[Federal Register Volume 75, Number 228 (Monday, November 29, 2010)]
[Notices]
[Pages 73042-73045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-29963]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-847]


1-Hydroxyethylidene-1, 1-Diphosphonic Acid From India: 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to a timely request by one manufacturer/exporter, 
Aquapharm Chemicals Pvt., Ltd. (Aquapharm), the Department of Commerce 
(the Department) is conducting an administrative review of the 
antidumping duty order on 1-hydroxyethylidene-1, 1-diphosphonic acid 
(HEDP) from India with respect to Aquapharm. The review covers the 
period April 23, 2009, through March 31, 2010. We preliminarily 
determine that Aquapharm did not make sales below normal value (NV).
    If the preliminary results are adopted in our final results of the 
administrative review, we will issue appropriate assessment 
instructions to U.S. Customs and Border Protection (CBP).

FOR FURTHER INFORMATION CONTACT: David Goldberger or Brandon Custard, 
AD/CVD Operations, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC, 20230; telephone (202) 482-
4136 or (202) 482-1823, respectively.

SUPPLEMENTARY INFORMATION:

Background

    In response to a timely request by Aquapharm, on May 28, 2010, the 
Department published in the Federal Register a notice of initiation of 
an administrative review of the antidumping duty order on HEDP from 
India with respect to Aquapharm covering the period April 23, 2009, 
through March 31, 2010. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 75 FR 29976 (May 28, 2010).
    On June 11, 2010, we issued the antidumping duty questionnaire to 
Aquapharm. On July 19, 2010, we received a response to section A (i.e., 
the section covering general information about the company), and on 
August 10, 2010, we received responses to sections B (i.e., the section 
covering comparison-market sales) and C (i.e., the section covering 
U.S. sales) of the antidumping duty questionnaire from Aquapharm.
    On September 15, 2010, we issued to Aquapharm a supplemental 
questionnaire regarding its responses to sections A, B, and C of the 
original questionnaire, and received a response to this supplemental 
questionnaire on September 29, 2010.

Scope of the Order

    The merchandise covered by this order includes all grades of 
aqueous, acidic (non-neutralized) concentrations of 1-
hydroxyethylidene-1, 1-diphosphonic acid,\1\ also referred to as 
hydroxethlylidenediphosphonic acid, hydroxyethanediphosphonic acid, 
acetodiphosphonic acid, and etidronic acid. The CAS (Chemical Abstract 
Service) registry number for HEDP is 2809-21-4. The merchandise subject 
to this order is currently classified in the Harmonized Tariff Schedule 
of the United States (HTSUS) at subheading 2931.00.9043. It may also 
enter under HTSUS subheading 2811.19.6090. While HTSUS subheadings are 
provided for convenience and customs purposes only, the written 
description of the scope of this order is dispositive.
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    \1\ C2H8O7P2 or 
C(CH3)(OH)(PO3H2)2.
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Period of Review

    The period of review (POR) is April 23, 2009, through March 31, 
2010.

Comparisons to Normal Value

    To determine whether Aquapharm's sales of HEDP from India to the 
United States were made at less than NV, we compared the export price 
(EP) or constructed export price (CEP) to NV, as described in the 
``Export Price and Constructed Export Price'' and ``Normal Value'' 
sections of this notice.
    Pursuant to section 777A(d)(2) of the Tariff Act of 1930, as 
amended (the Act), we compared the EPs and CEPs of individual U.S. 
transactions to the weighted-average NV of the foreign like product 
where there were sales made in the ordinary course of trade. See 
discussion below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by Aquapharm covered by the

[[Page 73043]]

description in the ``Scope of the Order'' section, above, to be foreign 
like products for purposes of determining appropriate product 
comparisons to U.S. sales. Pursuant to 19 CFR 351.414(e)(2), we 
compared Aquapharm's U.S. sales of HEDP to its sales of HEDP made in 
the home market. Where there were no contemporaneous sales within the 
definition of 19 CFR 351.414(e)(2)(i), pursuant to 19 CFR 
351.414(e)(2)(ii) and (iii), we compared sales within the 
contemporaneous window period, which extends from three months prior to 
the month of the U.S. sale until two months after the sale. In making 
the product comparisons, we matched foreign like products based on 
their aqueous concentration. Aquapharm reported that, pursuant to 
section 771(16)(A) of the Act, all of its U.S. sales during the POR 
were identical based on the product matching criterion (i.e., aqueous 
concentration) to contemporaneous sales in the home market. 
Accordingly, in calculating Aquapharm's NV, we made product comparisons 
without having to account for cost differences associated with 
differences in the physical characteristics of the merchandise pursuant 
to section 773(a)(6)(C)(ii) of the Act.

