Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Purified Carboxymethylcellulose From Sweden

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) preliminarily determines that purified carboxymethylcellulose (CMC) from Sweden is being sold, or is likely to be sold, in the United States at less than fair value (LTFV), as provided in section 733 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.

EFFECTIVE DATE:

December 27, 2004.

FOR FURTHER INFORMATION CONTACT:

Helen M. Kramer at 202-482-0405 or Abdelali Elouaradia at 202-482-1374, AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230.

Case History

On June 9, 2004, the Department received a petition for the imposition of antidumping duties on purified CMC from Finland, Mexico, the Netherlands, and Sweden, filed in the proper form by Aqualon Company (Aqualon or petitioner), a division of Hercules Incorporated. See Letter from petitioner to Secretary Evans of the Department, “Petition for the Imposition of Antidumping Duties on Imports of Purified Carboxymethylcellulose (CMC) from Finland, Mexico, the Netherlands, and Sweden” (Petition). The Department initiated the antidumping investigations of purified CMC from Finland, Mexico, the Netherlands, and Sweden on June 29, 2004. See Notice of Initiation of Antidumping Investigations: Purified Carboxymethylcellulose (CMC) from Finland, Mexico, the Netherlands, and Sweden, 69 FR 40617 (July 6, 2004) (Initiation Notice). Since the initiation of this investigation, the following events have occurred.

On July 23, 2004, the International Trade Commission (the Commission) preliminarily determined that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of purified CMC from Finland, Mexico, the Netherlands, and Sweden that are alleged to be sold in the United States at LTFV. See Purified Carboxymethylcellulose from Finland, Mexico, the Netherlands, and Sweden, 69 FR 45851 (July 30, 2004).

On July 29, 2004, the Department issued Sections A, B, and C of the antidumping questionnaire to Noviant CMC Oy of Finland, Quimica Amtex S.A. of Mexico, Noviant Holdings B.V. of the Netherlands, Akzo Nobel Specialty Chemicals of the Netherlands, and Noviant AB of Sweden.

On July 30, 2004, petitioner submitted suggested model match criteria. On August 3, 2004, John Drury, Mark Flessner, Robert James, and Brian Sheba of the Department traveled to petitioner's Hopewell, Virginia production facility for a plant tour. See Memorandum to The File from Robert James, Program Manager, “Purified Carboxymethylcellulose from Finland, Mexico, the Netherlands, and Sweden; Tour of Aqualon's Hopewell Plant” (August 5, 2004).

On August 9, 2004, respondents Noviant OY (Finland), Noviant BV (the Netherlands), and Noviant AB (Sweden) submitted comments on petitioner's July 30, 2004, suggested model match criteria. On August 11, 2004, petitioner rebutted Noviant's August 9, 2004, comments. On August 18, 2004, the Department issued proposed questionnaire Appendix V model match criteria to all interested parties. On August 19, 2004, petitioner filed comments on the Department's proposed model match criteria. On August 25, 2004, Noviant OY, Noviant BV, Noviant AB, and Noviant Inc. (United States) (collectively, Noviant Group Companies) filed comments to the Department's proposed model match and petitioner's August 19, 2004, comments thereto. On August 30, 2004, the Department issued its final questionnaire Appendix V model match criteria.

On August 17, 2004, the Noviant Group Companies requested a three-week extension to file their questionnaire responses. On August 19, 2004, the Department granted the Noviant Group Companies a two-week extension. On September 3, 2004, the Noviant Group Companies requested a one-week extension to file their Section A questionnaire responses. On September 3, 2004, the Department granted the Noviant Group Companies a five-day extension. On September 9, 2004, the Noviant Group Companies submitted Section A questionnaire responses. On September 15, 2004, the Noviant Group Companies requested a one-week extension to file questionnaire Sections B and C. On September 17, 2004, the Department granted the Noviant Group Companies' request.

On September 24, 2004, the Noviant Group Companies notified the Department that Noviant OY and Noviant AB would not be submitting responses to Sections B and C of the Department's questionnaire. The Noviant Group Companies cited resource and staff limitations as the reason they could not participate in each parallel proceeding. As such, the Noviant Group Companies will only participate in the Noviant BV (the Netherlands) proceeding.

On October 25, 2004, the petitioner requested a postponement of the preliminary determination in this investigation. On November 3, 2004, the Department published a Federal Register notice postponing the deadline for the preliminary determination until December 16, 2004. See Purified Carboxymethylcellulose from Finland (A-405-803), Mexico (A-201-834), the Netherlands (A-421-811), and Sweden (A-401-808): Notice of Postponement of Preliminary Determinations of Antidumping Investigations, 69 FR 64030.

Postponement of Final Determination and Extension of Provisional Measures

Section 735(a)(2) of the Act provides that a final determination may be postponed until not later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise, or in the event of a negative preliminary determination, a request for such postponement is made by the petitioners. Section 351.210(e)(2) of the Department's regulations requires that requests by respondents for postponement of a final determination be accompanied by a request for an extension of the provisional measures from a four-month period to not more than six months.

