[Federal Register: January 26, 2004 (Volume 69, Number 16)]
[Notices]
[Page 3552-3557]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26ja04-22]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-549-821]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Polyethylene Retail
Carrier Bags from Thailand
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: January 26, 2004.
SUMMARY: We preliminarily determine that polyethylene retail carrier
bags from Thailand are being, or are likely to be, sold in the United
States at less than fair value, as provided in section 733 of the
Tariff Act of 1930, as amended. Interested parties are invited to
comment on this preliminary determination. We will make our final
determination not later than 135 days after the date of publication of
this preliminary determination.
FOR FURTHER INFORMATION CONTACT: Lyn Johnson (Thai Plastic Bags) or
Fred Aziz (Universal Polybag), 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:
Preliminary Determination
The Department of Commerce (the Department) has conducted this
antidumping investigation in accordance with section 733 of the Tariff
Act of 1930, as amended (the Act). We preliminarily determine that
polyethylene retail carrier bags (PRCBs) from Thailand are being sold,
or are likely to be sold, in the United States at less than fair value
(LTFV), as provided in section 733 of the Act. The estimated margins of
sales at LTFV are shown in the ``Suspension of Liquidation'' section of
this notice.
Case History
We initiated this investigation on July 10, 2003. See Initiation of
Antidumping Duty Investigations: Polyethylene Retail Carrier Bags from
The People's Republic of China, Malaysia, and Thailand, 68 FR 42002
(July 16, 2003) (Initiation Notice). Since the initiation of this
investigation the following events have occurred.
On July 14, 2003, we issued a letter to interested parties in this
investigation providing an opportunity to comment on the
characteristics we should use in identifying the different models the
respondents sold in the United States. The petitioners and both
respondents submitted comments on July 28, 2003. No other party
submitted comments. After reviewing the parties' comments, we have
adopted the characteristics and hierarchy as explained in the ``Fair
Value Comparisons'' section, below.
On July 14, 2003, we sent a partial section A questionnaire to all
of the producers and exporters named in the petition and to the
producers/exporters who comprise the top 80 percent of producers and
exporters in terms of quantity produced (in thousands of units) of the
subject merchandise according to data from U.S. Customs and Border
Protection (CBP). We requested information on the quantity and value of
merchandise sold by these producers/exporters in order to identify
potential respondents in the investigation. We received responses from
eight firms which reported exports of subject merchandise during the
period of investigation (POI). In addition, a number of firms indicated
that they did not export subject merchandise to the United States
during the POI. We did not receive responses from Champion Paper
Polybags Ltd., TRC Polypack, and Zip-Pac Co., Ltd. The record indicates
that these companies received our July 14, 2003, questionnaire. On
August 1, 2003, we sent a letter to these firms to reiterate our
request for a response to our July 14, 2001, questionnaire. We received
no responses from these firms.
On August 4, 2003, the United States International Trade Commission
(ITC) issued its affirmative preliminary determination that there is a
reasonable indication that an industry in the United States is
materially injured by reason of imports of the subject merchandise from
the PRC, Malaysia, and Thailand, which the ITC published in the Federal
Register on August 11, 2003. See Polyethylene Retail Carrier Bags From
China, Malaysia, and Thailand, 68 FR 47609 (August 11, 2003).
On August 14, 2003, the Department selected Thai Plastic Bags
Industries Co., Ltd. (Thai Plastic Bags), and Universal Polybag Co.,
Ltd. (Universal), as mandatory respondents. See Memorandum from Laurie
Parkhill to Jeff May dated August 14, 2003.
On August 14, 2003, the Department issued its antidumping
questionnaire to the mandatory respondents. Both mandatory respondents
responded to our questionnaire. We issued supplemental questionnaires
to the mandatory respondents and received responses from both companies
to our supplemental questionnaires. Because Thai Plastic Bags is
comprised of three companies (Thai Plastic Bags Industries Co., Ltd.,
Winner's Pack Co., Ltd., and APEC Film Ltd.), it provided a unified
response to our questionnaires with respect to the collapsed companies.
