[Federal Register Volume 66, Number 36 (Thursday, February 22, 2001)]
[Notices]
[Pages 11137-11140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-4405]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-824]


Polyvinyl Alcohol From Taiwan: Preliminary Results of Fourth 
Antidumping Duty Administrative Review

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

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

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SUMMARY: In response to a request by Chang Chun Petrochemical Co., 
Ltd.,\1\ a producer and exporter of polyvinyl alcohol from Taiwan, the 
Department of Commerce is conducting an administrative review of the 
antidumping duty order on polyvinyl

[[Page 11138]]

alcohol from Taiwan. The period of review is May 1, 1999, through April 
30, 2000.
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    \1\ On January 19, 2001, counsel for Air Products and Chemicals, 
Inc. (``the petitioner'') stated that the petitioner's PVA business 
was sold to Celanese Ltd.
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    We preliminarily find that sales of subject merchandise have not 
been made below normal value. If these preliminary results are adopted 
in our final results of administrative review, we will instruct the 
Customs Service not to assess antidumping duties on entries for which 
the importer-specific rate is de minimis (i.e., less than 0.5 percent). 
Interested parties are invited to comment on these preliminary results.

EFFECTIVE DATE: February 22, 2001.

FOR FURTHER INFORMATION CONTACT: Brian Ledgerwood, at (202) 482-3836, 
or Brian Smith, at (202) 482-1766, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act''), as 
amended, by the Uruguay Round Agreements Act (``URAA''). In addition, 
unless otherwise indicated, all references are made to the Department 
of Commerce's (``the Department's'') final regulations at 19 CFR Part 
351 (2000).

Case History

    On May 14, 1996, the Department published in the Federal Register 
an antidumping duty order on polyvinyl alcohol (``PVA'') from Taiwan. 
See 61 FR 24286. On May 16, 2000, the Department published a notice 
providing an opportunity to request an administrative review of this 
order for the period May 1, 1999, through April 30, 2000 (65 FR 31141). 
On May 31, 2000, we received a timely request for an administrative 
review from Chang Chun Petrochemical Co., Ltd. (``Chang Chun''). In 
addition, Chang Chun requested that the Department revoke the 
antidumping duty order with respect to it. On May 31, 2000, we received 
a timely request for an administrative review from the petitioner. On 
July 7, 2000, we published a notice of initiation of this review for 
Chang Chun (65 FR 41942).
    On June 30, 2000, we issued an antidumping questionnaire to Chang 
Chun. Because the Department disregarded sales that failed the cost 
test in the last completed review for Chang Chun (at that time) (see 
Polyvinyl Alcohol from Taiwan: Final Results of Second Antidumping Duty 
Administrative Review, 64 FR 32024, 32025 (June 15, 1999) (hereafter 
``Second Administrative Review-PVA'')), the Department had reasonable 
grounds to believe or suspect that Chang Chun's sales of the foreign 
like product may have been made at prices below the cost of production 
(``COP'') as provided by section 773(b)(2)(A)(ii) of the Act. 
Therefore, pursuant to section 773(b)(1) of the Act, we initiated an 
investigation to determine whether Chang Chun made home market sales 
during the period of review (``POR'') at prices below its COP, and 
required Chang Chun to respond to the COP section of the questionnaire 
issued on June 30, 2000.
    The Department received Chang Chun's response in August 2000. We 
issued a supplemental questionnaire to Chang Chun in October 2000. The 
response to this questionnaire was received in November 2000. On 
October 6, 2000, Chang Chun withdrew its request for revocation, in 
part, of the antidumping duty order on polyvinyl alcohol from Taiwan.

Scope of Review

    The product covered by this review is PVA. PVA is a dry, white to 
cream-colored, water-soluble synthetic polymer. This product consists 
of polyvinyl alcohols hydrolyzed in excess of 85 percent, whether or 
not mixed or diluted with defoamer or boric acid. Excluded from this 
review are PVAs covalently bonded with acetoacetylate, carboxylic acid, 
or sulfonic acid uniformly present on all polymer chains in a 
concentration equal to or greater than two mole percent, and PVAs 
covalently bonded with silane uniformly present on all polymer chains 
in a concentration equal to or greater than one-tenth of one mole 
percent. PVA in fiber form is not included in the scope of this review.
    The merchandise under review is currently classifiable under 
subheading 3905.30.00 of the Harmonized Tariff Schedule of the United 
States (``HTSUS''). Although the HTSUS subheading is provided for 
convenience and customs purposes, our written description of the scope 
is dispositive.

