[Federal Register Volume 63, Number 152 (Friday, August 7, 1998)]
[Notices]
[Pages 42366-42368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21229]
[[Page 42366]]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-412-803]
Industrial Nitrocellulose From the United Kingdom; 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; Industrial Nitrocellulose from the United
Kingdom.
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on industrial
nitrocellulose (INC) from the United Kingdom in response to a request
by petitioner, Hercules Incorporated. This review covers exports of
subject merchandise to the United States during the period July 1, 1996
through June 30, 1997.
We have preliminarily determined that sales have been made below
normal value (NV). If these preliminary results are adopted in our
final results, we will instruct the U.S. Customs Service to assess
antidumping duties based on the difference between the constructed
export price (CEP) and the NV. Interested parties are invited to
comment on these preliminary results. Parties who submit comments are
requested to submit with each comment (1) a statement of the issue and
(2) a brief summary of the comment.
EFFECTIVE DATE: August 7, 1998.
FOR FURTHER INFORMATION CONTACT: Gideon Katz or Maureen Flannery, AD/
CVD Enforcement, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
5255 or (202) 482-3020.
Applicable Statute and Regulations
Unless otherwise stated, 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. In addition, unless otherwise stated, all
citations to the Department's regulations are references to the
regulations as codified at 19 CFR Part 351 (62 FR 27296, May 19, 1997).
SUPPLEMENTARY INFORMATION:
Background
The Department published in the Federal Register the antidumping
duty order on INC from the United Kingdom on July 10, 1990 (55 FR
28270). On July 21, 1997, we published in the Federal Register (62 FR
38973) a notice of opportunity to request an administrative review of
the antidumping duty order on INC from the United Kingdom covering the
period July 1, 1996 through June 30, 1997.
In accordance with 19 CFR 351.221, petitioner requested that we
conduct an administrative review of sales of subject merchandise made
by respondent, Imperial Chemical Industries PLC (ICI). We published a
notice of initiation of this antidumping duty administrative review on
August 28, 1997 (62 FR 45622). Under section 751(a)(3)(A) of the Act,
the Department may extend the deadline for completion of administrative
reviews if it determines that it is not practicable to complete the
review within the established time limit. The Department published a
notice of extension of the time limit for the preliminary results in
this case on February 17, 1998. See Industrial Nitrocellulose from the
United Kingdom: Notice of Extension of Time Limits for Preliminary
Results of Antidumping Administrative Review, 63 FR 7756 (February 17,
1998). The Department is conducting this administrative review in
accordance with section 751(a) of the Act.
Scope of the Review
This review covers shipments of INC from the United Kingdom. INC is
a dry, white, amorphous synthetic chemical with a nitrogen content
between 10.8 and 12.2 percent, which is produced from the reaction of
cellulose with nitric acid. It is used as a film-former in coatings,
lacquers, furniture finishes, and printing inks. INC is currently
classifiable under Harmonized Tariff Schedule (HTS) item number
3912.20.00. Although HTS subheadings are provided for convenience and
Customs purposes, the written description of the scope of this order
remains dispositive. The scope of the antidumping order does not
include explosive grade nitrocellulose, which has a nitrogen content of
greater than 12.2 percent.
This review covers sales of the subject merchandise manufactured by
ICI and entered into the United States during the period July 1, 1996
through June 30, 1997.
Verification
As provided in section 782(i) of the Act, we verified information
provided by ICI using standard verification procedures, including on-
site inspection of the manufacturer's facilities, examination of
relevant sales and financial records, and selection of original
documentation containing relevant information. Our verification results
are outlined in the verification reports.
Constructed Export Price
Respondent reported U.S. sales as export price (EP) sales, claiming
that, although an affiliated U.S. company, ICI Americas Inc. (ICIA),
was involved in the sales process, ICIA's role involved no more than
processing paperwork, and that all of ICI's U.S. sales were actually
made in the United Kingdom.
