or cellulose gum, which is a white to off-white, 
non-toxic, odorless, biodegradable power, comprising sodium 
carboxymethylcellulose that has been refined and purified to a minimum 
assay of 90 percent. Purified CMC does not include unpurified or crude 
CMC, CMC Fluidized Polymer Suspensions, and CMC that is cross-linked 
through heat treatment. Purified CMC is CMC that has undergone one or 
more purification operations which, at a minimum, reduce the remaining 
salt and other by-product portion of the product to less than ten 
percent.
    The merchandise subject to this investigation is classified in the 
Harmonized Schedule of the United States (HTSUS) at subheading 
3912.31.00. This tariff classification is provided for convenience and 
customs purposes; however, the written description of the scope of this 
investigation is dispositive.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
CMC produced and sold by the respondent in Mexico during the POI 
fitting the description in the ``Scope of Investigations'' section of 
this notice to be foreign like product for purposes of determining 
appropriate product comparisons to U.S. sales. We compared U.S. sales 
to sales made in the home market. Where there were no sales of 
identical merchandise in the home market in the ordinary course of 
trade to compare to U.S. sales, we compared U.S. sales to sales of the 
most similar foreign like product made in the ordinary course of trade.
    In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by the respondent in the 
following order

[[Page 77203]]

of importance: grade, viscosity, degree of substitution, particle size, 
and solution characteristics. Petitioner's model match comments listed 
the criteria in descending order of importance: grade, viscosity, 
degree of substitution, particle size, and solution characteristics, 
and provided subfields for each criterion. Petitioner agreed that the 
addition of one subfield for oil drilling and an extra viscosity range 
to reflect more meaningful distinctions in the market was justified.

Fair Value Comparisons

    To determine whether sales of purified CMC from Mexico to the 
United States were made at LTFV, we compared the export price (EP) to 
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 compared POI weighted-average EPs to 
NVs.
    As discussed below under ``Home Market Viability and Comparison 
Market Selection,'' we determined that Amtex had a viable home market 
during the POI.

Export Price

    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 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.
    We used EP methodology for Amtex, in accordance with section 772(c) 
of the Act, because the subject merchandise was sold directly to the 
first unaffiliated purchaser in the United States before importation. 
We based EP on the packed price to unaffiliated purchasers in the 
United States. In accordance with section 772(c)(2)(A) of the Act, we 
made deductions for movement expenses, where appropriate, for foreign 
inland freight from the plant to the distribution warehouse, 
warehousing, foreign inland freight from the plant/warehouse to the 
port of exportation, foreign inland insurance, foreign brokerage and 
handling, U.S. brokerage and handling, international freight, and U.S. 
inland freight from the port to the warehouse. In addition, we deducted 
billing adjustments and other discounts from EP, where appropriate.

Normal Value

A. Home Market Viability and Comparison Market Selection

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared respondent's volume of home market sales of 
the foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act.
    In this investigation, we determined Amtex's aggregate volume of 
home market sales of the foreign like product was greater than five 
percent of the aggregate volume of U.S. sales of the subject 
merchandise. Therefore, we used home market sales as the basis for NV 
in accordance with section 773(a)(1)(B) of the Act.

