68 FR 71068, December 22, 2003

DEPARTMENT OF COMMERCE

International Trade Administration

[A-427-825]

Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Wax and Wax/Resin Thermal Transfer Ribbons From France

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

EFFECTIVE DATE: December 22, 2003.

FOR FURTHER INFORMATION CONTACT: Sebastian Wright at (202) 482-5254, or 
Mark Hoadley at (202) 482-3148; Office of AD/CVD Enforcement 7, Group 
III, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION: 

Preliminary Determination

    We preliminarily determine that wax and wax/resin thermal transfer 
ribbons (TTR) from France are being sold, or are 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). Because 
the sole respondent involved in this investigation, Armor, S.A. 
(Armor), withdrew its participation in the investigation, the 
preliminary margin assigned to Armor is based on adverse facts 
available (AFA). The estimated margin of sales at LTFV is shown in the 
Suspension of Liquidation section of this notice.
    Interested parties are invited to comment on this preliminary 
determination. Unless extended, we will make our final determination 
not later than 75 days after the date of this preliminary 
determination.

[[Page 71069]]

Case History

    This investigation was initiated on June 19, 2003.\1\ See Notice of 
Initiation of Antidumping Duty Investigation: Thermal Transfer Ribbons 
From France, Japan and the Republic of Korea, 68 FR 38305 (June 27, 
2003) (Initiation Notice). Since the initiation of the investigation, 
the following events have occurred.
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    \1\ The petitioner in this investigation is International 
Imaging Materials, Inc. (IIMAK).
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    On July 14, 2003, the United States International Trade Commission 
(ITC) preliminarily determined that ``there is a reasonable indication 
that an industry in the United States is materially injured by reason 
of imports from France, Japan, and Korea of certain wax and wax/resin 
thermal transfer ribbons.'' See Certain Wax and Wax/Resin Thermal 
Transfer Ribbons From France, Japan, and Korea, 68 FR 42759 (July 18, 
2003).
    On July 14, 2003, counsel for Armor met with the Department to 
discuss product characteristics. On July 17, 2003, Armor submitted 
comments regarding product characteristics and the Department's 
upcoming tour of petitioner's TTR production facilities in New York. On 
July 21, 2003, the Department toured these facilities and met with 
petitioner to discuss product characteristics.
    On August 4, 2003, August 6, 2003, and August 18, 2003, petitioner 
submitted comments regarding the model match criteria. On August 5, 
2003, and August 6, 2003, Armor submitted comments regarding the model 
match criteria. Additional model match comments were submitted by other 
interested parties on this record, as follows: Illinois Tool Works Inc. 
and ITW Specialty Films Co., Ltd. (collectively, ITW), on July 21, 
2003, and August 4, 2003; Dai Nippon Printing Company, Ltd., on August 
5, 2003; and Brother International Corporation, on August 6, 2003. On 
August 8, 2003, the Department issued its model match criteria via 
sections B and C of the questionnaire. On August 28, 2003, the 
Department clarified its model match criteria. On September 4, 2003, 
petitioner submitted additional comments regarding model match 
criteria. On October 9, 2003, the Department met with petitioner's 
counsel to discuss its model match comments.
    On July 28 and July 30, 2003, petitioner submitted comments 
regarding the scope of the investigation. On August 7, 2003, General 
Company Limited, an interested party, submitted comments regarding the 
scope of the investigation. On September 2, 2003, petitioner submitted 
a ``test'' description to the Department, for the purpose of 
determining whether a product should be classified as a wax, resin 
enhanced wax, or wax/resin ribbon. On September 9, 2003, Armor 
submitted comments on petitioner's September 2 test proposal. On 
September 11, 2003, the Department issued a clarification to the scope 
of this investigation. See Memorandum from Edward C. Yang, Director, 
Office of AD/CVD Enforcement 9, to Joseph A. Spetrini, Deputy Assistant 
Secretary; Antidumping Investigation on Certain Wax and Wax/Resin 
