[Federal Register: April 21, 2003 (Volume 68, Number 76)]
[Notices]               
[Page 19510-19513]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21ap03-52]                         

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-588-861]

 
Notice of Final Determination of Sales at Less Than Fair Value: 
Polyvinyl Alcohol from Japan

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: April 21, 2003.

FOR FURTHER INFORMATION CONTACT: Mike Strollo or Gregory E. Kalbaugh at 
(202) 482-0629 or (202) 482-3693, respectively, Office of AD/CVD 
Enforcement, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

FINAL DETERMINATION:

    We determine that polyvinyl alcohol (PVA) from Japan is being sold, 
or is likely to be sold, in the United States at

[[Page 19511]]

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 
February 12, 2003. See Notice of Preliminary Determination of Sales at 
Less Than Fair Value: Polyvinyl Alcohol from Japan, 68 FR 8203 (Feb. 
20, 2003) (Preliminary Determination).
    Since the preliminary determination, the following events have 
occurred. On February 21, 2003, the Nippon Synthetic Chemical Industry 
Co., Ltd. (Nippon Gohsei), one of the mandatory respondents in this 
investigation, notified the Department that it would no longer 
participate in this investigation, and it requested that the Department 
remove its business proprietary information from the record of this 
proceeding. On February 27, 2003, the Department destroyed Nippon 
Gohsei's submissions containing business proprietary information and 
notified Nippon Gohsei of this action. For further discussion, see the 
``Facts Available (FA)'' section of this notice.
    On March 3, 2003, the petitioners agreed to revise the scope to 
exclude certain types of PVA covalently bonded with 
diacetoneacrylamide, pursuant to a request by one of the mandatory 
respondents in this case, Japan VAM and POVAL Co., Ltd. (Japan VAM & 
POVAL). For a description of this merchandise, see the ``Scope of the 
Investigation'' section below. There were no case or rebuttal briefs 
submitted. A public hearing was not requested.\1\
---------------------------------------------------------------------------

    \1\ Normally, when the Department issues a final determination, 
the Federal Register notice is accompanied by a separate Issues and 
Decision Memorandum. Since no briefs were filed in this case, we 
have not issued a separate memorandum.
---------------------------------------------------------------------------

Scope of 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 purposes, the written description of the 
merchandise under investigation is dispositive.

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).

Facts Available (FA)

    In the preliminary determination, we based the dumping margin for 
three of the four mandatory respondents in this case, Denki Kagaku 
Kogyo Kabushiki Kaisha (Denki Kagaku), Japan VAM & POVAL, and Kuraray 
Co., Ltd. (Kuraray), on adverse facts available pursuant to section 
776(b) of the Act. The use of adverse facts available was warranted 
because Denki Kagaku, Japan VAM & POVAL, and Kuraray, as mandatory 
respondents, failed to supply the information requested in the 
antidumping duty questionnaires issued to them. Therefore, we found 
that Denki Kagaku, Japan VAM & POVAL, and Kuraray failed to cooperate 
by not acting to the best of their ability. As a result, pursuant to 
section 776(b) of the Act, we used an adverse inference in selecting 
from the facts available. Specifically, we assigned Denki Kagaku, Japan 
VAM & POVAL, and Kuraray the highest margin alleged in the notice of 
initiation. A complete explanation of both the selection and 
application of facts available can be found in the Preliminary 
Determination, 68 FR at 8205. We have done a new corroboration analysis 
which is discussed below.
    No interested parties have commented on the use of adverse facts 
available for Denki Kagaku, Japan VAM & POVAL, and Kuraray in this 
investigation, or to the choice of the facts available margin. 
Accordingly, for the final determination, we are continuing to use the 
highest margin alleged in the notice of initiation for Denki Kagaku, 
Japan VAM & POVAL, and Kuraray. See the Preliminary Determination, 68 
FR at 8209. Moreover, we continue to find that the data on which this 
margin is based has probative value, as discussed below in the 
``Corroboration of Information'' section of this notice.
    Regarding the fourth mandatory respondent, Nippon Gohsei, on 
February 21, 2003, this company notified the Department that it would 
no longer 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

[[Page 19512]]

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. Because Nippon 
Gohsei provided information to the Department but subsequently withdrew 
that information from the record of this case, we have applied FA to 
calculate its dumping margin, pursuant to section 776(a)(2)(C) of the 
Act.
    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 (Aug. 
30, 2002). Nippon Gohsei was notified in the Department's original and 
supplemental questionnaires that failure to submit the requested 
information by the dates specified might result in use of FA. After the 
Department issued its preliminary determination, Nippon Gohsei: 1) 
notified the Department that it would no longer participate in this 
investigation; and 2) withdrew its submissions containing business 
proprietary information from the record. Without Nippon Gohsei's data, 
we are unable to calculate a dumping margin for Nippon Gohsei. As a 
consequence, we find that Nippon Gohsei has failed to cooperate to the 
best of its ability. As Nippon Gohsei failed to cooperate to the best 
of its ability, we are applying an adverse inference pursuant to 
section 776(b) of the Act.