B. Level of Trade

    In accordance with section 773(a)(1)(B)(i) 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 transaction. See also 
19 CFR 351.412. The NV LOT is the level of the starting-price sales in 
the comparison market. For EP sales, the U.S. LOT is the level of the 
starting-price sale, which is usually from the exporter to the 
importer.
    To determine whether NV sales are at a different LOT than EP, we 
examine stages in the marketing process and selling functions along the 
chain of distribution between the producer and the unaffiliated 
customer. In analyzing differences in selling functions, we determine 
whether the LOTs identified by the respondent are meaningful. See 
Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 
27371 (May 19, 1997). If the claimed LOTs are the same, we expect 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. 
See Porcelain-on-Steel Cookware from Mexico: Final Results of 
Administrative Review, 65 FR 30068 (May 10, 2000). If the NV 
transactions are at a different LOT than EP transactions, 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 U.S. sales at the LOT of the export transactions, we make an LOT 
adjustment under section 773(a)(7)(A) of the Act.
    In this investigation, we obtained information from Amtex regarding 
the marketing stages involved in its selling activities for its 
reported home market and U.S. sales, including a description of the 
selling activities performed by the respondent for each channel of 
distribution it claimed (see Amtex Section B & C Response, September 
22, 2004, at page C-15).
Analysis
    Amtex provided a Selling Functions Chart (see Amtex's Section A 
Response, September 1, 2004, at Exhibit A-14) in which there is a 
division between four categories: (1) Home market sales to end-users; 
(2) Home market sales to distributors; (3) U.S. sales to end-users; and 
(4) U.S. sales to distributors. None of the selling activity entries 
under any of these four categories are properly quantified; they are 
only reported as ``performed'' or ``not performed.'' No distinctions 
such as ``heavy'' or ``medium'' or ``slight'' are attributed to any 
function. Further, the Selling Functions Chart lists several functions 
as not being performed when the narrative descriptions would indicate 
otherwise. One example would be the selling activity ``pay 
commissions,'' which Amtex clearly states occurs in the home market 
(see Amtex's Section B Response, September 22, 2004, at B-20). Another 
example would be the selling activity ``order input/processing,'' which 
Amtex states occurs in the U.S. market (see Amtex's Section A Response, 
September 1, 2004, at A-12). Since these selling activities are not 
properly quantified or analyzed, the Department has no means of 
comparison.
Level of Trade in the Home Market
    Amtex reported on LOT in the Mexican market with one channel of 
distribution to two classes of customers: (1) Direct sales from the 
mill to end-users, and (2) direct sales from the mill to 
distributors.\3\ Generally, Amtex

[[Page 77204]]

claims a higher number of selling activities performed for sales to 
end-users than for sales to distributors. As discussed above, whoever, 
the selling functions are not properly quantified or analyzed in 
Amtex's response. Therefore, based on our review of evidence on the 
record, we find home market sales to both customer categories were 
substantially similar with respect to selling functions and stages of 
marketing. Accordingly, we preliminarily find that Amtex had only one 
LOT for its home market sales.
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    \3\ In addition, Amtex reported a subset of this channel of 
distribution for the local market in which a pro forma invoice was 
issued by Amtex's wholly owned affiliate, Aquasol S.A. de C.V. 
(Aquasol), via a tolling arrangement; Aquasol has no production 
facility of its own and all functions of Aquasol are performed by 
Amtex personnel. This arrangement is a book-keeping expediency not 
rising to the level of a separate channel of distribution (see 
Amtex's Section A Response, September 1, 2004, at Exhibits A-2 and 
A-3). Nothing indicates the two classes of customers, end-users and 
distributors, are different for Aquasol transactions; the only 
difference appears to be geographical. We conclude that this is not 
a different channel of distribution and its activities are included 
in the considerations below.
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Level of Trade in the U.S. Market
    We also reviewed the selling functions and services performed by 
Amtex in the U.S. market for EP sales. Amtex reported one LOT in the 
U.S. market with one channel of distribution to two classes of 
customers: (1) Direct sales from the mill to end-users, and (2) direct 
sales from the mill to distributors (see Amtex's Section A Response, 
September 1, 2004, at Exhibit A-3). Amtex's Selling Function Chart 
indicated the same three selling activities for both categories of 
sales: (1) Inventory Maintenance; (2) Warranty Services; and (3) 
Freight and Delivery. Therefore, there is no difference between these 
two classes of customers in the U.S. market. As with the home market 
sales, some functions are reported as not having any activity when the 
narrative descriptions would indicate otherwise; an example would be 
the selling activity ``order input/processing,'' which Amtex states 
occurs in the U.S. market (see Amtex's Section A Response, September 1, 
2004, at A-12). Also, as with the home market entries, Amtex did not 
quantify the extent to which it performs these functions. Accordingly, 
we preliminarily determine there is one EP LOT in the U.S. market.
Comparison of Levels of Trade Between Markets
    Amtex states that due to the smaller type of customer in the home 
market and the greater need of support there, there is greater activity 
in the home market (see Amtex's Section A Response, September 1, 2004, 
at page A-9). We find the selling functions and services performed by 
Amtex on direct sales for the one U.S. channel of distribution relating 
to the EP LOT (i.e., sales of merchandise produced to order for 
unaffiliated end-users or distributors and sales or merchandise from 
stock to unaffiliated end-users and distributors) have not been shown 
to be substantially different from those provided for home market 
sales. As discussed above, none of the selling activity entries are 
properly quantified, nor is the Selling Function Chart consistent with 
the narrative descriptions. Since the selling activities are not 
properly quantified or analyzed, the Department has no means of 
comparison. Therefore, we preliminarily determine the EP LOT is the 
same as the LOT in the home market.

