Granular Polytetrafluoroethylene Resin From Japan; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

[A-588-707]

Granular Polytetrafluoroethylene Resin From Japan; 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: In response to requests by a respondent and petitioners, the

Department of Commerce (the Department) is conducting an administrative

review of the antidumping duty order on granular

polytetrafluoroethylene (PTFE) resin from Japan. The review period is

August 1, 1992, through July 31, 1993. This review covers one company,

Daikin Industries, Ltd. As a result of the review, the Department has

preliminarily determined that dumping margins exist for the respondent.

Interested parties are invited to comment on these preliminary results.

EFFECTIVE DATE: January 30, 1995.

FOR FURTHER INFORMATION CONTACT: Charles Riggle or Michael Rill, Office

of Antidumping Compliance, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-

4733.

SUPPLEMENTARY INFORMATION:

Background

On August 3, 1993, the Department published in the Federal Register

a notice of ``Opportunity to Request Administrative Review'' (58 FR

41239) of the antidumping duty order on granular PTFE resin from Japan

(53 FR 32287, August 24, 1988). Respondent Daikin Industries, Ltd., and

petitioners E. I. Dupont de Nemours & Company and ICI Americas, Inc.,

requested an administrative review in accordance with 19 CFR 353.22(a)

(1993). On September 30, 1993, the Department published a notice of

initiation of this review (58 FR 51053), which covers the period August

1, 1992, through July 31, 1993. The Department is now conducting this

review pursuant to section 751 of the Tariff Act of 1930, as amended

(the Tariff Act).

Scope of the Review

The antidumping duty order covers granular PTFE resins, filled or

unfilled. The order explicitly excludes PTFE dispersions in water and

PTFE fine powders. During the period covered by this review, such

merchandise was classified under item number 3904.61.90 of the

Harmonized Tariff Schedule (HTS). We are providing this HTS number for

convenience and customs purposes only. The written description of scope

remains dispositive.

The review covers one manufacturer/exporter of granular PTFE resin,

Daikin Industries, Ltd. (Daikin). The period of review is August 1,

1992, through July 31, 1993.

United States Price

In calculating United States price (USP), the Department determined

both purchase price (PP) and exporter's sales price (ESP), as defined

in section 772 of the Tariff Act, to be appropriate. All sales were

made through Daikin America, Inc. (DAI), a related sales agent in the

United States, to an unrelated purchaser. However, whenever sales are

made prior to the date of importation through a related sales agent in

the United States, we typically determine that PP is the most

appropriate determinant of the USP if:

1. The merchandise in question was shipped directly from the

manufacturer to the unrelated buyer, without being introduced into the

inventory of the related shipping agent;

2. Direct shipment from the manufacturer to the unrelated buyers

was the customary commercial channel for sales of this merchandise

between the parties involved; and

3. The related selling agent in the United States acted only as a

processor of sales-related documentation and a communication link with

the unrelated U.S. buyers.

Granular Polytetrafluoroethylene Resin From Japan; Final Results of

Antidumping Duty Administrative Review, 58 FR 50343, 50344 (September

27, 1993); Final Determination of Sales at Less Than Fair Value: New

Minivans From Japan, 57 FR 21937, 21945 (May 26, 1992).

For Daikin's sales which satisfy the criteria listed above, we

regard the routine selling functions of the exporter as merely having

been relocated from the country of exportation to the United States,

where the sales agent performs them. Whether these functions take place

in the United States or abroad does not change the substance of the

transactions or the functions themselves, and we therefore treated

these sales as PP transactions in accordance with Sec. 353.41(b) of the

Department's regulations.

During the period of review DAI began to inventory subject

merchandise in the United States based on anticipated demand. Where

DAI's role included warehousing responsibilities in addition to routine

selling functions, such that the date of importation preceded the date

of sale, we regarded sales of such merchandise as ESP sales in

accordance with Sec. 353.41(c) of the Department's regulations.

We based PP and ESP on the packed, delivered price to unrelated

purchasers in the United States. We made deductions, where applicable,

for foreign brokerage and handling, foreign inland freight, ocean

freight, marine insurance, U.S. brokerage and handling, U.S. inland

freight, U.S. duty, U.S. harbor fees and merchandise processing fees,

and inland insurance, in accordance with section 772(d) of the Tariff

Act. We also treated certain early payment discounts as reductions in

price, and deducted them accordingly, in accordance with the

Department's policy. See Sonco Steel Tube Div. v. United States, 714

F.Supp 1218, 1222 (CIT 1989). For ESP sales we also made deductions,

where applicable, for credit expense, replacement of defective

merchandise, commissions paid to unrelated selling agents in the United

States and indirect selling expenses, in accordance with section 772(e)

of the Tariff Act.

We made an addition to USP for the Japanese consumption tax in

accordance with our practice as set forth in Silicomanganese From

Venezuela; Preliminary Determination of Sales at Less Than Fair Value

(Silicomanganese), 59 FR 31204 (June 17, 1994).

