Furfuryl Alcohol from Thailand: Preliminary Results of the 2005-2006 Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commence is conducting an administrative review of the antidumping duty order on furfuryl alcohol from Thailand. The period of review is July 1, 2005, through May 3, 2006. This review covers imports of furfuryl alcohol from one producer/exporter.

We preliminarily determine that sales of subject merchandise have not been made at less than normal value. If these preliminary results are adopted in our final results, we will instruct U.S. Customs and Border Protection to liquidate entries of furfuryl alcohol from Indorama Chemicals (Thailand) Ltd. without regard to antidumping duties. We invite interested parties to comment on these preliminary results. We will issue the final results not later than 120 days from the date of publication of this notice.

DATES:

Effective Date: August 2, 2007.

FOR FURTHER INFORMATION CONTACT:

Damian Felton or Brandon Farlander, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-0133 and (202) 482-0182, respectively.

SUPPLEMENTARY INFORMATION:

Background

On July 25, 1995, the Department published an antidumping duty order on furfuryl alcohol from Thailand. See Furfuryl Alcohol from Thailand: Notice of Amended Final Antidumping Duty Determinant and Order, 60 FR 38035 (July 25, 1995). On July 3, 2006, the Department published its Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 71 FR 37890 (July 3, 2006). On July 28, 2006, Penn Specialty Chemicals, Inc. (“petitioner”) requested that the Department conduct an administrative review of Indorama Chemicals (Thailand), Ltd. (“IRCT”), a producer and exporter of furfuryl alcohol from Thailand. In accordance with 19 CFR 351.221(b)(1), we published a notice of initiation of this antidumping duty administrative review on August 30, 2006. See Notice of Initiation of Antidumping and Countervailing Duty Administrative Reviews, 71 FR 51573 (August 30, 2006) (“Furfuryl Alcohol Initiation”).

An antidumping duty questionnaire was sent to IRCT on September 6, 2006. We received timely responses to the questionnaire from IRCT on September 27, 2006, and October 27, 2006. On April 3, 2007, in accordance with section 751(a)(3)(A) of the Tariff Act of 1930, as amended (“the Act”), we published a notice extending the time limit for the completion of the preliminary results in this case by 120 days (i.e., until no later than July 31, 2007). See Furfuryl Alcohol from Thailand: Notice of Extension for Time Limit for Preliminary Results of the 2005-2006 Antidumping Administrative Review, 72 FR 15863 (April 3, 2007).

We issued a supplemental questionnaire regarding IRCT's responses to sections A, B, and C of the Department's original questionnaire on May 3, 2007, and received a timely response from IRCT on May 25, 2007. We issued an additional supplemental questionnaire on June 18, 2007, and received a timely response to the second supplemental questionnaire on June 22, 2007.

Period of Review

The period of review (“POR”) covers July 1, 2005, through May 3, 2006.

Scope of the Order

The merchandise covered by this order is furfuryl alcohol (C₄ H₃ OCH₂ OH). Furfuryl alcohol is a primary alcohol, and is colorless or pale yellow in appearance. It is used in the manufacture of resins and as a wetting agent and solvent for coating resins, nitrocellulose, cellulose acetate, and other soluble dyes.

The product subject to this order is classifiable under subheading 2932.13.00 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of this proceeding is dispositive.

Fair Value Comparisons

To determine whether sales of furfuryl alcohol by IRCT to the United States were made at less than normal value (“NV”), we compared the export price (“EP”) to NV, as described in the “Export Price” and “Normal Value” sections of this notice, below.

Pursuant to section 777A(d)(2) of the Act, we compared the EPs of individual U.S. transactions to the weighted-average sales prices of the foreign like product, where there were sales made in the ordinary course of trade, as discussed in the “Normal Value” section of this notice.

Product Comparisons

In accordance with section 771(16) of the Act, we considered all products produced by IRCT 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. In making product comparisons, consistent with the Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from Thailand: Final Determination of Sales at Less Than Fair Value, 60 FR 22557 (May 8, 1995) and Furfuryl Alcohol from Thailand: Notice of Amended Final Antidumping Duty Determination and Order, 60 FR 38035 (July 25, 1995) (collectively “LTFV Final”), we matched foreign like products based on the physical characteristics reported by IRCT.

Export Price

We calculated EP in accordance with section 772(a) of the Act because the merchandise was sold to the first unaffiliated purchaser in the United States prior to importation by the exporter or producer and constructed export price methodology was not otherwise warranted. We based EP on the packed delivered, freight-on-board, cash-in-freight, or the delivery-duty paid price to unaffiliated purchasers in the United States. We made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These deductions included foreign inland freight, country of manufacture inland insurance, brokerage and handling, international freight, and marine insurance. We also made adjustments to the starting price for duty drawback in accordance with section 772(c)(1)(B) of the Act.