On October 16, 2003, the petitioners requested that the Department
postpone its preliminary determination by 50 days. In accordance with
section 733(c)(1)(A) of the Act, we postponed our preliminary
determination by 50 days. See Notice of Postponement of Preliminary
Determinations in Antidumping Duty Investigations:
[[Page 3553]]
Polyethylene Retail Carrier Bags From the People's Republic of China,
Malaysia, and Thailand, 68 FR 61656 (October 29, 2003).
Postponement of Final Determination and Extension of Provisional
Measures
Section 735(a)(2) of the Act provides that a final determination
may be postponed until not later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
exports of the subject merchandise. In accordance with 19 CFR
351.210(e)(2), the Department requires that exporters requesting
postponement of the final determination must also request an extension
of the provisional measures in section 733(d) of the Act from a four-
month period until not more than six months.
We received a request to postpone the final determination from Thai
Plastic Bags. In its request, Thai Plastic Bags consented to the
extension of provisional measures to no longer than six months. Since
this preliminary determination is affirmative, the request for
postponement is made by an exporter that accounts for a significant
proportion of exports of the subject merchandise, and there is no
compelling reason to deny the respondent's request. Therefore, we have
extended the deadline for issuance of the final determination until the
135th day after the date of publication of this preliminary
determination in the Federal Register and have extended provisional
measures to no longer than six months.
Period of Investigation
The POI corresponds to the four most recent fiscal quarters prior
to the filing of the petition, i.e., April 1, 2002, through March 31,
2003.
Scope Comments
In accordance with the preamble to our regulations (see Antidumping
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), we
set aside a period of time for parties to raise issues regarding
product coverage and encouraged all parties to submit comments within
20 calendar days of publication of the Initiation Notice (see 66 FR
42002). Interested parties submitted such comments by August 5, 2003.
Pursuant to the Department's solicitation of scope comments in the
Initiation Notice on August 4, 2003, Regal Import Packaging, an
importer of PRCBs, requested that bags that are ``four dimensional'',
bags with handles made of a material that differs from the bag itself,
and custom-printed bags where the bag order is of 50,000 bags or less,
be excluded from the scope of the investigation. The importer asserted
that these types of bags were not manufactured in the United States and
therefore should be excluded from the scope of the investigation. On
August 12, 2003, the petitioners commented that the bags in question
were manufactured in the United States and requested that the scope of
the investigation not exclude these types of bags. We have not adopted
the changes in the scope of the investigation requested by Regal Import
Packaging because we find the petitioners have placed sufficient
evidence on the record to show that the bags in question are
manufactured in the United States and fall within the scope of the
investigation.
Scope of Investigation
The merchandise subject to this investigation is polyethylene
retail carrier bags, which also may be referred to as t-shirt sacks,
merchandise bags, grocery bags, or checkout bags. The subject
merchandise is defined as non-sealable sacks and bags with handles
(including drawstrings), without zippers or integral extruded closures,
with or without gussets, with or without printing, of polyethylene film
having a thickness no greater than .035 inch (0.889 mm) and no less
than .00035 inch (0.00889 mm), and with no length or width shorter than
6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of
the bag may be shorter than 6 inches but not longer than 40 inches
(101.6 cm).
PRCBs are typically provided without any consumer packaging and
free of charge by retail establishments (e.g., grocery, drug,
convenience, department, specialty retail, discount stores and
restaurants) to their customers to package and carry their purchased
products. The scope of the petition excludes (1) polyethylene bags that
are not printed with logos or store names and that are closeable with
drawstrings made of polyethylene film and (2) polyethylene bags that
are packed in consumer packaging with printing that refers to specific
end-uses other than packaging and carrying merchandise from retail
establishments (e.g., garbage bags, lawn bags, trash-can liners).
Imports of the subject merchandise are classified under statistical
category 3923.21.0090 of the Harmonized Tariff Schedule of the United
States. This subheading also covers products that are outside the scope
of this investigation. Furthermore, although the HTSUS subheading is
provided for convenience and customs purposes, our written description
of the scope of this investigation is dispositive.
