[Federal Register: August 11, 2003 (Volume 68, Number 154)]
[Notices]
[Page 47540-47543]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11au03-47]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-580-850]
Notice of Final Determination of Sales at Less Than Fair Value:
Polyvinyl Alcohol From the Republic of Korea
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: August 11, 2003.
FOR FURTHER INFORMATION CONTACT: Irina Itkin or Jill Pollack at (202)
482-0656 and (202) 482-4593, respectively, AD/CVD Enforcement, Office
2, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230.
Final Determination
We determine that polyvinyl alcohol (PVA) from the Republic of
Korea (Korea) is being sold, or is likely to be sold, in the United
States at less than fair value (LTFV), as provided in section 735 of
the Tariff Act of 1930, as amended (the Act). The estimated margins of
sales at LTFV are shown in the ``Suspension of Liquidation'' section of
this notice.
Background
The preliminary determination in this investigation was issued on
March 14, 2003. See Notice of Preliminary Determination of Sales at
Less Than Fair Value and Postponement of Final Determination: Polyvinyl
Alcohol from the Republic of Korea, 68 FR 13681 (March 20, 2003)
(Preliminary Determination).
Since the preliminary determination, the following events have
occurred. On March 3, 2003, the petitioners agreed to revise the scope
of the companion case on PVA from Japan to exclude certain types of PVA
covalently bonded with diacetoneacrylamide. The petitioners' submission
was made in response to a request by Japan VAM and POVAL Co., Ltd., one
of the mandatory respondents in the companion Japanese case.
Because these comments relate to PVA in general, we find that they
are applicable to this proceeding. Accordingly, as we did in the
preliminary determination, we have modified the scope to conform to
that set forth in the companion Japanese proceeding, as described
below. See Notice of Final Determination of Sales at Less Than Fair
Value: Polyvinyl Alcohol from Japan, 68 FR 19510 (April 21, 2003).
On March 12, 2003, DC Chemical Company, Ltd. (DC CHEM), the
mandatory respondent in this investigation, filed a request to exclude
from the scope of this investigation certain grades of PVA in which the
PVA is covalently bonded with itaconic acid.
On March 27, 2003, DC CHEM notified the Department that it no
longer intended to participate in this investigation. For further
discussion, see the ``Facts Available (FA)'' section of this notice.
On April 1, 2003, the petitioners commented on DC CHEM's exclusion
request. For further discussion, see the ``Scope Comments'' section of
this notice.
Scope of the Investigation
The merchandise covered by this investigation is PVA. This product
consists of all PVA hydrolyzed in excess of 80 percent, whether or not
mixed or diluted with commercial levels of defoamer or boric acid,
except as noted below.
The following products are specifically excluded from the scope of
this investigation:
(1) PVA in fiber form.
(2) PVA with hydrolysis less than 83 mole percent and certified not
for use in the production of textiles.
(3) PVA with hydrolysis greater than 85 percent and viscosity
greater than or equal to 90 cps.
(4) PVA with a hydrolysis greater than 85 percent, viscosity
greater than or equal to 80 cps but less than 90 cps, certified for use
in an ink jet application.
(5) PVA for use in the manufacture of an excipient or as an
excipient in the manufacture of film coating systems which are
components of a drug or dietary supplement, and accompanied by an end-
use certification.
(6) PVA covalently bonded with cationic monomer uniformly present
on all polymer chains in a concentration equal to or greater than one
mole percent.
(7) PVA covalently bonded with carboxylic acid uniformly present on
all polymer chains in a concentration equal to or greater than two mole
percent, certified for use in a paper application.
(8) PVA covalently bonded with thiol uniformly present on all
polymer chains, certified for use in emulsion polymerization of non-
vinyl acetic material.
(9) PVA covalently bonded with paraffin uniformly present on all
polymer chains in a concentration equal to or greater than one mole
percent.
(10) PVA covalently bonded with silan uniformly present on all
polymer chains certified for use in paper coating applications.
(11) PVA covalently bonded with sulfonic acid uniformly present on
all polymer chains in a concentration level equal to or greater than
one mole percent.
(12) PVA covalently bonded with acetoacetylate uniformly present on
all polymer chains in a concentration level equal to or greater than
one mole percent.
