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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-475-703]

Granular Polytetrafluoroethylene Resin From Italy; 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 a request by the petitioner, the Department of

Commerce (the Department) is conducting an administrative review of the

antidumping duty order on granular polytetrafluoroethylene (PTFE) resin

from Italy. This review covers one manufacturer/exporter of the subject

merchandise to the United States for the period August 1, 1994, through

July 31, 1995.

We have preliminarily determined that dumping margins exist for the

respondent. Interested parties are invited to comment on these

preliminary results. Parties who submit arguments in this proceeding

are requested to submit with each argument (1) a statement of the

issue, and (2) a brief summary of the argument.

EFFECTIVE DATE: October 1, 1996.

FOR FURTHER INFORMATION CONTACT: Michael Rausher or Richard Rimlinger,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, N.W.,

Washington, DC 20230; telephone: (202) 482-4733.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (the Act), are references to the provisions effective

January 1, 1995, the effective date of the amendments made to the Act

by the Uruguay Round Agreements Act (URAA). In addition, unless

otherwise indicated, all citations to the Department's regulations are

to the current regulations, as amended by the interim regulations

published in the Federal Register on May 11, 1995 (60 FR 25130).

Background

On August 30, 1988, the Department published in the Federal

Register (53 FR 33163) the antidumping duty order on granular PTFE

resin from Italy. On August 1, 1995, the Department published a notice

of ``Opportunity to Request Administrative Review'' of the antidumping

duty order for the period of August 1, 1994 through July 31, 1995 (60

FR 39150). We received a timely request for review from the petitioner,

E. I. DuPont de Nemours & Company. On October 12, 1995, the Department

initiated a review of Ausimont S.p.A. (60 FR 53165).

Scope of the Review

The product covered by this review is granular PTFE resins, 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 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 (HTS). We are providing

this HTS number for convenience and Customs purposes only. The written

description of the scope remains dispositive.

The review covers one Italian manufacturer/exporter of granular

PTFE resin, Ausimont S.p.A., and the period August 1, 1994 through July

31, 1995.

Use of Facts Available

In the Department's initial questionnaire, we requested that

Ausimont provide value-added data for all models which are further

manufactured in the United States. Ausimont failed to provide this

information. In a supplemental questionnaire dated May 26, 1996, we

again requested that Ausimont report the cost of further manufacturing

performed in the United States. In responding, Ausimont still failed to

provide this information for certain models.

Section 776(a) of the Act provides that if necessary information is

not available on the record, or an interested party or any other person

fails to provide such information by the deadlines for submission of

the information or in the form and manner requested, the Department

shall use the facts otherwise available. In addition, section 776(b) of

the Act provides that if an interested party has failed to cooperate by

not acting to the best of its ability to comply with a request for

information, the Department may use an inference that is adverse to the

interests of that party in selecting from among the facts otherwise

available.

Ausimont's failure to provide further manufacturing data for

certain models

[[Page 51267]]

renders it necessary that we rely upon the facts otherwise available.

Ausimont offered no explanation for this failure on its part, despite

the Department's repeated requests for this information. On this basis,

we preliminarily determine that Ausimont failed to cooperate by not

acting to the best of its ability to comply with the Department's

information requests. Therefore, we determine it is appropriate to use

an inference that is adverse to Ausimont's interests, pursuant to

section 776(b) of the Act. Section 776(b) authorizes the Department to

use as facts otherwise available information derived from the petition,

the final determination, a previous administrative review, or any other

information placed on the record. We have determined that the number of

models for which Ausimont failed to provide further manufacturing data

are relatively few in number, and the absence of this information does

not impact upon the remainder of Ausimont's data base. For these

reasons, we are not resorting to total facts available under section

776(a). We have instead selected the highest reported cost of further

manufacturing reported by Ausimont as facts available for those models

for which Ausimont failed to report the cost of further manufacturing.

United States Price

The Department based United States price (USP) on constructed

exporter's sale price (CEP) as defined in section 772(b) of the Act

because all sales to unrelated parties were made after importation of

the subject merchandise into the United States. We based CEP on the

packed, delivered prices to unrelated purchasers in the United States

(the starting price). We made deductions for movement expenses, in

accordance with section 772(c)(2)(A) of the Act, including

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

inland freight, other transportation expenses, and U.S. customs duties.