We examined the facts of this case in light of the statute and our
past practice regarding EP and CEP sales and have preliminarily
determined that respondent's U.S. sales are properly classified as CEP
sales. Section 772(b) of the Act defines CEP as ``the price at which
the subject merchandise is first sold (or agreed to be sold) in the
United States before or after the date of importation by or for the
account of the producer or exporter of such merchandise or by a seller
affiliated with the producer or exporter, to a purchaser not affiliated
with the producer or exporter, as adjusted * * *.'' (emphasis added).
Section 772(a) of the Act defines EP as ``the price at which the
subject merchandise is first sold (or agreed to be sold) before the
date of importation by the producer or exporter of the subject
merchandise outside of the United States to an unaffiliated purchaser
in the United States or to an unaffiliated purchaser for exportation to
the United States, as adjusted * * *.''
When sales are made prior to importation through an affiliated or
unaffiliated U.S. sales agent to an unaffiliated customer in the United
States, our practice is to examine several criteria in order to
determine whether the sales are EP sales. Those criteria are: (1)
whether the merchandise was shipped directly from the manufacturer to
the unaffiliated U.S. customer; (2) whether this was the customary
commercial channel between the parties involved; and (3) whether the
function of the U.S. selling agent was limited to that of a ``processor
of sales-related documentation'' and a ``communications link'' with the
unaffiliated U.S. buyer. Where all three criteria are met, indicating
that the activities of the U.S. selling agent are ancillary to the
sale, the Department has classified the sales as EP sales. Where one or
more of these conditions are not
[[Page 42367]]
met, indicating that the U.S. sales agent is substantially involved in
the U.S. sales process, the Department has classified the sales in
question as CEP sales. See, e.g., Certain Cold-Rolled and Corrosion-
Resistant Carbon Steel Flat Products From Korea: Final Results of
Antidumping Duty Administrative Reviews, 63 FR 13170 (March 18, 1998)
wherein the Department determined that where a U.S. affiliate is
involved in making a sale, it normally considers the sale to be a CEP
transaction unless the record demonstrates that the U.S. affiliate's
involvement in making the sale is incidental or ancillary (see, also,
Viscose Rayon Staple Fiber from Finland: Final Results of Antidumping
Duty Administrative Review, 63 FR 32820 (June 16, 1998)).
In the instant review, the fact that the subject merchandise was
shipped directly from ICI to the unaffiliated U.S. customers and that
this was the customary commercial channel between these parties is not
disputed. However, ICI contracted a U.S. selling agent whose duties
included sales solicitation and price negotiation. Discussion of these
two functions in a public notice is not possible due to their
proprietary nature. See U.S. Verification Report.
Because of ICI's agent's involvement in sales solicitation and
price negotiation, we determine that ICI's U.S. selling agent is
substantially involved in the sales process for INC. As indicated by
our analysis of the third factor listed above, in this case, the
function of the U.S. selling agent is not limited to that of a
``processor of sales-related documentation'' and a ``communications
link'' with the unaffiliated U.S. buyer. See U.S. Steel Group v. United
States, CIT Slip Op. 98-96 (July 7, 1998) (upholding the Department's
CEP determination in Certain Cut-to-Length Carbon Steel Plate from
Germany: Final Results of Antidumping Administrative Review, 62 FR
18390, which was largely based on the Department's discovery at
verification that the U.S. importer was authorized to negotiate sales
terms without prior approval from the exporter/producer).
Therefore, ICI's U.S. sales process does not satisfy all of the
three criteria for EP treatment. Accordingly, we determine that ICI's
U.S. sales are properly treated as CEP transactions. We calculated CEP
as defined in section 772(b) of the Act. We based CEP on the packed,
delivered prices to unaffiliated purchasers in the United States. We
made adjustments for rebates. We made deductions for movement expenses,
including international freight, other U.S. transportation expenses,
marine insurance, brokerage and handling, and U.S. customs duties, in
accordance with section 772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act, we deducted
commissions for selling INC in the United States, credit expenses, and
indirect selling expenses. Finally, we made an adjustment for the
profit allocated to selling expenses incurred in the United States, in
accordance with section 772(d)(3) of the Act.
