[Federal Register Volume 61, Number 192 (Wednesday, October 2, 1996)]
[Notices]
[Pages 51411-51421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25242]
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DEPARTMENT OF COMMERCE
[A-412-817]
Notice of Final Determination of Sales at Less Than Fair Value:
Foam Extruded PVC and Polystyrene Framing Stock From the United Kingdom
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: October 2, 1996.
FOR FURTHER INFORMATION CONTACT: Ellen Grebasch, Dorothy Tomaszewski,
or Erik Warga, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone:
[[Page 51412]]
(202) 482-3773, (202) 482-0631, or (202) 482-0922, respectively.
THE APPLICABLE STATUTE: Unless otherwise indicated, all citations to
the Tariff Act of 1930, as amended (``the Act'') are references to the
provisions effective January 1, 1995, the effective date of the
amendments made to the Act by the Uruguay Round Agreements Act
(``URAA'').
FINAL DETERMINATION: We determine that foam extruded PVC and
polystyrene framing stock (``framing stock'') from the United Kingdom
is being, or is likely to be, sold in the United States at less than
fair value (``LTFV''), as provided in section 735 of the Act.
Case History
Since the preliminary determination in this investigation (Notice
of Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Foam Extruded PVC and Polystyrene
Framing Stock From the United Kingdom 61 FR 22021, (May 13, 1996), the
following events have occurred:
On May 16, 1996, respondent, Robobond Ltd. (``Robobond''), alleged
the Department made two ministerial errors in its preliminary
determination. The Department found that there were errors made in the
preliminary determination; however, these errors did not result in a
combined change of at least five absolute percentage points in, but no
less than 25 percent of, the weighted-average dumping margin calculated
in the preliminary determination. Accordingly, no revision to the
preliminary determination was made. (See Memorandum from the Framing
Stock Team to Barbara R. Stafford, June 6, 1996.)
On May 16, 1996, the Department issued a supplemental cost
questionnaire to Robobond. Robobond submitted its response on May 31,
1996, and June 6, 1996.
On May 24, 1996, respondent, Magnolia Group Plc. (``Magnolia''),
withdrew from the investigation.
In June 1996, we verified the questionnaire responses of Ecoframe
Plc. (``Ecoframe'') and Robobond. Petitioner and respondents submitted
case briefs on August 12, 1996, and rebuttal briefs on August 19, 1996.
On August 22, 1996, petitioners protested that information in
Ecoframe's rebuttal constituted new information. On August 23, 1996,
the Department rejected certain new information contained in Ecoframe's
rebuttal brief. The Department held a public hearing for this
investigation on August 23, 1996.
On September 3, 1996, the Department requested certain information
from Ecoframe regarding its quantity adjustment claim. Ecoframe
responded on September 5, 1996. Petitioners submitted comments on
September 9, 1996.
Scope of Investigation
This investigation covers all extruded PVC and polystyrene framing
stock regardless of color, finish, width or length. Finished frames
assembled from foam extruded PVC and polystyrene framing stock are
excluded. The merchandise under investigation is currently classifiable
under subheadings 3924.90.20.00; 3926.90.90.90; 3926.90.95.90; and
3926.90.98.90 of the Harmonized Tariff Schedules of the United States
(``HTS''). Although the HTS subheadings are provided for convenience
and customs purposes, our written description of the scope of this
investigation is dispositive.
Period of Investigation
The POI is September 1, 1994, through August 31, 1995.
Facts Available
Section 776(a)(2) of the Act provides that if an interested party
withholds information that has been requested by the Department, fails
to provide such information by the deadlines for the submission of
information or in the form and manner requested, significantly impedes
a proceeding under the antidumping statute, or provides such
information but the information cannot be verified, the Department
shall use facts otherwise available in reaching the applicable
determination. Because respondent Magnolia withdrew from the proceeding
following the preliminary determination, Magnolia's questionnaire
response information on the record is unverifiable. Therefore, we must
use facts otherwise available with respect to Magnolia.
Section 776(b) provides that adverse inferences may be used against
a party that has failed to cooperate by not acting to the best of its
ability to comply with requests for information. (See also Statement of
Administrative Action, H.R. Doc. No. 316, 103d Cong., 2d Sess. 870
(1994) (``SAA'').) Magnolia's failure to participate following the
preliminary determination and to agree to verification of its
information on the record demonstrate that Magnolia has failed to
cooperate to the best of its ability in this investigation. In past
cases, when a company refuses to provide the information requested in
the form required, or otherwise significantly impedes the Department's
investigation, it is appropriate for the Department to assign to that
company the higher of (a) the highest margin alleged in the petition,
or (b) the highest calculated rate of any respondent in the
investigation. (See Final Determination of Sales at Less Than Fair
Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-
Rolled Carbon Steel Flat Products, and Certain Cut-to-Length Carbon
Steel Plate From Belgium 58 FR 37083, (July 9, 1993).) Therefore, the
Department has determined that, in selecting among the facts otherwise
available with respect to Magnolia, an adverse inference is warranted.
