[Federal Register Volume 73, Number 184 (Monday, September 22, 2008)]
[Notices]
[Pages 54557-54560]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22108]



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DEPARTMENT OF COMMERCE

International Trade Administration

[A-475-703]


Amended Notice of Preliminary Results of Antidumping Duty 
Administrative Review: Granular Polytetrafluoroethylene Resin From 
Italy

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

EFFECTIVE DATE: September 22, 2008.

FOR FURTHER INFORMATION CONTACT: Yasmin Nair or Alicia Winston, at 
(202) 482-3813 or (202) 482-1785, respectively; AD/CVD Operations, 
Office 1, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street & Constitution Avenue, NW, 
Washington, DC 20230.
SUMMARY: The Department of Commerce is conducting an administrative 
review of the antidumping duty order on granular 
polytetrafluoroethylene resin from Italy, covering the period August 1, 
2006, through July 31, 2007. We preliminarily determine that sales of 
subject merchandise by Solvay Solexis, Inc. and Solvay Solexis S.p.A. 
have been made below normal value. If these preliminary results are 
adopted in our final results, we will instruct U.S. Customs and Border 
Protection to assess antidumping duties on appropriate entries. 
Interested parties are invited to comment on these preliminary results. 
We released the preliminary results to the parties on Wednesday, 
September 3, 2008. However, that version inadvertently included 
business proprietary information, so this amended preliminary 
determination corrects that error. The error was discovered prior to 
publication in the Federal Register, consequently this amended notice 
is being published in its place.

SUPPLEMENTARY INFORMATION:

Background

    On August 30, 1988, The Department of Commerce (the Department) 
published in the Federal Register the antidumping duty order on 
granular polytetrafluoroethylene resin (PTFE) from Italy. See 
Antidumping Duty Order; Granular Polytetrafluoroethylene Resin from 
Italy, 53 FR 33163 (August 30, 1988). On August 2, 2007, the Department 
issued a notice of opportunity to request an administrative review of 
this order. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
72 FR 42383 (August 2, 2007). In accordance with 19 CFR 351.213(b), 
Solvay requested an administrative review. On September 25, 2007, the 
Department published the notice of initiation of this antidumping duty 
administrative review, covering the period August 1, 2006, through July 
31, 2007 (the period of review, or POR). See Initiation of Antidumping 
and Countervailing Duty Administrative Reviews and Requests for 
Revocation in Part, 72 FR 54428 (September 25, 2007).
    On October 12, 2007, the Department issued its antidumping 
questionnaire to Solvay Solexis, Inc. and Solvay Solexis S.p.A 
(collectively, Solvay). The Department received timely responses to 
Sections A-E of the initial antidumping questionnaire and associated 
supplemental questionnaires.
    On April 9, 2008, the Department published a notice of a 120-day 
extension of the preliminary results of this administrative review. See 
Granular Polytetrafluoroethylene Resin from Italy: Notice of Extension 
of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 73 FR 19193. This notice extended the deadline 
for the preliminary results to September 2, 2008.

Scope of the Order

    The product covered by this order is granular PTFE resin, filled or 
unfilled. This order also covers PTFE wet raw polymer exported from 
Italy to the United States. See Granular Polytetrafluoroethylene Resin 
from Italy; Final Affirmative Determination of Circumvention of 
Antidumping Duty Order, 58 FR 26100 (April 30, 1993). This order 
excludes PTFE dispersions in water and fine powders. During the period 
covered by this review, such merchandise was classified under item 
number 3904.61.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). We are providing this HTSUS number for convenience and 
U.S. Customs and Border Protection (CBP) purposes only. The written 
description of the scope remains dispositive.

Fair Value Comparisons

    We compared the constructed export price (CEP) to the normal value 
(NV), as described in the Constructed Export Price and Normal Value 
sections of this notice. Pursuant to section 777A(d)(2) of the Tariff 
Act of 1930, as amended (the Act), we compared the CEPs of individual 
transactions to contemporaneous monthly weighted-average prices of 
sales of the foreign like product.
    Pursuant to section 771(16) of the Act, we first attempted to 
compare contemporaneous sales of products sold in the United States and 
the comparison market that were identical with respect to the following 
characteristics: type, filler, percentage of filler, and grade. Where 
we were unable to compare sales of identical merchandise, we compared 
U.S. sales with comparison market sales of the most similar 
merchandise. Where there were no sales of identical or similar 
merchandise made in the ordinary course of trade in the comparison 
market, we compared U.S. sales to constructed value (CV).

