[Federal Register Volume 65, Number 89 (Monday, May 8, 2000)]
[Notices]
[Pages 26567-26570]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-11461]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-484-801]


Electrolytic Manganese Dioxide From Greece: Preliminary Results 
of Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: Based on a request by a Greek producer, Tosoh Hellas A.I.C., 
the Department of Commerce is conducting an administrative review of 
the antidumping duty order on electrolytic manganese dioxide from 
Greece.
    We have preliminarily determined that sales by Tosoh Hellas A.I.C. 
have not been made below normal value. If these preliminary results are 
adopted in our final results of administrative review, we will instruct 
U.S. Customs to liquidate without regard to antidumping duties all 
entries of EMD from Tosoh Hellas A.I.C. during the period of review.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments in this proceeding are requested 
to submit with each argument (1) a statement of the issue and (2) a 
brief summary of the argument.

EFFECTIVE DATE: May 8, 2000.

FOR FURTHER INFORMATION CONTACT: Hermes Pinilla or Richard Rimlinger, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, Washington, DC 20230; telephone: (202) 482-
4733.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department of Commerce's (the 
Department's) regulations are to 19 CFR Part 351 (1999).

Background

    On April 17, 1989, the Department published in the Federal Register 
(54 FR 15243) the antidumping duty order on electrolytic manganese 
dioxide (EMD) from Greece. Tosoh Hellas A.I.C. (Tosoh) requested a 
review on April 29, 1999. In response to this request, the Department 
published a notice of initiation of administrative review on May 20, 
1999, in accordance with 19 CFR 351.213(b) (64 FR 28973). The 
Department is conducting this administrative review in accordance with 
section 751 of the Act.

Scope of Review

    Imports covered by this review are shipments of EMD from Greece. 
EMD is

[[Page 26568]]

manganese dioxide (MnO<INF>2</INF>) that has been refined in an 
electrolysis process. The subject merchandise is an intermediate 
product used in the production of dry-cell batteries. EMD is sold in 
three physical forms, powder, chip, or plate, and two grades, alkaline 
and zinc-chloride. EMD in all three forms and both grades is included 
in the scope of the order. This merchandise is currently classifiable 
under item number 2820.10.0000 of the Harmonized Tariff Schedule of the 
United States (HTSUS). The HTSUS number is provided for convenience and 
customs purposes. It is not determinative of the products subject to 
the order. The written product description remains dispositive.

Period of Review

    The period of review (POR) is April 1, 1998, through March 31, 
1999.