In accordance with section 772(d)(1) of the Act and the Statement

of Administrative Action (SAA) accompanying the URAA (at 823-824), we

also adjusted the starting price by deducting selling expenses

associated with economic activities occurring in the United States,

including direct selling expenses assumed on behalf of the buyer and

U.S. indirect selling expenses. Finally, we made an adjustment for an

amount of profit allocated to these expenses, in accordance with

section 772(d)(3) of the Act and as described in section 772(f).

For sales of granular PTFE resin finished in the United States from

PTFE wet raw polymer imported from Italy, we determined that the

special rule for merchandise with value added after importation under

section 772(e) of the Act did not apply because the value added in the

United States by the affiliated person did not exceed substantially the

value of the subject merchandise. Therefore, for subject merchandise

further manufactured in the United States, we used the starting price

of the subject merchandise and deducted the costs of further

manufacturing to determine the CEP for such merchandise in accordance

with section 772(d)(2) of the Act. We deducted the costs of further

manufacturing in the United States and that portion of the profit on

sales of further-manufactured merchandise attributable to the

additional manufacturing. No other adjustments were claimed or allowed.

Normal Value

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 normal value (NV), we compared 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) of the Act. Because the aggregate volume of home market sales of

the foreign like product for Ausimont was greater than five percent of

the respective aggregate volume of U.S. sales for the subject

merchandise, we determined that the home market provides a viable basis

for calculating NV for Ausimont. 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.

We calculated NV on a monthly weighted-average basis. Where

possible, we compared U.S. sales to sales of identical merchandise in

Italy. When there were no identical sales of the foreign like product

available for matching purposes, we based NV on contemporaneous sales

of the most similar foreign like product, in accordance with section

771(16) of the Act. Because filled and unfilled resins generally are

not similar in terms of their physical characteristics, we compared,

whenever possible, home market sales of filled resins to U.S. sales of

filled resins and home market sales of unfilled resins with U.S. sales

of unfilled resins. We matched filled resins sold in the two markets

according to the amounts and types of fillers, and the percentages of

fillers, in the products sold based upon the information provided in

Ausimont's questionnaire response.

In accordance with section 773(a)(4) of the Act, we used

constructed value (CV) as the basis for NV when there were no

comparable sales of the foreign like product in the home market. We

calculated CV in accordance with section 773(e) of the Act. We included

the cost of materials and fabrication, selling, general and

administrative (SG&A) expenses, and profit. In accordance with section

773(e)(2)(A) of the Act, we based SG&A expenses and profit on the

amounts incurred and realized by Ausimont in connection with the

production and sale of the foreign like product in the ordinary course

of trade for consumption in Italy. For selling expenses, we used the

weighted-average home market selling expenses. We included U.S. packing

pursuant to section 773(e)(3) of the Act. Where appropriate, we made

adjustments to CV, in accordance with section 773(a)(8) of the Act for

differences in the circumstances of sale (COS). Specifically, we made

COS adjustments by deducting home market direct selling expenses.

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 COS in accordance with section 773(a)(6)(C)(iii) of the Act. These

COS adjustments included deductions for home market rebates and credit.

Level of Trade

As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA

accompanying the URAA at pages 829-831, the Department will, to the

extent practicable, calculate normal value based on sales at the same

level of trade as the U.S. sales. When the Department is unable to find

sales in the comparison market at the same level of trade as the U.S.

sales, the Department may compare sales in the U.S. and foreign markets

at different levels of trade. See Final Determination of Sales at Less

Than Fair Value: Certain Pasta from Italy, 61 FR 30326 (June 14, 1996).

In accordance with section 773(a)(7)(A), if sales at different

levels of

[[Page 51268]]

trade are compared, the Department will adjust the normal value to

account for the difference in level of trade if the different sales

functions between the levels of trade affect price comparability as

evidenced by a pattern of consistent price differences between sales of

the different levels of trade in which NV is determined.

Additionally, section 773(a)(7)(B) of the Act establishes that a

CEP offset may be made when two conditions are present: (1) NV is

established at a level of trade which constitutes a more advanced stage

of distribution than the level of trade of the CEP; and (2) the data

available do not provide an appropriate basis for a level-of-trade

adjustment.

In order to determine that there is a difference in level of trade,

the Department must find that two sales have been made at different

phases of marketing, or the equivalent. Different phases of marketing

necessarily involve differences in selling functions, but differences

in selling functions (even substantial ones) are not alone sufficient

to establish a difference in the level of trade. Similarly, seller and

customer descriptions (such as ``distributor'' and ``wholesaler'') are

useful in identifying different levels of trade, but are insufficient

to establish that there is a difference in the level of trade.