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate
individual dumping margins for each known exporter and producer of the
subject merchandise. Section 777A(c)(2) of the Act gives the Department
discretion, when faced with a large number of exporters or producers,
to limit its examination to a reasonable number of such companies if it
is not practicable to examine all companies. There is no data on the
record that indicates conclusively the number of producers or exporters
from Thailand that exported the subject merchandise to the United
States during the POI. We also determined that we only had the
resources to investigate two companies.
On July 14, 2003, the Department sent partial section A
questionnaires addressed to all producers/exporters of the subject
merchandise listed in the petition. As discussed above, we received
responses from a number of firms in this investigation. Based on the
responses we received to our July 14, 2003, questionnaire, we selected
Thai Plastic Bags and Universal as mandatory respondents. We selected
Thai Plastic Bags and Universal because these two firms account for
85.2 percent of known U.S. imports of subject merchandise and we do not
have the resources to investigate all potential respondents. See
Memorandum from Laurie Parkhill to Jeff May dated August 14, 2003.
Use of Facts Otherwise Available
Section 776(a)(2) of the Act provides that, if an interested party
withholds information that has been requested by the Department, fails
to provide such information in a timely manner or in the form or manner
requested, significantly impedes a proceeding under the antidumping
statute, or provides such information but the information cannot be
verified, the Department shall, subject to sections 782(d) and (e) of
the Act, use facts otherwise available in reaching the applicable
determination.
Section 776(a)(2)(B) of the Act requires the Department to use
facts available when a party does not provide the Department with
information by the established deadline or in the form and manner
requested by the Department. In addition, section 776(b) of the Act
provides that, if the Department finds that an interested party ``has
failed to cooperate by not acting to the best of its
[[Page 3554]]
ability to comply with a request for information,'' the Department may
use information that is adverse to the interests of that party as facts
otherwise available.
As explained above, Champion Paper Polybags Ltd., TRC Polypack, and
Zip-Pac Co., Ltd., failed to respond to our July 14, 2003, request for
information. Pursuant to section 776(a) of the Act, in reaching our
preliminary determination, we have used total facts available for all
three of these companies because these firms did not provide the data
we needed to decide whether they should be selected as a mandatory
respondent. Also, because these companies failed to respond to our
requests for information, we have found that they failed to cooperate
to the best of their ability. Therefore, pursuant to section 776(b) of
the Act, we have used an adverse inference in selecting from the facts
available for the margins for these companies. As adverse facts
available, we used the margins that the petitioners alleged in their
June 20, 2003, petition and selected the highest of the three margins
which we calculated to be 122.88 percent.
Section 776(c) of the Act provides that the Department shall, to
the extent practicable, corroborate secondary information used for
facts available by reviewing independent sources reasonably at its
disposal. Information from the petitioners constitutes secondary
information. The Statement of Administrative Action accompanying the
Uruguay Round Agreements Act, H.R. Doc. 103-316, at 870 (1994) (SAA),
provides that the word ``corroborate'' means that the Department will
satisfy itself that the secondary information used has probative value.
As explained in Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, from Japan, and Tapered Roller Bearings Four Inches or Less
in Outside Diameter, and Components Thereof, from Japan: Preliminary
Results of Antidumping Duty Administrative Reviews and Partial
Termination of Administrative Review, 61 FR 57391, 57392 (November 6,
1996) (Tapered Roller Bearings and Parts Thereof from Japan), in order
to corroborate secondary information, the Department will examine, to
the extent practicable, the reliability and relevance of the
information used.
The petitioners' methodology for calculating the export price (EP)
and normal value in the petition is discussed in the initiation notice.
See Initiation Notice, 68 FR at 42003-4. To corroborate the
petitioners' EP and normal-value calculations, we compared the prices
and expenses in the petition to the prices and expenses submitted by
the responding companies for comparable products.
As discussed in the memorandum to the file entitled Corroboration
of Facts Available, dated January 16, 2004, we found that the EP and
normal-value information in the petition were reasonable and,
therefore, we preliminarily determine that the petition information has
probative value. Accordingly, we find that the highest margin based on
petition information and adjusted as described above, 122.88 percent,
is corroborated within the meaning of section 776(c) of the Act.