Export Price and Constructed Export Price

    In accordance with section 772(a) of the Act, we calculated EP for 
those sales where the subject merchandise was sold to the first 
unaffiliated purchaser in the United States prior to importation and 
CEP methodology was not otherwise warranted based on the facts of the 
record. We based EP on the packed delivered price to unaffiliated 
purchasers in the United States. Where appropriate, pursuant to 19 CFR 
351.401(c), we adjusted the starting prices for billing adjustments. We 
made deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act, which included, where appropriate, foreign 
inland freight from plant to the port of exportation, foreign brokerage 
and handling, U.S. brokerage and handling, international freight, U.S. 
inland freight to the customer, marine insurance, and U.S. customs 
duties (including harbor maintenance fees and merchandise processing 
fees).
    Pursuant to section 772(b) of the Act, we calculated CEP for those 
sales where the subject merchandise was 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 or by a seller affiliated with 
the producer or exporter, to a purchaser not affiliated with the 
producer or exporter. We based CEP on the packed ex-U.S. warehouse 
prices to unaffiliated purchasers in the United States. Where 
appropriate, pursuant to 19 CFR 351.401(c), we adjusted the starting 
prices for billing adjustments. We made deductions for movement 
expenses, in accordance with section 772(c)(2)(A) of the Act, which 
included, where appropriate, foreign inland freight from plant to the 
port of exportation, foreign brokerage and handling, U.S. brokerage and 
handling, international freight (inclusive of U.S. port to U.S. 
warehouse transportation), marine insurance, U.S. customs duties 
(including harbor maintenance fees and merchandise processing fees), 
and warehouse expenses. In accordance with section 772(d)(1) of the Act 
and 19 CFR 351.402(b), we deducted those selling expenses associated 
with economic activities occurring in the United States, including 
direct selling expenses (i.e., credit expenses, commissions, and bank 
charges), and indirect selling expenses (including inventory carrying 
costs). We also deducted from CEP an amount for profit in accordance 
with section 772(d)(3) of the Act. In accordance with sections 
772(f)(1) and (2)(C)(iii) of the Act, we calculated the CEP profit 
percentage using information from Aquapharm's audited financial 
statement. See Memorandum entitled ``Aquapharm Preliminary Results 
Margin Calculation,'' dated contemporaneously with this notice, for 
further discussion of the CEP profit calculation.

Normal Value

A. Home Market Viability and Selection of Comparison Market

    To determine whether there was a sufficient volume of sales in the 
home market to serve as a viable basis for calculating NV, we compared 
the 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)(1)(C) of the Act. Based on this comparison, we 
determined that, pursuant to 19 CFR 351.404(b), Aquapharm had a viable 
home market during the POR. Consequently, pursuant to section 
773(a)(1)(B)(i) of the Act and 19 CFR 351.404(c)(i), we based NV on 
home market sales.

B. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales of the 
foreign like product at the same level of trade (LOT) as the EP or CEP. 
Sales are made at different LOTs if they are made at different 
marketing stages (or their equivalent). See 19 CFR 351.412(c)(2). 
Substantial differences in selling activities are a necessary, but not 
sufficient condition for determining that there is a difference in the 
stages of marketing. See id.; see also 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) (Plate from 
South Africa). To determine whether the comparison-market sales were at 
different stages in the marketing process than the U.S. sales, we 
reviewed the distribution system in each market (i.e., the chain of 
distribution), including selling functions, class of customer (customer 
category), and the level of selling expenses for each type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for EP and comparison-market sales (i.e., where NV is based on either 
home market or third country prices),\2\ we consider the starting 
prices before any adjustments. For CEP sales, we consider only the 
selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F. 3d 1301, 1314-16 (Fed. Cir. 
2001). When the Department is unable to match U.S. sales of the foreign 
like product in the comparison market at the same LOT as the EP or CEP, 
the Department may compare the U.S. sales to sales at a different LOT 
in the comparison market. In comparing EP or CEP sales at a different 
LOT in the comparison market, where available data make it practicable, 
we make an LOT adjustment under section 773(a)(7)(A) of the Act. 
Finally, for CEP sales only, if the NV LOT is at a more advanced stage 
of distribution than the LOT of the CEP and there is no basis for 
determining whether the difference in LOTs between NV and CEP affects 
price comparability (i.e., no LOT adjustment was practicable), the 
Department shall grant a CEP offset, as provided in section 
773(a)(7)(B) of the Act. See Plate from South Africa, 62 FR at 61732-
33.
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    \2\ Where NV is based on constructed value (CV), we determine 
the NV LOT based on the LOT of the sales from which we derive 
selling expenses, general and administrative (G&A) expenses, and 
profit for CV, where possible.
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    In this administrative review, we obtained information from 
Aquapharm regarding the marketing stages involved in making its 
reported home market and U.S. sales, including a description of the 
selling activities performed by Aquapharm for each channel of 
distribution.