Period of Review

    The POR is May 1, 1999, through April 30, 2000.

Fair Value Comparisons

    To determine whether sales of the subject merchandise to the United 
States were made at prices below normal value, we compared the export 
price to normal value as described below. In accordance with section 
777A(d)(2) of the Act, we compared the export price of individual 
transactions to the monthly weighted-average price of sales of the 
foreign like product made in the ordinary course of trade (see section 
773(a)(1)(B)(i) of the Act).

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by Chang Chun covered by the description in the 
``Scope of Review'' section, above, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
We compared U.S. sales to sales made in the home market within the 
contemporaneous window period, which extends from three months prior to 
the U.S. sale and until two months after the sale. Where there were no 
sales of identical merchandise made in the home market in the ordinary 
course of trade, 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 Chang Chun in the following order: 
viscosity, hydrolysis, particle size, tackifier, defoamer, ash, color, 
volatiles, and visual impurities.

Export Price

    In accordance with sections 772(a) and (c) of the Act, we 
calculated an export price for all of Chang Chun's sales since the 
merchandise was sold directly to the first unaffiliated purchaser in 
the United States prior to importation, and because constructed export 
price methodology was not otherwise warranted based on the facts of the 
record. We calculated export price based on the packed, CIF or FOB 
prices to unaffiliated purchasers in, or for exportation to, the United 
States. We made deductions, where appropriate, from the starting price 
for foreign inland freight, foreign brokerage and handling, 
international freight (including harbor construction taxes), and marine 
insurance in accordance with section 772(c)(2)(A) of the Act.

Normal Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating 
normal value (i.e., the aggregate volume of home market sales of the 
foreign like product is five percent or more of the aggregate volume of 
U.S. sales), we compared Chang Chun's volume of home market sales of 
the foreign like product to its volume of U.S. sales of the subject 
merchandise, in

[[Page 11139]]

accordance with 19 CFR 351.404(b). For Chang Chun, we determined that 
the quantity of foreign like product sold in the exporting country was 
sufficient to permit a proper comparison with the sales of the subject 
merchandise to the United States because Chang Chun had sales in its 
home market which were greater than five percent of its sales in the 
U.S. market. Therefore, in accordance with section 773(a)(1)(B)(i) of 
the Act, we based normal value on sales in Taiwan.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determined normal value based on sales in the 
comparison market at the same level of trade (``LOT'') as the export 
price transaction. The normal value LOT is that of the starting-price 
sales in the comparison market or, when normal value is based on 
constructed value, that of the sales from which we derive selling, 
general, and administrative (``SG&A'') expenses and profit. For export 
price, the LOT is also the level of the starting-price sale, which is 
usually from the exporter to the importer.
    To determine whether normal value sales are at a different LOT than 
export price sales, we examine stages in the marketing process and 
selling functions along the chain of distribution between the producer 
and the customer. 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 
normal value 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 Act. See Final Determination of Sales at Less Than Fair Value: 
Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 
61731, 61732-33 (November 19, 1997).
    As in previous administrative reviews, Chang Chun reported one 
channel of distribution for its U.S. and home market sales (see Second 
Administrative Review--PVA, 64 FR 32024 (June 15, 1999); Notice of 
Final Results of Third Antidumping Duty Administrative Review: 
Polyvinyl Alcohol from Taiwan, 65 FR 60615 (October 12, 2000) 
(hereafter ``Third Administrative Review--PVA'')). Based on Chang 
Chun's submission of its reported selling functions, we found that the 
selling activities performed by Chang Chun in both the home market and 
the United States were similar. In both the home market and the U.S. 
market Chang Chun made sales directly to customers and provided no post 
sale services (e.g., typically limited to freight and delivery 
arrangements). Therefore, we determined that sales in both markets are 
at the same LOT and consequently no LOT adjustment is warranted. (See 
Final Results of Antidumping Duty Administrative Review: PVA From 
Taiwan, 63 FR 32810, 32812 (June 16, 1998)).

