[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Notices]
[Pages 20313-20317]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8741]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-834]
Purified Carboxymethylcellulose From Mexico: Notice of
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from petitioner Aqualon Company, a
unit of Hercules Incorporated (Aqualon), the Department of Commerce
(the Department) is conducting an administrative review of the
antidumping duty order on purified carboxymethylcellulose (CMC) from
Mexico. The review covers exports of the subject merchandise to the
United States produced and exported by Quimica Amtex S.A. de C.V.
(Amtex); the period of review (POR) is July 1, 2009, through June 30,
2010.
We preliminarily find that Amtex has made sales at less than normal
value (NV) during the POR. If these preliminary results are adopted in
our final results of this review, we will instruct U.S. Customs and
Border Protection (CBP) to assess antidumping duties based on
differences between the export price (EP) or constructed export price
(CEP) and NV.
Interested parties are invited to comment on these preliminary
results. Parties who submit arguments in this proceeding are requested
to submit with the arguments: (1) A statement of the issues, (2) a
brief summary of the arguments, and (3) a table of authorities.
DATES: Effective Date: April 12, 2011.
FOR FURTHER INFORMATION CONTACT: Mark Flessner or Robert James, AD/CVD
Operations, Office 7, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
6312 or (202) 482-0649, respectively.
SUPPLEMENTARY INFORMATION:
Background
The Department published the antidumping duty order on CMC from
Mexico on July 11, 2005. See Notice of Antidumping Duty Orders:
Purified Carboxymethylcellulose from Finland, Mexico, the Netherlands,
and Sweden, 70 FR 39734 (July 11, 2005). On July 1, 2010, the
Department published the notice of opportunity to request an
administrative review of CMC from Mexico for the period of July 1,
2009, through June 30, 2010. See Antidumping or Countervailing Duty
Order, Finding, or Suspended Investigation: Opportunity To Request
Administrative Review, 75 FR 38074 (July 1, 2010). On July 26, 2010,
petitioner Aqualon requested an administrative review of Amtex. On
August 31, 2010, the Department published in the Federal Register a
notice of initiation of this antidumping duty administrative review.
See Initiation of Antidumping and Countervailing Duty Administrative
Reviews and Deferral of Initiation of Administrative Review, 75 FR
53274 (August 31, 2010).
On September 21, 2010, the Department issued its standard
antidumping duty questionnaire to Amtex. Amtex submitted its response
to section A of the Department's questionnaire on October 15, 2010
(Amtex Section A Response). Amtex submitted corrections to its section
A response on October 18, 2010. Amtex submitted its response to
sections B and C of the Department's questionnaire on November 29, 2010
(Amtex Sections B and C Response). On March 7, 2011, the Department
issued a supplemental section A, B, and C questionnaire to Amtex. Amtex
timely submitted its response to the Department's supplemental section
A, B, and C questionnaire on March 14, 2011 (Amtex Supplemental
Response).
Period of Review
The POR is July 1, 2009, through June 30, 2010.
Scope of the Order
The merchandise covered by this order is all purified
carboxymethylcellulose (CMC), sometimes also referred to as purified
sodium CMC, polyanionic cellulose, or cellulose gum, which is a white
to off-white, non-toxic, odorless, biodegradable powder, comprising
sodium CMC that has been refined and purified to a minimum assay of 90
percent. Purified CMC does not include unpurified or crude CMC, CMC
Fluidized Polymer Suspensions, and CMC that is cross-linked through
heat treatment. Purified CMC is CMC that has undergone one or more
purification operations which, at a minimum, reduce the remaining salt
and other by-product portion of the product to less than ten percent.
The merchandise subject to this order is classified in the Harmonized
Tariff Schedule of the United States at subheading 3912.31.00. This
tariff classification is provided for convenience and customs purposes;
however, the written description of the scope of the order is
dispositive.
