# Notice of Preliminary Determination of Sales at Less Than Fair Value: Polyvinyl Alcohol From Taiwan > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A95-25061 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** October 10, 1995 - **Citation:** 60 FR 52651 ## Text DEPARTMENT OF COMMERCE [A-583-824] Notice of Preliminary Determination of Sales at Less Than Fair Value: Polyvinyl Alcohol From Taiwan AGENCY: Import Administration, International Trade Administration, Department of Commerce. EFFECTIVE DATE: October 10, 1995. FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Barbara Wojcik- Betancourt, Office of Antidumping Investigations, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 482-4136 or (202) 482-0629, respectively. The Applicable Statute 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) by the Uruguay Round Agreements Act (URAA). Preliminary Determination We preliminarily determine that polyvinyl alcohol from Taiwan is being, or is likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733 of the Tariff Act of 1930, as amended (the Act). The estimated margins are shown in the ``Suspension of Liquidation'' section of this notice. Case History Since the initiation of this investigation on March 29, 1995, (60 FR 17053, April 4, 1995), the following events have occurred: On April 24, 1995, the U.S. International Trade Commission (ITC) notified the Department of Commerce (the Department) of its affirmative preliminary determination. In May 1995, the Department presented an antidumping duty questionnaire to Chang Chun Petrochemical Co., Ltd. (Chang Chun), the sole Taiwan producer of the subject merchandise. Chang Chun submitted its questionnaire responses in June and July 1995. The Department issued supplemental questionnaires, and Chang Chun responded to them, in August 1995. During September 1995, the Department requested and received additional information from Chang Chun. In addition, both petitioner and Chang Chun submitted comments regarding treatment of various issues for the preliminary determination. Pursuant to section 733(c)(1)(B) of the Act, as amended, the Department determined that this investigation is extraordinarily complicated and additional time is necessary to make the preliminary determination. Accordingly, we postponed the preliminary determination until October 2, 1995 (60 FR 35899, July 12, 1995). On September 19, 1995, petitioner amended the petition to exclude from the scope of this investigation polyvinyl alcohols 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, or polyvinyl alcohols covalently bonded with silane uniformly present on all polymer chains in a concentration equal to or greater than one-tenth of one mole percent. We have revised the scope of this investigation to reflect petitioner's amendment (see the ``Scope of Investigation'' section of this notice, below). Scope of Investigation The merchandise under investigation is polyvinyl alcohol. Polyvinyl alcohol is a dry, white to cream-colored, water-soluble synthetic polymer, usually prepared by hydrolysis of polyvinyl acetate. This product includes polyvinyl alcohols hydrolyzed in excess of 85 percent, whether or not mixed or diluted with defoamer or boric acid, except for polyvinyl alcohols covalently bonded with acetoacetylate, carboxylic [[Page 52652]] acid, or sulfonic acid uniformly present on all polymer chains in a concentration equal to or greater than two mole percent, or polyvinyl alcohols covalently bonded with silane uniformly present on all polymer chains in a concentration equal to or greater than one-tenth of one mole percent, which are excluded. The merchandise under investigation is currently classifiable under subheading 3905.20.00 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive. Period of Investigation The period of investigation (POI) is April 1, 1994, through March 31, 1995. Product Comparisons In accordance with section 771(16) of the Act, we considered all products in the home market to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. Where there were no sales of identical merchandise in the home market to compare to U.S. sales, we made comparisons on the basis of the characteristics listed in the Department's antidumping questionnaire. Chang Chun reported that it sells to customers at three levels of trade in the home market: distributor, retailer, and end-user; and to two levels of trade in the U.S. market: distributor and end-user. It has requested that we make comparisons at the same level of trade, in accordance with section 773(a)(1)(B) of the Act. Under this section of the Act, the Department will compare products, to the extent practicable, at the same level of trade. Section 773(a)(7)(A)(i) specifies that the difference in level of trade must involve the performance of different selling activities by the seller (i.e. the responding exporter). While Chang Chun has identified different functions performed by its customers at the alleged levels of trade, it has failed to demonstrate that Chang Chun itself engages in different selling activities among end-users, distributors, and retailers. Chang Chun states that it ``treats end-users and distributors the same as far as the handling of the transactions.'' Apart from a quantity rebate offered only to home market distributors, and a commission paid on some end-user U.S. sales, it has not reported any other selling activities that differ among the alleged levels of trade. Because Chang Chun reports performing no other selling activities and reports incurring no expenses for technical service, warranty or advertising, it has failed to demonstrate that it performs different selling activities dependent on the customer. Based on this analysis, we have determined that Chang Chun has failed to support its contention that it sells to different levels of trade. In making our comparisons, we therefore, made no distinctions between levels of trade. Fair Value Comparisons To determine whether Chang Chun's sales of PVA to the United States were made at less than fair value, we compared Export Price (EP) to the Normal Value (NV), as specified below. Export Price We calculated EP, in accordance with section 772(a) of the Act, because the subject merchandise was sold to the first unaffiliated purchaser in the United States prior to importation, and Constructed Export Price (CEP) under section 772(b) is not otherwise warranted based on the facts of this investigation. We calculated EP based on packed, FOB factory, C&F or CIF prices to unaffiliated customers in the United States. We made deductions from the starting price (gross unit price), where appropriate, for the following charges: inland freight in Taiwan; freight and marine insurance; brokerage and handling; ocean freight, ocean freight fees; and harbor construction tax. Normal Value In accordance with section 773(a)(1)(B) of the Act, we have based NV on sales in Taiwan, the home market. We compared all home market sales to the cost of production (COP), as described below. In every instance, home market prices were above COP, and we calculated NV based on FOB factory or delivered prices to unaffiliated customers, and made deductions from the starting price for freight, discounts, and rebates (reported also as a discounts by Chang Chun), and post-sale billing corrections. In