As facts otherwise available, we are making an adverse inference and
assigning to Magnolia the margin calculated based on its submitted
information at the preliminary determination 1 of 84.82 percent.
This rate is the higher of the highest margin alleged in the petition,
or the highest calculated rate of any respondent in the investigation.
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\1\ Following the preliminary determination minor errors were
found in the margin program. These errors have been corrected for
the final determination.
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Fair Value Comparisons
To determine whether sales of the subject merchandise by
respondents to the United States were made at less than fair value, we
compared the export price (``EP'') to the normal value (``NV''), as
described in the ``Export Price'' and ``Normal Value'' sections of this
notice. In accordance with section 777A(d)(1)(A)(i), we compared the
weighted-average EP to the weighted-average NV during the POI. In
determining averaging groups for comparison purposes, we considered the
appropriateness of such factors as physical characteristics, comparable
quantities and level of trade.
A. Physical Characteristics
In accordance with section 771(16) of the Act, we considered all
products covered by the description in the Scope of Investigation
section, above, produced in the United Kingdom (``UK'') and sold in the
home market during the POI, to be foreign like products for purposes of
determining appropriate product comparisons to U.S. sales. Where there
were no sales of identical merchandise in the home market to compare to
U.S. sales, we compared U.S. sales to the next most similar foreign
like product on the basis of the characteristics listed in the
Department's antidumping questionnaire. In making the product
comparisons, we relied on the following criteria (in order of
preference): material; weight per linear foot; profile
[[Page 51413]]
type; width; finish type (pasta/compo, foil, mylar, laminated/wrapped,
embossed plain substrate, embossed substrate with foil, embossed
substrate with mylar, wet system (e.g., paint, or other); and total
number of finishes.
B. Comparable Quantities
In this investigation, Ecoframe requested the Department to make
fair value comparisons of its sales at comparable quantities. We have
examined the sales information submitted by Ecoframe and determined
that this methodology is appropriate. (For further discussion, see
``Interested Parties' Comments'' section of this notice.) Where there
were no home market sales of the most similar merchandise at comparable
quantities to match to U.S. sales, we compared the U.S. sales to the
weighted-average of the most similar foreign like product.
C. Level of Trade
Based on our findings at verification, there was no support for
Robobond's level of trade claim. Therefore, level of trade was not a
factor in Robobond's final margin calculations. (For further
discussion, see ``Interested Parties' Comments'' section of this
notice.)
Export Price
In accordance with subsections 772 (a) and (c) of the Act, we
calculated EP for each of the respondents where the subject merchandise
was sold directly to the first unaffiliated purchaser in the United
States prior to importation. Use of constructed export price was not
otherwise warranted based on the facts of record.
We calculated EP based on the same methodology used in the
preliminary determination, with the following exceptions:
Robobond
Adjustments to reported sale terms, payment dates, and
international freight were made based on verification findings. We made
adjustments for verified commission expense on certain U.S. sales in
the final margin calculation. Credit expense was recalculated to
reflect the verified short-term interest rate. (For details, see
September 25, 1996, Final Determination Calculation Memorandum for
Robobond.)
Ecoframe
Minor adjustments to reported sales data were made based on
verification findings. (For details, see September 25, 1996, Final
Determination Calculation Memorandum for Ecoframe.)
Normal Value; Cost of Production Analysis
In the preliminary determination, the Department found reasonable
grounds to believe or suspect that each respondent made sales in the
home market at prices below the cost of producing the merchandise. As a
result, the Department initiated investigations to determine whether
the respondents made home market sales at prices below their respective
COPs during the POI within the meaning of section 773(b) of the Act.
Before making any fair value comparisons, we conducted the COP
analysis described below.
A. Calculation of COP
We calculated the COP based on the sum of each respondent's cost of
materials and fabrication used in producing the foreign like product,
plus amounts for home market general and administrative expenses
(``G&A'') and packing costs in accordance with section 773(b)(3) of the
Act.
B. Test of Home Market Prices
We used the respondents' adjusted weighted-average COP to test home
market prices. We compared the weighted-average COP figures to home
market sales of the foreign like product as required under section
773(b) of the Act, in order to determine whether these sales had been
made at below-cost prices, within an extended period of time, in
substantial quantities, and were not at prices which permit recovery of
all costs within a reasonable period of time. On a product-specific
basis, we compared the COP to the home market prices, less any
applicable movement charges and direct and indirect selling expenses.