(13) PVA covalently bonded with polyethylene oxide uniformly
present on all polymer chains in a concentration level equal to or
greater than one mole percent.
(14) PVA covalently bonded with quaternary amine uniformly present
on all polymer chains in a concentration level equal to or greater than
one mole percent.
(15) PVA covalently bonded with diacetoneacrylamide uniformly
present on all polymer chains in a concentration level greater than
three mole percent, certified for use in a paper application.
The merchandise under investigation is currently classifiable under
subheading 3905.30.00 of the Harmonized Tariff Schedule of the United
States (HTSUS). Although the HTSUS subheading is provided for
convenience and customs
[[Page 47541]]
purposes, the written description of the merchandise under
investigation is dispositive.
Scope Comments
On March 12, 2003, DC CHEM filed a request to exclude from the
scope of this investigation certain grades of a copolymer of PVA in
which the PVA is covalently bonded with itaconic acid. On April 1,
2003, the petitioners commented on DC CHEM's exclusion request. In
their comments, the petitioners state that three of the five grades of
PVA listed in DC CHEM's exclusion request (i.e., CL-05, CL-05A, and CL-
05S) are not subject to this investigation because their level of
hydrolysis is less than 80 percent. Regarding the remaining grades, the
petitioners comment that PVA covalently bonded with itaconic acid (a
type of carboxylic acid) for use in paper applications is also outside
the scope of this investigation. See item 7 in the ``Scope of the
Investigation'' section of this notice, above. However, the petitioners
do not agree to exclude PVA covalently bonded with itaconic acid for
non-paper applications because, they assert, these products are
directly competitive with products produced by the domestic industry.
We have analyzed DC CHEM's request and the petitioners' objections
and we find no modifications to the scope are warranted. Because PVA
covalently bonded with itaconic acid for non-paper applications is
clearly within the scope of the investigation, we find no basis on
which to exclude these products.
Period of Investigation
The period of investigation (POI) is July 1, 2001, through June 30,
2002. This period corresponds to the four most recent fiscal quarters
prior to the month of the filing of the petition (i.e., September
2002).
Analysis of Comments Received
On April 11, 2003, we received comments from the petitioners in
response to the preliminary determination. Parties can find a complete
discussion of all issues raised in this investigation and the
corresponding recommendations in the Decision Memo, which is on file in
the Central Records Unit, room B-099, of the main Department building.
In addition, a complete version of the Decision Memo can be accessed
directly on the Web at http://ia.ita.doc.gov. The paper copy and
electronic version of the Decision Memo are identical in content.
Facts Available (FA)
The mandatory respondent in this case, DC CHEM, notified the
Department on March 27, 2003, that it no longer intended to participate
in the investigation. Section 776(a)(2) of the Act provides that, if an
interested party: (A) Withholds information requested by the
Department, (B) fails to provide such information by the deadline, or
in the form or manner requested, (C) significantly impedes a
proceeding, or (D) provides information that cannot be verified, the
Department shall use, subject to sections 782(d) and (e) of the Act,
facts otherwise available in reaching the applicable determination.
In selecting from among the facts otherwise available, section
776(b) of the Act authorizes the Department to use an adverse inference
if the Department finds that an interested party failed to cooperate by
not acting to the best of its ability to comply with a request for
information. See, e.g., Notice of Final Determination of Sales of Less
Than Fair Value and Final Negative Critical Circumstances: Carbon and
Certain Alloy Steel Wire Rod from Brazil, 67 FR 55792, 55794-96 (August
30, 2002). To examine whether the respondent cooperated by acting to
the best of its ability under section 776(b) of the Act, the Department
considers, inter alia, the accuracy and completeness of submitted
information and whether the respondent has hindered the calculation of
accurate dumping margins. See, e.g., Notice of Final Determination of
Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon
Quality Steel Products From Brazil, 65 FR 5554, 5567 (February 4,
2000).
In the instant investigation, the accuracy and completeness of the
submitted information has not been established because the respondent
did not agree to verification of all of its responses. Without verified
data on the record, the Department cannot calculate accurate margins.
Therefore, the respondent's refusal to allow a complete verification
has hindered the calculation of accurate dumping margins and impeded
the proceeding within the meaning of section 776(a)(2)(C) of the Act.
