65FR26570 Electrolytic Manganese Dioxide From Japan: Preliminary Results of Antidumping Duty Administrative Review
robop...@us.govnews.org
Posting-number: Volume 65, Issue 89, Page 26570
[Federal Register: May 8, 2000 (Volume 65, Number 89)]
[Notices]
[Page 26570-26573]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08my00-26]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-806]
Electrolytic Manganese Dioxide From Japan: Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Preliminary Results of Antidumping Duty
Administrative Review.
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SUMMARY: Based on a request by a Japanese producer, Tosoh Corporation,
the Department of Commerce is conducting an administrative review of
the antidumping duty order on electrolytic manganese dioxide from
Japan.
We have preliminarily determined that sales by Tosoh Corporation
have not been made below normal value. If these preliminary results are
adopted in our final results of administrative review, we will instruct
Customs to liquidate without regard to antidumping duties all entries
of EMD from Tosoh Corporation during the period of review.
We invite interested parties to comment on these preliminary
results. Parties who submit comments in this proceeding are requested
to submit with each argument (1) a statement of the issue and (2) a
brief summary of the argument.
EFFECTIVE DATE: May 8, 2000.
FOR FURTHER INFORMATION CONTACT: Larry Tabash or Richard Rimlinger,
Import Administration, International Trade Administration, U.S.
Department of Commerce, Washington, D.C. 20230; telephone: (202) 482-
5047 or (202) 482-4477, respectively.
SUPPLEMENTARY INFORMATION:
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department of Commerce's (the
Department's) regulations are to 19 CFR Part 351 (1999).
Background
On April 17, 1989, the Department published in the Federal Register
(54 FR 15243) the antidumping duty order on electrolytic manganese
dioxide (EMD) from Japan. On June 30, 1999, the Department published a
notice of initiation of administrative review in accordance with 19 CFR
351.213(b). The Department is conducting this administrative review in
accordance with section 751 of the Act.
Scope of Review
Imports covered by this review are sales of EMD from Japan. EMD is
manganese dioxide (MnO2) that has been refined in an electrolysis
process. The subject merchandise is an intermediate product used in the
production of dry-cell batteries. EMD is sold in three physical forms,
powder, chip or plate, and two grades, alkaline and zinc-chloride. EMD
in all three forms and both grades is included in the scope of the
order. This merchandise is currently classifiable under item number
2820.10.0000 of the Harmonized Tariff Schedule (HTSUS) of the United
States. The HTSUS number is provided for convenience and customs
purposes. It is not determinative of the products subject to the order.
The written product description remains dispositive.
Period of Review
The period of review (POR) is April 1, 1998, through March 31,
1999.
Product Comparisons
Two product-comparison issues arose prior to the completion of
these preliminary results. First, the sub-types of alkaline-grade EMD
Tosoh sold in the home market and a sub-type of alkaline-grade EMD
Tosoh sold to the United States varied by physical characteristics such
as moisture, mesh, and particle size.
Tosoh provided in its questionnaire response a product-matching
table identifying the various sub-types of alkaline-grade EMD it sold
in the home market and to the United States. In its July 21, 1999,
submission, the respondent stated that the sub-type of alkaline-grade
EMD it sold to the United States was not sold in the home market during
the POR and that the Department should match the sub-type sold in the
United States to the closest sub-type of alkaline-grade EMD sold in the
home market. Kerr-McGee Chemical LLC and Chemetals Inc. (collectively
``the petitioners'') responded that the Department should disregard the
respondent's proposed product-matching criteria and base normal value
of EMD exported to the United States on all sales of alkaline-grade EMD
in the home market because, they argue, it is the Department's practice
to base model-matching schemes only on
[[Page 26571]]
physical differences that are shown to be ``commercially meaningful.''