Date of Sale

    Normally, the Department employs invoice date as the date of sale. 
However, if the Department determines that another date reflects the 
date on which the exporter or producer establishes the material terms 
of sale, the Department may use this date. See 19 CFR 351.401(i). 
Solvay reported that its terms of sale in the home market are subject 
to change until shipment. For virtually all of its home market sales, 
shipment date precedes the invoice date. When shipment date precedes 
invoice date, it is the Department's practice to use shipment date as 
the date of sale. See Certain Cold Rolled and Corrosion Resistant 
Carbon Steel Flat Products from Korea: Final Results of Antidumping 
Duty Administrative Reviews, 63 FR 13170, 13172 73 (Mar.18, 1998). 
Therefore, we have relied upon Solvay's reported date of sale for home 
market transactions. For U.S. market sales, Solvay reported that the 
invoice date is the date on which the material terms of sale were 
established. Therefore, we are preliminarily using the date of invoice 
as the date of sale for Solvay's U.S. market sales.

Constructed Export Price

    For all sales to the United States, we calculated CEP, as defined 
in section 772(b) of the Act, because all sales to unaffiliated parties 
were made after importation of the subject merchandise into the United 
States through the respondent's affiliate, Solvay Solexis, Inc. We 
based CEP on the packed, delivered prices to unaffiliated purchasers in 
the United States, net of billing adjustments. We adjusted these prices 
for movement expenses, including international freight, marine 
insurance, brokerage and handling in the United States, U.S. other 
transport expense, U.S. inland freight, U.S. warehousing, and U.S. 
customs duties, in accordance with section 772(c)(2)(A) of the Act.

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    In accordance with section 772(d)(1) of the Act, we deducted 
selling expenses incurred by the affiliated reseller. These expenses 
include credit, inventory carrying costs, and indirect selling expenses 
incurred by Solvay Solexis, Inc. See Memorandum from Alicia Winston, 
International Trade Compliance Analyst, to The File, Re: Preliminary 
Results Calculation Memorandum, dated September 2, 2008 (Analysis 
Memo).

Normal Value

A. Selection of Comparison Markets

    In order to determine whether there was a sufficient volume of 
sales of granular PTFE resin in the home market to serve as a viable 
basis for calculating NV, we compared Solvay'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. Because the aggregate volume of home market sales of the foreign 
like product was greater than five percent of the respective aggregate 
volume of U.S. sales for the subject merchandise, we determined that 
the home market provided a viable basis for calculating NV. Therefore, 
in accordance with section 773(a)(1)(B)(i) of the Act, we based NV on 
the prices at which the foreign like product was first sold for 
consumption in the exporting country, in the usual commercial 
quantities and in the ordinary course of trade.

B. Cost of Production Analysis

    Because we disregarded below-cost sales in the calculation of the 
final results of the 2004-2005 administrative review, the most recently 
completed review of PTFE at the time of initiation of this review, with 
respect to Solvay, we had reasonable grounds to believe or suspect that 
home market sales of the foreign like product by Solvay had been made 
at prices below the cost of production (COP) during the period of this 
review. See section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to 
section 773(b)(1) of the Act, we initiated a COP investigation 
regarding home market sales. Solvay calculated its model-specific costs 
of production on a POR basis.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of Solvay's cost of materials and fabrication for the 
foreign like product, plus amounts for general and administrative 
expenses (G&A), and interest expenses.
2. Test of Home Market Sales Prices
    We compared the weighted-average COP to the home market sales of 
the foreign like product, as required under section 773(b) of the Act, 
in order 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 COP to home market 
prices, less any rebates, discounts, applicable movement charges, and 
direct and indirect selling expenses.
3. Adjustments to Respondent's Data
    We relied on the COP information provided by Solvay except in the 
following instances. We adjusted the transfer prices for certain inputs 
purchased by Solvay from affiliated suppliers in accordance with the 
major input rule of section 773(f)(3) of the Act. Specifically, we 
increased the reported cost of manufacturing where we found that the 
transfer price for the inputs was below the reported costs of the 
affiliated suppliers of that input. Also, Solvay excluded certain 
expenses from the G&A expenses. Therefore, we adjusted the respondent's 
G&A expense ratio to include expenses that appear to relate to the 
general operations of the company and for which Solvay failed to 
provide an explanation for excluding these items. Finally, Solvay did 
not exclude packing costs from the cost of goods sold denominators used 
to calculate the G&A and financial expense ratios. Therefore, for the 
ratios to be applied on the same basis as they were calculated, we 
applied the G&A and financial expense ratios to the total cost of 
manufacturing including the packing costs. See Cost of Production and 
Constructed Value Calculation Adjustments for the Preliminary Results 
Solvay Solexis S.p.A. (Cost Calc Memo).
4. Results of the COP Test
    We disregarded below-cost sales where: (1) 20 percent or more of 
Solvay's sales of a given product during the POR were made at prices 
below the COP, because such sales were made within an extended period 
of time in substantial quantities in accordance with sections 
773(b)(2)(B) and (C) of the Act; and (2) based on comparisons of price 
to weighted-average COPs for the POR, we determined that the below-cost 
sales of the product were at prices which would not permit recovery of 
all costs within a reasonable time period, in accordance with section 
773(b)(2)(D) of the Act. We found that Solvay made sales below cost, 
and we disregarded such sales where appropriate pursuant to section 
773(b) of the Act.