Furthermore, there is no information on the record that
demonstrates that the rate we have selected is an inappropriate total
adverse facts-available rate for the companies in question. On the
contrary, our existing record supports the use of this rate as the best
indication of the EP and dumping margin for these firms. Therefore, we
consider the selected rate to have probative value with respect to the
firms in question and to reflect the appropriate adverse inference.
Accordingly, for the preliminary determination, the margin for
Champion Paper Polybags Ltd., TRC Polypack, and Zip-Pac Co., Ltd., is
122.88 percent. Because these are preliminary margins, the Department
will consider all margins on the record at the time of the final
determination for the purpose of determining the most appropriate final
margins for these companies.
Fair Value Comparisons
To determine whether sales of PRCBs to the United States by Thai
Plastic Bags and Universal in this investigation were made at less than
fair value, we compare EP or constructed export price (CEP) to normal
value, as described in the ``U.S. Price'' and ``Normal Value'' sections
of this notice. In accordance with section 777A(d)(1)(A)(i) of the Act,
we calculated weighted-average EPs and CEPs.
In making the product comparisons, we matched foreign like products
based on the physical characteristics reported by the respondents in
the following order of importance: 1) quality, 2) bag type, 3) length,
4) width, 5) gusset, 6) thickness, 7) percent of high density
polyethylene resin, 8) percent of low density polyethylene resin, 9)
percent of low linear density polyethylene resin, 10) percent of color
concentrate, 11) percent of ink coverage, 12) number of ink colors, 13)
number of sides printed.
U.S. Price
In accordance with section 772(a) of the Act, we used EP for Thai
Plastic Bags because the subject merchandise was sold directly to
unaffiliated customers in the United States prior to importation. In
accordance with section 772(b) of the Act, we also used CEP for Thai
Plastic Bags and for Universal because the subject merchandise was sold
in the United States after the date of importation by a U.S. seller
affiliated with the producer. In accordance with section
777A(d)(1)(A)(I) of the Act, we compared POI-wide weighted-average EPs
and CEPs to the normal values.
We calculated EP and CEP based on the packed F.O.B., C.I.F., or
delivered price to unaffiliated purchasers in, or for exportation to,
the United States. We made deductions, as appropriate, for discounts
and rebates. We also made deductions for any movement expenses in
accordance with section 772(c)(2)(A) of the Act. With respect to Thai
Plastic Bags, we did not allow its claim of a duty drawback on U.S.
sales since it has not provided sufficient or legible documentation to
support its claim. In addition, it is not clear from Thai Plastic Bag's
responses how it determined which of the three duty-drawback schemes to
apply to each transaction it reported in its sales listing. See the
Thai Plastic Bags Analysis Memorandum from the case analyst to the file
dated January 16, 2004, for additional information. We will review this
issue further during our verification of Thai Plastic Bag's home-market
sales.
In accordance with section 772(d)(1) of the Act and the SAA at 823-
824, we calculated the CEP by deducting selling expenses associated
with economic activities occurring in the United States, which includes
commissions, direct selling expenses, indirect selling expenses, and
U.S. repacking expenses. Finally, we made an adjustment for profit
allocated to these expenses in accordance with section 772(d)(3) of the
Act.
The petitioners have identified an issue with respect to Universal
in a number of comments submitted on the record in this investigation.
Because of the business proprietary nature of this issue, please see
the decision memorandum from Laurie Parkhill to Jeffrey May dated
January 16, 2004, for a discussion of the issue.
Normal Value
1. Home-Market Viability
Based on a comparison of the aggregate quantity of home-market and
U.S. sales and absent any information that a particular market
situation in the
[[Page 3555]]
exporting country did not permit a proper comparison, we determined
that the quantity of foreign like product sold by Thai Plastic Bags in
the exporting country 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. This company's quantity of sales in its home
market was greater than five percent of its sales to the U.S. market.
Therefore, in accordance with section 773(a)(1)(B)(I) of the Act, we
based normal value on the prices at which the foreign like products
were first sold for consumption in the exporting country.