Corroboration of Information

    Section 776(b) of the Act authorizes the Department to use as 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 
Statement of Administrative Action (SAA) accompanying the Uruguay Round 
Agreements Act, H.R. Doc. No. 103-316 at 870 (1994) and 19 CFR 
351.308(d).
    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 the preliminary determination, we corroborated the margins in 
the petition using information submitted by Nippon Gohsei. However, 
because Nippon Gohsei has withdrawn this information from the record of 
this case, we have re-examined the issue of corroboration for the final 
determination.
    Therefore, in order to determine the probative value of the margins 
in the petition for use as AFA for purposes of this determination, we 
examined additional evidence supporting the calculations in the 
petition. 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.

Export Price

    With respect to the margins in the petition, EP was based on POI 
price quotes for the sale of PVA produced by Kuraray to customers in 
the United States. The petitioners calculated net U.S. prices for PVA 
by deducting a distributor mark-up, where applicable, and certain 
movement charges.
    For purposes of corroborating the price-to-price calculations in 
the petition, we compared these prices to U.S. customs data. Using U.S. 
customs data, we calculated the average U.S. price of imports from all 
mandatory respondents. We found that the petitioners' price quotes were 
comparable to the U.S. Customs information. Therefore, we find that the 
petitioners' information for U.S. price continues to have probative 
value.
    For further discussion, see the April 28, 2003, memorandum to the 
file from the team entitled ``Corroboration of Data Contained in the 
Petition for Assigning Facts Available Rates'' (Corroboration Memo).

Normal Value

    The petitioners based NV on home market price quotes from Kuraray 
for PVA of a comparable grade to the products exported to the United 
States. These price quotes were contemporaneous with the U.S. price 
quotes used as the basis for EP. In addition, the petitioners alleged 
that sales of PVA products 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. 
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. The petitioners calculated COP based on 
the experience of a U.S. PVA producer during the 2001 fiscal year, 
adjusted for known differences between costs incurred to manufacture 
PVA in the United States and Japan.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioners based NV for sales in Japan on constructed value (CV). The 
petitioners calculated CV using the same COM, SG&A and financial 
expense figures used to compute the COP. Consistent with section 
773(e)(2) of the Act, the petitioners included in CV an amount for 
profit. For profit, the petitioners relied upon the amount reported in 
Kuraray's 2001 financial statements. The petitioners made a 
circumstance-of-sale adjustment for credit expenses.
    The Department was provided with no useful information by the 
respondents or other interested parties and is aware of no other 
independent sources of information that would enable us to further 
corroborate the margin calculations in the petition. Specifically, we 
attempted to locate both home market prices through publicly available 
sources and U.S. producer costs upon which CV was

[[Page 19513]]

based, but we were unable to do so. See the Corroboration Memo.
    It is worth noting that the implementing regulation for section 776 
of the Act states, ``(t)he fact that corroboration may not be 
practicable in a given circumstance will not prevent the Secretary from 
applying an adverse inference as appropriate and using secondary 
information in question. `` See 19 CFR 351.308(d). Additionally, the 
SAA at 870 specifically states that where ``corroboration may not be 
practicable in a given circumstance,'' the Department need not prove 
that the facts available are the best alternative information.
    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 petition to be corroborated to 
the extent practicable for purposes of this final determination. See 
the Corroboration Memo.
    Accordingly, in selecting AFA with respect to Denki Kagaku, Japan 
VAM & POVAL, Kuraray, and Nippon Gohsei, we have applied the margin 
rate of 144.16 percent, which is the highest estimated dumping margin 
set forth in the notice of initiation. See the Initiation Notice, 67 FR 
at 61593.
    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 SAA at 873. Because the 
petition contained four estimated dumping margins, we have used these 
four estimated dumping margins, as adjusted per the notice of 
initiation, to create an ``All Others'' rate based on a simple average. 
Therefore, we have calculated the margin of 76.78 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 (Apr. 
19, 1999).

Analysis of Comments Received

    We received no comments from interested parties in response to our 
preliminary determination. We did not hold a hearing because none was 
requested.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing the Customs Service to continue to suspend all entries of PVA 
from Japan, that are entered, or withdrawn from warehouse, for 
consumption on or after February 20, 2003, the date of publication of 
our preliminary determination. The Customs Service 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                  [chyph](percent)
------------------------------------------------------------------------
Denki Kagaku Kogyo Kabushiki Kaisha...................           144.16
Japan VAM & POVAL Co., Ltd............................           144.16
Kuraray Co., Ltd......................................           144.16
The Nippon Synthetic [chyph]Chemical Industry Co.,               144.16
 [chyph]Ltd...........................................
All Others............................................            76.78
------------------------------------------------------------------------

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 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 Customs Service 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: April 14, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-9738 Filed 4-18-03; 8:45 am]