C. Results of COP Test
In accordance with section 773(b)(2)(C) of the Act, where less than
20 percent of a respondent's sales of a given product were at prices
less than the COP, we did not disregard any below-cost sales of that
product because we considered such below-cost sales not to be made in
``substantial quantities.'' Where 20 percent or more of a respondent's
sales of a given product during the POI were at prices less than the
COP, we disregarded those sales because we consider to be made in
substantial quantities within an extended period of time (in accordance
with section 773(b)(2)(B) of the Act) and at prices which would not
permit recovery of all costs, within a reasonable period of time (in
accordance with section 773(b)(2)(D) of the Act).
Where there were no above-cost sales available for matching
purposes, export prices that would have been compared to home market
prices for these models were compared instead to CV.
D. Calculation of CV
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of a respondent's cost of materials, fabrication,
selling, general, and administrative expenses (``SG&A''), profit and
U.S. packing costs as reported in the U.S. sales databases. In
accordance with section 773(e)(2)(A) of the Act, we based SG&A and
profit on the amounts incurred and realized by the respondent in
connection with the production and sale of the foreign like product in
the ordinary course of trade, for consumption in the foreign country.
Price to CV Comparisons
Where we compared CV to export prices, we deducted from CV the
weighted-average home market direct selling expenses and added the
weighted-average U.S. product-specific direct selling expenses (where
appropriate) in accordance with section 773(a)(8) of the Act.
Adjustments to COP and CV
We based COP and CV on the same methodology used in the preliminary
determination, with the following exceptions:
Ecoframe
Minor adjustments to reported costs were made based on verification
findings. (See Memorandum to the file from Michael Martin dated July
30, 1996 (``cost verification report'').)
Robobond
Robobond's reported G&A expense was adjusted to include a figure
for dividends. An amount for building depreciation expense was added to
reported total depreciation expense. Robobond's reported depreciation
expense for equipment was adjusted to reflect depreciation expense
calculated in accordance with the depreciation methodology historically
used by the company. (For above-noted adjustments concerning Ecoframe
and Robobond, see ``Interested Party Comments.'')
Adjustments to Normal Value
We based normal value on the same methodology used in the
preliminary determination, with the following exceptions:
Ecoframe
Minor adjustments to reported sales data were made pursuant to
verification
[[Page 51414]]
findings. Additionally, credit expense was recalculated to reflect the
verified short-term interest rate used by Ecoframe.
Robobond
Minor adjustments to reported sales terms, inland freight, and
payment dates were made pursuant to verification findings. Certain
reported direct selling expenses were treated as indirect selling
expenses. Credit expense was recalculated to reflect the verified
short-term interest rate used by Robobond.
(For details concerning these adjustments, see ``Interested Party
Comments'' in this notice.)
Currency Conversion
We made currency conversions into U.S. dollars based on the
official exchange rates in effect on the dates of the U.S. sales as
certified by the Federal Reserve Bank. Section 773A(a) of the Act
directs the Department to use a daily exchange rate in order to convert
foreign currencies into U.S. dollars unless the daily rate involves a
fluctuation. It is the Department's practice to find that a fluctuation
exists when the daily exchange rate differs from the benchmark rate by
2.25 percent. The benchmark is defined as the moving average of rates
for the past 40 business days. When we determine a fluctuation to have
existed, we substitute the benchmark rate for the daily rate, in
accordance with established practice. Further, section 773A(b) directs
the Department to allow a 60-day adjustment period when a currency has
undergone a sustained movement. A sustained movement has occurred when
the weekly average of actual daily rates exceeds the weekly average of
benchmark rates by more than five percent for eight consecutive weeks.
(For an explanation of this method, see Policy Bulletin 96-1: Currency
Conversions 61 FR 9434, (March 8, 1996).) Such an adjustment period is
required only when a foreign currency is appreciating against the U.S.
dollar. The use of an adjustment period was not warranted in this case
because the U.K. pound did not undergo a sustained movement, nor were
there currency fluctuations during the POI.
Verification
As provided in section 782(i)(1) of the Act, we verified the
information submitted by respondents for use in our final
determination. We used standard verification procedures, including
examination of relevant accounting and production records and original
source documents provided by respondents.
Interested Party Comments
Robobond
Comment 1: Final Determination Based on Adverse Facts Available
Petitioner asserts that Robobond has misled the Department during
the course of this investigation through a series of omissions,
discrepancies, and misrepresentation of data provided on the record.
While certain misstatements and inaccuracies in the information
supplied by Robobond may be inadvertent, petitioner maintains that
other instances appear to be deliberate attempts by Robobond to mislead
the Department and to manipulate and distort the results of this
proceeding. Petitioner submits that the cumulative impact of the
omissions and misrepresentations attributable to Robobond render
Robobond's responses inherently unreliable as a whole. As such,
petitioner requests the Department to reject Robobond's responses for
the final determination and assign it a margin based on the most
adverse facts available.
