Pressure Sensitive Plastic Tape from Italy: Preliminary Results of Antidumping Duty Changed Circumstances Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

February 26, 2010.

SUMMARY:

The Department of Commerce (the Department) is conducting a changed circumstances review of the antidumping duty finding on pressure sensitive plastic tape from Italy pursuant to section 751(b) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.216 and 351.221(c)(3). We preliminarily determine that Evotape S.p.A was the successor-in-interest to Tyco Adhesives Italia S.p.A. (Tyco), and that Evotape Packaging S.r.l. (Evotape Packaging) and Evotape Masking S.r.l. (Evotape Masking) are both successors-in-interest to Evotape S.p.A for purposes of determining antidumping liability. Interested parties are invited to comment on these preliminary results.

FOR FURTHER INFORMATION CONTACT:

Terre Keaton Stefanova or Rebecca Trainor, 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) 482-1280 and (202) 482-4007, respectively.

SUPPLEMENTARY INFORMATION:

Background

On July 27, 2009, Evotape Packaging requested that the Department conduct an expedited changed circumstances review to determine that it is the successor-in-interest to Tyco for purposes of determining antidumping liability.¹ Evotape Packaging provided additional information at the Department's request on August 28, 2009. On September 10, 2009, the Department initiated a changed circumstances review but did not expedite the review, as requested by Evotape Packaging, because questions remained as to the factual claims forming the basis of the change circumstances review request. See Pressure Sensitive Plastic Tape from Italy: Notice of Initiation of Antidumping Duty Changed Circumstances Review, 74 FR 47555 (September 16, 2009). On October 26, 2009, the Department placed on the record a memorandum regarding corrections to the scope language contained in the initiation notice. (See October 26, 2009, Memorandum to The File regarding “Corrections to Scope Language”). On November 3, 2009, the Department requested additional information from Evotape Packaging, and on November 24, 2009, Evotape Packaging submitted its response to the Department's information request.

Scope of the Finding

The products covered by the finding are shipments of pressure sensitive plastic tape measuring over one and three-eighths inches in width and not exceeding four mils in thickness, currently classifiable under subheadings 3919.10.20 and 3919.90.50 of the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS subheadings are provided for convenience and for customs purposes. The written description remains dispositive.

Successor-in-Interest Determination

In making a successor-in-interest determination, the Department typically examines several factors including, but not limited to: (1) management; (2) production facilities; (3) supplier relationships; and (4) customer base. See, e.g., Notice of Final Results of Changed Circumstances Review: Polychloroprene Rubber from Japan, 69 FR 67890 (November 22, 2004) (Polychloroprene Rubber from Japan) citing; B rass Sheet and Strip from Canada; Final Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 1992) (Canadian Brass); and, Certain Circular Welded Carbon Steel Pipes and Tubes from Taiwan: Initiation of Antidumping Duty Changed Circumstances Review, 70 FR 17063 (April 4, 2005). While no single factor or combination of these factors will necessarily be dispositive, the Department will generally consider the new company to be the successor to the previous company if its resulting operation is not materially dissimilar to that of its predecessor. See, e.g., Polychloroprene Rubber from Japan; Industrial Phosphoric Acid from Israel: Final Results of Changed Circumstances Review, 59 FR 6944 (February 14, 1994); Canadian Brass; Certain Frozen Warmwater Shrimp From Thailand: Preliminary Results of Antidumping Duty Changed Circumstances Review and Notice of Intent to Revoke in Part 74 FR 39042 (August 5, 2009); (unchanged in final results Certain Frozen Warmwater Shrimp From Thailand: Final Results of Antidumping Duty Changed Circumstances Review and Notice of Revocation in Part 74 FR 52452 (October 13, 2009)). Thus, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the former company, the Department will generally accord the new company the same antidumping duty treatment as its predecessor.

Preliminary Results

In its request for a changed circumstances review, Evotape Packaging explained that, in May 2005, its parent company, Evotape S.p.A, acquired Tyco's business and assets, which included two production units (packaging and masking tape) and related sales offices. Subsequently, in December 2007, Evotape S.p.A went through a restructuring that created two wholly-owned subsidiaries (i.e., Evotape Packaging and Evotape Masking S.r.l. (Evotape Masking)) using the assets and business of the two production units. In response to the Department's questions concerning the corporate restructuring, Evotape Packaging stated that Evotape Masking produces two in-scope products, but does not ship or sell these products to the United States, and has no future plans to do so (see August 28, 2009, and November 24, 2009, responses).²

Based on the facts on the record surrounding the acquisition and subsequent corporate restructuring described above, and in accordance with 19 CFR 351.221(c)(3)(i), we have made two preliminary successor-in-interest determinations.

