[Federal Register Volume 73, Number 153 (Thursday, August 7, 2008)]
[Notices]
[Pages 45948-45954]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18246]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-405-803]


Purified Carboxymethylcellulose From Finland; Notice of 
Preliminary Results of Antidumping Duty Administrative Review

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

SUMMARY: In response to requests from Aqualon Company, a division of 
Hercules Inc. (the petitioner) and respondents CP Kelco OY and CP Kelco 
U.S., Inc. (collectively, CP Kelco), the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on purified carboxymethylcellulose (CMC) from Finland. The 
review covers exports of the subject merchandise to the United States 
produced by CP Kelco. The period of review (POR) is July 1, 2006, 
through June 30, 2007.
    We preliminarily find that CP Kelco made sales at less than normal 
value (NV) during the POR. If these preliminary results are adopted in 
our final results of this review, we will instruct U.S. Customs and 
Border Protection (CBP) to assess antidumping duties based on 
differences between the export price (EP) or constructed export price 
(CEP) and NV.

DATES: Effective Date: August 7, 2008.

FOR FURTHER INFORMATION CONTACT: Tyler Weinhold or Robert James, AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
1121 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department published the antidumping duty order on CMC from 
Finland on July 11, 2005. See Notice of Antidumping Duty Orders: 
Purified Carboxymethylcellulose from Finland, Mexico, the Netherlands, 
and Sweden,

[[Page 45949]]

70 FR 39734 (July 11, 2005). On July 3, 2007, the Department published 
the notice of opportunity to request an administrative review of CMC 
from Finland for the period July 1, 2006, through June 30, 2007. See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity To Request Administrative Review, 72 FR 
36420 (July 3, 2007).
    On July 25, 2007, the petitioner requested a review of CP Kelco for 
the period July 1, 2006, through June 30, 2007. On July 27, 2007, CP 
Kelco requested an administrative review for the same period. On August 
24, 2007, the Department published in the Federal Register a notice of 
initiation of this antidumping duty administrative review. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Requests for Revocation in Part, 72 FR 48613 (August 24, 
2007).
    On August 27, 2007, the Department issued its standard antidumping 
questionnaire (antidumping questionnaire) to CP Kelco. CP Kelco 
submitted its response to section A of the Department's antidumping 
questionnaire on October 5, 2007 (CP Kelco's Section A Response). CP 
Kelco submitted its response to sections B and C of the antidumping 
questionnaire on October 22, 2007 (CP Kelco's Sections B and C 
Response).
    On November 15, 2007, the Department issued a supplemental 
questionnaire to CP Kelco regarding its responses to sections A, B, and 
C of the antidumping questionnaire. CP Kelco submitted its response to 
the Department's supplemental questionnaire on December 11, 2007 (CP 
Kelco's December 11, 2007, Response). On January 18, 2008, the 
Department issued a second supplemental regarding CP Kelco's response 
to sections A, B, and C. CP Kelco submitted its response to the 
Department's supplemental questionnaire on February 12, 2008 (CP 
Kelco's February 12, 2008, Response).
    On November 7, 2007, petitioner alleged that, during the POR, CP 
Kelco made sales of the foreign like product at prices below the cost 
of production (COP) in the home market. On January 18, 2008, the 
Department initiated an investigation to determine whether CP Kelco's 
sales of CMC were made at prices below CP Kelco's cost of production. 
See Memorandum from Ji Young Oh, of the Office of Accounting and Tyler 
Weinhold, case analyst, to Richard O. Weible, Director, Office 7, AD/
CVD Enforcement, regarding Petitioner's Allegation of Sales Below the 
Cost of Production for CP Kelco Oy, dated January 18, 2008 (Cost 
Initiation Memo). The preliminary results of this investigation are 
discussed in the ``Normal Value'' section of this notice, below. On 
January 18, 2008, the Department sent a letter to CP Kelco requesting 
that the company respond to section D of the Department's antidumping 
questionnaire. CP Kelco submitted its response on February 4, 2008 (CP 
Kelco's Section D Response).
    On March 3, 2008, the Department issued a supplemental 
questionnaire to CP Kelco regarding its Section D response. CP Kelco 
submitted its response to the Department's supplemental questionnaire 
on March 25, 2008 (CP Kelco's March 25, 2008, Response). On March 31, 
2008, the Department issued a second section D supplemental 
questionnaire to CP Kelco. CP Kelco submitted its response to the 
Department's supplemental questionnaire on April 11, 2008 (CP Kelco's 
April 11, 2008, Response). On May 13, 2008, the Department issued a 
third section D supplemental questionnaire to CP Kelco. CP Kelco 
submitted its response to the Department's supplemental questionnaire 
on May 27, 2008 (CP Kelco's May 27, 2008, Response).
    Because it was not practicable to complete this review within the 
normal time frame, on March 11, 2008, the Department published in the 
Federal Register a notice of the extension for the preliminary results 
of this review. See Purified Carboxymethylcellulose from Finland, 
Extension of Time Limits for Preliminary Results of Antidumping Duty 
Administrative Review, 73 FR 12950 (March 11, 2008). This extension 
established the deadline for these preliminary results as July 30, 
2008.