Robobond counters that there is no merit whatsoever in petitioner's
claims that Robobond misled the Department. Robobond maintains that its
sales and cost of production data were successfully verified, and those
topics for which discrepancies were noted involve only minor issues
which can easily be corrected for the final determination. Accordingly,
Robobond urges the Department to reject petitioner's allegations.
DOC Position
Certain discrepancies and omissions in Robobond's reported sales
and cost data were discovered during verification (see e.g., comment 6
below, regarding missing accounting records). However, the
discrepancies and omissions do not warrant the use of adverse facts
available. Such errors will be addressed individually. (See, e.g.,
Certain Corrosion-Resistant Carbon Steel Flat Products from Korea;
Final Results of Antidumping Duty Administrative Review 61 FR 18558
(April 26, 1996).)
Comment 2: International Freight
For certain sales observations where international freight was
incorrectly reported as zero, Robobond argues that these omissions were
clerical errors, consistent with criteria recently announced in Certain
Fresh Cut Flowers from Ecuador; Final Results of the Antidumping Duty
Administrative Review, 61 FR 37044, (July 16, 1996) 2
(``Flowers''). According to Robobond, the omission of international
freight from these sales constitutes inadvertent errors that satisfy
the test set forth in Flowers and should be treated accordingly.
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\2\ ``* * * We will accept corrections of clerical errors under
the following conditions: (1) The error in question must be
demonstrated to be a clerical error, not a methodological error, an
error in judgement, or a substantive error; (2) the Department must
be satisfied that the corrective documentation provided in support
of the clerical error allegation is reliable; (3) respondent must
have availed itself of the earliest reasonable opportunity to
correct the error; (4) the clerical error allegation, and any
corrective documentation, must be submitted to the Department no
later than the due date for the respondent's administrative case
brief; (5) the clerical error must not entail a substantial revision
of the response; and (6) the respondent's corrective documentation
must not contradict information previously determined to be accurate
at verification.'' (pages 37044-37045)
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Further, Robobond contends that the use of the highest reported per
unit international freight figure would unnecessarily overstate the
actual international freight cost associated with the sales in
question. Robobond notes that application of the highest reported
figure is inconsistent with the Department's actions regarding errors
in international freight described in the sales verification report for
Ecoframe, the other UK respondent in this investigation.
Alternatively, if the Department does not decide that these
omissions constitute clerical errors, Robobond suggests that the
Department apply a weighted-average freight expense from the initial
invoice or invoices to the correcting invoice as a more reasonable
method of adjustment.
Petitioner argues that Robobond's failure to report international
freight for certain U.S. sales clearly does not constitute an
inadvertent error, but was either a methodological error, error in
judgement, or substantive error, within the definition given in
Flowers. Petitioner requests that the Department reject Robobond's
claims for the correction of clerical errors because Robobond has not
satisfied the test set forth in Flowers, and assign the highest
reported international freight rate per linear foot to these sales
transactions.
DOC Position
The test set forth in Flowers defines a clerical error as being
``not a methodological error, an error in judgement, or a substantive
error.'' In the case of the one invoice (4275), where international
freight was not reported for one out of 23 line items, we agree with
Robobond's assessment that this was a clerical error. The fact that
international freight was reported for all line items listed on the
invoice except for one (amounting to 6% of total sales
[[Page 51415]]
value and 9% of total footage of the invoice) indicates that this
movement expense was inadvertently missed when compiling the database.
Accordingly, we have treated this omission as a clerical error for the
final determination.
With respect to the other six invoices in question, we determine
that the omission does not constitute a clerical error. The omission of
international freight figures for certain reported sales resulted where
certain product line items listed on the delivery notes (and
transported to the customer) were overlooked by invoicing staff when
preparing the original sales invoice. Subsequently, additional invoices
were issued to account for the missed product line items on the
original invoice. When compiling the sales database, however, Robobond
neglected to account for international freight for these six invoices
even though it was known that international freight was provided for
these sales. This omission occurred consistently for six invoices which
were issued under similar circumstances. In all six instances, the
actual invoice document noted the error and, in most cases, referred to
the original sales invoice. Accordingly, we find that Robobond did not
act to the best of its ability to comply with the Department's request
for information. Therefore, pursuant to section 776(b) of the Act, we
are applying the highest international freight figure reported for
merchandise listed in the original invoice for the six invoices in
question.
Comment 3: Error in Calculating International Freight
For sales listed on one sales invoice (invoice 4331), petitioner
notes that the international freight figure was understated because the
amount of the expense was incorrectly billed to the U.S. customer at a
lower rate. Therefore, petitioner requests that the Department make a
correction to account for this understatement.
DOC Position
We agree with petitioner and have corrected this error accordingly.