It is normally the Department's practice to confirm that the duty drawback adjustment claimed by the respondent meets the Department's two-pronged criteria for determining whether the duty drawback adjustment is appropriate. See Rajinder Pipes, Ltd. v. United States, 70 F. Supp. 2d 1350, 1358 (CIT 1999); see also Notice of Final Determination of Sales at Less Than Fair Value: Light-Walled Rectangular Pipe and Tube from Turkey, 69 FR 53675 (September 2, 2004) and accompanying Issues and Decision Memorandum at Comment 1; and Notice of Final Determination of Sales at Less Than Fair Value and Final Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the Republic of Korea, 71 FR 29310 (May 22, 2006) and accompanying Issues and Decision Memorandum at Comment 49. We have determined that only one of the reported inputs used in the projection of furfuryl alcohol meets the two-pronged criteria. Therefore, we made an adjustment to the starting price for duty drawback to account for import duties paid on the importation of a single input used in the production of the subject merchandise. for an in-depth explanation of these changes, see Memorandum from Case Analyst to File, “Preliminary Results Calculation Memorandum for Indorama Chemicals (Thailand) Ltd.,” (“Prelim Calc Memo”) dated July 25, 2007, available in the Department's CRU.

Normal Value

A. Home Market Viability

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 volume of IRCT's home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(C)(ii) of the Act. Because IRCT'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 for the subject merchandise, we determined that the home market was viable.

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 at the same level of trade (“LOT”) as the EP. 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. 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). In order to determine whether the comparison 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 sale.

Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying levels of trade for EP and comparison market sales, we consider the starting prices before any adjustments. See Micron Technology, Inc. v. United States, et. al., 243 F. 3d 1301, 1314-1315 (Fed. Cir. 2001) (affirming this methodology).

When the Department is unable to match U.S. EP sales to sales of the foreign like product in the comparison market at the same LOT as the EP, the Department may compare the U.S. sale to sales at a different LOT in the comparison market. In comparing EP sales to a different LOT in the comparison market, where available data make it practical, we make a LOT adjustment under section 773(a)(7)(A) of the Act.

IRCT reported one LOT in the home market and one LOT in the U.S. market. IRCT reported making sales only to end-users in the home market. In the United States, IRCT reported that it made sales only to a trading company. We examined the information IRCT reported regarding its marketing process for making the reported comparison market and U.S. sales, including the type and level of selling activities performed and customer categories. Specifically, we considered the extent to which the sales process, freight services, warehouse/inventory maintenance, and warranty services varied with respect to the different customer categories (i.e., distributors and end-users). Based on our analysis, we found that the single LOT in the United States is identical to the single LOT in the comparison market. Thus, we preliminarily find that a LOT adjustment for IRCT is not warranted.

C. Calculation of Normal Value Based on Comparison Market Prices

We calculated NV based on the delivered prices to unaffiliated customers. In accordance with section 773(a)(6)(b)(ii) of the Act, we made deductions for inland freight and inland insurance. Furthermore, where appropriate, we 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 by deducting direct selling expenses incurred on comparison market sales (credit expenses), and adding U.S. direct selling expenses (credit expenses). We deducted inventory carrying costs incurred on comparison market sales, and added U.S. inventory carrying cost. We deducted home market packing costs and added U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of the Act.

Preliminary Results of the Review

We preliminarily find that the following dumping margin exists for the period July 1, 2005, through May 3, 2006.

Assessment Rates

Upon completion of this administrative review, the Department will determine, and U.S. Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b), the Department calculates an assessment rate for each importer (or customer) of the subject merchandise. Upon issuance of the final results of this administrative review, if any importer (or customer)-specific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.5 percent), the Department will issue appraisement instructions directly to CBP to assess antidumping duties on appropriate entries. 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 Department intends to issue appropriate assessment instructions directly to CBP 15 days after the date of publication of the final results of this administrative review.

Cash Deposit Rates

On March 5, 2006, pursuant to section 751(d)(2) of the Act and 19 CFR 351.222(i)(1)(ii), the Department revoked the antidumping duty order on furfuryl alcohol from Thailand (see Furfuryl Alcohol from Thailand; Final Results of the Second Sunset Review of the Antidumping Duty Order and Revocation of the Order, 72 FR 9729 (March 5, 2006)). The effective date of the revocation is May 4, 2007. As a result of this action, we do not intend to issue cash deposit instructions.

Public Comment

Any interested party may request a hearing within 30 days of publication of this notice. See 19 CFR 351.310(c). A hearing, if requested, will be 44 days after the publication of this notice, or the first business day thereafter. Issues raised in the hearing will be limited to those raised in the case and rebuttal briefs. Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results. See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than five days after submission of case briefs. See 19 CFR 351.309(d). Parties who submit arguments 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.

The Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs or hearing, no later than 120 days after publication of these preliminary results.

Notification to Interested Parties

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.

We are issuing and publishing these results in accordance with sections 751(a)(1) and 777(i)(1) of the Act.