On November 19, 2004, on behalf of Noviant OY, Noviant BV and Noviant AB, the Noviant Group Companies requested that, in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination. Noviant also included a request to extend the provisional measures from a four-month period to not more than six months. In addition, on November 19, 2004, petitioners requested that, in the event of a negative determination or de minimis against respondents' imports, that the Department postpone the deadline for its final determination until a date not later than the 135th day after the date on which the Department will have published its notice of preliminary determination.

Accordingly, because we have made an affirmative preliminary determination in this case, and the requesting parties account for a significant portion of exports of the subject merchandise, we are postponing the final determination until not later than 135 days after the date of the publication of the preliminary determination and are extending the provisional measures accordingly.

Period of Investigation

The period of investigation (POI) is April 1, 2003, through March 31, 2004. See 19 CFR 351.204(b)(1).

Scope Comments

In accordance with the preamble to the Department's regulations (see Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), we set aside a period of time for parties to raise issues regarding product coverage under the scope of the investigation and encouraged all parties to submit comments on product coverage within 20 calendar days of publication of the Initiation Notice (see 68 FR 40618). Comments were not submitted to the record of this investigation.

Scope of Investigation

For purposes of this investigation, the products covered are all purified carboxymethylcellulose (CMC), sometimes also referred to as purified sodium CMC, polyanionic cellulose, or cellulose gum, which is a white to off-white, non-toxic, odorless, biodegradable powder, comprising sodium carboxymethylcellulose that has been refined and purified to a minimum assay of 90 percent. Purified CMC does not include unpurified or crude CMC, CMC Fluidized Polymer Suspensions, and CMC that is cross-linked through heat treatment. Purified CMC is CMC that has undergone one or more purification operations which, at a minimum, reduce the remaining salt and other by-product portion of the product to less than ten percent.

The merchandise subject to this investigation is classified in the Harmonized Tariff Schedule of the United States (HTSUS) at subheading 3912.31.00. This tariff classification is provided for convenience and customs purposes; however, the written description of the scope of this investigation is dispositive.

Facts Available

For the reasons discussed below, we determine that the use of adverse facts available is appropriate for the preliminary determination with respect to Noviant AB.

A. Use of Facts Available

Section 776(a)(2) of the Act provides that, if an interested party withholds information requested by the Department, fails to provide such information by the deadline or in the form or manner requested, significantly impedes a proceeding, or provides information which cannot be verified, the Department shall use, subject to section 782(d) and (e) of the Act, facts otherwise available in reaching the applicable determination. Section 782(d) of the Act provides that if the Department determines that a response to a request for information does not comply with the Department's request, the Department shall promptly inform the responding party and provide an opportunity to remedy the deficient submission. Section 782(e) of the Act further states that the Department shall not decline to consider submitted information if all of the following requirements are met: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties.

In this case, Noviant AB has failed to provide pertinent information requested by the Department that is necessary to calculate the dumping margin for this preliminary determination. On September 24, 2004, Noviant AB submitted a letter stating that it would not respond to Sections B and C of the Department's questionnaire. Specifically, Noviant AB failed to provide the following requested information, all of which is necessary to complete the Department's calculations: (1) Department questionnaire Section B, related to home market sales and expenses and (2) Department questionnaire Section C, related to U.S. market sales and expenses. Thus, in reaching our preliminary determination, pursuant to sections 776(a)(2)(A), (B), and (C) of the Act, we have based Noviant AB's dumping margin on facts available.

B. Application of Adverse Inferences for Facts Available

In applying facts otherwise available, section 776(b) of the Act provides that the Department may use an inference adverse to the interests of a party that has failed to cooperate by not acting to the best of its ability to comply with the Department's requests for information. See, e.g., Notice of Final Determination of Sales at 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), Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Bottle-Grade Polyethylene Terephthalate (PET) Resin From Thailand, 69 FR 62850 (October 28, 2004), Notice of Final Determination of Sales at Less Than Fair Value: Polyethylene Retail Carrier Bags From Thailand, 69 FR 34122 (June 18, 2004), Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Circular Welded Carbon-Quality Line Pipe From Mexico, 69 FR 59892 (October 6, 2004). Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Statement of Administrative Action Accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 103-316, at 870 (1994) (SAA). Furthermore, “affirmative evidence of bad faith on the part of a respondent is not required before the Department may make an adverse inference.” See Antidumping Duties; Countervailing Duties, 62 FR 27355 (May 19, 1997). Although the Department provided respondents with notice of the consequences of failure to respond adequately to the questionnaires in this case, Noviant AB has failed to respond to sections B and C of the questionnaire. This constitutes a failure on the part of Noviant AB to cooperate to the best of its ability to comply with a request for information by the Department within the meaning of section 776 of the Act. Therefore, the Department has preliminarily determined that in selecting from among the facts otherwise available, an adverse inference is warranted. See, e.g., Notice of Final Determination of Sales at Less than Fair Value: Circular Seamless Stainless Steel Hollow Products from Japan, 65 FR 42985, 42986 (July 12, 2000) (the Department applied total adverse facts available (AFA) where respondent failed to respond to the antidumping questionnaires).