Product Comparability and Home Market Viability

    In a July 20, 1999, submission, and in several subsequent 
submissions from Kerr-McGee Chemical LLC and Chemetals Inc. 
(collectively ``the petitioners''), the petitioners allege three points 
concerning the selection of comparable merchandise: (1) The zinc-
chloride-grade EMD sold in the home market is not a foreign like 
product that can be compared to the alkaline-grade EMD sold to the 
United States under the definition set forth in section 771(16)(B) of 
the Act; (2) the current review presents an unusual situation in which 
the home market sales of EMD, though accounting for more than five 
percent of sales to the United States, should not be considered a 
viable comparison market; and (3) a particular market situation exists 
which warrants rejection of home market sales for comparison purposes.
    We have preliminarily determined the following: (1) The subject 
merchandise sold in Greece is a foreign like product as defined under 
section 771(16)(B) of the Act; (2) the home market is viable within the 
meaning of section 773(a)(1)(C)(ii) of the Act; and (3) a particular 
market situation does not exist within the meaning of section 
773(a)(1)(C)(iii) of the Act.
    With respect to the first point, we examined whether the EMD grade 
sold in the home market met the standards of section 771(16)(B) of the 
Act. Specifically, pursuant to section 771(16)(B) of the Act, we 
evaluated the following criteria: (1) Whether the foreign like product 
was produced in the same country and by the same person as the subject 
merchandise; (2) whether the merchandise in question is like in 
component material or materials and in the purposes for which used; and 
(3) whether the two grades (i.e., zinc-chloride and alkaline) of EMD 
are approximately equal in commercial value.
    Based on the information provided on the record we found that the 
merchandise in question is produced in the same country and by the same 
person as the subject merchandise. In addition, we found that both the 
U.S.--and home market--sold grades of EMD are produced using the same 
component materials and both grades are used as cathode material in the 
production of dry-cell batteries.
    With regard to the commercial-value criterion, we found that the 
products satisfy our twenty-percent difference-in-merchandise test 
which we generally apply to evaluate the commercial-value criterion of 
the statute. See Import Administrative Policy Bulletin 92.2 
``Difference in Merchandise, 20 percent rule'' (July 29, 1992); Certain 
Forged Stainless Steel Flanges From India: Final Results of Antidumping 
Duties Administrative Review, 61 FR 51263, 51265 (October 1, 1996); 
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside 
Diameter, and Components Thereof, From Japan; Final Results of 
Antidumping Duty Administrative Reviews, 63 FR 63860, 63874 (November 
17, 1998). In addition, information the respondent submitted on March 
13, 2000, shows that the two products have less than a two-percent 
difference in price when sold to a particular third-country market, the 
respondent's only market in which both zinc-chloride-grade and 
alkaline-grade EMD are sold. This less than two-percent difference in 
price, when considered in conjunction with a difference-in-merchandise 
adjustment of less than 20 percent, provides an indication that the 
grades are approximately equal in commercial value. Therefore, we 
preliminarily determine that the two products are ``approximately equal 
in commercial value'' as set forth in section 771(16)(B)(iii) of the 
Act.
    Based on the reasons stated above, we determined that zinc-
chloride-grade EMD is a foreign like product as defined under section 
771(16)(B) of the Act. For a detailed explanation of our analysis, see 
the Decision Memorandum from Office Director to Deputy Assistant 
Secretary dated May 1, 2000 (``Decision Memo'').
    With respect to the petitioners' second point, we analyzed whether 
the current review presents an unusual situation in which home market 
sales of EMD constituting more than five percent of sales to the United 
States should not be considered viable. Based on our interpretation of 
the statute, we have preliminarily found that in this case there is no 
unusual situation which makes our application of our normal statutory 
five-percent viability test inappropriate. Therefore, since the 
aggregate quantity of the respondent's home market sales is more than 
five-percent of the aggregate quantity of the respondent's U.S. sales, 
we find that it is viable in accordance with our statute and 
regulations. For a detailed explanation of our analysis, see the 
Decision Memo.
    Finally, with respect to the petitioners' final point, that a 
particular market situation exists, the petitioners assert in their 
July 20, 1999, submission, that there are a number of elements which do 
not permit a proper price-to-price comparison in this review period. 
According to the petitioners, these elements are as follows: (1) The 
component materials used in the home market product are unlike the 
component materials in the U.S. product; (2) the two types of EMD 
differ substantially in the purposes for which they are used; (3) the 
two types of EMD differ substantially in commercial value; and (4) 
Tosoh's home market sales are incidental or insignificant to Tosoh. The 
petitioners argue that all of these factors create a particular market 
situation that prevents the Department from making an appropriate 
price-to-price comparison.
    The Act states that there may be ``particular market situations'' 
in a foreign market that do not permit a proper comparison with EP or 
CEP sales. Although the Act does not identify these ``particular market 
situations,'' several are identified in the Statement of Administrative 
Action (SAA), H. Doc.103-316, vol. 1, 103d Cong., 2d sess., 822 (1994). 
These include: (1) Where a single sale in a foreign market constitutes 
five percent of sales to the United States; (2) where there are such 
extensive government controls over pricing in a foreign market that 
prices in that market cannot be considered competitively set; and (3) 
where there are differing patterns of demand in the United States and a 
foreign market. Finally, 19 CFR 351.404(c)(2) permits the Department to 
decline to calculate normal value on the basis of prices in a viable 
home market if parties establish to the Department's satisfaction that 
certain situations in the viable market would not permit a proper 
comparison of like product prices in that market with EP or CEP sales. 
See SAA at 822.

[[Page 26569]]

    We have found no evidence of a particular market situation, within 
the meaning of section 773(a)(1)(C)(iii) of the Act, which would 
prevent a proper price comparison and which warrants a departure from 
the normal five-percent viability test. For example, there is no 
evidence to suggest that a single sale in the home market constitutes 
five percent of sales to the United States, that there are extensive 
government controls over pricing in the Greek home market, or that 
there are differing patterns of demand for EMD in the United States and 
in the home market. For a detailed explanation of our analysis, see our 
Decision Memo.
    Because the criteria on which the petitioners rely in their 
particular market-situation argument reflect the definition of a 
foreign like product in sections 771(16)(B) (ii) and (iii) of the Act, 
we examined whether the SAA mentions any of the criteria as 
determinants of a particular market situation. Based on our analysis of 
the SAA, we found that the SAA does not mention any of the criteria on 
which the petitioners rely in their particular-market-situation 
argument as a measure for finding that a particular market situation 
exists. For a detailed explanation of our analysis, see the Decision 
Memo.

Constructed Export Price

    For the price to the United States, we used constructed export 
price (CEP) as defined in section 772(b) of the Act. We calculated CEP 
based on the packed, delivered prices to unaffiliated purchasers in the 
United States. We made deductions for any movement expenses in 
accordance with section 772(c)(2)(A) of the Act.
    In accordance with section 772(d)(1) of the Act and the SAA (at 
823-824), we calculated the CEP by deducting selling expenses 
associated with economic activities occurring in the United States, 
including direct selling expenses and indirect selling expenses.
    With respect to CEP profit, section 772(d)(3) of the Act requires 
the Department, in determining CEP, to identify and deduct from the 
starting price in the U.S. market an amount for profit allocable to 
selling and further-manufacturing activities in the United States. 
Section 772(f) of the Act provides the rule for determining the amount 
of CEP profit to deduct from the CEP starting price. In this review, 
since we do not have any cost information to calculate CEP profit, we 
determined that the best available sources of profit information are 
the 1998 financial statements which the respondent and its U.S. 
affiliate submitted in response to section A of our questionnaire. See 
Analysis Memorandum dated April 28, 2000 (``Analysis Memo'').
    Finally, in accordance with section 772(d)(1)(B) of the Act, we 
adjusted CEP to reflect a rebate which Tosoh is contractually obligated 
to make to its customer based on the relationship of its price, after 
all previously described adjustments, and normal value. For further 
details see Analysis Memo.