[[Page 73044]]

    Aquapharm reported that during the POR it sold HEDP to end-users, 
distributors, and end-users/distributors through three channels of 
distribution in the United States, and to end-users and traders through 
two channels of distribution in the home market.
    Aquapharm made CEP sales in the U.S. market through one channel of 
distribution: sales through an unaffiliated U.S. selling agent to an 
unaffiliated U.S. distributor of HEDP maintained in inventory at an 
unaffiliated U.S. warehouse (Channel 1). In addition, Aquapharm made EP 
sales in the U.S. market through two channels of distribution: Direct 
sales/shipments to unaffiliated U.S. end-users (Channel 2); and direct 
sales/shipments to unaffiliated U.S. distributors (Channel 3).
    We examined the selling activities performed for the three U.S. 
sales channels and found that Aquapharm performed the following selling 
functions for each channel: sales forecasting, order input/processing, 
direct sales personnel, packing, freight and delivery services, 
inventory maintenance, technical assistance, warranty service, and 
after-sales service. These selling activities can be generally grouped 
into four selling function categories for analysis: (1) Sales and 
marketing; (2) freight and delivery; (3) warehousing and inventory; and 
(4) warranty and technical support. Accordingly, based on the four 
selling function categories, we find that Aquapharm performed primarily 
sales and marketing, freight and delivery services, and warranty and 
technical services for U.S. sales. Although Aquapharm performed 
additional freight and delivery functions, (such as repacking) and 
warehousing functions for its U.S. sales through Channel 1, we did not 
find these differences to be material selling function distinctions 
which are significant enough to warrant a separate LOT in the U.S. 
market. Therefore, we preliminarily determine that there is one LOT in 
the U.S. market because Aquapharm performed essentially the same 
selling functions for all U.S. sales.
    With respect to the home market, Aquapharm made sales through the 
following channels of distribution: (1) Sales to unaffiliated end-users 
(Channel 1); and sales to unaffiliated traders (Channel 2). We examined 
the selling activities performed for each home market sales channel and 
found that Aquapharm performed the following selling functions for 
sales made through both channels: Sales forecasting, order input/
processing, advertising, direct sales personnel, sales/marketing 
support, market research, packing, freight and delivery services, 
inventory maintenance, technical assistance, and warranty service. 
Accordingly, based on the four selling function categories described 
above, we find that Aquapharm performed primarily sales and marketing, 
freight and delivery services, and warranty and technical services for 
home market sales. Moreover, we did not find any significant 
distinctions between the selling functions Aquapharm performed for each 
home market channel to warrant a separate LOT in the home market. 
Therefore, we preliminarily determine that there is one LOT in the home 
market because Aquapharm performed essentially the same selling 
functions for all home market sales.
    Finally, we compared the U.S. LOT to the home market LOT and found 
that the selling functions performed for home market sales are either 
performed at the same degree of intensity as, or vary only slightly 
from, the selling functions performed for U.S. sales. Specifically, we 
found that with respect to the four selling function categories, there 
are only slight differences in the level of intensity between the home 
and U.S. markets, and have preliminarily determined that these slight 
differences do not provide a sufficient basis to find separate LOTs 
between the two markets. Therefore, we find that the single home market 
LOT and single U.S. LOT are the same and, as a result, no LOT 
adjustment or CEP offset is warranted. Accordingly, we matched U.S. and 
home market sales at the same LOT.

C. Calculation of Normal Value Based on Comparison-Market Prices

    We based NV for Aquapharm on delivered prices to unaffiliated 
customers in the home market. We made deductions, where appropriate, 
from the starting price for discounts, inland freight expenses and 
inland insurance expenses, under section 773(a)(6)(B)(ii) of the Act. 
Where appropriate, we also added freight and insurance revenue to the 
starting price, and capped it by the amount of freight and insurance 
expenses incurred, in accordance with our practice. See, e.g., Certain 
Orange Juice from Brazil: Final Results of Antidumping Duty 
Administrative Review and Notice of Intent Not To Revoke Antidumping 
Duty Order in Part, 75 FR 50999 (August 18, 2010), and accompanying 
Issues and Decision Memorandum at Comment 2.
    Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 
351.410(b), we made, where appropriate, circumstance-of-sale 
adjustments for imputed credit expenses and bank charges. We also made 
adjustments in accordance with 19 CFR 351.410(e) for indirect selling 
expenses incurred on comparison market or U.S. sales where commissions 
were granted on sales in one market but not the other. Specifically, 
where commissions were granted in the U.S. market but not in the 
comparison market, we made a downward adjustment to NV for the lesser 
of: (1) The amount of the commission paid in the U.S. market; or (2) 
the amount of the indirect selling expenses incurred in the comparison 
market. We also deducted home market packing costs and added U.S. 
packing costs, in accordance with sections 773(a)(6)(A) and (B) of the 
Act.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act and 19 CFR 351.415, based on the exchange rates 
in effect on the dates of the U.S. sales as certified by the Federal 
Reserve Bank.