Date of Sale
The Department's regulations state that it will normally use the
date of invoice, as recorded in the exporter's or producer's records
kept in the ordinary course of business, as the date of sale. See 19
CFR 351.401(i). However, if the Department is satisfied that ``a
different date * * * better reflects the date on which the exporter or
producer establishes the material terms of sale,''
[[Page 20314]]
the Department may choose a different date. Id. Amtex has reported the
commercial invoice (as differentiated from pro forma invoice) as the
invoice date. See Amtex Section A Response at A22. With regard to the
invoice date, Amtex bills some of its sales via ``delayed invoices'' in
both the home and U.S. markets. Id. In these instances, delivery is
made to the customer and a pro forma invoice is issued. However, the
subject merchandise remains in storage and continues to be the property
of Amtex until withdrawn for consumption by the customer (usually at
the end of a regular, monthly billing cycle), at which time a
definitive invoice is issued. Id. In Amtex's normal books and records,
it is this definitive invoice date (not the pro forma invoice date)
that is recorded as the date of sale. Id. Therefore, the Department
preliminarily determines that the definitive invoice date is the date
of sale provided that the definite invoice is issued on or before the
shipment date. We have used the shipment date as the date of sale where
the invoice is issued after the shipment date. See Purified
Carboxymethylcellulose from Mexico: Preliminary Results Analysis
Memorandum for Quimica Amtex, S.A. de C.V., dated April 2, 2011
(Analysis Memorandum), for further discussion of date of sale. A public
version of this memorandum is on file in the Department's Central
Records Unit (CRU) located in Room 7046 of the main Department of
Commerce Building, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230.
Fair Value Comparisons
To determine whether sales of CMC in the United States were made at
less than NV, we compared U.S. price to NV, as described in the
``Export Price,'' ``Constructed Export Price,'' and ``Normal Value''
sections of this notice. In accordance with section 777A(d)(2) of the
Tariff Act of 1930, as amended (the Act), we calculated monthly
weighted-average NVs and compared these to individual U.S.
transactions. Because we determined Amtex made both EP and CEP sales
during the POR, we used both EP and CEP as the basis for U.S. price in
our comparisons.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by Amtex covered by the description in the ``Scope of
the Order'' section, above, and sold in the home market during the POR,
to be foreign like products for purposes of determining appropriate
product comparisons to U.S. sales. We relied on five characteristics to
match U.S. sales of subject merchandise to comparison sales of the
foreign like product (listed in order of priority): (1) Grade; (2)
viscosity; (3) degree of substitution; (4) particle size; and (5)
solution gel characteristics. Where there were no sales of identical
merchandise in the home market to compare to U.S. sales, we compared
U.S. sales to the next most similar foreign like product on the basis
of these product characteristics and the reporting instructions listed
in the Department's September 21, 2010, questionnaire. Because there
were contemporaneous sales of identical or similar merchandise in the
home market suitable for comparison to all U.S. sales, we did not
compare any U.S. sales to constructed value (CV). However, in
accordance with our normal practice, the CV calculation was performed
in case NV is based on CV for the final results. See the CV section
below.
Export Price (EP)
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 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 under section 772(c) of the Act. In accordance
with section 772(a) of the Act, we used EP for a number of Amtex's U.S.
sales because these sales were made before the date of importation and
were sales directly to unaffiliated customers in the United States, and
because CEP methodology was not otherwise indicated.
We based EP on the packed, delivered duty paid, cost and freight
(C&F) or free on board (FOB) prices to unaffiliated customers in the
United States. 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 the mill to the U.S. border,
inland freight from the border to the customer or warehouse, and U.S.
brokerage and handling. We made an adjustment for direct selling
expenses (credit expenses) in accordance with section 772(c)(2)(A) of
the Act.
Constructed Export Price (CEP)
In accordance with section 772(b) of the Act, CEP is ``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 under sections 772(c) and
(d) of the Act. In accordance with section 772(b) of the Act, we used
CEP for a number of Amtex's U.S. sales because Amtex sold merchandise
to its affiliate in the United States, Amtex Chemicals LLC (Amtex
Chemicals or ACUS), which, in turn, sold subject merchandise to
unaffiliated U.S. customers. See, e.g., Amtex's Section A Response at
A2-A3, A10-A11, and Exhibit A-6. We preliminarily find these U.S. sales
are properly classified as CEP sales because they occurred in the
United States and were made through Amtex's U.S. affiliate, Amtex
Chemicals, to unaffiliated U.S. customers.