We requested information about the selling activities associated

with each phase of marketing, or the equivalent, in each of Ausimont's

markets. Ausimont claimed that the level of trade of its CEP sales was

the same as that of its NV sales. Ausimont claimed one level of trade

and one channel of distribution with regard to its sales to its U.S.

affiliate, Ausimont U.S.A., Inc. For its home market, Ausimont also

claimed only one channel of distribution, from Ausimont to fabricators.

To determine whether Ausimont's CEP and NV sales were at the same

level of trade, we reviewed the selling activities associated with both

types of sales. Because Ausimont's sales in the United States were all

based on CEP, we only considered the selling activities reflected in

the price after making the appropriate adjustments under section 772(d)

of the Act. Certain Stainless Wire Rods From France: Final Results of

Antidumping Duty Administrative Review, 61 FR 47874, 47879-80 (Sept.

11, 1996); Preliminary Results of Antidumping Duty Administrative

Reviews of Antifriction Bearings (Other Than Tapered Roller Bearings)

and Parts Thereof From France, et al., 61 FR 35713 (July 8, 1996). The

selling activities included inventory maintenance, after sales

services/warranties, post-sale warehousing, technical advice, strategic

and economic planning, market research, computer assistance, personnel

training, engineering services, research and development, advertising,

procurement, and freight and delivery services. Whenever sales were

made by or through an affiliated company or agent, we considered all

selling activities of both affiliated parties, except for those selling

activities related to the expenses deducted under section 772(d) of the

Act.

We determined that the selling functions performed by Ausimont for

the home market are the same as those performed by Ausimont for CEP

sales and that Ausimont's home market level of trade constituted the

same stage of distribution as that of the level of trade of the CEP.

Therefore, in accordance with section 773(a)(7)(B) of the Act, because

we determined that Ausimont's home market sales upon which we

established NV were at the same level of trade as that of the CEP, we

made no CEP offset to NV.

Preliminary Results of Review

As a result of this review, we preliminarily determine that the

following weighted-average dumping margin exists:

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

Margin

Manufacturer/exporter Period (percent)

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Ausimont S.p.A.......................... 08/01/94-07/31/95 6.23

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Parties to the proceeding may request disclosure within five days

of the date of publication of this notice. Any interested party may

request a hearing within 10 days of publication. Any hearing, if

requested, will be held 44 days after the date of publication, or the

first workday thereafter. Case briefs and/or written comments from

interested parties may be submitted not later than 30 days after the

date of publication. Rebuttal briefs and rebuttals to written comments,

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

not later than 37 days after the date of publication. Parties who

submit arguments in this proceeding are requested to submit with each

argument (1) a statement of the issue and (2) a brief summary of the

argument. The Department will issue the final results of the

administrative review, including the results of its analysis of issues

raised in any such written comments or at a hearing, within 120 days of

issuance of these preliminary results.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Individual differences

between USP and NV may vary from the percentage stated above. The

Department will issue appraisement instructions directly to Customs.

The final results of this review shall be the basis for the assessment

of antidumping dumping duties on entries of merchandise covered by the

determination and for future deposits of estimated duties.

Furthermore, the following deposit requirements will be effective

upon completion of the final results of this administrative review for

all shipments of PTFE resin from Italy 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 Act: (1) The cash deposit rate for Ausimont will be

the rate established in the final results of administrative review; (2)

for merchandise exported by manufacturers or exporters not covered in

this review but covered in the original less than fair value (LTFV)

investigation or a previous review, the cash deposit will continue to

be the most recent rate published in the final determination or final

results for which the manufacturer or exporter received a company-

specific rate; (3) if the exporter is not a firm covered in this

review, a previous review, or the original investigation, but the

manufacturer is, the cash deposit rate will be that established for the

manufacturer of the merchandise in the final results of this review or

the LTFV investigation; and (4) if neither the exporter nor the

manufacturer is a firm covered in this or any previous review, the cash

deposit rate will be 46.46 percent, the ``all others'' rate established

in the LTFV investigation (50 FR 26019, June 24, 1985).

This notice also serves as a preliminary reminder to importers of

their responsibility 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 Act (19 U.S.C. 1675(a)(1)) and 19 C.F.R.

Sec. 353.22 (1996).

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Dated: September 25, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-25114 Filed 9-30-96; 8:45 am]

BILLING CODE 3510-DS-P