The Department determined, based on Universal's response, that its
home market was not viable. Furthermore, Universal's sole third-country
market was also not viable. Therefore, in accordance with section
773(a)(4) of the Act, we based normal value on constructed value for
Universal.
2. Affiliated-Party Transactions and Arm's-Length Test
The Department may calculate normal value based on a sale to an
affiliated party only if it is satisfied that the price to the
affiliated party is comparable to the price at which sales are made to
parties not affiliated with the exporter or producer, i.e., sales at
arm's-length prices. See 19 CFR 351.403(c). Sales to affiliated
customers for consumption in the home market that were determined not
to be at arm's-length prices were excluded from our analysis. Thai
Plastic Bags reported sales of the foreign like product to affiliated
end-users and resellers. To test whether these sales were made at
arm's-length prices, the Department compared the prices of sales of
comparable merchandise to affiliated and unaffiliated customers, net of
all rebates, movement charges, direct selling expenses, and packing.
Pursuant to 19 CFR 351.403(c) and in accordance with the Department's
practice, when the prices charged to an affiliated party were, on
average, between 98 and 102 percent of the prices charged to
unaffiliated parties for merchandise comparable to that sold to the
affiliated party, we determined that the sales to the affiliated party
were at arm's length. See Antidumping Proceedings: Affiliated Party
Sales in the Ordinary Course of Trade, 67 FR 69186, 69187 (November 15,
2002). We included in our normal-value calculations those sales to
affiliated parties that were made at arm's-length prices.
3. Cost-of-Production Analysis
The petitioners submitted evidence on October 16, 2003, that
suggested that Thai Plastic Bags sold the foreign like product at
prices that may have been below the cost of production (COP) as
provided by section 773(b)(2)(A)(I) of the Act. Based on this evidence,
we determined that we had reasonable grounds to believe or suspect that
sales of the foreign like product under consideration for the
determination of normal value in this investigation may have been made
at prices below the COP. Accordingly, pursuant to section 773(b)(1) of
the Act, we conducted a COP investigation of sales by Thai Plastic Bags
in the home market.
In accordance with section 773(b)(3) of the Act, we calculated the
COP based on the sum of the costs of materials and fabrication employed
in producing the foreign like product, the selling, general, and
administrative (SG&A) expenses, and all costs and expenses incidental
to packing the merchandise. In our COP analysis, we relied upon the COP
information provided by Thai Plastic Bags in its questionnaire response
except for the following adjustments:
1. We adjusted the reported cost database for one of the three
combined companies for an unreconciled difference shown in the
reconciliation of the financial statements to the POI reported costs.
2. We adjusted the cost of inputs purchased from affiliates to the
higher of transfer price, market price, or the affiliate's COP in
accordance with section 773(f)(3) of the Act.
3. We adjusted the general and administrative (G&A) and financial-
expense rates for mathematical errors.
After calculating the COP, in accordance with section 773(b)(1) of
the Act, we tested whether home-market sales of the foreign like
product were made at prices below the COP within an extended period of
time in substantial quantities and whether such prices permitted the
recovery of all costs within a reasonable period of time. We compared
model-specific COPs to the reported home-market prices less any
applicable movement charges, discounts, and rebates. See Import
Administration Policy Bulletin, Number 94.1 of March 25, 1994, for
further information on this test.
Pursuant to section 773(b)(2)(C) of the Act, when less than 20
percent of the respondent's sales of a given product were at prices
less than the COP, we did not disregard any below-cost sales of that
product because the below-cost sales were not made in substantial
quantities within an extended period of time. When 20 percent or more
of the respondent's sales of a given product during the POI were at
prices less than the COP, we disregarded the below-cost sales because
they were made in substantial quantities within an extended period of
time pursuant to sections 773(b)(2)(B) and (C) of the Act and because,
based on comparisons of prices to weighted-average COPs for the POI, we
determined that these sales were at prices which would not permit
recovery of all costs within a reasonable period of time in accordance
with section 773(b)(2)(D) of the Act. Based on this test, we
disregarded below-cost sales with respect to Thai Plastic Bags. See the
Thai Plastic Bags Analysis Memorandum from the case analyst to the file
dated January 16, 2004, for additional information.