1. Evotape S.p.A Was the Successor-In-Interest to Tyco

Our first preliminary successor-in-interest determination is that Evotape S.p.A was the successor-in-interest to Tyco. Evotape Packaging submitted documentation to demonstrate that Evotape S.p.A acquired Tyco in May 2005 (see Evotape Packaging's July 27, 2009, submission at Exhibit 1). Evotape Packaging also provided information pertaining to changes in management, production, suppliers, and customers that occurred after Evotape S.p.A. acquired Tyco. The information indicated that, except for three changes in management and some minor changes in customers, the company's business operations had not been substantially affected by the change in ownership (see November 24, 2009, response). Thus, we preliminary find that in May 2005, Evotape S.p.A. became the successor-in-interest to Tyco, because the changes in management and customers that took place after Tyco's acquisition by Evotape S.p.A. did not alter the production or business operations of the company.

2. Evotape Packaging and Evotape Masking are Successors-In-Interest to Evotape S.p.A

For our second preliminary successor-in-interest determination, we find that both Evotape Packaging and Evotape Masking are successors-in-interest to Evotape S.p.A. Evotape Packaging submitted copies of the documents that established Evotape Packaging and Evotape Masking as separate wholly-owned subsidiaries of Evotape S.p.A in December 2007 (see November 24, 2009, response at Exhibit 1). Evotape Packaging also provided information indicating that, while some minor changes in business operations occurred after the companies' transition from production units to formal companies, they continued to operate essentially as they did as production units under Evotape S.p.A. Specifically, the restructuring resulted in the reallocation of duties among managers, and a slight reduction in the number of employees at both companies. The companies also experienced slight changes to their supplier and customer lists, but maintained their top supplier and customer relationships. Evotape Packaging added two products to its product mix, but the two companies continued to use the same separate production facilities that they used as production units under Evotape S.p.A. (see November 24, 2009, response). Moreover, the ownership of the two entities remains essentially the same as both companies are wholly-owned subsidiaries of Evotape S.p.A. Because both companies continue to operate essentially as they did as production units of Evotape S.p.A., after the December 2007, restructuring, irrespective of the minor changes described above, we preliminary find that in December 2007, both Evotape Packaging and Evotape Masking became the successors-in-interest to Evotape S.p.A. for purposes of determining antidumping liability.

In conclusion, as a result of both of these determinations, we preliminary find that Evotape Packaging and Evotape Masking should receive Tyco's antidumping duty cash deposit rate with respect to the subject merchandise (i.e., 0.00 percent). If the above preliminary results are affirmed in the Department's final results, the cash deposit rate resulting from this changed circumstances review will apply to all entries of the subject merchandise from Evotape Packaging and Evotape Masking entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this changed circumstances review. See Granular Polytetrafluoroethylene Resin from Italy Final Results of Antidumping Duty Changed Circumstances Review, 68 FR 25327 (May 12, 2003).

Public Comment

Interested parties are invited to comment on these preliminary results. Written comments may be submitted no later than 14 days after the date of publication of these preliminary results. Rebuttals to written comments, limited to issues raised in such comments, may be filed no later than 21 days after the date of publication of this notice. All written comments shall be submitted in accordance with 19 CFR 351.303. Any interested party may request a hearing within 14 days of publication of this notice. Any hearing, if requested, will be held no later than 30 days after the date of publication of this notice, or the first workday thereafter. Persons interested in attending the hearing, if one is requested, should contact the Department for the date and time of hearing. In accordance with 19 CFR 351.216(e), the Department will issue the final results of this antidumping duty changed circumstances review no later than 270 days after the date on which this review was initiated, or within 45 days if all parties agree to our preliminary results.

During the course of this antidumping duty changed circumstances review, cash deposit requirements for the subject merchandise produced and exported by Evotape Packaging and Evotape Masking will continue to be the all-others rate established in the investigation. See Pressure Sensitive Plastic Tape From Italy; Determination of Injury or Likelihood Thereof, 42 FR 44853 (September 7, 1977). The cash deposit rate requirement for Evotape Packaging and Evotape Masking will be altered, if warranted, pursuant only to the final results of this review.

We are issuing and publishing these preliminary results and notice in accordance with sections 751(b)(1) and 777(i)(1) and (2) of the Act and 19 CFR 351.216 and 351.221(c)(3).