Scope of the Order

    The merchandise covered by this order is all purified 
carboxymethylcellulose (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 powder, comprising 
sodium CMC 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 order is classified in the Harmonized 
Tariff Schedule of the United States at subheading 3912.31.00. This 
tariff classification is provided for convenience and customs purposes; 
however, the written description of the scope of the order is 
dispositive.

Fair Value Comparisons

    To determine whether sales of CMC in the United States were made at 
less than NV, we compared U.S. price to NV, as described in the 
``Export Price,'' ``Constructed Export Price,'' and ``Normal Value'' 
sections of this notice. In accordance with section 777A(d)(2) of the 
Tariff Act of 1930, as Amended (the Tariff Act), we calculated monthly 
weighted-average NVs and compared these to individual U.S. 
transactions. Because we determined CP Kelco made both EP and CEP sales 
during the POR, we used both EP and CEP as the basis for U.S. price in 
our comparisons. We used the invoice date, as recorded in CP Kelco's 
normal books and records as the date of sale for CP Kelco's EP, CEP, 
and home market sales. For a more detailed discussion of these 
calculations, see Memorandum from Tyler Weinhold to the File, 
``Analysis of Data Submitted by CP Kelco U.S. Inc. and CP Kelco OY, 
(collectively, CP Kelco) in the Preliminary Results of the 2006-2007 
Administrative Review of the Antidumping Duty Order on Purified 
Carboxymethylcellulose (CMC) from Finland (A-405-803),'' (Preliminary 
Analysis Memorandum).

Product Comparisons

    In accordance with section 771(16) of the Tariff Act, we considered 
all products produced by CP Kelco covered by the description in the 
``Scope of the Order'' section, above, and sold in the home market 
during the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We relied on five 
characteristics to match U.S. sales of subject merchandise to home 
market sales of the foreign like product (listed in order of priority): 
(1) Grade; (2) viscosity; (3) degree of substitution; (4) particle 
size; and (5) solution gel characteristics. See the antidumping 
questionnaire at Appendix 5. 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 these product characteristics and the reporting instructions listed 
in the antidumping questionnaire. Because there were sales of identical 
or similar merchandise in the home market suitable for comparison to 
each U.S. sale, we did not compare any U.S. sales to constructed value 
(CV).

[[Page 45950]]