C. Calculation of Normal Value Based on Comparison-Market Prices

    We determined home market prices net of price adjustments (e.g., 
other discounts and rebates). Where applicable, we made adjustments for 
packing and movement expenses, in accordance with sections 773(a)(6)(A) 
and (B) of the Act. In order to adjust for differences in packing 
between the two markets, we deducted home market packing costs from NV 
and added U.S. packing costs. 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 
other differences in the circumstances of sale (COS) in accordance with 
section 773(a)(6)(C)(iii) of the Act (i.e., differences in credit 
expenses). Finally, we made a CEP-offset adjustment to the NV for 
indirect selling expenses pursuant to section 773(a)(7)(B) of the Act, 
as discussed in the Level of Trade/CEP Offset section below.

D. Calculation of Normal Value Based on Constructed Value

    Section 773(a)(4) of the Act provides that where NV cannot be based 
on comparison-market sales, NV may be based on CV. Accordingly, for 
PTFE for which we could not determine the NV based on comparison market 
sales, either because there were no useable sales of a comparable 
product or all sales of the comparable products failed the COP test, we 
based NV on the CV.
    Section 773(e) of the Act provides that the CV shall be based on 
the sum of the cost of materials and fabrication for the imported 
merchandise, plus amounts for selling, general and administrative 
(SG&A) expenses, profit, and U.S. packing costs. We calculated the cost 
of materials and fabrication based on the methodology described in the 
Cost of Production Analysis section, above. We based SG&A and profit on 
the actual amounts incurred and realized by Solvay in connection with 
the production and sale of the foreign like product in the ordinary 
course of trade for consumption in the comparison market, in accordance 
with section 773(e)(2)(A) of the Act. We used U.S. packing costs as 
described in the Constructed Export Price section, above.
    We made adjustments to CV for differences in COS in accordance with 
section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons to 
CEP, we

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made COS adjustments by deducting from CV direct selling expenses 
incurred on home-market sales (i.e., credit expense and warranty 
expense).