Comment 4: Exclusion of Certain Reported Sales
Robobond asserts that certain reported sales should not be
considered in the final margin calculation because those transactions
are not sales to the ``first unaffiliated U.S. customer.'' According to
Robobond, these sales were of merchandise initially sold to a U.S.
customer, but portions of these sales were not paid for and,
subsequently, they were directed to another U.S. customer. Robobond
requests that these sales be excluded from the final margin
calculation. Alternatively, if the Department were to include these
sales in its final margin calculation, Robobond requests that the
Department use a weighted-average international freight cost of the
initial invoice to calculate the freight cost for the subsequent sale.
Petitioner counters that the sales in question should be considered
in the final margin calculation. According to petitioner, the initial
sales to the U.S. customer were not actually concluded because the
customers did not pay for the merchandise or keep the merchandise.
Petitioner requests the Department reject Robobond's argument and
consider applying international freight for these reported sales based
upon facts available.
DOC Position
We agree with petitioner. The transactions in question were sales
by Robobond of returned goods to the first unaffiliated U.S. customer.
Accordingly, these sales are included in the final margin calculation.
Additionally, Robobond's argument for using weighted-average
international freight fails to address the fact that the cost to
transport the merchandise from the UK to US was not reported for these
sales even though such freight costs were incurred by Robobond. We do
not consider the omission of the known freight expense for all five
invoices to be a clerical error and, accordingly, we find that Robobond
did not act to the best of its ability to comply with the Department's
request for information. Therefore, pursuant to section 776(b) of the
Act, we have applied the highest reported international freight figure
per linear foot.
Comment 5: Affiliated Party
Petitioner asserts that an unreported affiliated party was
disclosed at verification. Robobond counters that the status of the
alleged affiliated party was thoroughly examined at verification where
it was found that the company in question was dissolved prior to the
POI and, therefore, should not be considered a factor in determining
whether to base the final determination on facts available.
DOC Position
We agree with Robobond. Company records from the U.K. Registrar of
Companies were examined for all listed shareholders of Robobond, Robam,
D&J Simons, Ltd., D&J Simons & Sons, Ltd, Danant Holdings and Gransim
Properties. As noted in the verification report, no discrepancies were
discovered concerning the corporate structure and affiliated parties
reported by Robobond. Therefore, this issue does not require further
consideration for purposes of the final determination.
Comment 6: Accounting Records
Petitioner contends that Robobond's accounting records were
incomplete to the extent that the Department was precluded from
verifying the accuracy of Robobond's questionnaire responses and, in
particular, reconciling Robobond's reported quantity and value of sales
during the POI. Because of this deficiency at verification, petitioner
requests the Department to reject Robobond's responses and determine
that the most adverse inference is warranted in the selection of facts
otherwise available for purposes of the final determination.
Robobond counters that the Department's verification report makes
no mention of any major discrepancies in its review of company sales
and accounting records for the POI. Robobond maintains that to the
extent that accounting records were incomplete, this did not hinder the
Department's verification. Further, Robobond notes that, according to
the verification report, nominal ledger daybooks and sales invoice
files were available for verifying completeness.
DOC Position
We consider Robobond's reported volume and value of sales to be
verified as complete and accurate for purposes of this investigation.
While the missing accounting records are a cause for concern, as noted
in the Department's verification report, source records and nominal
ledger daybooks were available for review and used for reconciling
Robobond's reported volume and value of sales and testing completeness
of Robobond's reported sales of subject merchandise made during the
POI. Therefore, there is no basis for making a final determination in
this proceeding based solely upon facts available.
Comment 7: Level of Trade
Petitioner contends that Robobond made statements supporting its
level of trade claim that were subsequently proven false at
verification. According to petitioner, such misleading statements
reflect Robobond's consistent equivocation on the record of this
proceeding and, therefore, the Department should use facts available
for the final determination.
Robobond maintains that it stated nothing false on the record of
this proceeding. According to Robobond, all statements made concerning
its sales
[[Page 51416]]
process, size of orders, and inventory maintenance in support of its
level of trade claim were accurate. Robobond requests the Department to
dismiss petitioner's assessment of these statements.
DOC Position
We did not grant Robobond's level of trade claim for the
preliminary determination because it did not provide sufficient
information to indicate that separate levels of trade existed (see May
3, 1996, Decision Memorandum from the Team to Deputy Assistant
Secretary Barbara Stafford). Verification failed to disclose any
evidence to support Robobond's claim that its sales were made at
different levels of trade. Therefore, the Department has rejected
Robobond's alleged level of trade claim.
Comment 8: Treatment of Commission Expense
Petitioner contends that there is no reasonable basis to conclude
that no other commission payments were made for sales of subject
merchandise during the POI because Robobond's accounting records were
incomplete. Therefore, for the final determination, petitioner requests
the Department to apply a commission expense to all sales made during
the three-month period of the POI for which the accounting records were
incomplete.
Robobond submits that it properly reported relevant commission
expense data prior to verification, in accordance with the Department's
regulations, and notes that the verification report disclosed no
discrepancies regarding this subject. Therefore, Robobond argues an
application of a commission expense to U.S. sales as facts available is
unwarranted.