Export Price

    Section 772(a) of the Tariff 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 of subject merchandise 
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 section 772(c).'' In accordance with section 
772(a) of the Tariff Act, we used EP for a number of CP Kelco's U.S. 
sales. We have preliminarily found that these sales are properly 
classified as EP sales because these sales were made before the date of 
importation and were sales directly to unaffiliated U.S. customers.
    We based EP on the packed, delivered duty paid or free-on-board 
(FOB)-warehouse prices to unaffiliated customers in the United States. 
We made adjustments for price or billing adjustments and discounts, 
where applicable. We also made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Tariff Act, which included, 
where appropriate, foreign inland freight, international freight, 
marine insurance, and U.S. brokerage and handling. We also reduced 
movement expenses, where appropriate, by the amount of certain freight 
revenue (i.e., revenue received from customers for invoice items 
covering transportation expenses) paid by the customer. Additionally, 
we made adjustments for direct selling expenses (credit expenses) in 
accordance with section 772(c)(2)(A) of the Tariff Act.
    CP Kelco incurred certain expenses as a result of factoring certain 
sales (i.e., selling the accounts receivable associated with those 
sales to an affiliated financial institution in exchange for an 
immediate payment). For factored sales, we made an adjustment to gross 
unit price based upon the difference between the face value of the 
accounts receivables factored and the immediate payment received upon 
the factoring of those receivables (factoring charges).

Constructed Export Price

    In accordance with section 772(b) of the Tariff Act, CEP is ``the 
price at which the subject merchandise is first sold (or agreed to be 
sold) in the United States before or after the date of importation by 
or for the account of the producer or exporter of such merchandise, or 
by a seller affiliated with the producer or exporter, to a purchaser 
not affiliated with the producer or exporter,'' as adjusted under 
sections 772(c) and (d) of the Tariff Act. In accordance with section 
772(b) of the Tariff Act, we used CEP for a number of CP Kelco's U.S. 
sales because CP Kelco sold merchandise to affiliate CP Kelco U.S., 
Inc. in the United States which, in turn, sold subject merchandise to 
unaffiliated U.S. customers. We have preliminarily found that these 
U.S. sales are properly classified as CEP sales because they occurred 
in the United States and were made through CP Kelco's U.S. affiliate, 
CP Kelco U.S., Inc., to unaffiliated U.S. customers.
    We based CEP on the packed, delivered duty paid or FOB-warehouse 
prices to unaffiliated purchasers in the United States. We made 
adjustments for price or billing adjustments, early payment discounts, 
and factoring charges,\1\ where applicable. We also made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Tariff 
Act, which included, where appropriate, foreign inland freight, foreign 
brokerage and handling, international freight, marine insurance, 
customs duties, U.S. brokerage, U.S. inland freight, and U.S. 
warehousing expenses. We also reduced movement expenses, where 
appropriate, by the amount of freight revenue paid by the customer. In 
accordance with section 772(d)(1) of the Tariff Act, we deducted those 
selling expenses associated with economic activities occurring in the 
United States, including direct selling expenses (imputed credit 
expenses), inventory carrying costs, and indirect selling expenses. We 
also made an adjustment for profit in accordance with section 772(d)(3) 
of the Tariff Act.
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    \1\ See EP section, above.
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Further-Manufactured U.S. Sales