4. Calculation of Normal Value
We compared U.S. sales with sales of the foreign like product in
the home market on the basis of the physical characteristics described
under Fair Value Comparisons above. Wherever we were unable to match a
U.S. model to identical merchandise sold in the home market, we
selected the most similar model of subject merchandise in the home
market as the foreign like product.
Home-market prices were based on the packed, ex-factory, or
delivered prices to affiliated or unaffiliated purchasers. When
applicable, we made adjustments for differences in packing and for
movement expenses in accordance with sections 773(a)(6)(A) and (B) of
the Act. We also made adjustments for differences in cost attributable
to differences in physical characteristics of the merchandise pursuant
to section 773(a)(6)(C)(ii) of the Act and for differences in
circumstances of sale in accordance with section 773(a)(6)(C)(iii) of
the Act and 19 CFR 351.410. For comparisons to EP, we made
circumstances-of-sale adjustments by deducting home-market direct
selling expenses from and adding U.S. direct selling expenses to normal
value. For comparisons to CEP, we made circumstances-of-sale
adjustments by deducting home-market direct selling expenses from
normal value. We also made adjustments, when applicable, for home-
market indirect selling expenses to offset U.S. commissions in EP and
CEP calculations.
In accordance with section 773(a)(1)(B)(I) of the Act, we based
normal value, to the extent practicable, on sales at the same level of
trade as the EP or CEP. If normal value was calculated at a different
level of trade, we made an adjustment, if appropriate and if possible,
in accordance with section 773(a)(7) of the Act. See the Level of Trade
section below.
In accordance with section 773(a)(4) of the Act, we used
constructed value as the basis for normal value when there
[[Page 3556]]
were no usable sales of the foreign like product in the comparison
market. We calculated constructed value in accordance with section
773(e) of the Act, which states that constructed value shall be based
on the sum of each respondent's cost of materials and fabrication for
the subject merchandise, plus amounts for SG&A, profit, and U.S.
packing costs. For Thai Plastic Bags and Universal, we relied on the
submitted constructed-value information except for the following
adjustments:
Thai Plastic Bags
See adjustments in COP section above.
Universal
1. We imputed an interest expense amount for a certain loan. For
the preliminary determination, we used an interest rate in Thailand, as
published by the International Monetary Fund, to calculate the imputed
interest expense. For further information, see Memorandum from Nancy
Decker through Theresa Caherty to Neal Halper, ``Universal Polybag Co.,
Ltd. Constructed Value Calculation Adjustments for the Preliminary
Determination'' dated January 16, 2004 (Universal Preliminary Cost
Memorandum).
2. We increased the reported costs to include unreconciled
differences in the reconciliations of the financial statements to
financial accounting system and of the financial accounting system to
the reported costs for the POI.
In accordance with section 773(e)(2)(A) of the Act, for Thai
Plastic Bags, we based SG&A expenses and profit on the amounts incurred
and realized by Thai Plastic Bags in connection with the production and
sale of the foreign like product in the ordinary course of trade for
consumption in the home market.
Because Universal had no viable home or third-country market during
the POI, the Department could not determine selling expenses and profit
under section 773(e)(2)(A) of the Act, which requires sales by the
respondent in question in the ordinary course of trade in a comparison
market. In situations where we cannot calculate selling expenses and
profit under section 773(e)(2)(A), section 773(e)(2)(B) of the Act sets
forth three alternatives. The SAA states at 840 that ``section
773(e)(2)(B) does not establish a hierarchy or preference among these
alternative methods.'' Section 773(e)(2)(B)(i) of the Act specifies
that SG&A and profit may be calculated based on ``actual amounts
incurred by the specific exporter or producer . . . on merchandise in
the same general category'' as subject merchandise. Universal does not
produce any products other than the subject merchandise. Alternative
(ii) of section 773(e)(2)(B) provides that SG&A and profit may be
calculated based on ``the weighted average of the actual amounts
incurred and realized by {other{time} exporters or producers that are
subject to the investigation.'' Because there is only one other
respondent in this case, however, the Department cannot calculate
selling expenses, G&A expenses, and profit based on section
773(e)(2)(B)(ii) of the Act because it would reveal the business
proprietary information of the other respondent, Thai Plastic Bags.