Foreign Market Value

Based on a comparison of the volume of home market and third

country sales, we determined that the home market was viable.

Therefore, in accordance with section 773(a)(1)(A) of the Tariff Act,

we based FMV on the packed, delivered price to unrelated purchasers in

the home market.

In the preceding administrative review we found that Daikin made

home market sales below the cost of production (COP). Therefore, in

accordance with our standard practice, we also conducted a COP

investigation during the current administrative review. We calculated

COP as the sum of Daikin's reported materials, labor, factory overhead,

and general expenses. [[Page 5623]] We compared COP to home market

prices, net of movement charges, price adjustments, and discounts.

As a result of our COP investigation, we found no below-cost sales,

and therefore did not disregard any home market sales as being below

cost.

We calculated FMV on a monthly weighted-average basis. We compared

all U.S. sales to sales of identical merchandise in Japan. In

accordance with our practice in this case, we disregarded sample sales

as being outside the ordinary course of trade. The sales in question

represent small quantities of granular PTFE resin sold to testing

facilities in Japan at prices substantially higher than the prices of

the vast majority of Daikin's sales. Further, the sales in question

were not for consumption, but for evaluation purposes. See PTFE Resin

From Japan, 58 FR at 50345.

Where applicable, we made deductions for inland freight, discounts,

and post-shipment price adjustments. To adjust for differences in

circumstances of sale between the home market and the United States, we

first deducted direct selling expenses incurred in the home market,

which included credit and replacement of defective merchandise. For

comparison to PP sales, we then added direct selling expenses incurred

in the United States for replacement of defective merchandise, credit,

and commissions (because no commissions were paid in the home market).

Where applicable, in accordance with Sec. 353.56(b)(1) of the

Department's regulations, we offset U.S. commissions by deducting home

market indirect selling expenses from FMV in an amount not exceeding

those commissions. For comparison to ESP sales, in accordance with

Sec. 353.56(b)(2) of the Department's regulations, we deducted home

market indirect selling expenses in an amount not to exceed the sum of

U.S. commissions and indirect selling expenses incurred in the United

States.

On January 5, 1994, the Court of Appeals for the Federal Circuit,

in The Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray Portland

Cement v. United States, 13 F.3d 398 (Fed. Cir. 1994), held that the

Department could not deduct home market movement charges from FMV

pursuant to its inherent power to fill in the gaps in the antidumping

statute. Accordingly, we now adjust for home market movement expenses

under the circumstance-of-sale (COS) provision of 19 CFR 353.56 and the

offset provisions of 19 CFR 353.56(b)(1) and (2), as appropriate. In

this review, home market movement expenses incurred between the

warehouse and the customer after the sale were treated as direct COS

deductions. Home market movement expenses were also incurred between

the factory and the warehouse before the sale, and we have adjusted for

such expenses as indirect selling expenses under the commission offset

provision of 19 CFR 353.56(b)(1) and under the ESP offset provision of

19 CFR 353.56(b)(2), as appropriate.

In order to adjust for differences in packing between the two

markets, we deducted home market packing costs from FMV and added U.S.

packing costs. We also adjusted for Japanese consumption tax in

accordance with our decision in Silicomanganese.

Preliminary Results of Review

As a result of our comparison of USP with FMV, we preliminarily

determine that the following dumping margins exist:

------------------------------------------------------------------------

Margin

Manufacturer/exporter Period (percent)

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Daikin Industries....................... 08/01/92-07/31/93 23.19

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Interested parties may submit written comments on these preliminary

results. Interested parties may request disclosure within 5 days of the

date of publication of this notice and may request a hearing within 10

days of publication. Any hearing, if requested, will be held

approximately 35 days from the date of publication. Case briefs and

other written comments from interested parties may be submitted not

later than 21 days from the date of publication. Rebuttal briefs and

rebuttal comments, limited to issues raised in the case briefs, may be

filed not later than 28 days from the date of publication. The

Department will publish the final results of this administrative review

including the results of its analysis of issues raised in any such

written comments or at a hearing.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between USP and FMV may vary from the percentages stated

above. Upon completion of this review, the Department will issue

appraisement instructions directly to the Customs Service.

Furthermore, the following deposit requirements will be effective

for all 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, as provided by section

751(a)(1) of the Tariff Act:

(1) The cash deposit rates for the reviewed companies will be those

rates established in the final results of this administrative review;

(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 original 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) the cash deposit rate for all

other manufacturers or exporters will continue to be 91.74 percent, the

rate made effective by the final results of the most recent

administrative review of the order (see PTFE Resin From Japan, 58 FR at

50346). As noted in the Department's previous final results in this

proceeding, this rate is the ``all others'' rate from the LTFV

investigation. These deposit requirements, when imposed, shall remain

in effect until publication of the final results of the next

administrative review.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26 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

section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR

353.22.

Dated: December 23, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-2233 Filed 1-27-95; 8:45 am]

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