We based CEP on the packed, delivered duty paid or FOB warehouse
prices to unaffiliated purchasers in the United States. We made
deductions for movement expenses in accordance with section
772(c)(2)(A) of the Act, which included, where appropriate, foreign
inland freight to the border, foreign brokerage and handling, customs
duties, U.S. brokerage, U.S. inland freight, and U.S. warehousing
expenses. In accordance with section 772(d)(1) of the Act, we deducted
those selling expenses associated with economic activities occurring in
the United States, including direct selling expenses (credit costs),
inventory carrying costs, and indirect selling expenses. We made an
adjustment for CEP profit as set forth in the Analysis Memorandum. See
Analysis Memorandum at 11.
Normal Value
A. Selection of Comparison Market
In order 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 respondent's volume of home market sales of the foreign
like product to the volume of U.S. sales of the subject merchandise, in
accordance with section 773(a) of the Act. Because Amtex's aggregate
volume of home market sales of the foreign like product was greater
than five percent of its aggregate volume of U.S. sales of the subject
merchandise, we determined the home market was viable. See section
773(a)(1)(B) of the Act. Therefore, we based NV on home market sales in
the usual commercial quantities and in the ordinary course of trade.
B. Price-to-Price Comparisons
We calculated NV based on prices to unaffiliated customers. Amtex
reported no billing adjustments, discounts or
[[Page 20315]]
rebates in the home market. We made deductions for movement expenses
including, where appropriate, foreign inland freight and insurance,
pursuant to section 773(a)(6)(B) of the Act. In addition, when
comparing sales of similar merchandise, we made adjustments for
differences in cost attributable to differences in physical
characteristics of the merchandise (i.e., DIFMER) pursuant to section
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We also made
adjustments for differences in circumstances of sale (COS) in
accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410. We made COS adjustments for imputed credit expenses. Finally,
we deducted home market packing costs and added U.S. packing costs in
accordance with sections 773(a)(6)(A) and (B) of the Act.
Level of Trade
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we base NV on sales made in the comparison market
at the same level of trade (LOT) as the export transaction. The NV LOT
is based on the starting price of sales in the home market or, when NV
is based on CV, on the LOT of the sales from which SG&A expenses and
profit are derived. With respect to CEP transactions in the U.S.
market, the CEP LOT is defined as the level of the constructed sale
from the exporter to the importer. See section 19 CFR
351.412(c)(1)(ii).
To determine whether NV sales are at a different LOT than CEP
sales, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the customer.
See 19 CFR 351.412(c)(2). If the comparison-market sales are at a
different LOT, 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 LOT of
the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Act. For CEP sales, 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, e.g., Certain Hot-Rolled Flat-
Rolled Carbon Quality Steel Products from Brazil; Preliminary Results
of Antidumping Duty Administrative Review, 70 FR 17406, 17410 (April 6,
2005), unchanged in Notice of Final Results of Antidumping Duty
Administrative Review: Certain Hot-Rolled Flat-Rolled Carbon Quality
Steel Products from Brazil, 70 FR 58683 (October 7, 2005); see also
Final Determination of Sales at Less Than Fair Value: Greenhouse
Tomatoes From Canada, 67 FR 8781 (February 26, 2002), and accompanying
Issues and Decisions Memorandum at Comment 8. For CEP sales, we
consider only the selling activities reflected in the price after the
deduction of expenses and CEP profit under section 772(d)(3) of the
Act. See Micron Technology, Inc. v. United States, 243 F.3d 1301, 1314-
15 (Fed. Cir. 2001). We expect that if the claimed LOTs are the same,
the functions and activities of the seller should be similar.
Conversely, if a party claims that the LOTs are different for different
groups of sales, the functions and activities of the seller should be
dissimilar. See Porcelain-on-Steel Cookware from Mexico: Final Results
of Antidumping Duty Administrative Review, 65 FR 30068 (May 10, 2000),
and accompanying Issues and Decisions Memorandum at Comment 6.
Amtex reported it sold CMC to end-users and distributors in the
home market and to end-users and distributors in the United States. For
the home market, Amtex identified two channels of distribution: End
users (channel 1) and distributors (channel 2). See Amtex's Section A
Response at A14. Amtex claimed a single level of trade in the home
market, stating that it performs virtually the same selling functions
to either category of customer. Id.