DOC Position
The commission expense was reported by Robobond to the Department
prior to verification. As noted in the verification report, with the
exception of the reported commission payment, no evidence of any other
commission payments were discovered to be linked to any POI sales of
the subject merchandise. Therefore, we have considered the verified
commission expenses relating to U.S. sales observations in the final
margin calculation.
Comment 9: Home Market Direct Selling Expenses
Bank Charges (Returned Check Fees)
Petitioner asserts that the sales verification revealed that the
returned check fees, reported by Robobond as direct selling expenses,
were not the actual expenses charged by the bank. The difference
between the reported and verified amounts for this expense, petitioner
contends, was grossly overstated and, as such, should be rejected as a
direct selling expense.
Robobond contends that the actual difference between the reported
and verified amounts was insignificant when compared to the total value
of home market POI sales. Robobond argues the difference cannot be
characterized as an ``extreme overstatement'' of the expense.
Therefore, the Department should reject petitioner's arguments.
DOC Position
As stated in the verification report, the returned check fees
reported by Robobond were not the actual amounts charged by the bank
for returned checks. However, the Department was able to verify the
actual returned check fees charged to Robobond. We agree with Robobond
that the difference between what was reported and what was verified is
negligible in proportion to the home market sales database and does not
warrant the use of facts otherwise available. We have therefore
corrected this field in Robobond's database to reflect the verified
amounts of returned check fees.
Freight Revenue (credit notes clearing customer accounts that were
incorrectly billed for freight)
Petitioner asserts that verification revealed Robobond over-
credited certain customers for freight, thereby improperly inflating
the adjustment to normal value. Therefore, petitioner argues the
Department should reject freight revenue as a direct selling expense.
Robobond contends that it reported the amount actually credited to
the customer's account when the freight charges were removed.
Therefore, Robobond argues that it appropriately reported the actual
credits incurred and the Department should adjust the normal value
accordingly.
DOC Position
We agree with petitioner, in part. At verification, it was revealed
that, due to the nature of the expense, the freight credit should not
exceed the amount reported for freight revenue. Where this situation
occurred in Robobond's database, we find that Robobond did not act to
the best of its ability to comply with the Department's request for
information. Therefore, pursuant to section 776(b) of the Act, we have
used, as the facts available, zero in this expense field. However, the
remaining freight revenue was verified. Accordingly, this error does
not warrant rejecting the entire expense.
Shortage Credits
Petitioner cites Robobond's submissions stating that there were no
referenced invoices on the face of the credit notes issued by Robobond
for shortages. Petitioner argues that verification found this statement
to be false and, as such, the Department should reject this adjustment
as a direct selling expense.
Robobond contends that the allocation methodology is correct, in
that Robobond believed that these credit notes incorrectly identified
the applicable invoice. Therefore, allocating the credit notes on a
customer-specific basis, Robobond contends, is an acceptable
methodology.
DOC Position
Verification revealed that the shortage credit notes could be
accurately tied to specific invoices. Therefore, we have allocated the
credit notes to the applicable invoices.
Return Freight Charges (freight charges for merchandise returned to
Robobond)
Robobond asserts that it adequately tied certain returned freight
charges (DIRSEL7B) to the appropriate customer. Regarding the remaining
returned freight charges (DIRSEL7A), Robobond contends that the freight
company did not provide sufficient documentation to link the freight
charges to a specific customer. Therefore, the charges were allocated
over total sales during the POI. Robobond argues that the methodology
used is legitimate and the adjustments should be accepted as direct
selling expenses for the final determination.
Petitioners argue that because the returned freight charges listed
in DIRSEL7A could not be tied to sales within the POI, the expense
should be considered indirect. As for the returned freight charges
listed in DIRSEL7B, Petitioners believe that the credit notes did not
adequately establish that they were tied to sales within the POI and as
such should be considered indirect.
DOC Position
We agree with petitioner in part. The antidumping questionnaire
directs respondents to report those expenses which can be directly tied
to a sale within the POI as direct selling expenses. Where an expense
cannot be tied to a sale within the POI, the expense is considered
indirect. Therefore, we treated the returned
[[Page 51417]]
freight charges which were not tied to a sale within the POI as
indirect selling expenses for purposes of the final determination. As
for the remaining returned freight expenses (i.e., those expenses tied
to a specific customer) we determine that the documentation provided at
verification adequately established that the expenses were tied to
sales during the POI. Accordingly, we have considered these to be
direct selling expenses for purposes of the final determination.
Freight Credit (credit notes issued by the freight company to Robobond)
Petitioner argues that Robobond failed to tie the credit notes
issued by the freight company to specific sales during the POI. As
such, petitioner contends that these expenses should be considered
indirect.