    CP Kelco made certain sales of subject merchandise to Huber 
Engineered Materials (HEM), an affiliated company in the United States. 
See CP Kelco's Sections B and C Response at pages C-33 and C-34, and CP 
Kelco's December 11, 2007, Response at pages 12 and 13. The total 
quantity of this material represented less than 10 percent of CP 
Kelco's total U.S. sales. See Section A of CP Kelco's December 11, 
2007, Response at pages 12 and 13 and at Exhibit A-32 and CP Kelco's 
February 12, 2008 Response at pages 4 to 6 and Exhibits A-33 and A-34. 
This material was then further manufactured by HEM into non-subject 
merchandise, which was then sold to unaffiliated U.S. customers. See 
section A of CP Kelco's December 11, 2007 Response at pages 12 and 13 
and CP Kelco's February 12, 2008, Response at pages 4 to 6 and Exhibits 
A-33 and A-34.
    Section 772(e) of the Tariff Act provides that when the value added 
in the United States by an affiliated party is likely to exceed 
substantially the value of the subject merchandise, the Department 
shall use one of the following prices to determine CEP if there is a 
sufficient quantity of sales to provide a reasonable basis of 
comparison and the use of such sales is appropriate: (1) The price of 
identical subject merchandise sold by the exporter or producer to an 
unaffiliated person; or (2) the price of other subject merchandise sold 
by the exporter or producer to an unaffiliated person.
    In accordance with 19 CFR 351.402(c)(2), we conducted an analysis 
to determine whether the value added by HEM to the subject merchandise 
after importation in the United States was at least 65 percent of the 
price charged to the first unaffiliated purchaser for the merchandise 
as sold in the United States. See 19 CFR 351.402(c)(2). Our analysis 
showed that the value added by HEM was significantly greater than 65 
percent. Therefore, we determine that the value added in the United 
States by HEM exceeds substantially the value of the subject 
merchandise. Id. See also section A of CP Kelco's December 11, 2007, 
Response at pages 12 and 13 and Exhibit C-32, and CP Kelco's February, 
12, 2008, Response at pages 4 to 6 and Exhibits A-33 and A-34.
    We then considered whether there were sales of identical subject 
merchandise or other subject merchandise sold in sufficient quantities 
by the exporter or producer to an unaffiliated person that could 
provide a reasonable basis of comparison. In addition to the sales of 
subject merchandise to HEM which was further manufactured, CP Kelco 
also made CEP sales of identical subject merchandise to unaffiliated 
customers in the United States through CP Kelco U.S., Inc.
    Decisions as to the appropriate methodology for determining CEP for 
sales involving further manufacturing generally must be made on a case-
by-case basis. See, e.g., Certain Corrosion-Resistant Carbon Steel Flat 
Products from the Republic of Korea: Notice of Preliminary Results and 
Partial Rescission of Antidumping Duty Administrative Review, 72 FR 
51584, 51586 (September 10, 2007) (unchanged in final results, 73 FR 
14220 (March 17, 2008)). In the instant review, we find the quantity of 
sales of identical merchandise to unaffiliated customers is 
sufficiently large to serve as a reasonable basis for the calculation 
of

[[Page 45951]]

CEP. The value added to the CMC after importation is very large and the 
further manufacturing very complex. Therefore, similar to our practice 
in other cases (see, e.g., Certain Hot-Rolled Carbon Steel Flat 
Products from the Netherlands; Final Results of Antidumping Duty 
Administrative Review, 72 FR 28676 (May 22, 2007); Certain Corrosion-
Resistant Carbon Steel Flat Products from the Republic of Korea: Notice 
of Preliminary Results and Partial Rescission of Antidumping Duty 
Administrative Review, 72 FR 51584, (September 10, 2007) (unchanged for 
final results, 73 FR 14220 (March 17, 2008)), we have applied the 
preliminary weighted-average margin reflecting the rate calculated for 
sales of identical or other subject merchandise sold to unaffiliated 
customers in the United States.

Normal Value

A. Selection of Comparison Market

    In order to determine whether there was 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 was equal to or greater than five percent of the aggregate 
volume of U.S. sales), we compared the 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) of the 
Tariff Act. As CP Kelco's aggregate volume of home market sales of the 
foreign like product was greater than five percent of its aggregate 
volume of U.S. sales of the subject merchandise, we determined the home 
market was viable. Therefore, we have based NV on home market sales in 
the usual commercial quantities and in the ordinary course of trade.

B. Cost of Production Analysis

    As explained above in the Background section of this notice, on 
November 7, 2007, the petitioner alleged that CP Kelco made sales of 
the foreign like product at prices below the COP in the home market 
during the POR. The Department found there were reasonable grounds to 
believe or suspect that sales in the home market were made at prices 
below the COP. Therefore, pursuant to section 773(b)(1) of the Tariff 
Act, we initiated a cost investigation on January 18, 2008, to 
determine whether CP Kelco's sales made during the POR were at prices 
below its COP. See Cost Initiation Memo.