We obtained information from Amtex regarding the marketing stages
involved in making its reported home market and U.S. sales. Amtex
provided a table listing all selling activities it performs, and
comparing the levels of trade among each channel of distribution in
each market. See Amtex's Section A Response at Exhibit A-7. We reviewed
Amtex's claims concerning the intensity to which all selling functions
were performed for each home market channel of distribution and
customer category. For virtually all selling functions, the selling
activities of Amtex were identical in both channels, including sales
forecasting, personnel training, sales promotion, direct sales
personnel, technical assistance, warranty service, after-sales service
and arranging delivery. Id. Amtex described the level of activity as
independent of channel of distribution. See Amtex's Section A Response
at A15-A16.
While we find some differences in the selling functions performed
between the home market end-user and distributor channels of
distribution, such differences are minor in that they are not the
principal selling functions but rather specific to a few customers and
rarely performed. See Amtex's Section A Response at Exhibit A-7. Based
on our analysis of all of Amtex's home market selling functions, we
agree with Amtex's characterization of all its home market sales as
being made at the same level of trade, the NV LOT.
In the U.S. market, Amtex reported a single level of trade for EP
sales and a single level of trade for CEP sales through two channels of
distribution (i.e., end-users and distributors) in each. See Amtex
Section C Response at C26. We examined the record with respect to
Amtex's EP sales and find that for all EP sales, Amtex performed such
selling functions as sales forecasting, sales promotion, U.S. sales
personnel, technical assistance, warranties, after-sales services and
arranging delivery. See Amtex's Section A Response at Exhibit A-7. In
terms of the number and intensity of selling functions performed on EP
sales, these were indistinguishable between sales from Amtex to end
users and to distributors. Id. Accordingly, we agree with Amtex and
preliminarily determine that all EP sales were made at the same LOT.
We compared Amtex's EP level of trade to the single NV level of
trade found in the home market. However, while we find differences in
the levels of intensity performed for some of these functions between
the home market NV level of trade and the EP level of trade, such
differences are minor (specific to a few customers and rarely
performed) and do not establish distinct levels of trade between the
home market and the U.S. market. Based on our analysis of all of
Amtex's home market and EP selling functions, we find these sales were
made at the same level of trade.
For CEP sales, Amtex claims that the number and intensity of
selling functions performed by Amtex in making its sales to Amtex
Chemicals are lower than the number and intensity of selling functions
Amtex performed for its EP sales, and further claims that CEP sales are
at a less advanced stage than home market sales. See Amtex's Section A
Response at A18. Amtex specifically states that Amtex ``made no sales
in the home market or other markets at the same level of trade as its
CEP sales for the U.S.'' Id. However, we find that the CEP LOT is more
advanced than the NV LOT. Amtex's Section C Response indicates that
Amtex's CEP sales are at a more advanced marketing stage than are its
home market sales. See Amtex Sections B and C Response at C48. Amtex
reports that many of the principal functions in both markets are
carried out by a single employee in the
[[Page 20316]]
Mexico office. While U.S. employees of Amtex Chemicals do perform
important selling functions, such as contacting customers and
negotiating prices, the preponderance of overall selling functions are,
in fact, performed by the Amtex employee in Mexico City. The record
indicates this employee devotes a disproportionate amount of his
efforts on CEP sales, despite the fact that both the Mexican home
market and Amtex's EP market are considerably larger than Amtex's CEP
market. From our analysis of Amtex's overall selling functions, it is
evident that the intensity of activity for the principal functions is
greater for CEP sales than other sales. Id.; see also Exhibit A-1.
Accordingly, we preliminarily determine that the CEP LOT (that is,
sales from Amtex to its U.S. affiliate) involves a much more advanced
stage of distribution than the NV LOT. See Analysis Memorandum at 4-7.
Because we found the home market and U.S. CEP sales were made at
different LOTs, we examined whether a LOT adjustment or a CEP offset
may be appropriate in this review. As we found only one LOT in the home
market, it was not possible to make a LOT adjustment to home market
sales prices, because such an adjustment is dependent on our ability to
identify a pattern of consistent price differences between the home
market sales on which NV is based and home market sales at the CEP LOT.