While Universal has suggested that the Department can use the combined
data of the three companies that form the respondent Thai Plastic Bags,
the Department considers Thai Plastic Bags to be one entity for
purposes of this investigation and, therefore, to use the information
of the three combined companies is to reveal that respondent's
proprietary information.
Therefore, the only statutory option available to the Department to
calculate the selling expenses, G&A expenses, and profit for
constructed value for Universal is under section 773(e)(2)(B)(iii).
This section allows the Department to use ``any other reasonable
method'' to calculate selling expenses, G&A expenses, and profit for
constructed value, provided that the amount for profit does not
``exceed the amount normally realized by exporters or producers . . .
in connection with the sale, for consumption in the foreign country, of
merchandise that is in the same general category of products as the
subject merchandise.'' On January 6, 2004, the petitioners provided
2001 financial-statement information on another Thai producer,
Thantawan Industry Public Co. Ltd. (TIPC), of plastic products
including PRCBs. This information provides expense and profit data for
TIPC. Lacking more suitable information, we calculated constructed
value selling expenses for Universal based on TIPC's reported selling
and administrative expenses. Selling expenses are not separated in
TIPC's financial statement. Therefore, we deducted Universal's reported
G&A rate from TIPC's SG&A rate because we have no reason to believe
that Universal's reported G&A expenses are unreliable.
We calculated amounts for constructed-value profit based on the
profit earned by TIPC. While TIPC produces other merchandise in
addition to the subject merchandise, its financial information shows
that more than 70 percent of its revenue comes from subject
merchandise. Because we do not have any further information regarding
profit on the same general category of merchandise other than that of
the one other respondent in this case, we are not able to quantify the
``profit cap'' described in section 773(e)(2)(B)(iii) of the Act
without revealing proprietary information of Thai Plastic Bags, as
discussed above. The SAA anticipates such situations and directs that,
where the Department cannot calculate a profit cap, the Department may
apply section 773(e)(2)(B)(iii) of the Act on the basis of the facts
available. Therefore, we have not calculated a ``profit cap'' for the
instant determination. As neutral facts available, we have used TIPC's
profit rate of 10.43 percent in calculating constructed value as a
reasonable surrogate for Universal's home-market profit. See Universal
Preliminary Cost Memorandum.
When appropriate, we made adjustments to constructed value in
accordance with section 773(a)(8) of the Act and 19 CFR 351.410 for
circumstances-of-sale differences and level-of-trade differences. For
comparisons to EP, we made circumstances-of-sale adjustments by
deducting home-market direct selling expenses from and adding U.S.
direct selling expenses to normal value. For comparisons to CEP, we
made circumstances-of-sale adjustments by deducting home-market direct
selling expenses from normal value. We also made adjustments, when
applicable, for home-market indirect selling expenses to offset U.S.
commissions in EP and CEP comparisons.
Level of Trade
To the extent practicable, we determined normal value for sales at
the same level of trade as the U.S. sales (either EP or CEP). When
there were no sales at the same level of trade, we compared U.S. sales
to home-market sales at a different level of trade. The normal-value
level of trade is that of the starting-price sales in the home market.
When normal value is based on constructed value, the level of trade is
that of the sales from which we derived SG&A and profit. To determine
whether home-market sales are at a different level of trade than U.S.
sales, we examined 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 were at a
different level of trade from that of a U.S. sale and the difference
affected
[[Page 3557]]
price comparability, as manifested in a pattern of consistent price
differences between the sales on which normal value is based and
comparison-market sales at the level of trade of the export
transaction, we made a level-of-trade adjustment under section
773(a)(7)(A) of the Act. See, e.g., Notice of Final Determination of
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate
from South Africa, 62 FR 61731 (November 19, 1997).