C. Calculation of Cost of Production (COP)

    In accordance with section 773(b)(3) of the Tariff Act, we 
calculated the weighted-average COP for each model based on the sum of 
CP Kelco's materials and fabrication costs for the foreign like 
product, plus an amount for home market selling expenses, general and 
administrative (G&A) expenses, financial expenses, and packing costs. 
We relied on the COP data submitted by CP Kelco. At our request, CP 
Kelco submitted two G&A expense variables, ``GNA,'' which is CP Kelco's 
G&A expenses reported according to CP Kelco's international financial 
reporting standards (IFRS) financial statements, and ``ALTGNA,'' which 
is CP Kelco's G&A expenses reported according to CP Kelco's Finnish 
accounting standards (FAS) financial statements. See CP Kelco's Section 
A response at Exhibits 20 and 21 and (CP Kelco Oy's 2006 FAS and IFRS 
audited financial statements, respectively). Both sets of financial 
statements are audited.
    The differences between these two separate financial statements and 
the accounting methods used to prepare them do not affect any other 
expenses besides G&A expenses. The primary relevant difference between 
the two financial statements is that CP Kelco's FAS financial 
statements include an amount for goodwill amortization expense, while 
CP Kelco's IFRS financial statements do not include goodwill 
amortization expense.
    We find that CP Kelco's FAS financial statements reflect CP Kelco's 
normal books and records. In addition, CP Kelco's FAS financial 
statements were also prepared using materially the same accounting 
standards as those used to prepare the financial statements referenced 
in the previous segment of this proceeding. See Purified 
Carboxymethylcellulose from Finland, Notice of Final Results of 
Antidumping Duty Administrative Review, 72 FR 70568 (December 12, 2007) 
and the accompanying Issues and Decisions Memorandum at Comment 1. 
Thus, CP Kelco's ``ALTGNA'' represents the G&A expenses reported 
according to CP Kelco's normal books and records. Therefore, in our 
analysis, we have used CP Kelco's alternative G&A expense variable, 
``ALTGNA.'' See the Preliminary Analysis Memorandum at page 4.

D. Test of Home Market Prices

    We compared the weighted-average COP of CP Kelco's home market 
sales to home market sales prices of the foreign like product (net of 
billing adjustments, discounts, any applicable movement expenses, 
direct and indirect selling expenses, and packing), as required under 
section 773(b) of the Tariff Act in order to determine whether these 
sales had been made at prices below the COP. In determining whether to 
disregard home market sales made at prices below the COP, we examined, 
in accordance with sections 773(b)(1)(A) and (B) of the Tariff Act, 
whether such sales were made in substantial quantities within an 
extended period of time, and whether such sales were made at prices 
which would permit recovery of all costs within a reasonable period of 
time.

E. Results of the Cost Test

    Pursuant to section 773(b)(2)(C) of the Tariff Act, where less than 
20 percent of CP Kelco's sales of a given model were at prices less 
than the COP, we did not disregard any below-cost sales of that model 
because these below-cost sales were not made in substantial quantities. 
Where 20 percent or more of CP Kelco's home market sales of a given 
model were at prices less than the COP, we disregarded the below-cost 
sales because such sales were made: (1) within an extended period of 
time and in ``substantial quantities'' within the POR, in accordance 
with section 773(b)(2)(B) and (C) of the Tariff Act, and (2) at prices 
which would not permit recovery of all costs within a reasonable period 
of time, in accordance with section 773(b)(2)(D) of the Tariff Act 
(i.e. , the sales were made at prices below the weighted-average per-
unit COP for the POR). In this review, we have disregarded such sales 
from our margin calculation. We used the remaining sales as the basis 
for determining NV, if such sales existed, in accordance with section 
773(b)(1) of the Tariff Act.

F. Price-to-Price Comparisons

    We calculated NV based on prices to unaffiliated customers. We made 
adjustments for billing adjustments, early payment discounts, rebates, 
and factoring charges,\2\ where appropriate. We made deductions, where 
appropriate, for foreign inland freight, pursuant to section 
773(a)(6)(B) of the Tariff Act. We also offset inland freight for any 
freight revenue. In addition, when comparing sales of similar 
merchandise, we made adjustments for differences in cost (i.e. , 
DIFMER), where those differences were attributable to differences in 
physical characteristics of the merchandise pursuant to section 
773(a)(6)(C)(ii) of the Tariff Act and section 351.411 of the