See 19 CFR 351.412(d)(1)(ii). Furthermore, because the CEP LOT involves
a much more advanced stage of distribution than the NV LOT, it is not
possible to make a CEP offset to NV in accordance with section
773(a)(7)(B) of the Act.
Currency Conversions
Amtex reported certain home market and U.S. sales prices and
adjustments in both U.S. dollars and Mexican pesos. Therefore, we made
peso-U.S. dollar currency conversions, where appropriate, based on the
exchange rates in effect on the date of the sale, as certified by the
Federal Reserve Board, in accordance with section 773A(a) of the Act.
Preliminary Results of Review
As a result of our review, we preliminarily find the following
weighted-average dumping margin exists for the period July 1, 2009,
through June 30, 2010:
------------------------------------------------------------------------
Weighted-average
Producer/Exporter margin (percentage)
------------------------------------------------------------------------
Quimica Amtex, S.A. de C.V........................ 0.80
------------------------------------------------------------------------
The Department will disclose calculations performed within five
days of the date of publication of this notice in accordance with 19
CFR 351.224(b). An interested party may request a hearing within thirty
days of publication. See 19 CFR 351.310(c). Requests should contain the
party's name, address, and telephone number, the number of
participants, and 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. Any hearing, if
requested, will be held 37 days after the date of publication, or the
first business day thereafter, unless the Department alters the date
pursuant to 19 CFR 351.310(d). Interested parties may submit case
briefs no later than 30 days after the date of publication of these
preliminary results of review. See 19 CFR 351.309(c)(1)(ii). Rebuttal
briefs, limited to issues raised in the case briefs, may be filed no
later than 35 days after the date of publication of this notice. See 19
CFR 351.309(d)(1). Parties who submit arguments in these proceedings
are requested to submit with the argument: (1) A statement of the
issue; (2) a brief summary of the argument; and (3) a table of
authorities. Further, parties submitting written comments must provide
the Department with an additional copy of the public version of any
such comments on diskette. The Department will issue final results of
this administrative review, including the results of our analysis of
the issues in any such written comments or at a hearing, within 120
days of publication of these preliminary results.
The Department shall determine, and CBP shall assess, antidumping
duties on all appropriate entries. Upon completion of this
administrative review, pursuant to 19 CFR 351.212(b), the Department
will calculate an assessment rate on all appropriate entries. Amtex has
reported entered values for all of its sales of subject merchandise to
the United States during the POR. Therefore, in accordance with 19 CFR
351.212(b)(1), we will calculate importer-specific duty assessment
rates on the basis of the ratio of the total amount of antidumping
duties calculated for the examined sales to the total entered value of
the examined sales of that importer. These rates will be assessed
uniformly on all entries the respective importers made during the POR
if these preliminary results are adopted in the final results of
review. Where the assessment rate is above de minimis, we will instruct
CBP to assess duties on all entries of subject merchandise by that
importer. In accordance with 19 CFR 356.8(a), the Department intends to
issue appropriate assessment instructions directly to CBP on or after
41 days following the publication of the final results of review.
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). This
clarification will apply to entries of subject merchandise during the
POR produced by the company included in these preliminary results that
the company did not know were destined for the United States. In such
instances we will instruct CBP to liquidate unreviewed entries at the
``all others'' rate if there is no rate for the intermediate company or
companies involved in the transaction.
Cash Deposit Requirements
Furthermore, the following cash deposit requirements will be
effective for all shipments of CMC from Mexico 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 Amtex will be the
rate established in the final results of review, unless that rate is
less than 0.50 percent (de minimis within the meaning of 19 CFR
351.106(c)(1)), in which case the cash deposit rate will be zero; (2)
if the exporter is not a firm covered in this review or the 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 (3) if neither the
exporter nor the manufacturer is a firm covered in this or any previous
review conducted by the Department, the cash deposit rate will be the
all-others rate of 12.61 percent from the LTFV investigation. See
Notice of Antidumping Duty Orders: Purified Carboxymethylcellulose from
Finland, Mexico, the Netherlands and Sweden, 70 FR 39734 (July 11,
2005).
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding
[[Page 20317]]
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.
We are issuing and publishing this notice in accordance with
sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).
Dated: April 4, 2011.
Paul Piquado,
Acting Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-8741 Filed 4-11-11; 8:45 am]
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