Cost of Production

    As we stated in the ``Case History'' section, because we 
disregarded sales below the COP for Chang Chun in the last completed 
segment of the proceeding (at that time) (see Second Administrative 
Review--PVA, 64 FR 32024 (June 15, 1999)), we had reasonable grounds to 
believe or suspect that Chang Chun's sales of the foreign like product 
under consideration for the determination of normal value in this 
review may have been made at prices below the COP, as provided by 
section 773(b)(2)(A)(ii) of the Act. Therefore, pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by 
Chang Chun in the home market.

A. Calculation of COP

    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP, by grade, based on the sum of the cost of 
materials and fabrication, general and administrative (``G&A'') 
expenses, and packing costs. We relied on Chang Chun's submitted COP 
for PVA. In addition, as we have done in the investigation and previous 
administrative reviews of this order, we adjusted the joint production 
costs between PVA and acetic acid using the relative sales value of 
each product calculated on the basis of a two-year period prior to the 
period of the less-than-fair-value (``LTFV'') investigation (see 
January 30, 2001, preliminary results calculation memorandum and Third 
Administrative Review--PVA, 65 FR 60615 (October 12, 2000), and the 
accompanying Decision Memorandum at the ``Margin Calculations'' 
section).
    Consistent with the prior reviews and investigation, we determined 
that Chang Chun purchased a major input (i.e., vinyl acetate monomer 
(``VAM'')) used in the production of PVA from an affiliated party (See 
Final Determination: Polyvinyl Alcohol from Taiwan, 61 FR 14064, 14071 
at Comment 8 and 9 (March 29, 1996)). Pursuant to 19 CFR 351.407(b), we 
applied the major input rule to determine the value of the VAM. Under 
the major input rule, we normally will determine the value of a major 
input purchased from an affiliated person based on the higher of: (1) 
the price paid by the exporter or producer to the affiliated person for 
the major input; (2) the amount usually reflected in sales of the major 
input in the market under consideration; or (3) the cost to the 
affiliated person of producing the major input. In this case, for the 
preliminary results, we used the affiliated person's COP, which was 
higher than the market price or the affiliate's transfer price (see, 
Chang Chun's August 2000 Section D response at page D-27, Exhibits D-2 
and D-10, and Chang Chun's November 2000 supplemental response at pages 
supp-22 and 23). Consistent with 19 CFR 351.407(b), in the previous 
three reviews the Department used Chang Chun's affiliate's transfer 
price for VAM, which was the highest of the three values discussed 
above, for purposes of calculating the weight-average COP. For these 
preliminary results, we have accepted Chang Chun's valuation of VAM 
based on its affiliate's COP because it meets the requirements under 19 
CFR 351.407(b), as noted above.

B. Test of Home Market Prices

    We compared the weighted-average COP, adjusted where appropriate, 
to the comparison 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 in substantial quantities, and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time. On a grade-specific basis, we compared the revised COPs 
to the comparison market prices, less any applicable movement charges, 
discounts, and direct and indirect selling expenses.

C. Results of the COP Test

    Pursuant to section 773(b)(2)(C), where less than 20 percent of the 
respondent's sales of a given product were made at prices below the 
COP, we did not disregard any below-cost sales of that product because 
we determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of the respondent's sales of a 
given product were made at prices below the COP, we disregarded the 
below-cost sales because such sales were found to be made within an 
extended period of time in ``substantial quantities,'' in accordance 
with sections 773(b)(2)(B) and (C) of the Act, and because the below-
cost sales of the product were 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 Act. Based on the COP test, we 
excluded

[[Page 11140]]

from our analysis certain comparison-market sales of PVA products.