For Universal, because there was no viable home or third market and
all sales in the United States were CEP sales, no level-of-trade
comparison was necessary. For Thai Plastic Bags, with respect to EP, we
found the EP level of trade to be the same as the home-market level of
trade and, consequently, were able to match sales at the same level of
trade. With respect to Thai Plastic Bags' CEP sales, because we deduct
the expense of the selling activities performed by the U.S. affiliate
under section 772(d) of the Act, we have concluded that CEP sales
constitute a different level of trade from the home-market level of
trade. Consequently, we could not match to sales at the same level of
trade in the home market nor could we determine a level-of-trade
adjustment based on Thai Plastic Bags' home-market sales of the foreign
like product. Furthermore, we have no other information that provides
an appropriate basis for determining a level-of-trade adjustment.
Therefore, we have granted a CEP offset for all such sales. The CEP
offset is the sum of indirect selling expenses incurred on the home-
market sale up to the amount of indirect selling expenses incurred on
the U.S. sale. See the Thai Plastic Bags Analysis Memorandum from the
case analyst to the file dated January 16, 2004, for more information
on the level-of-trade decision.
Currency Conversion
We made currency conversions into U.S. dollars in accordance with
section 773A(a) of the Act based on the exchange rates in effect on the
dates of the U.S. sales as certified by the Federal Reserve Bank.
Verification
As provided in section 782(i) of the Act, we will verify the
information upon which we will rely in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(2)(A) of the Act, we are
directing CBP to suspend liquidation of all imports of subject
merchandise from Thailand that are entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
notice in the Federal Register. We will instruct CBP to require a cash
deposit or the posting of a bond equal to the weighted-average amount
by which the normal value exceeds the EP or CEP, as indicated in the
chart below. These suspension-of-liquidation instructions will remain
in effect until further notice. The weighted-average dumping margins
are as follows:
------------------------------------------------------------------------
Weighted-
Exporter/manufacturer average
percent margin
------------------------------------------------------------------------
Thai Plastic Bags....................................... 2.84
Universal............................................... 34.76
Champion Paper Polybags Ltd............................. 122.88
TRC Polypack............................................ 122.88
Zip-Pac Co., Ltd........................................ 122.88
All Others.............................................. 11.54
------------------------------------------------------------------------
Pursuant to section 735(c)(5)(A) of the Act, we have excluded from
the calculation of the all-others rate margins which are zero or de
mimimis or determined entirely on facts available.
The Department will disclose calculations performed within five
days of publication of this notice to parties in this proceeding in
accordance with 19 CFR 351.224(b).
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination of sales at LTFV. Section 735(b)(2) requires
that the ITC make a final determination before the later of 120 days
after the date of the Department's preliminary determination or 45 days
after the Department's final determination whether the domestic
industry in the United States is materially injured, or threatened with
material injury, by reason of imports, or sales (or the likelihood of
sales) for importation, of the subject merchandise. Because we have
postponed the deadline for our final determination to 135 days from the
date of the publication of this preliminary determination, the ITC will
make its final determination within 45 days of our final determination.
Public Comment
Case briefs or other written comments may be submitted to the
Assistant Secretary for Import Administration no later than seven days
after the date of the final verification report issued in this
proceeding and rebuttal briefs, limited to issues raised in case
briefs, no later than five days after the deadline date for case
briefs. A list of authorities used and an executive summary of issues
should accompany any briefs submitted to the Department. This summary
should be limited to five pages total, including footnotes. In
accordance with section 774 of the Act, 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, any hearing
will be held three days after the deadline for submission of the
rebuttal briefs at the U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230, at a time and location
to be determined. Parties should confirm by telephone the date, time,
and location of the hearing two days before the scheduled date.
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
1870, within 30 days of the date of publication of this notice. See 19
CFR 351.310(c). 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. At the hearing, each party may make an
affirmative presentation only on issues raised in that party's case
brief and may make rebuttal presentations only on arguments included in
that party's rebuttal brief. See 19 CFR 351.310(c).
We will make our final determination no later than 135 days after
the date of publication of the preliminary determination.
This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: January 16, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-1575 Filed 1-23-04; 8:45 am]