DOC Position
We agree with petitioner in part. The antidumping questionnaire
directs respondents to report those adjustments which can be directly
tied to a sale within the POI as direct. Where an adjustment cannot be
tied to a sale within the POI, it is considered indirect. Therefore, we
treated the freight credits which were not tied to a sale within the
POI (DIRSEL6A) as indirect selling expenses for purposes of the final
determination. As for the remaining freight credits (DIRSEL6B), we
determine that the documentation provided at verification adequately
established that the revenues were tied to sales during the POI.
Accordingly, we have considered these to be direct for purposes of the
final determination. (See Memorandum to the File from the Framing Stock
Team, September 25, 1996, for a discussion of specific freight credit
notes.)
Bankruptcy Credit Notes (credit notes issued to clear the accounts of
customers that went bankrupt)
Robobond contends that the Department should accept the bankruptcy
credit notes reported in its database as a direct selling expense.
Robobond cites Daewoo Electronics Company Ltd. v. United States, 712 F.
Supp. 931, 938 (CIT 1989), aff'd in part and rev'd in part on other
grounds, 6 F.3d 1511 (Fed. Cir. 1993), cert. Denied, 114 S. Ct. 2672
(1994) and Color Television Receivers from the Republic of Korea 61 FR
4,408, February 6, 1996) as supporting its position that these credit
notes have been accepted in the past as bad debt expense which is
treated as a direct selling expense.
Petitioners argue that the credit notes could not be tied to sales
within the POI and, therefore, should be considered an indirect selling
expense.
DOC Position
We agree with Robobond. The Department verified the bad debt
expenses and found these expenses to be incurred with respect to sales
of the subject merchandise and to specific customers which went
bankrupt during the POI. Furthermore, we found no discrepancies with
respect to the allocation methodology. We have therefore, accepted
these expenses as direct selling expenses for purposes of the final
determination.
Accounts Receivable (credit notes to clear the outstanding balance of
customer's accounts)
Petitioner contends that Robobond deliberately attempted to
manipulate the sales database by issuing credit notes to clear the
outstanding balance of certain customers. Petitioner argues that the
Department should reject the credit notes as a direct selling expense.
Instead, petitioner contends, the Department should calculate the
imputed credit expense on the total amount of the credit notes, for
each customer, from September 1, 1994, through the present and apply
that credit expense to every sale made by Robobond to the customer in
question as the facts otherwise available.
Robobond disputes petitioner's interpretation as unreasonable and
contends the use of the facts otherwise available is not justified
because none of the criteria of Section 776(a)(2) of the Act are
applicable in this situation. Finally, Robobond asserts that if the
Department disagrees with the classification of these credit notes as
direct selling expenses it should simply treat them as indirect.
DOC Position
The documentation regarding the accounts in question was thoroughly
examined at verification. While we do not find evidence that the data
were manipulated for the purposes of this proceeding, the credit notes
in question could not be tied to specific sales during the POI. We have
therefore treated this expense as indirect.
Remaining Credit Notes
Petitioner contends that the discrepancies found during the review
of the randomly sampled credit notes additionally call into question
the reliability and credibility of Robobond's responses. Petitioner
argues that, due to the abundant discrepancies found at verification,
the Department should assign to Robobond a margin based on the facts
otherwise available.
Robobond argues that it correctly reported its credit notes and
that the Department should disregard petitioner's claim.
DOC Position
We disagree with petitioner. Verification revealed minor errors
with respect to two credit notes. These errors have been corrected for
the final determination. As for not using total adverse facts
available, see, interested party comment 1.
Comment 10: Home Market Warranty Claims (based on credit notes)
Robobond asserts that the questionnaire directs respondents to
report warranty expenses on a product-specific basis. If this is not
possible, Robobond continues, the respondent should use a broader
allocation basis (i.e., a customer-specific basis), not a narrower
invoice-specific basis (i.e., tying warranty credit notes to specific
sales during the POI). Robobond cites Antifriction Bearings and Parts
Thereof from Germany: Final Results of AD Administrative Review 56 FR
31692, (July 11, 1991) (``AFBs from Germany''), to support its claim
that the methodology used is consistent with the Department's
established practice regarding warranty expenses. Moreover, Robobond
argues that it would have been impractical and unduly burdensome to
report warranty expenses on an invoice-specific basis. Therefore,
Robobond contends that it correctly reported its warranty expenses and
the Department should adjust normal value accordingly.
Petitioner argues that Robobond was unable to produce historical
warranty expense information. Additionally, not all of the warranty
credit notes could be tied to sales within the POI (i.e., on an
invoice-specific basis). Therefore, the Department should reject
Robobond's reported warranty expenses. Further, petitioner contends
that AFBs from Germany does not support Robobond's argument, instead it
confirms that Robobond ignored the Department's stated policy regarding
warranty expenses in that the acceptance of surrogate product-specific
data is acceptable only when the respondent has provided the Department
with historical warranty expense data with which to measure the
reasonableness of the product-specific data.