[[Page 45952]]

Department's regulations. We also made adjustments for differences in 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Tariff Act and section 351.410 of the 
Department's regulations. We made COS adjustments for imputed credit 
expenses. We also made an adjustment, where appropriate, for the CEP 
offset in accordance with section 773(a)(7)(B) of the Tariff Act. See 
``Level of Trade and CEP Offset'' section below. Finally, we deducted 
home market packing costs and added U.S. packing costs in accordance 
with sections 773(a)(6)(A) and (B) of the Tariff Act.
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    \2\ See EP section, above.
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G. Constructed Value (CV)

    In accordance with section 773(a)(4) of the Tariff Act, we base NV 
on CV if we are unable to find a contemporaneous comparison market 
match of such or similar merchandise for the U.S. sale. Section 773(e) 
of the Tariff Act provides that CV shall be based on the sum of the 
cost of materials and fabrication employed in making the subject 
merchandise, selling, general, and administrative (SG&A) expenses, 
profit, and U.S. packing costs. We calculated the cost of materials and 
fabrication for CP Kelco based on the methodology described in the COP 
section of this notice. In accordance with section 773(e)(2)(A) of the 
Tariff Act, we based SG&A expenses and profit on the amounts incurred 
and realized by CP Kelco in connection with the production and sale of 
the foreign like product in the ordinary course of trade, for 
consumption in the foreign country. However, for these preliminary 
results, we did not base NV on CV in any instances.

Level of Trade and CEP Offset

    In accordance with section 773(a)(1)(B) of the Tariff Act, to the 
extent practicable, we base NV on sales made in the comparison market 
at the same level of trade (LOT) as the export transaction. The NV LOT 
is based on the starting price of sales in the home market or, when NV 
is based on CV, on the LOT of the sales from which SG&A expenses and 
profit are derived. With respect to CEP transactions in the U.S. 
market, the CEP LOT is defined as the level of trade of the constructed 
sale from the exporter to the importer. See section 773(a)(7)(A) of the 
Tariff Act.
    To determine whether NV sales are at a different LOT than CEP 
sales, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the customer. 
See 19 CFR 351.412(c)(2). If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the Tariff Act. For CEP sales, if the NV LOT is more 
remote from the factory than the CEP LOT and there is no basis for 
determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Tariff Act (the CEP offset provision). See, e.g., Final 
Determination of Sales at Less Than Fair Value: Greenhouse Tomatoes 
From Canada, 67 FR 8781 (February 26, 2002) and accompanying Issues and 
Decisions Memorandum at Comment 8; see also Certain Hot-Rolled Flat-
Rolled Carbon Quality Steel Products from Brazil; Preliminary Results 
of Antidumping Duty Administrative Review, 70 FR 17406, 17410 (April 6, 
2005) (unchanged in final results of review, 70 FR 58683 (October 7, 
2005)). For CEP sales, we consider only the selling activities 
reflected in the U.S. price after the deduction of expenses incurred in 
the U.S. and CEP profit under section 772(d) of the Tariff Act. See 
Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314-1315 
(Fed. Cir. 2001). We expect that if the claimed LOTs are the same, the 
functions and activities of the seller should be similar. Conversely, 
if a party claims the 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 Antidumping 
Duty Administrative Review, 65 FR 30068 (May 10, 2000) and accompanying 
Issues and Decisions Memorandum at Comment 6.
    CP Kelco reported it had sold CMC to end users and distributors in 
the home market and to end users and distributors in the United States. 
CP Kelco identified two channels of distribution for sales in both the 
home market and the U.S. market: end users (channel 1) and distributors 
(channel 2). See CP Kelco's Sections B and C Response at page B-12. In 
the home market, CP Kelco claims its end user and distributor channels 
of distribution represent separate LOTs and that CP Kelco's home market 
sales to end users were made at the same LOT as CP Kelco's EP sales. 
Id. at B-18. However, because the Department found in the previous 
review that there was only one LOT in the home market, CP Kelco 
reported only one level of trade in its home market sales listing. See 
Purified Carboxymethylcellulose from Finland; Notice of Preliminary 
Determination of Antidumping Duty Administrative Review, 74 FR 44106 
(August 7, 2007) (unchanged in the final results, 72 FR 70568 (December 
12, 2007)).
    As described above, CP Kelco made both direct (EP) sales of subject 
merchandise to U.S. customers and sales of subject merchandise through 
its affiliate, CP Kelco U.S., Inc. (CEP sales). CP Kelco reported that 
its EP sales to both end users and distributors were made at the same 
LOT as sales made to home market end users. See CP Kelco's Sections B 
and C Response at page B-18. However, CP Kelco reported that its CEP 
sales were made at a different LOT.
    We obtained information from CP Kelco regarding the marketing 
stages involved in making its reported home market and U.S. sales. CP 
Kelco provided a table listing all selling activities performed, and 
comparing the LOT among each channel of distribution for both markets. 
See CP Kelco's Section A response at page A-29. We reviewed the 
intensity to which all selling functions were performed for each home 
market channel of distribution and customer category and between CP 
Kelco's EP and home market channels of distribution and customer 
categories.
    While we found differences in the levels of intensity performed for 
some of these functions between the home market end user and 
distributor channels of distribution, such differences are minor and do 
not establish distinct and separate levels of trade in Finland. Based 
on our analysis of all of CP Kelco's home market selling functions, we 
find all home market sales were made at the same LOT. Further, we find 
only minor differences between the sole home market LOT and that of CP 
Kelco's EP sales. Accordingly, we preliminarily determine CP Kelco's 
home market and EP sales were made at the same LOT.
    We then compared the NV LOT, based on the selling activities 
associated with the transactions between CP Kelco and its customers in 
the home market, to the CEP LOT, which is based on the selling 
activities associated with the transaction between CP Kelco and its 
affiliated importer, CP Kelco U.S., Inc. Our analysis indicates the 
selling functions performed for home market customers are either 
performed at a higher degree of intensity or are greater in number than 
the selling functions performed for CP Kelco U.S., Inc. For example, in 
comparing CP Kelco's selling activities, we find most of the reported 
selling functions performed in the home market are not a part of CEP 
transactions (i.e., sales negotiations, credit risk