Thermal Transfer Ribbon from France, Japan and Korea: Scope 
Clarification. The Department removed the word ``pure'' from the 
section discussing the exclusion of resin TTR in the scope language.
    On November 4, 2003, petitioner submitted a letter to the 
Department correcting a typographical error in the color specification 
of the scope, as written in the petition and initiation notice. 
Petitioner stated that ``-20a*<35'' should read, ``-
20<a*<35.''
    On August 1, 2003, the Department issued section A of its 
questionnaire to Armor, the only known French producer/exporter of TTR 
to the United States.\2\ As mentioned above, on August 8, 2003, the 
Department issued sections B through E of its questionnaire, including 
model match criteria. On August 20, 2003, the Department, pursuant to 
Armor's request, extended the deadlines for responding to all sections 
of the questionnaire, to September 5 for section A, and to September 24 
for sections B through E. On September 5, 2003, the Department received 
a response to section A of its questionnaire. On September 22, 2003, 
the Department again extended the deadlines for sections B through E to 
September 29, again at Armor's request. On September 29, 2003, the 
Department received a response to sections B and C. On September 26, 
2003, pursuant to a third extension request from Armor, the Department 
again extended the deadline for sections D and E until October 2, 2003. 
On October 14, 2003, petitioner submitted comments on Armor's section B 
and C responses.
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    \2\ See VII-1 of the preliminary report of the ITC, publication 
3613, July 2003, for proprietary information concerning Armor's 
share of French production and exports.
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    On September 4, 2003, the Department met with Armor's counsel to 
discuss various issues regarding its forthcoming cost reporting. On 
September 5, 2003, Armor submitted documents to the Department used in 
the September 4 meeting for illustrative purposes. On September 10, 
2003, petitioner submitted comments on these cost reporting issues. On 
September 12, 2003, the Department issued its positions on Armor's cost 
reporting issues. See Letter to Armor, S.A. from Sally Gannon, Program 
Manager, Office of AD/CVD Enforcement 7; Regarding Antidumping Duty 
Investigation of Certain Wax and Wax/Resin Thermal Transfer Ribbons 
from France; Clarification of Cost Reporting. The Department received a 
response to sections D and E on October 2, 2003. On October 20, 2003, 
petitioner submitted comments on the section D and E responses.
    On October 22, 2003, the Department issued a supplemental 
questionnaire to Armor pertaining to its section A through C responses. 
In the questionnaire, we also asked Armor to consider rebracketing 
significant portions of all sections of its questionnaire response, 
reducing the amount of information it claimed to be business 
proprietary. On October 27, 2003, pursuant to Armor's request, we 
granted deadline extensions to Armor, to October 28 for rebracketing, 
and to November 7 for answering supplemental questions. On October 29 
and 30, 2003, the Department issued supplemental questionnaires 
pertaining to Armor's section D and E responses, respectively.
    On October 3, 2003, petitioner made a timely request for a forty-
day postponement of the preliminary determination pursuant to section 
733(c)(1)(A) of the Act. On October 21, 2003, we postponed the 
preliminary determination until no later than December 16, 2003. See 
Wax and Wax/Resin Thermal Transfer Ribbons from France, Japan, and the 
Republic of Korea; Notice of Postponement of Preliminary Determinations 
in Antidumping Duty Investigations, 68 FR 60085 (October 21, 2003).
    On October 30, 2003, Armor withdrew from the investigation, 
requesting that all business proprietary copies of its questionnaire 
responses be returned or destroyed. It cited ``the burdensome nature 
and extreme expense of participating'' in the investigation as its 
reason for withdrawing. On December 16, 2003, the Department notified 
Armor that it had destroyed all business proprietary copies of its 
questionnaire responses. See Letter to Armor, S.A. from Sally Gannon, 
Program Manager, Office of AD/CVD Enforcement 7.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual

[[Page 71070]]

dumping margins for each known exporter and producer of the subject 
merchandise. Where it is not practicable to examine all known 
producers/exporters of subject merchandise, section 777A(c)(2) of the 
Act permits the Department to investigate either: (1) A sample of 
exporters, producers, or types of products that is statistically valid, 
based on the information available at the time of selection; or (2) 
exporters and producers accounting for the largest volume of the 
subject merchandise that can reasonably be examined.
    During the period of investigation (POI), only Armor was identified 
as a producer/exporter of subject merchandise from France. Therefore, 
we selected Armor as the sole respondent in the investigation of TTR 
from France.

Period of Investigation

    The POI is April 1, 2002, through March 31, 2003. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of filing of the petition (i.e., June 2003) involving imports from a 
market economy, and is in accordance with our regulations. See 19 CFR 
351.204(b)(1).

Scope of Investigation

    This investigation covers wax and wax/resin thermal transfer 
ribbons (TTR), in slit or unslit (``jumbo'') form originating from 
France with a total wax (natural or synthetic) content of all the image 
side layers, that transfer in whole or in part, of equal to or greater 
than 20 percent by weight and a wax content of the colorant layer of 
equal to or greater than 10 percent by weight, and a black color as 
defined by industry standards by the CIELAB (International Commission 
on Illumination) color specification such that L*<35, -20<a*<35, and -
40<b*<31, and black and near-black TTR. TTR is typically used in 
printers generating alphanumeric and machine-readable characters, such 
as bar codes and facsimile machines.
    The petition does not cover resin TTR, and finished thermal 
transfer ribbons with a width greater than 212 millimeters (mm), but 
not greater than 220 mm (or 8.35 to 8.66 inches) and a length of 230 
meters (m) or less (i.e., slit fax TTR, including cassetted TTR), and 
ribbons with a magnetic content of greater than or equal to 45 percent, 
by weight, in the colorant layer.The merchandise subject to this 
investigation may be classified in the Harmonized Tariff Schedule of 
the United States (HTSUS) at heading 3702 and subheadings 
3921.90.40.25, 9612.10.90.30, 3204.90, 3506.99, 3919.90, 3920.62, 
3920.99 and 3926.90. The tariff classifications are provided for 
convenience and Customs and Border Protection (CBP) purposes; however, 
the written description of the scope of the investigation is 
dispositive.
    On October 28, 2003 and November 21, 2003, petitioner submitted 
documents it claims suggest the respondents in the TTR investigations 
are attempting to circumvent a potential TTR antidumping order by 
slitting subject merchandise jumbo rolls in a third country. Petitioner 
contends that the country of origin of slit TTR should be determined by 
the country of origin of the jumbo TTR roll from which it was slit, 
regardless of where the slitting occurred. Petitioner argues that 
slitting subject merchandise jumbo TTR rolls does not involve a 
substantial transformation, and therefore, does not change the country 
of origin of slit TTR rolls.
    On November 26, 2003, Armor submitted comments regarding 
petitioner's allegation. Armor argues that the further manufacturing 
process does in fact substantially transform the jumbo TTR rolls, and, 
thus, does change the country of origin of the merchandise. On December 
5, 2003, petitioner submitted a response to Armor's November 26 
submission. On December 12, 2003, Armor submitted additional comments 
regarding this issue.
    We have reviewed petitioner's and Armor's comments. However, since 
a determination of whether or not slitting jumbo TTR rolls constitutes 
substantial transformation and changes the country of origin of the 
merchandise may affect the scope of this investigation and future 
proceedings, it is necessary to provide interested parties the 
opportunity to comment on this issue. See Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997). 
Therefore, the Department encourages all interested parties to submit 
such comments. Comments are due within 14 days of the publication of 
this notice. Rebuttal comments must be filed within five days after the 
deadline for the submission of the initial country of origin comments. 
We remind parties that case and rebuttal briefs, whether commenting on 
this country of origin issue, or any other issue, must be limited to 
the facts already on the record in accordance with section 351.301 of 
the Department's regulations.

Facts Available

    For the reasons discussed below, we determine that the use of AFA 
is appropriate for the preliminary determination with respect to Armor.

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 facts otherwise available 
in reaching the applicable determination. As stated above, Armor has 
informed the Department that it will no longer participate in this 
investigation and has requested that all of its responses be returned 
or destroyed. Therefore, the Department has no choice but to rely on 
the facts otherwise available in order to determine a margin for this 
party. Thus, in reaching our preliminary determination, pursuant to 
section 776(a)(2) of the Act, we have based Armor's margin rate on the 
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). 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, ``{a{time} ffirmative 
evidence of bad faith on the part of a respondent is not required 
before the Department may make an adverse inference.'' See Antidumping 
Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 1997). 
In this case, Armor has failed to cooperate to the best of its ability 
by withdrawing its responses to the Department's antidumping 
questionnaires and declining any further participation in this 
investigation. We note that the Department granted all four of Armor's 
extension requests (as discussed above), albeit not necessarily always 
for the full extension requested by Armor. Therefore, the Department 
has preliminarily determined that in selecting from among the facts

[[Page 71071]]