C. Calculation of Normal Value Based on Home Market Prices

    We calculated Amtex's NV based on delivered prices to unaffiliated 
customers. We made deductions for movement expenses, including inland 
freight from the plant to the distribution warehouse, warehousing, 
inland freight from the plant/warehouse to the customer, and inland 
insurance, under section 773(a)(6)(B)(ii) of the Act. In addition, we 
made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410 for differences in circumstances of sale for direct selling 
expenses, including commissions and inventory carrying costs. We also 
deducted home market packing costs and added U.S. packing costs to the 
starting price in accordance with section 773(a)(6)(A) and (B) of the 
Act. Furthermore, we made an adjustment for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411.

Currency Conversion

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

Verification

    As provided in section 782(i) of the Act, we will verify the 
information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
U.S. Customs and Border Protection (CBP) to suspend liquidation of all 
imports of subject merchandise that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. We will instruct CBP to require a cash 
deposit or the posting of a bond equal to the weighted-average amount 
by which NV exceeds EP, as indicated in the chart below. These 
suspension-of-liquidation instructions will remain in effect until 
further notice. The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                        margin
                                                              (percent)
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Quimica Amtex, S.A. de C.V.................................        12.18
All Others.................................................        12.18
------------------------------------------------------------------------

    See Memorandum to the File, ``Preliminary Determination Analysis 
for Amtex,'' December 16, 2004. Public versions of our analysis 
memoranda are on file in the Central Records Unit (CRU), room B-099 of 
the Herbert C. Hoover Department of Commerce building, 14th Street and 
Pennsylvania Avenue, NW., Washington, DC.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
Commission of our preliminary affirmative determination. If our final 
determination is affirmative, the Commission will determine before the 
later of 120 days after the date of this preliminary determination or 
45 days after our final determination whether these imports are 
materially injuring, or threaten material injury to, the U.S. industry. 
Because we have postponed the deadline for our final determination to 
135 days from the date of the publication of this preliminary 
determination, the Commission will make its final determination within 
45 days of our final determination.

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

Public Comment

    Case briefs for this investigation must be submitted to the 
Department by the later of 30 days after publication of this 
preliminary determination or seven days after the date the final 
verification report is issued in this proceeding. Rebuttal briefs must 
be filed five days from the deadline date for case briefs. 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. Section 774 of the Act provides that the Department will 
hold a public hearing to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs, provided that 
such a hearing is requested by an interested party. If a

[[Page 77205]]

request for a hearing is made in this investigation, the hearing will 
tentatively be held two days after the rebuttal brief deadline date at 
the U.S. Department of Commerce, 14th Street and Pennsylvania Avenue, 
NW., Washington, DC. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
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 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. 
Oral presentations will be limited to issues raised in the briefs.
    We will make our final determination not later than 135 days after 
the publication of this notice in the Federal Register.
    This determination is published pursuant to sections 733(f) and 
777(i) of the Act.

    Dated: December 16, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-28117 Filed 12-23-04; 8:45 am]
BILLING CODE 3510-DS-M