C. Selection and Corroboration of Information Used as Facts Available

Where the Department applies AFA because a respondent failed to cooperate by not acting to the best of its ability to comply with a request for information, section 776(b) of the Act authorizes the Department to rely on information derived from the petition, a final determination, a previous administrative review, or other information placed on the record. See also 19 CFR 351.308(c); SAA at 829-831. In this case, because we are unable to calculate margins based on Noviant AB's own data and because an adverse inference is warranted, we have assigned to Noviant AB the margin alleged for Sweden in the petition, as recalculated in the initiation and described in detail below. See Initiation Notice.

When using facts otherwise available, section 776(c) of the Act provides that, when the Department relies on secondary information (such as the petition), it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal.

The SAA clarifies that “corroborate” means the Department will satisfy itself that the secondary information to be used has probative value. See SAA at 870. The Department's regulations state 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. See 19 CFR 351.308(d) and SAA at 870. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.

For the purposes of this investigation, to the extent appropriate information was available, we reviewed the adequacy and accuracy of the information in the petition during our pre-initiation analysis. See Import Administration Investigation AD Initiation Checklist, at 6 (June 29, 2004) (Initiation Checklist).

For this preliminary determination, we examined evidence supporting the calculations in the petition to determine the probative value of the margins in the petition for use as AFA. In accordance with section 776(c) of the Act, to the extent practicable, we examined the key elements of the export price (EP) and NV calculations on which the margins in the petition were based. We find that the estimated margin set forth in the initiation has probative value. See Memorandum to the File from Helen M. Kramer, International Trade Compliance Analyst, Re: Preliminary Determination in the Antidumping Investigation of Purified Carboxymethylcellulose (CMC) from Sweden: Total Facts Available Corroboration Memorandum, dated December 16, 2004 (Corroboration Memo). Therefore, in selecting AFA with respect to Noviant AB, we have applied the margin rate of 25.29 percent, the highest estimated dumping margin set forth in the notice of initiation, which is the margin alleged in the petition adjusted by the Department for currency conversion. See Initiation Notice, 68 FR 57667.

All Others Rate

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 margins, 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 the Department may weight-average margins other than the zero, de minimis, or facts available margins to establish the “all others” rate. When the data do not permit weight-averaging such other margins, the Statement of Administrative Action (SAA) provides that the Department may use any other reasonable methods. See the SAA accompanying the URAA, H.R. Rep. No. 103-316 at 873 (1994). Because the petition contained only one estimated dumping margin, there are no additional estimated margins available with which to create the “all others” rate. Therefore, we are using the initiation margin of 25.29 percent as the “all others” rate. See Notice of Final Determination of Sales at Less Than Fair Value: Ferrovanadium from the Republic of South Africa, 67 FR 71136 (November 29, 2002).

Suspension of Liquidation

In accordance with section 733(d) of the Act, we are directing U.S. Customs and Border Protection (CBP) to suspend liquidation of all entries of purified CMC from Sweden that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the U.S. price, as indicated in the chart below. These suspension-of-liquidation instructions will remain in effect until further notice. The weighted-average dumping margins are as follows:

International Trade Commission Notification

In accordance with section 733(f) of the Act, we have notified the Commission of our preliminary determination of sales at LTFV. If our final antidumping determination is affirmative, the Commission will determine whether the imports covered by that determination are materially injuring, or threatening material injury to, the U.S. industry. The deadline for that determination would be the later of 120 days after the date of this preliminary determination or 45 days after the date of our final determination.

Public Comment

Case briefs for this investigation must be submitted no later than 30 days after the publication of this notice. Rebuttal briefs must be filed within five days after the deadline for submission of case briefs. A list of authorities used, a table of contents, and an executive summary of issues should accompany any briefs submitted to the Department. Executive summaries should be limited to five pages total, including footnotes. Further, the Department respectfully requests that all parties submitting written comments also provide the Department with an additional copy of the public version of any such comments on diskette.

Section 774 of the Act provides that the Department will hold a hearing to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs, provided that such a hearing is requested by an interested party. If a request for a hearing is made in an investigation, the hearing normally will be held two days after the deadline for submission of the rebuttal briefs, at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request within 30 days of the publication of this notice. 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. As noted above, the Department will make its final determination within 135 days after the date of the publication of the preliminary determination.

This determination is issued and published pursuant to sections 733(f) and 777(i)(1) of the Act.