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 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 for the 
respondent in this investigation, we are assigning to Armor the highest 
margin from the proceeding, which is the highest margin alleged for 
France in the petition, 60.60 percent. See Initiation Notice, 68 FR at 
38307.
    When using facts otherwise available, section 776(c) of the Act 
provides that, when the Department relies on secondary information 
(such as the petition) in using facts otherwise available, it must, to 
the extent practicable, corroborate that information from independent 
sources that are reasonably at its disposal. The SAA clarifies that 
``corroborate'' means that 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); see also SAA at 870.
    To assess the reliability of the petition margin 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 Antidumping 
Investigations Initiation Checklist; Wax and Wax/Resin Thermal Transfer 
Ribbon From France, Japan, and South Korea, pages 5 through 7 (June 25, 
2003) (Initiation Checklist). In accordance with section 776(c) of the 
Act, to the extent practicable, we examined the key elements of the 
constructed export price (CEP) and normal value (NV) calculations on 
which the highest margin in the petition was based.\3\
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    \3\ The petition contains three margins. Two are comparisons of 
CEP to NV based on home market sales, and the third is based on a 
comparison of CEP to constructed value. The highest margin is one of 
the two that bases NV on home market sales.
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1. Corroboration of Constructed Export Price
    To calculate constructed export price (CEP) petitioner obtained 
pricing information for sales by Armor of certain wax and wax/resin 
products sold in the United States, comparable to products sold in the 
home market. Petitioner made certain adjustments to this selling price 
for specific expenses that would be incurred by foreign producers of 
the subject merchandise for sales made in the United States. Because 
petitioner was unable to obtain actual data for selling expenses 
incurred by respondents in the United States, petitioner obtained price 
quotes as a basis for its estimates of certain expenses, and also based 
its estimates of such expenses on actual figures incurred in the course 
of its own selling activities. Petitioner claimed this approach is a 
reasonable and appropriate way to calculate CEP because the selling 
process for TTR is uniform within the United States, and the selling 
activities performed by respondent's U.S. affiliates for their U.S. 
customers are largely the same as those performed by petitioner for its 
U.S. customers. Where known differences between petitioner's and 
respondent's operations exist, petitioner adjusted selling expenses 
accordingly to account for such differences.
    With respect to selling expenses incurred in France, petitioner 
indicated there is no basis to believe that such expenses would differ 
for TTR destined for the United States versus merchandise sold in the 
home market. Therefore, according to petitioner, it is reasonable to 
consider such expenses to be equal for sales to the United States and 
in the home market.
    As detailed in the Initiation Checklist, the petition contained 
documentation supporting the figures used in this CEP calculation, 
which was analyzed by the Department and revised by petitioner through 
answers to supplemental questions issued by the Department.
2. Corroboration of Normal Value
    With respect to normal value (NV), petitioner relied on foreign 
market research to obtain price estimates for TTR sold in the home 
market. Petitioner obtained foreign market research relating to two 
grades of TTR sold in the French market. This sales information is 
contemporaneous with the sales information used as the basis for CEP 
and represents sales of products that are either identical or similar 
to those products for which petitioner obtained U.S. sales information.
    As detailed in the Initiation Checklist, the petition contained 
documentation supporting the figures used in this NV calculation, which 
was analyzed by the Department and revised by petitioner through 
answers to supplemental questions issued by the Department.

All Others Rate

    Section 735(c)(5)(B) of the Act provides that, where the estimated 
weighted-averaged 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 facts available margins to establish that ``All 
Others'' rate. Where the data do not permit weight-averaging such 
rates, the SAA provides that we use other reasonable methods. See SAA 
at 873. The petition contained only information relating to U.S. sales 
by Armor, compared against home market sales prices and cost. Since 
Armor is the only known French producer/exporter of subject 
merchandise, it is reasonable to use the sales by Armor used in the 
petition. Accordingly, we have applied a margin of 44.93 percent, a 
simple average of the two margins based on price and the one margin 
based on constructed value contained in the petition, as the ``All 
Others'' rate.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
CBP to suspend liquidation of all entries of TTR from France that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. We are also 
instructing CBP to require a cash deposit or the posting of a bond 
equal to the dumping margins as indicated in the chart below. These 
instructions suspending liquidation will remain in effect until further 
notice.
    The dumping margins are as follows:

------------------------------------------------------------------------
                                                              Margin
                    Producer/exporter                      (percentage)
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Armor, S.A..............................................           60.60

[[Page 71072]]


All Others..............................................           44.93
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International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of the Department's preliminary affirmative determination. If the 
final determination in this proceeding is affirmative, the ITC will 
determine before the later of 120 days after the date of this 
preliminary determination or 45 days after the final determination 
whether imports of TTR from France are materially injuring, or 
threatening material injury to, the U.S. industry.

Public Comment

    Interested parties are invited to comment on the preliminary 
determination. Interested parties may submit case briefs within 50 days 
of the date of publication of this notice. See 19 CFR 351.309(c)(1)(i). 
Rebuttal briefs, the content of which is limited to the issues raised 
in the case briefs, must be filed within five days after the deadline 
for the submission of case briefs. See 19 CFR 351.309(d). 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, we request that parties submitting briefs and 
rebuttal briefs provide the Department with a copy of the public 
version of such briefs on diskette.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. If a request 
for a hearing is made, we will tentatively hold the hearing two days 
after the deadline for submission of rebuttal briefs at the U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230, at a time and in a room to be determined. Parties 
should confirm by telephone the date, time, and location of the hearing 
48 hours before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
in a hearing if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, 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; and (3) a list of the 
issues to be discussed. At the hearing, oral presentations will be 
limited to issues raised in the briefs. See 19 CFR 351.310(c). Unless 
extended, the Department will make its final determination no later 
than 75 days after the date of this preliminary determination. However, 
as this date falls on a weekend, the due date will fall on the next 
business day, March 1, 2004.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: December 16, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-31478 Filed 12-19-03; 8:45 am]