accordance with section 773(a)(6) of the Act, we deducted home market packing costs and added U.S. packing costs. In addition, we adjusted for differences in the circumstances of sale, in accordance with section 773(a)(6)(C)(iii). These circumstances included differences in imputed credit expenses and commissions. Chang Chun paid commissions on some U.S. sales, but paid no commissions on any home market sales. Thus, we deducted the lesser of either (1) the amount of the weighted-average commission paid on the U.S. sales of a product; or (2) the sum of the weighted average indirect selling expenses paid on the home market sales, and then added the weighted-averaged amount of the commission paid on the U.S. sales to NV in accordance with 19 CFR 353.56(a)(2). Petitioner claims that Chang Chun's sales to its major distributors in the home market should be considered sales to affiliated parties under section 771(33) because suppliers are so reliant on Chang Chun that Chang Chun is in a position to legally or operationally exercise restraint or direction over these suppliers. Chang Chun responds that it has no ownership, overlapping management, or financial arrangements with these customers and is in no position to control its distributors. For the preliminary determination, we have considered these customers to be unaffiliated, but will examine this issue further at verification prior to the final determination. Cost of Production Analysis Pursuant to an allegation made by the petitioner, we initiated a cost of production investigation in our notice of initiation ( 60 FR 17053, April 4, 1995). To determine whether the home market prices were above COP, pursuant to section 773(b), we calculated COP based on the sum of Chang Chun's reported cost of materials, fabrication, general expenses, and packing. We made no adjustment to Chang Chun's submitted cost data for purposes of the preliminary determination. Petitioner claims that Chang Chun has incorrectly treated acetic acid as a co-product of PVA production rather than a by-product in its cost allocation methodology. We have preliminarily treated acetic acid as a co-product, but will examine this issue further at verification for the final determination. Results of COP Analysis In accordance with section 773(b)(1) of the Act, we compared home market sales to the weighted-average cost of production, by product, to determine whether sales were made below the COP within an extended period of time in substantial quantities at prices that do not permit the recovery of all costs within a reasonable period of time. Based on our preliminary analysis, none of Chang Chun's sales were found to be below cost. Accordingly, we calculated NV for all U.S. sales based on price to price comparisons. [[Page 52653]] Comparison Methodology In accordance with section 777A(d)(1)(A)(i), we calculated weighted-average EPs for comparisons to weighted average NVs. The weighted-averages were calculated and compared by product characteristics. Petitioner argues that monthly average home market and U.S. prices should be used in calculating the dumping margin due to alleged differences in the time, volume, and distribution of sales during the POI. Petitioner contends that the use of monthly averages is appropriate in order to avoid understating a margin calculated using yearly POI averages. The Department's standard practice in past antidumping investigations involving weighted-average foreign market values (now NV) was to calculate a single weighted-average price for each product during the 6-month POI. The Department intends to extend this practice to the calculation of POI average prices in both markets under the new section 777A of the Act. At this point, the available information on the record does not establish a sufficient basis to use monthly average prices instead of POI average prices. Currency Conversion For the purpose of the preliminary determination, we made currency conversions into U.S. dollars based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of Chicago, in accordance with section 773A(a) of the Act. Verification As provided in section 788(i) of the Act, we will verify all information determined to be acceptable for use in making our final determination. Suspension of Liquidation In accordance with section 733(d) of the Act, we are directing the Customs Service to suspend liquidation of all entries of polyvinyl alcohol from Taiwan, that are entered, or withdrawn from warehouse for consumption, on or after the date of publication of this notice in the Federal Register. The Customs Service will require a cash deposit or posting of a bond equal to the estimated amount by which the normal value exceeds the export price as shown below. These suspension of liquidation instructions will remain in effect until further notice. The weighted-average dumping margins are as follows: ------------------------------------------------------------------------ Weighted- average Exporter/manufacturer margin percentage ------------------------------------------------------------------------ Chang Chun Petrochemical Co., Ltd.......................... 4.03 All others................................................. 4.03 ------------------------------------------------------------------------ The all others rate applies to all entries of subject merchandise except for entries of merchandise produced by Chang Chun. ITC Notification In accordance with section 733(f) of the Act, we have notified the ITC of our determination. If our final determination is affirmative, the ITC will determine before the later of 120 days after the date of this preliminary determination or 45 days after our final determination whether these imports are materially injuring, or threaten material injury to, the U.S. industry. Public Comment In accordance with 19 CFR 353.38, case briefs or other written comments in at least ten copies must be submitted to the Assistant Secretary for Import Administration no later than November 17, 1995, and rebuttal briefs, no later than November 20, 1995. A list of authorities used and an executive summary of issues should accompany any briefs submitted to the Department. Such summary should be limited to five pages total, including footnotes. In accordance with 19 CFR 353.38, we will hold a public hearing, if requested, to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs. Tentatively, the hearing will be held on November 22, 1995, time and place to be determined, at the U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time. 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, U.S. Department of Commerce, Room B-099, within ten days of the publication of this notice. Requests should contain: (1) the party's name, address, and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. In accordance with 19 CFR 353.38(b), oral presentations will be limited to issues raised in the briefs. If this investigation proceeds normally, we will make our final determination by December 18, 1995. This determination is published pursuant to section 733(f) of the Act. Dated: October 3, 1995. Susan G. Esserman, Assistant Secretary for Import Administration. [FR Doc. 95-25061 Filed 10-6-95; 8:45 am] BILLING CODE 3510-DS-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A95-25061. Public record. Not legal advice.