[[Page 45953]]

management, collection, sales promotion, direct sales personnel, 
technical support, guarantees, and discounts). For those selling 
activities performed for both home market sales and CEP sales (i.e., 
customer care, logistics, inventory maintenance, packing, and freight/
delivery), CP Kelco reported it performed each activity at either the 
same or at a higher level of intensity in one or both of the home 
market channels of distribution. We note that CEP sales from CP Kelco 
to CP Kelco U.S., Inc. generally occur at the beginning of the 
distribution chain, representing essentially a logistical transfer of 
inventory. In contrast, all sales in the home market occur closer to 
the end of the distribution chain and involve smaller volumes and more 
customer interaction which, in turn, require the performance of more 
selling functions. Based on the foregoing, we conclude that the NV LOT 
is at a more advanced stage than the CEP LOT.
    Because we found the home market and U.S. CEP sales were made at 
different LOTs, we examined whether a LOT adjustment or a CEP offset 
may be appropriate in this review. As we found only one LOT in the home 
market, it was not possible to make a LOT adjustment to home market 
sales, because such an adjustment is dependent on our ability to 
identify a pattern of consistent price differences between the home 
market sales on which NV is based and home market sales at the LOT of 
the CEP sales. See 19 CFR 351.412(d)(1)(ii). Furthermore, we have no 
other information that provides an appropriate basis for determining a 
LOT adjustment. Because the data available do not form an appropriate 
basis for making a LOT adjustment, and because the NV LOT is at a more 
advanced stage of distribution than the CEP LOT, we have made a CEP 
offset to NV in accordance with section 773(a)(7)(B) of the Tariff Act.