Price-to-Price Comparisons

    We calculated normal value based on packed, FOB or delivered prices 
to unaffiliated purchasers in Taiwan. We made adjustments to the 
starting price for returns, where appropriate. We also made deductions, 
where appropriate, for inland freight (inclusive of inland insurance) 
pursuant to section 773(a)(6)(B) of the Act. In addition, we made 
adjustments for 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, as well as for differences in circumstances-of-sale 
(``COS'') in accordance with section 773(a)(6)(C)(iii) of the Act and 
19 CFR 351.410. We made COS adjustments by deducting home market direct 
selling expenses (i.e., credit expenses) and adding U.S. direct selling 
expenses (i.e., credit expenses and bank charges). Finally, we deducted 
home market packing costs and added U.S. packing costs in accordance 
with 773(a)(6) of the Act.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following margin exists for the period May 1, 1998 through April 30, 
1999:

------------------------------------------------------------------------
                                                                 Margin
                    Manufacturer/exporter                      (percent)
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Chang Chun Petrochemical Co., Ltd............................       0.00
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    Pursuant to 19 CFR 351.224(b), the Secretary will disclose to the 
parties to the proceeding the calculations performed in connection with 
this review, within five days after the date of publication of the 
preliminary results of this review. Any interested party may request a 
hearing within 30 days of publication. Any hearing, if requested, will 
be held 44 days after the date of publication or the first business day 
thereafter.
    Issues raised in hearings will be limited to those raised in the 
respective case briefs and rebuttal briefs. Case briefs from interested 
parties and rebuttal briefs, limited to the issues raised in the 
respective case briefs, may be submitted not later than 30 days and 37 
days, respectively, from the date of publication of these preliminary 
results. Parties who submit case briefs or rebuttal briefs in this 
proceeding are requested to submit with each argument (1) a statement 
of the issue and (2) a brief summary of the argument. Parties are also 
encouraged to provide a summary of the arguments not to exceed five 
pages and a table of statutes, regulations and cases cited.
    The Department will subsequently issue the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written briefs, not later than 120 days after the 
date of publication of this notice.
    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, Room B-099, within 30 days of the 
date of publication of this notice. The request should contain: (1) The 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed.

Cash Deposit and Assessment Requirements

    The final results of this review shall be the basis for the 
assessment of antidumping duties on entries of merchandise covered by 
this review and for future deposits of estimated duties. The Department 
shall determine, and the U.S. Customs Service shall assess, antidumping 
duties on all appropriate entries. Upon completion of this review, the 
Department will issue appraisement instructions directly to the U.S. 
Customs Service.
    If these preliminary results are adopted in the final results, we 
will instruct the U.S. Customs Service to assess antidumping duties on 
all appropriate entries covered by this review for which any importer-
specific assessment rates calculated in the final results of this 
review are above de minimis (i.e., at or above 0.5 percent), in 
accordance with 19 CFR 351.106(c)(2). For assessment purposes, we 
intend to calculate importer-specific assessment rates for the subject 
merchandise by aggregating the dumping margins calculated for all U.S. 
sales to each importer and dividing this amount by the total entered 
value of the sales examined.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this antidumping duty review 
for all shipments of PVA from Taiwan, 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) of the Act: (1) No cash deposits will be required for PVA from 
Taiwan that is produced by Chang Chun (unless the margin established 
for Chang Chun in the final results of this review is above de 
minimis); (2) for exporters not covered in this review, but covered in 
the LTFV investigation or prior reviews, the cash deposit rate will 
continue to be the company-specific rate from the LTFV investigation or 
the prior review; (3) if the exporter is not a firm covered in this 
review, a prior review, or the original 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) 
the cash deposit rate for all other manufacturers or exporters will 
continue to be 19.21 percent, the ``All Others'' rate made effective by 
the LTFV investigation. These requirements, when imposed, shall remain 
in effect until publication of the final results of the next 
administrative review.

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 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.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.213. Effective 
January 20, 2001, Bernard T. Carreau is fulfilling the duties of the 
Assistant Secretary for Import Administration.

    Dated: January 30, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, AD/CVD Enforcement II.
[FR Doc. 01-4405 Filed 2-21-01; 8:45 am]
BILLING CODE 3510-DS-P