Normal Value

    In calculating normal value, as we stated above, we determined that 
the quantity of foreign like product sold by the respondent in the 
exporting country was sufficient to permit a proper comparison with the 
sales of the subject merchandise to the United States pursuant to 
section 773(a)(1) of the Act because the quantity of sales in the home 
market was greater than five percent of the sales to the U.S. market. 
Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we 
based normal value on the price at which the foreign like product was 
sold for consumption in the exporting country. See Analysis Memo.
    We calculated monthly, weighted-average normal values. Because 
identical merchandise was not sold during the relevant contemporaneous 
period, we compared U.S. sales to sales of the most similar foreign 
like product in accordance with section 771(16)(B) of the Act.
    Home market prices were based on packed, free-on-truck prices to 
the unaffiliated purchasers in the home market. Where applicable, we 
made adjustments for differences in packing in accordance with section 
773(a)(6)(A) of the Act. We also made adjustments for differences in 
costs attributable to differences in physical characteristics of the 
merchandise pursuant to section 773(a)(6)(C)(ii) of the Act, and for 
differences in circumstances of sale (COS) in accordance with section 
773 (a)(6)(C)(iii) of the Act and 19 CFR 351.410. With respect to our 
comparisons to CEP, we made COS adjustments by deducting home-market 
direct selling expenses from normal value. We also made adjustments for 
home-market indirect selling expenses to offset U.S. indirect selling 
expenses.

Level of Trade

    To the extent practicable, we determined normal value for sales at 
the same level of trade as the U.S. sales in accordance with section 
773(a)(1)(B) of the Act. The normal value level of trade is that of the 
starting-price sales in the home market. See 19 CFR 351.412(c)(iii).
    To determine whether home market sales were at a different level of 
trade than U.S. sales, we examined stages in the marketing process and 
selling functions along the chain of distribution between the producer 
and the unaffiliated customer. Tosoh reported that there was only one 
channel of distribution in the home market, and we conclude that there 
is only one level of trade. Because all of Tosoh's U.S. sales were CEP 
sales, we identified the level of trade based on the price after the 
deduction of expenses and profit under section 772(d) of the Act, 
pursuant to 19 CFR 351.412(c)(ii). Based on our analysis, we considered 
CEP sales to constitute a single level of trade. Based on the record, 
we found that there were significant differences between the selling 
activities associated with the home market level of trade and those 
associated with the CEP level of trade. Therefore, we determined that 
CEP sales were at a different level of trade from the home market 
sales. Consequently, we could not match U.S. sales to sales at the same 
level of trade in the home market. Moreover, data necessary to 
determine a level-of-trade adjustment was not available. Therefore, 
because home market sales were made at a more advanced stage of 
distribution than that of the CEP level, we made a CEP-offset 
adjustment when comparing CEP and home market sales in accordance with 
section 773(a)(7)(B) of the Act. For a more detailed description of our 
analysis, see the Level-of-Trade section of our Analysis Memo.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margin of 0.00 for Tosoh for the period April 1, 1998, 
through March 31, 1999.
    Any interested party may request a hearing within 30 days of 
publication of this notice. Any hearing, if requested, will be held 40 
days after the date of publication of this notice, or the first workday 
thereafter. Issues raised in hearings will be limited to those raised 
in the respective case and rebuttal briefs. Interested parties may 
submit case briefs within 30 days of the date of publication of this 
notice. Rebuttal briefs, which must be limited to issues raised in the 
case briefs, may be filed not later than 35 days after the date of 
publication of this notice.
    Parties who submit arguments are requested to submit with the 
arguments: (1) A table of contents, (2) a statement of the issue, (3) a 
list of authorities used, and (4) an executive summary of issues. 
Executive summaries should be limited to five pages total, including 
footnotes.

[[Page 26570]]

    Hearing requests should specify the number of participants and 
provide a list of the issues to be discussed. Oral presentations will 
be limited to issues raised in the briefs. All memoranda to which we 
refer in this notice can be found in the public reading room, located 
in the Central Records Unit, room B-099 of the main Department of 
Commerce building.
    The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written briefs or at a hearing. The Department will 
issue final results of this review within 120 days of publication of 
these preliminary results.
    Upon completion of the final results of this administrative review, 
if there is no change from our preliminary results, we will instruct 
the Customs Service to liquidate all appropriate entries without regard 
to antidumping duties.
    On April 20, 2000, the International Trade Commission (ITC) 
determined that revoking the existing antidumping duty orders on 
electrolytic manganese dioxide from Greece and Japan would not be 
likely to lead to continuation or recurrence of material injury within 
a reasonably foreseeable time. Therefore, because the order will be 
revoked as a result of the ITC's determination with an effective date 
of January 1, 2000, no deposit requirements will be effective for 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this determination in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 1, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-11461 Filed 5-5-00; 8:45 am]
BILLING CODE 3510-DS-P