Preliminary Results of the Review

    We preliminarily determine that the following weighted-average 
dumping margin exists for Aquapharm for the period April 23, 2009, 
through March 31, 2010:

------------------------------------------------------------------------
                Manufacturer/exporter                    Percent margin
------------------------------------------------------------------------
Aquapharm Chemicals Pvt., Ltd........................               0.00
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Disclosure and Public Hearing

    The Department will disclose to parties the calculations performed 
in connection with these preliminary results within five days of the 
date of publication of this notice. See 19 CFR 351.224(b). Pursuant to 
19 CFR 351.309, interested parties may submit case briefs not later 
than 30 days after the date of publication of this notice. Rebuttal 
briefs, limited to issues raised in the case briefs, may be filed not 
later than five days after the date for filing case briefs. Parties who 
submit case briefs or rebuttal briefs in this proceeding are encouraged 
to submit with each argument: (1) A statement of the issue; (2) a brief 
summary of the argument; and (3) a table of authorities.
    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, Room 1870, within 30 days of the 
date of publication of this notice. Requests should contain: (1) The 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c). Issues raised in

[[Page 73045]]

the hearing will be limited to those raised in the respective case 
briefs.
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of the administrative review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries, in accordance with 19 CFR 351.212. The Department intends to 
issue appropriate appraisement instructions for the company subject to 
this review directly to CBP 15 days after the date of publication of 
the final results of this review.
    Where the respondent reported entered value for its U.S. sales, we 
will calculate importer-specific ad valorem duty assessment rates based 
on the ratio of the total amount of antidumping duties calculated for 
the examined sales to the total entered value of the examined sales for 
that importer.
    Where the respondent did not report entered value for its U.S. 
sales, we will calculate importer-specific per-unit duty assessment 
rates by aggregating the total amount of antidumping duties calculated 
for the examined sales and dividing this amount by the total quantity 
of those sales. To determine whether the duty assessment rates are de 
minimis, in accordance with the requirement set forth in 19 CFR 
351.106(c)(2), we will calculate importer-specific ad valorem ratios 
based on the estimated entered value.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis (i.e., at or above 0.50 percent). Pursuant to 19 CFR 
351.106(c)(2), we will instruct CBP to liquidate without regard to 
antidumping duties any entries for which the assessment rate is de 
minimis (i.e., less than 0.50 percent). The final results of this 
review shall be the basis for the assessment of antidumping duties on 
entries of merchandise covered by the final results of this review and 
for future deposits of estimated duties, where applicable.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment 
Policy Notice). This clarification will apply to entries of subject 
merchandise during the POR produced by the company included in these 
final results of review for which the reviewed company did not know 
that the merchandise it sold to the intermediary (e.g., a reseller, 
trading company, or exporter) was destined for the United States. In 
such instances, we will instruct CBP to liquidate unreviewed entries at 
the all-others rate effective during the POR if there is no rate for 
the intermediary involved in the transaction. See Assessment Policy 
Notice for a full discussion of this clarification.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise 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)(2)(C) of the Act: (1) The cash deposit rate for the company 
listed above will be that established in the final results of this 
review, except if the rate is less than 0.50 percent and, therefore, de 
minimis within the meaning of 19 CFR 351.106(c)(1), in which case the 
cash deposit rate will be zero; (2) for previously reviewed or 
investigated companies not participating in this review, the cash 
deposit rate 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 review or the original less-than-fair-value (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) the cash deposit rate for all other 
manufacturers or exporters will continue to be 3.10 percent, the all-
others rate made effective by the LTFV investigation. See 1-
Hydroxyethylidene-1, 1- Diphosphonic Acid from India: Notice of Final 
Determination of Sales at Less Than Fair Value, 74 FR 10543 (March 11, 
2009). These requirements, when imposed, shall remain in effect until 
further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) 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 published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.

     Dated: November 19, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-29963 Filed 11-26-10; 8:45 am]
BILLING CODE 3510-DS-P