In the original less-than-fair-value (LTFV) investigation and
previous administrative reviews of this order, we grouped EMD into the
following three categories for purposes of model-matching: (1)
Alkaline-grade EMD in powdered form, (2) zinc-chloride-grade EMD in
powdered form, and (3) EMD in chip or plate form. See Appendix V in the
Department's questionnaire dated June 7, 1999, for a complete
description of the product. Our decision to do this was based on our
analysis of comments that we received from all interested parties at
the beginning of this proceeding. The respondent has provided no
information regarding the commercial significance of the different sub-
types. We are not convinced by the respondent's assertion that a more
refined product-matching methodology is appropriate because the record
indicates that any differences in either price or cost attributable to
physical differences among the sub-types of alkaline grade EMD are
small. Therefore, for these preliminary results, we have continued to
match EMD based on the criteria outlined in the LTFV investigation.
Second, in an August 27, 1999, and in subsequent submissions, the
petitioners allege that the respondent should have reported and
accounted for home-market sales during the POR of EMD containing both
gamma crystalline structure and other crystalline structure. The
petitioners state that the Department's regulations for reporting the
subject merchandise do not make any distinction between the gamma
crystalline and other gamma crystalline structure EMD. The respondent
argues that the product covered by this administrative review is EMD
with a gamma crystalline structure, and that there is no basis to
require Tosoh to provide information relating to other crystalline
structure manganese dioxide which, according to Tosoh, is non-subject
merchandise.
Section 771(16) of the Act directs the Department to compare U.S.
sales to sales in the home market of identical merchandise prior to
making comparisons to non-identical merchandise sold in the home
market. As discussed above, under the definition of comparable
merchandise which has been in place since the beginning of this
proceeding, we consider all alkaline-grade EMD to be identical for
product-comparison purposes. Since we were able to compare U.S. sales
to sales of identical merchandise in the home market, we have not
required Tosoh to report its home-market sales of non-identical EMD.
Affiliated Party
On August 27, 1999, the petitioners alleged that Tosoh and the
Japanese trading company that Tosoh used to make sales of EMD to the
United States may be affiliated because the two companies own two other
companies jointly. (The identity of the Japanese trading company and
the two joint ventures is business proprietary information and can not
be disclosed in this public notice.) One of these joint ventures is a
producer of EMD in another country. On September 9, 1999, and in
subsequent submissions, Tosoh stated that it does not consider itself
to be affiliated with the trading company in question, and it reported
its sale to the trading company as the U.S. transaction. Tosoh argues
that the trading company is not legally or operationally able to
exercise any control or direction over Tosoh, and the fact that the
trading company and Tosoh participate in the ownership of two other
companies is irrelevant to this review. Tosoh also argues, citing 19
CFR 351.102(b), that its mere participation in a joint venture does not
support a finding of affiliation absent a showing pursuant to the
Department's regulations that ``the relationship has the potential to
impact decisions concerning the production, pricing, or cost of the
subject merchandise or foreign like product.'' Furthermore, Tosoh
asserts that affiliation between joint-venture partners can not be
found under section 771(33)(F) of the Act unless there is sufficient
evidence of ``control'' over decisions concerning the production,
pricing, or cost of the subject merchandise. Tosoh cites Certain Cold-
Rolled and Corrosion-Resistant Carbon Steel Flat Products From Korea,
63 FR 13170, 13185 (March 18, 1998), where the Department found that
two joint-venture partners were not affiliated under section 771(33)(F)
of the Act because of the absence of evidence of control.
On November 29, 1999, after reviewing the information Tosoh
presented in response to our original and supplemental questionnaires,
we requested that Tosoh report the ``downstream'' sale information
between the trading company's U.S. affiliate and its unaffiliated U.S.
customer. See November 29, 1999, memorandum from Richard Rimlinger to
Laurie Parkhill. (All memoranda to which we refer in this notice can be
found in the public reading room, located in the Central Records Unit,
room B-099 of the main Department of Commerce building.)