Currency Conversions

    CP Kelco reported certain U.S. sales prices and certain U.S. 
expenses and adjustments in euros. Therefore, we made euro-U.S. dollar 
currency conversions, where appropriate, based on the exchange rates in 
effect on the dates of the U.S. sales, as certified by the Federal 
Reserve Board, in accordance with section 773A(a) of the Tariff Act.

Preliminary Results of Review

    As a result of our review, we preliminarily find the following 
weighted-average dumping margin exists for the period July 1, 2006, 
through June 30, 2007:

------------------------------------------------------------------------
                                               Weighted Average Margin
           Manufacturer/Exporter                    (percentage)
------------------------------------------------------------------------
CP Kelco..................................  13.89
------------------------------------------------------------------------

    The Department will disclose calculations performed within five 
days of the date of publication of this notice in accordance with 
section 351.224(b) of the Department's regulations. An interested party 
may request a hearing within thirty days of publication. See section 
351.310(c) of the Department's regulations. Any hearing, if requested, 
will be held 37 days after the date of publication, or the first 
business day thereafter, unless the Department alters the date pursuant 
to section 351.310(d) of the Department's regulations.

Comments

    Interested parties may submit case briefs no later than 30 days 
after the date of publication of these preliminary results of review. 
Rebuttal briefs, limited to issues raised in the case briefs, may be 
filed no later than 35 days after the date of publication of this 
notice. Parties who submit arguments in these proceedings are requested 
to submit with the argument: (1) A statement of the issue; (2) a brief 
summary of the argument; and (3) a table of authorities. Further, 
parties submitting written comments should provide the Department with 
an additional copy of the public version of any such comments on 
diskette. The Department will issue final results of this 
administrative review, including the results of our analysis of the 
issues in any such written comments or at a hearing, within 120 days of 
publication of these preliminary results.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Upon completion of this 
administrative review, pursuant to section 351.212(b) of the 
Department's regulations, the Department will calculate an assessment 
rate on all appropriate entries. CP Kelco has reported entered values 
for all of its sales of subject merchandise to the U.S. during the POR. 
Therefore, in accordance with section 351.212(b)(1) of the Department's 
regulations, we will calculate importer-specific duty assessment rates 
on the basis of the ratio of the total amount of antidumping duties 
calculated for the examined sales to the total entered value of the 
examined sales of that importer. These rates will be assessed uniformly 
on all entries the respective importers made during the POR. Where the 
assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer. The 
Department will issue appropriate appraisement instructions directly to 
CBP fifteen days after publication of the final results of review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This 
clarification will apply to entries of subject merchandise during the 
period of review produced by the respondent for which it did not know 
its merchandise was destined for the United States. In such instances, 
we will instruct CBP to liquidate un-reviewed entries at the all-others 
rate if there is no rate for the intermediate company(ies) involved in 
the transaction. Id.

Cash Deposit Requirements

    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of CMC from Finland entered, or withdrawn from warehouse, 
for consumption on or after the publication date of the final results 
of this administrative review, as provided by section 751(a)(1) of the 
Tariff Act: (1) The cash deposit rate for CP Kelco will be the rate 
established in the final results of review; (2) if the exporter is not 
a firm covered in this review or the less-than-fair-value (LTFV) 
investigation, but the manufacturer is, the cash deposit rate will be 
the rate established for the most recent period for the manufacturer of 
the merchandise; and (3) if neither the exporter nor the manufacturer 
is a firm covered in this or any previous review conducted by the 
Department, the cash deposit rate will be the ``all others'' rate of 
6.65 percent (ad valorem) from the LTFV investigation. See Notice of 
Antidumping Duty Orders: Purified Carboxymethylcellulose from Finland, 
Mexico, the Netherlands and Sweden, 70 FR 39734 (July 11, 2005). These 
deposit requirements, when imposed, shall remain in effect until 
further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) 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

[[Page 45954]]

Secretary's presumption that reimbursement of antidumping duties 
occurred and the subsequent assessment of double the antidumping 
duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act.

    Dated: July 30, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
 [FR Doc. E8-18246 Filed 8-6-08; 8:45 am]
BILLING CODE 3510-DS-P