Normal Value
Based on a comparison of the aggregate quantity of home market and
U.S. sales, we determined that the quantity of foreign like product
sold in the home market was sufficient to permit a proper comparison
with the sales of the subject merchandise to the United States,
pursuant to section 773(a) of the Act. Therefore, in accordance with
section 773(a)(1)(B)(i) of the Act, we based NV on the price (exclusive
of value-added tax (VAT)) at which the foreign like product was first
sold for consumption in the home market, in the usual commercial
quantities and in the ordinary course of trade, and at the same level
of trade as the CEP sale.
Under 19 CFR 351.403(c), we excluded sales to one affiliated
customer in calculating NV because we determined that sales to this
customer were not made at arm's length prices (i.e., at prices
comparable to prices at which the firm sold identical merchandise to
unaffiliated customers).
We based NV on packed, delivered prices to unaffiliated purchasers
in the home market. We made adjustments, where applicable, in
accordance with section 773(a)(6) of the Act. Where applicable, we made
adjustments to home market price for billing adjustments, rebates,
discounts, and inland freight. We also made a deduction for home market
credit, pursuant to section 773(a)(6)(C)(iii) of the Act. We deducted
home market indirect selling expenses, up to the amount of U.S.
commissions. In order to adjust for differences in packing between the
two markets, we increased home market price by U.S. packing costs and
reduced it by home market packing costs. Prices were reported net of
VAT and, therefore, no deduction for VAT was necessary.
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the United Kingdom at
the same level of trade (LOT) as the CEP transactions. The NV LOT is
that of the starting-price sales in the comparison market. The U.S. LOT
is the level of the constructed sale from the exporter to the importer.
To evaluate LOTs, we examined information regarding the
distribution systems in both the U.S. and Canadian markets, including
the selling functions, classes of customer, and selling expenses for
each respondent. We determined that in this case the NV LOT was
identical to the CEP LOT.
Price-to-Price Comparisons
Pursuant to section 777A(d)(2), we compared the CEPs of individual
transactions to the monthly weighted-average prices of sales of the
foreign like product.
Preliminary Results of the Review
As a result of our comparison of CEP and NV, we preliminarily
determine that the following weighted-average dumping margin exists:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Period (percent)
------------------------------------------------------------------------
Imperial Chemical Industries PLC......... 7/1/96-6/30/97 16.48
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within 5 business
days of the date of publication of this notice. Any interested party
may request a hearing within 30 days of publication. Pursuant to 19 CFR
351.310, any hearing, if requested, will be held 2 days after the date
rebuttal briefs are due, or the first workday thereafter. Interested
parties may submit case briefs within 30 days of the date of
publication of this notice. Rebuttal briefs, which must be limited to
issues raised in the case briefs, may be filed not later than 5 days
after the time limit for filing the case brief. The Department will
publish a notice of final results of this administrative review, which
will include the results of its analysis of issues raised in any such
comments, not later than 120 days after the date of publication of this
notice.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Upon completion
of this review, the Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of the final results of this administrative review for all
shipments of INC from the United Kingdom entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(2)(c) of the Act: (1) the cash deposit
rate for the reviewed
[[Page 42368]]
company will be the rate established in the final results of this
review; (2) for merchandise exported by manufacturers or exporters not
covered in this review but covered in the original investigation of
sales at less than fair value (LTFV) or a previous review, the cash
deposit 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
or a previous 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)
for all other producers and/or exporters of this merchandise, the cash
deposit rate shall be 11.13 percent, the ``all others'' rate
established in the LTFV investigation (55 FR 21058, May 22, 1990).
These deposit rates, 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 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 determination is issued and published in accordance with
sections 751(a)(1) of the Act (19 U.S.C. 1675(a)) and 19 CFR 351.213.
Dated: July 30, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-21229 Filed 8-6-98; 8:45 am]
BILLING CODE 3510-DS-P