Pursuant to section 771(33)(F) of the Act, affiliation exists where
there are ``(t)wo or more persons directly or indirectly controlling,
controlled by, or under common control with, any person.'' However, we
recognize the regulatory guidance indicating that a control
relationship will not establish affiliation unless the relationship
``has the potential to impact decisions concerning the production,
pricing, or cost of the subject merchandise or foreign like product,''
19 CFR 351.102(b) (emphasis added). Regarding Tosoh's control of one of
the joint ventures, we are persuaded that potential control exists due
to the fact that this joint venture manufactures EMD for sale in a
variety of markets, including the United States. Thus, Tosoh is in a
position that requires it to coordinate production and sales activities
for its EMD production facilities. With respect to the trading
company's control of the same joint venture, the record indicates that
its wholly owned U.S. subsidiary negotiates the prices and terms of the
U.S. sales for both Tosoh and the third-country joint venture. Because
the subsidiary negotiates the prices and terms of the sales for both
Tosoh and the joint venture, we find that the trading company, through
its U.S. subsidiary, is able or at least has the potential to impact
decisions concerning the production, pricing, or cost of the subject
merchandise. Accordingly, we have preliminarily determined that Tosoh
and the trading company commonly control the joint venture within the
meaning of section 771(33)(F) of the Act and the Department's
regulations. See Affiliation Memorandum from Laurie Parkhill to Richard
W. Moreland, dated May 1, 2000. Accordingly, we conclude that Tosoh and
the trading company are affiliated and that the appropriate sale for
use in our analysis is the sale by the U.S. affiliate of the Japanese
trading company to the unaffiliated U.S. customer. That sale is a
constructed export price (CEP) transaction because it was made in the
United States.
Constructed Export Price
In calculating the price to the United States, we used CEP as
defined in section 772(b) of the Act. We calculated CEP based on the
delivered price to an unaffiliated purchaser in the United States. We
made deductions for movement expenses in accordance with section
772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act and the Statement
of Administrative Action (SAA), H. Doc. 103-316, vol. 1, 822-824
(1994), we calculated the CEP by deducting selling
[[Page 26572]]
expenses associated with economic activities occurring in the United
States, including direct selling expenses and indirect selling expenses
incurred in the United States.
With respect to CEP profit, section 772(d)(3) of the Act requires
the Department, in determining CEP, to identify and deduct from the
starting price in the U.S. market an amount for profit allocable to
selling and further-manufacturing activities in the United States.
Section 772(f) of the Act provides the rule for determining the amount
of CEP profit to deduct from the CEP starting price. Pursuant to
subsection 772(f)(2)(C), we determined that the best available sources
of profit information are the 1998 financial statements which the
respondent and the Japanese trading company's U.S. affiliate submitted
in their responses to our questionnaires. See Electrolytic Manganese
Dioxide from Japan--Tosoh Corporation, Analysis Memo dated April 28,
2000. We made adjustments, where appropriate, for domestic inland
freight, warehousing expenses, international freight, and brokerage and
handling in accordance with section 772(c)(2)(A) of the Act. In
accordance with 19 CFR 351.401(i), we used the invoice date as the date
of sale for the U.S. market. We made deductions for any movement
expenses in accordance with section 772(c)(2)(A) of the Act.
Finally, in accordance with section 772(d)(1)(B) of the Act, we
made an additional adjustment to CEP. Because of the business-
proprietary nature of the adjustment, please see our Analysis Memo.
Normal Value
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a basis for calculating normal value, we
compare 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 the aggregate volume
of home-market sales of the foreign like product was greater than five
percent of the aggregate volume of U.S. sales of the subject
merchandise, we determined that the home market provides a viable basis
for calculating normal value. Therefore, in accordance with section
773(a)(1)(B)(i) of the Act, we based normal value on the price at which
the foreign like product was first sold to unaffiliated customers for
consumption in the exporting country in the usual commercial quantities
and in the ordinary course of trade. We matched CEP to normal value at
the same level of trade in the home market and made no level-of-trade
adjustment (see discussion below).
