[Federal Register Volume 76, Number 242 (Friday, December 16, 2011)]
[Notices]
[Pages 78237-78240]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32262]
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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 1, 2010, through March 31, 2011. 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 April 29, 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 1, 2010,
through March 31, 2011. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 76 FR 30912 (May 27, 2011).
On May 31, 2010, we issued the antidumping duty questionnaire to
Aquapharm. On August 5, 2011, we received a response to section A
(i.e., the section covering general information about the company),
section B (i.e., the section covering comparison-market sales) and
section C (i.e., the section covering U.S. sales) of the antidumping
duty questionnaire from Aquapharm.
On September 19, 2011, 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 October 12, 2011.
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 1, 2010, through March 31,
2011.
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 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
[[Page 78238]]
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 warehousing 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 (f)(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)(1)(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 Tech.,
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 expenses, and profit
for CV, where possible. See Notice of Preliminary Determination of
Sales at Less Than Fair Value and Postponement of Final
Determination: Certain Frozen and Canned Warmwater Shrimp From
Brazil, 69 FR 47081 (August 4, 2004), unchanged in Notice of Final
Determination of Sales at Less Than Fair Value: Certain Frozen and
Canned Warmwater Shrimp From Brazil, 69 FR 76910 (December 23,
2004).
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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.
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.
[[Page 78239]]
Aquapharm made CEP sales in the U.S. market through one channel of
distribution: sales through an unaffiliated U.S. selling agent to
unaffiliated U.S. distributors/end-users 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, payment of commissions,
warranty service, and provision of guarantees. 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 do not find that these selling functions
constitute a substantial difference in selling functions which are
significant enough to warrant a separate LOT in the U.S. market. As
explained in the Department's regulations at 19 CFR 351.412(c)(2),
``{s{time} ubstantial differences in selling activities are a
necessary, but not sufficient, condition for determining that there is
a difference in the stage of marketing.'' 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 (2) 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,
sales promotion, distributor/dealer training, order input/processing,
direct sales personnel, sales/marketing support, market research,
packing, freight and delivery services, inventory maintenance,
technical assistance, warranty service, and provision of guarantees.
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., Ball
Bearings and Parts Thereof From France, Germany, Italy, Japan, and the
United Kingdom: Final Results of Antidumping Duty Administrative
Reviews and Revocation of an Order in Part, 74 FR 44819 (August 31,
2009), and accompanying Issues and Decision Memorandum at Comment 7.
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 1, 2010,
through March 31, 2011:
------------------------------------------------------------------------
Percent
Manufacturer/exporter 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;
[[Page 78240]]
and (3) a list of issues to be discussed. See 19 CFR 351.310(c). Issues
raised in the hearing will be limited to those raised in the respective
case briefs.
The Department intends to 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 Aquapharm 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 Aquapharm 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: December 11, 2011.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2011-32262 Filed 12-15-11; 8:45 am]
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