As a result, application of facts available is appropriate. Moreover,
by refusing to allow the Department to verify all of its responses, the
respondent did not act to the best of its ability as required by
section 776(b) of the Act. Consequently, we have determined to make an
adverse inference in determining an antidumping duty margin for DC
CHEM.
Corroboration of Information
Section 776(b) of the Act authorizes the Department to use as
adverse facts available (AFA) information derived from the petition,
the final determination from the LTFV investigation, a previous
administrative review, or any other information placed on the record.
Section 776(c) of the Act requires the Department to corroborate,
to the extent practicable, secondary information used as FA. Secondary
information is defined as ``{i{time} nformation derived from the
petition that gave rise to the investigation or review, the final
determination concerning the subject merchandise, or any previous
review under section 751 concerning the subject merchandise.'' See 19
CFR 351.308 (c) and (d); see also the Statement of Administrative
Action (SAA) accompanying the Uruguay Round Agreements Act, H.R. Doc.
No. 103-316 at 870 (1994).
The SAA clarifies that ``corroborate'' means that the Department
will satisfy itself that the secondary information to be used has
probative value. See the SAA at 870. The SAA also states that
independent sources used to corroborate such evidence may include, for
example, published price lists, official import statistics and customs
data, and information obtained from interested parties during the
particular investigation. Id.
In order to determine the probative value of the margins in the
petition for use as AFA for purposes of this final determination, we
used information submitted by DC CHEM on the record of this
investigation. We reviewed the adequacy and accuracy of the information
in the petition during our pre-initiation analysis of the petition, to
the extent appropriate information was available for this purpose (see
the September 25, 2002, Initiation Checklist, on file in the Central
Records Unit, Room B-099, of the Main Commerce Department building, for
a discussion of the margin calculations in the petition). In accordance
with section 776(c) of the Act, to the extent practicable, we examined
the key elements of the export price (EP) and normal value (NV)
calculations on which the margins in the petition were based. See the
August 4, 2003, memorandum to the file from the team entitled
``Corroboration of Data Contained in the Petition for Assigning Facts
Available Rates'' (Corroboration Memo).
[[Page 47542]]
Export Price
With respect to the margins in the petition, EP was based on POI
price quotes for the sale of fully-hydrolyzed PVA produced by DC CHEM
to customers in the United States. The petitioners calculated net U.S.
prices for PVA by deducting certain movement charges and a distributor
mark-up, where applicable.
We corroborated the U.S. prices from the petition by comparing them
to prices of comparable products reported by DC CHEM. We found that the
petitioners' price quotes were comparable to the price information
submitted by DC CHEM. Therefore, we find that the petitioners'
information for U.S. price has probative value. For further discussion,
see the Corroboration Memo.
Normal Value
The petitioners based NV on a home-market price quote from DC CHEM
for fully-hydrolyzed PVA of a comparable grade to the products exported
to the United States during the POI. This price quote was
contemporaneous with the U.S. price quotes used as the basis for EP. We
corroborated the home-market price from the petition by comparing it to
prices of comparable products sold by DC CHEM. We found that the
petitioners' price quote was comparable to the price information
submitted by DC CHEM. Therefore, we find that the petitioners'
information for home-market price has probative value. See the
Corroboration Memo.
In addition, the petitioners alleged that sales of PVA in the home
market were made at prices below the fully-absorbed cost of production
(COP), within the meaning of section 773(b) of the Act, and requested
that the Department conduct a country-wide sales-below-cost
investigation. Based upon a comparison of the prices of the foreign
like product in the home market to the calculated COP of the product,
we found reasonable grounds to believe or suspect that sales of the
foreign like product were made below the COP, within the meaning of
section 773(b)(2)(A)(i) of the Act. See Notice of Initiation of
Antidumping Duty Investigations: Polyvinyl Alcohol From Germany, Japan,
the People's Republic of China, the Republic of Korea, and Singapore,
67 FR 61591, 61594 (October 1, 2002) (Initiation Notice). Accordingly,
the Department initiated a country-wide cost investigation. Pursuant to
section 773(b)(3) of the Act, COP consisted of the cost of manufacture
(COM), selling, general and administrative (SG&A) expenses, and packing
expenses. The petitioners calculated COP based on their own production
experience, adjusted for known differences between costs incurred to
manufacture PVA in the United States and Korea. We corroborated the COP
from the petition by comparing it to the COP of comparable products
sold by DC CHEM. We found that the petitioners' calculated COP was
comparable to DC CHEM's COP. Therefore, we find that the petitioners'
calculated COP has probative value. See the Corroboration Memo.
Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the
petitioners based NV for sales in Korea on constructed value (CV). The
petitioners calculated CV using the same COM, SG&A, and financial
expense figures they used to compute the COP. Consistent with section
773(e)(2) of the Act, the petitioners included in CV an amount for
profit based on DC CHEM's 2001 financial statements. The petitioners'
calculation of profit was based on operating profit rather than the net
income of the producer. Therefore, we recalculated the CV profit rate
to include non-operating items. Because this calculation resulted in a
loss, we used a profit rate of zero for purposes of initiation.
For purposes of the AFA rate we have calculated for this final
determination, however, we do not believe it is appropriate to exclude
profit from the margin calculations because to do so would not be an
adverse inference. Consequently, we have revised our calculation of the
profit rate to use a rate derived from the publicly available 2001
financial statements of another Korean petrochemical company, LG
Petrochemical. For further discussion, see the Decision Memo at Comment
1.
Therefore, based on our efforts described above to corroborate
information contained in the petition and in accordance with 776(c) of
the Act, we consider the margins in the notice of initiation, as
adjusted, to be corroborated to the extent practicable for purposes of
this final determination. See the Corroboration Memo.
Accordingly, in selecting AFA with respect to DC CHEM, we have
applied the margin rate of 38.74 percent, which is the highest
estimated dumping margin submitted in the petition, used in the notice
of initiation, and subsequently adjusted as explained above. See the
Initiation Notice, 67 FR at 61593, and the Decision Memo at Comment 1.
All Others
Section 735(c)(5)(B) of the Act provides that, where the estimated
weighted-average dumping margins established for all exporters and
producers individually investigated are zero or de minimis or are
determined entirely under section 776 of the Act, the Department may
use any reasonable method to establish the estimated ``All Others''
rate for exporters and producers not individually investigated. This
provision contemplates that we weight-average margins other than zero,
de minimis, and FA margins to establish the ``All Others'' rate. Where
the data do not permit weight-averaging such rates, the SAA provides
that we may use other reasonable methods. See the SAA at 873. Because
the petition contained two estimated dumping margins, we have used
these two estimated dumping margins, as adjusted for the notices of
initiation and final determination, to create an ``All Others'' rate
based on a simple average. Therefore, we have calculated the margin of
32.08 percent as the ``All Others'' rate. See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value and Final Affirmative
Finding of Critical Circumstances: Elastic Rubber Tape from India, 64
FR 19123, 19124 (April 19, 1999).
Continuation of Suspension of Liquidation
In accordance with section 735(c)(1)(B) of the Act, we are
directing the U.S. Bureau of Customs and Border Protection (BCBP) to
continue to suspend all entries of PVA from Korea that are entered, or
withdrawn from warehouse, for consumption on or after March 20, 2003,
the date of publication of the preliminary determination. The BCBP
shall continue to require a cash deposit or the posting of a bond equal
to the estimated amount by which the normal value exceeds the U.S.
price as shown below. These instructions suspending liquidation will
remain in effect until further notice.
The dumping margins are provided below:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
DC Chemical Company, Ltd..................................... 38.74
All Others................................................... 32.08
------------------------------------------------------------------------
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
International Trade Commission (ITC) of our determination. As our final
determination is affirmative, the ITC will, within 45 days, determine
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry. If the ITC determines that material
injury or threat of material
[[Page 47543]]
injury does not exist, the proceeding will be terminated and all
securities posted will be refunded or canceled. If the ITC determines
that such injury does exist, the Department will issue an antidumping
duty order directing the BCBP to assess antidumping duties on all
imports of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the effective date of the
suspension of liquidation.
Notification Regarding APO
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 351.305. Timely notification of return/
destruction of APO materials or conversion to judicial protective order
is hereby requested. Failure to comply with the regulations and the
terms of an APO is a sanctionable violation.
This determination is issued and published pursuant to sections
735(d) and 777(i)(1) of the Act.
Dated: August 4, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Grant Aldonas, Under Secretary.
[FR Doc. 03-20320 Filed 8-8-03; 8:45 am]
BILLING CODE 3510-DS-P