We compared CEP to the monthly weighted-average price of sales of
the identical foreign like product. We based normal value on delivered
prices to unaffiliated purchasers in the home market. We made
adjustments to home-market price for inland freight, warehousing
expenses, discounts, and rebates. Home-market prices were based on
packed, delivered prices to the unaffiliated purchasers in the home
market. Where 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 costs attributable to differences in circumstances of
sale (COS) in accordance with section 773(a)(6)(C)(iii) of the Act and
19 CFR 351.410. With respect to our comparisons to CEP, we made COS
adjustments by deducting home-market direct selling expenses from
normal value.
Level of Trade
To the extent practicable, we determine normal value for sales at
the same level of trade as that in the United States in accordance with
section 773(a)(1)(B) of the Act. The normal value level of trade is
that of the starting-price sales in the home market. See 19 CFR
351.412(c)(iii).
To determine whether home-market sales were at a different level of
trade than that in the United States, we examined stages in the
marketing process and selling functions along the chain of distribution
between the producer and the unaffiliated customer. Tosoh reported two
channels of distribution in the home market. We examined the
differences in selling functions Tosoh reported in its responses to our
requests for information. We found that the selling activities
associated with sales to trading companies/distributors did not differ
from activities associated with sales to end-users in terms of various
selling activities. For example, there were no differences between the
two channels in terms of strategic planning/marketing, production
planning/order evaluation, technical service, and freight/delivery to
customer. Based on these sales activities and our overall analysis, we
found that the two home-market channels constitute one level of trade.
Because Tosoh made CEP sales in the United States, we identified
the level of trade based on the price after the deduction of expenses
and profit under section 772(d) of the Act and pursuant to 19 CFR
351.412(c)(ii). Based on our analysis, we considered CEP to constitute
a single level of trade.
As a result of our examination of the record, we found that the
respondent did not provide us with sufficient information to determine
whether there were significant differences or similarities between the
selling activities associated with the home-market level of trade and
those associated with the CEP level of trade. Moreover, the respondent
indicated in its July 21, 1999, and December 17, 1999, submissions that
it was not requesting a level-of-trade adjustment. Therefore, we have
determined that the U.S. sale was made at the same level of trade as
the home-market level of trade and, therefore, no level-of-trade
adjustment was necessary.
Preliminary Results of Review
As a result of our review, we preliminarily determine a weighted-
average dumping margin of 0.00 percent for the period April 1, 1998,
through March 31, 1999, for Tosoh.
Any interested party may request a hearing within 30 days of
publication of this notice. Any hearing, if requested, will be held 40
days after the date of publication of this notice, or the first workday
thereafter. Requests should specify the number of participants and
provide a list of the issues to be discussed. Oral presentations will
be limited to issues raised in the briefs. Any hearing, if requested,
will be held three days after the scheduled date for submission of
rebuttal briefs. Issues raised in hearings will be limited to those
raised in the respective case and rebuttal briefs. Interested parties
may submit case briefs within 30 days of the date of publication of
this notice. Rebuttal briefs, which must be limited to issues raised in
the case briefs, may be filed not later than 35 days after the date of
publication of this notice.
Parties who submit arguments are requested to submit with the
arguments (1) a table of contents, (2) a statement of the issue, (3) a
list of authorities used, and (4) an executive summary of issues.
Executive summaries should be limited to five pages total, including
footnotes.
The Department will publish the final results of this
administrative review, including the results of its analysis of issues
raised in any such written briefs or hearing. The Department will issue
final results of this review within 120 days of publication of these
preliminary results.
Upon completion of the final results of this administrative review,
if there is no change from our preliminary results, we will instruct
the Customs Service to
[[Page 26573]]
liquidate all appropriate entries without regard to antidumping duties.
On April 20, 2000, the International Trade Commission (ITC)
determined that revoking the existing antidumping duty orders on EMD
from Greece and Japan would not be likely to lead to continuation or
recurrence of material injury within a reasonably foreseeable time.
Therefore, because the order will be revoked as a result of the ITC's
determination with an effective date of January 1, 2000, no deposit
requirements will be effective for 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.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f)(2) 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.
We are issuing and publishing this determination in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: May 1, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-11462 Filed 5-5-00; 8:45 am]
BILLING CODE 3510-DS-P