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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-475-703]

Granular Polytetrafluoroethylene Resin From Italy; Preliminary

Results of Antidumping Duty Administration Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review.

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

SUMMARY: In response to a request by the petitioner, the Department of

Commerce is conducting an administrative review of the antidumping duty

order on gramdular polytetrafluoroethylene resin from Italy. This

review covers Ausimont SpA. The period of review is August 1, 1996,

through July 31, 1997.

We have preliminary determined that sales of

polytetrafluoroethylene resin from Italy have been at less then normal

value. We invite interested parties to comment on these preliminary

results. Parties who submit comments 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 DATES: May 11, 1998.

FOR FURTHER INFORMATION CONTACT: Magd Zalok or Kris Campbell, Import

Administration, International Trade Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC

20230; telephone: (202) 482-4162 or (202) 482-3813, respectively.

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 regulations provided in 19 CFR Part 351, as published in the

Federal Register on May 19, 1997 (62 FR 27296).

Background

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

Register the antidumping duty order on granular polytetrafluoroethylene

resin (PTFE) from Italy (53 FR 33163). On August 4, 1997, the

Department of published a notice of ``Opportunity to Request

Administrative Review'' of this antidumping duty order for the period

of August 1, 1996, through July 31, 1997 (62 FR 41925). On August 28,

1997, we received a timely request for review from E.I. DuPont de

Nemours & Company (the petitioner). The review request named one

respondent, Ausimont SpA and Ausimont USA Inc. (collectively,

Ausimont). On September 25, 1997, we published the notice of initiation

of this review (62 FR 50292).

We issued a questionnaire to Ausimont on September 24, 1997,

followed by a supplemental questionnaire on February 23, 1998. On

December 19, 1997, the petitioner submitted a timely request for

verification of Ausimont's response.

Verification

In accordance with section 782(i)(3) of the Act, we conducted a

verification of Ausimont's response from April 6 through April 14,

1998, in Bollate, Italy, and in Thorofare, New Jersey (see Verification

of the Responses of Ausimont SpA and Ausimont U.S.A. in the 1996/97

Administrative Review of Polytetrafluoroethylene (PTFE) Resin from

Italy, May 4, 1998).

Scope of the Review

The product covered by this review 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 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

(HTS). We are providing this HTS number for convenience and Customs

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 Act, we

compared the CEPs of individual transactions to contemporaneous monthly

weighted-average prices of sales of the foreign like product.

We first attempted to compare contemporaneous sales of products

sold in the U.S. 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 based on the characteristics listed above, in

that order of priority. With respect to U.S. sales of imported wet raw

polymer that further manufactured into finished PTFE resin (see

Constructed Export Price, below), we limited our price-based

comparisons to comparison market sales of wet raw polymer.

Where there were no appropriate comparison market sales of

comparable merchandise, we compared the merchandise sold in the United

States to constructed value (CV), in accordance with section 773(a)(4)

of the Act.

Constructed Export Price

For all sales to the United States, we calculated constructed

export price (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 Ausimont U.S.A.,

respondent's affiliate. We based CEP on the packed, delivered prices to

unaffiliated 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, we deducted

selling expenses incurred by the affiliated seller in connection with

economic activity in the United States. These expenses include credit,

warranty, technical service, inventory carrying costs, and indirect

expenses incurred by Ausimont USA.

With respect to sales involving imported wet raw polymer that was

further manufactured into finished PTFE resin in the United States, we

deducted the cost of such further manufacturing in accordance with

section 772(d)(2) of the Act. We determined that the special rule for

merchandise with value added after importation under section 772(e) of

the Act did not apply to such sales because the value added in the

United States by the affiliated person did not exceed substantially the

value of the subject merchandise.

Finally, we made an adjustment for the profit allocated to the

above-referenced selling and further manufacturing expenses, in

accordance with section 772(d)(3) of the Act.

[[Page 25827]]

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 Ausimont'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 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. 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 determined home prices net of price adjustments (early payment

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. We made a COS adjustment for home

market credit expense.

As noted above, we determined normal value based on CV where there

were no appropriate home market sales for comparison with the U.S.

sale. 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 COS. Specifically, we made a COS adjustment by

deducting home market credit. We also made a CEP-offset adjustment to

NV for indirect selling expenses pursuant to section 773(a)(7)(B) of

the Act as discussed below.

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

NV level of trade is that of the starting-price sales in the comparison

market. For CEP sales, such as those made by Ausimont 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 NV 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

Notice of Final Determination of Sales at Less Than Fair Value: Certain

Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732

(November 19, 1997).

In implementing these principles in this review, we obtained

information from Ausimont about the marketing stage involved in the

reported U.S. sales and the home market sales, including a description

of the selling activities performed by Ausimont 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 before us in this review indicates that the

home market and the CEP levels of trade have not changed from the 1995-

96 review.\1\ As in prior segments of the proceeding, we determined

that for Ausimont there was one home market level of trade and one U.S.

level of trade (i.e., the CEP level of trade). In the home market,

Ausimont sold directly to fabricators. These sales primarily entailed

selling activities such as inventory maintenance, technical services,

strategic and economic planning, market research, computer assistance

and business system development assistance, personnel training,

engineering services, and delivery services.

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

\1\ See 62 FR 48592, September 16, 1997 (final results) and 62

FR 26283, May 13, 1997 (preliminary results).

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

In determining the level of trade for the U.S. sales, we only

considered the selling activities reflected in the price after making

the appropriate adjustments under section 772(d) of the Act. (See, e.g.

Certain Stainless Wire Rods From France: Final Results of Antidumping

Administrative Review, 61 FR 47874, 47879-80 (Sept. 11, 1996). The CEP

level of trade involves minimal selling functions (e.g., invoicing).

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.

As noted above, all of the Ausimont's home market sales were at a

single level of trade which is different from the CEP level of trade.

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 but 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 based on the official exchange rates

in effect on the dates of the U.S. sales as certified by the Federal

Reserve Bank of New York. Section 773A(a) of the Act directs the

Department to use a daily exchange rate in order to convert foreign

[[Page 25828]]

currencies into U.S. dollars, unless the daily rate involves a

fluctuation. In accordance with our practice, we have determined as a

general matter that a fluctuation exists when the daily exchange rate

differs from a benchmark by 2.25 percent. The benchmark is defined as

the rolling average of rates for the past 40 business days. When we

determine a fluctuation exists, we substitute the benchmark for the

daily rate. See Policy Bulletin 96-1 Currency Conversions, 61 FR 9434

(March 8, 1996).

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)

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

Ausimont S.p.A........................ 08/01/96-07/31/97 40.90

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

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 30 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. Because the inability to

link sales with specific entries prevents calculation of duties on an

entry-by-entry basis, we have calculated an importer-specific ad

valorem duty assessment rate for the merchandise based on the ratio of

the total amount of antidumping duties calculated for the examined

sales made during the POR to the total customs value of the sales used

to calculate these duties. This rate will be assessed uniformly on all

entries of that particular importer made during the POR. (This is

equivalent to dividing the total amount of antidumping duties, which

are calculated by taking the difference between NV and CEP, by the

total CEP value of the sales compared, and adjusting the result by the

average difference between CEP and customs value for all merchandise

examined during the POR.) Individual differences between CEP and NV may

vary from the percentage stated above. Upon completion of this review,

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)

investigations 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 the 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 CFR

353.22(1996).

Dated: May 4, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-12318 Filed 5-8-98; 8:45 am]

BILLING CODE 3510-DS-M