E. Level of Trade/CEP Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales at the same level of trade 
in the comparison market as the level of trade of the U.S. sales. The 
comparison market level of trade is that of the starting-price sales in 
the comparison market. For CEP sales, such as those made by Solvay in 
this review, the U.S. level of trade is the level of the constructed 
sale from the exporter to the importer.
    To determine whether comparison market sales are at a different 
level of trade than that of the U.S. sales, we examine stages in the 
marketing process and selling functions along the chain of distribution 
between the producer and the unaffiliated customer. If the comparison-
market sales are at a different level of trade 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 level of trade of the export 
transaction, we make a level-of-trade adjustment under section 
773(a)(7)(A) of the Act. Finally, if the NV level is more remote from 
the factory than the CEP level 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 Act (the 
CEP-offset provision). See, e.g., Industrial Nitrocellulose from the 
United Kingdom; Notice of Final Results of Antidumping Duty 
Administrative Review, 65 FR 6148, 6151 (February 8, 2000) (Industrial 
Nitrocellulose).
    For this review, we obtained information from Solvay about the 
marketing involved in the reported U.S. sales and in the home market 
sales, including a description of the selling activities performed by 
Solvay for each channel of distribution. In identifying levels of trade 
for CEP and for home market sales, we considered the selling functions 
reflected in the CEP, after the deduction of expenses and profit under 
section 772(d) of the Act, and those reflected in the home market 
starting price before making any adjustments. We expect that, if 
claimed levels of trade are the same, the functions and activities of 
the seller should be similar. Conversely, if a party claims that levels 
of trade are different for different groups of sales, the functions and 
activities of the seller should be dissimilar.
    The record evidence in this review indicates that the home market 
and the CEP levels of trade for Solvay have not changed from the 2005-
2006 review,\1\ the most recently completed review in this case. As 
explained below, we preliminarily determine in this review, as in the 
2005-2006 administrative review, that there was one home market level 
of trade and one U.S. level of trade (i.e., the CEP level of trade).
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    \1\ See Notice of Final Results of Antidumping Duty 
Administrative Review: Granular Polytetrafluoroethylene Resin from 
Italy, 72 FR 65939 (November 26, 2007).
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    In the home market, Solvay sold directly to fabricators. These 
sales primarily entailed selling activities such as technical 
assistance, engineering services, research and development, technical 
programs, and delivery services. Given this fact pattern, we found that 
all home market sales were made at a single level of trade. In 
determining the level of trade for the U.S. sales, we considered only 
the selling activities reflected in the price after making the 
appropriate adjustments under section 772(d) of the Act. See, e.g., 
Industrial Nitrocellulose, 65 FR at 6150. The CEP level of trade 
involves minimal selling functions such as invoicing and the occasional 
exchange of personnel between Solvay and its U.S. affiliate. Given this 
fact pattern, we found that all U.S. sales were made at a single level 
of trade.
    Based on a comparison of the home market level of trade and this 
CEP level of trade, we find the home market sales to be at a different 
level of trade from, and more remote from the factory than, the CEP 
sales. Section 773(a)(7)(A) of the Act directs us to make an adjustment 
for difference in levels of trade where such differences affect price 
comparability. However, we were unable to quantify such price 
differences from information on the record. Because we have determined 
that the home-market level of trade is more remote from the factory 
than the CEP level of trade, and because the data necessary to 
calculate a level-of-trade adjustment are unavailable, we made a CEP-
offset adjustment to NV pursuant to section 773(a)(7)(B) of the Act.

Currency Conversion

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

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average margin exists for the period August 1, 2006, 
through July 31, 2007:

------------------------------------------------------------------------
                                                       Weighted-Average
                      Producer                              Margin
                                                         (Percentage)
------------------------------------------------------------------------
Solvay Solexis, Inc. and Solvay Solexis S.p.A                      95.24
 (collectively, Solvay).............................
------------------------------------------------------------------------

    In accordance with 19 CFR 351.224(b), the Department will disclose 
its weighted average antidumping margin calculations within 5 days of 
the date of publication of these preliminary results. An interested 
party may request a hearing within 30 days of publication of these 
preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, 
will be held 44 days after the date of publication, or the first 
working day thereafter. Interested parties may submit case briefs and/
or written comments no later than 30 days after the date of publication 
of these preliminary results. See 19 CFR 351.309(c). Rebuttal briefs 
and rebuttals to written comments, limited to issues raised in such 
briefs or comments, may be filed no later than 37 days after the date 
of publication. See 19 CFR 351.309(d). Parties who submit arguments 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, the 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 the final results of this administrative 
review, which will include the results of its analysis of issues raised 
in any such comments, within 120 days of publication of these 
preliminary results.

Assessment

    Upon completion of this administrative review, pursuant to 19 CFR 
351.212(b), the Department will calculate an assessment rate on all 
appropriate entries. We will calculate importer-specific duty 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total quantity of the 
sales for that importer. 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 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

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clarification will apply to entries of subject merchandise during the
    POR produced by the company included in these preliminary results 
for which the reviewed company did not know their merchandise was 
destined for the United States. In such instances, we will instruct CBP 
to liquidate unreviewed entries at the all-others rate if there is no 
rate for the intermediate company or companies involved in the 
transaction.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
PTFE from Italy entered, or withdrawn from warehouse, for consumption 
on or after the publication date, as provided by section 751(a)(1) of 
the Act: (1) the cash deposit rate listed above for Solvay will be the 
rate established in the final results of this review, except if a rate 
is less than 0.5 percent, and therefore de minimis, the cash deposit 
rate will be zero; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior 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 (4) 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 46.46 
percent, the ``all others'' rate established in the LTFV investigation. 
See Final Determination of Sales at Less Than Fair Value: Granular 
Polytetrafluoroethylene Resin from Italy, 53 FR 26096 (July 11, 1988). 
These cash deposit requirements, when imposed, shall remain in effect 
until further notice.

Notification to Importers

    This notice 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 entities 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.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: September 16, 2008.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E8-22108 Filed 9-19-08; 8:45 am]
BILLING CODE 3510-DS-S