DOC Position
We agree with Robobond. As stated in AFBs from Germany:
[[Page 51418]]
With respect to warranty expense, our past practice has been to
accept variable warranty expenses which were incurred during the
review period as a surrogate for such expenses actually incurred on
sales during the review period, provided such expenses reasonably
reflect the firm's historical experience with respect to warranty
expenses. We use a surrogate expense amount because warranty
commitments for sales under review may not reach fruition until
after the review period is over. Therefore, the Department does not
require a sale-by-sale breakdown of direct warranty expenses, just a
reasonable allocation of these expenses.
(AFBs from Germany, 56 FR at 31723.)
In this case, as in AFBs in Germany, we are satisfied that the
accounting system of Robobond prevents reporting these expenses on a
sale-by-sale basis or compiling historical data. Therefore, we have
determined that the verified allocation for warranty expense is
accurate, reasonable, and complete.
Comment 11: Home Market Credit Expense
Robobond argues that the Department should accept the verified home
market short-term interest rate reported in its questionnaire response
to calculate home market credit costs.
Petitioner contends that the Department should not accept the
reported short-term interest rate and should instead base credit
expense on the equivalent interest rate plus 1.5 per cent (i.e., for
U.S. sales, the U.S. prime rate plus 1.5 per cent and for home market
sales, the U.K. interest rate equivalent to the U.S. prime rate plus
1.5 per cent).
DOC Position
We agree with Robobond. The documentation regarding the Robobond's
short-term interest rate agreement was thoroughly examined at
verification--no discrepancies were noted. We have therefore used the
reported interest rate in our final calculations.
Comment 12: Depreciation
Petitioner asserts that Robobond should not be permitted to
selectively change its depreciation methodology during the POI in order
to lower costs. Petitioner notes that Robobond's May 31, 1995,
financial statement indicates that this change in accounting
methodology reduced the company's depreciation expense and POI
production costs by a significant amount. According to petitioner, the
change in depreciation methodology was made well after this
investigation was initiated. Moreover, petitioner notes that Robobond
has continued to depreciate all other categories of assets on the basis
of its normal accelerated depreciation methodology and the company's
parent and sister companies also continue to use an accelerated
methodology on all of their assets. Expenditures for plant and
machinery, the only class of assets subject to the change in
depreciation methodology, increased in the fiscal year ending May 31,
1995. Robobond's change in depreciation methodology is nothing more
than an after-the-fact attempt to artificially reduce production costs.
Respondent maintains that the Department should use Robobond's
submitted plant and machinery depreciation expense because it
accurately reflects the company's POI depreciation expense. Robobond
argues that the accelerated depreciation methodology it followed in the
past reflected the uncertainty of any given asset's useful life, while
Robobond was developing the subject merchandise. However, with the
establishment of its new facility and equipment, Robobond maintains
that it has the right to adopt a depreciation methodology more
representative of the assets' useful lives. Moreover, the methodology
adopted by Robobond is an acceptable methodology under the generally
accepted accounting principles (``GAAP'') of the UK. Robobond further
argues that under section 773(f)(1)(A) the Department must calculate
costs ``based on the records of the exporter or producer of the
merchandise'', if those records are in accordance with the country's
GAAP and reasonably reflect the costs associated with the production of
the subject merchandise.
DOC Position
We disagree with Robobond. Section 773(f)(1)(A) of the Act states
that ``[c]osts shall normally be calculated based on the records of the
exporter or producer of the merchandise, if such records are kept in
accordance with the generally accepted accounting principles of the
exporting country (or the producing country where appropriate) and
reasonably reflect the costs associated with the production and sale of
the merchandise.'' Further, as explained in the SAA, ``[t]he exporter
or producer will be expected to demonstrate that it has historically
utilized such allocations, particularly with regard to the
establishment of appropriate amortization and depreciation periods and
allowances for capital expenditures and other development costs.'' SAA
at 834.
In this instance, Robobond historically used an accelerated
depreciation methodology in preparing its financial statements.
Notwithstanding this long-established practice, Robobond has now
changed to a straight-line depreciation method in its financial
statements (as reflected in Robobond's May 31, 1995, statements), which
were completed after the filing of the petition in this proceeding.
Moreover, this change in methodology is limited solely to calculating
depreciation expense for equipment; all other assets continue to be
depreciated according to the historically utilized methodology. Also,
Robobond's financial statements, prepared by outside auditors, do not
provide any business reason for this change.
In past cases, where respondents have switched accounting
methodologies following the initiation of an investigation, the
Department has closely examined such modifications and has rejected
those changes which do not reasonably reflect costs and which redounds
to the benefit of the respondent in the proceeding. (See, e.g., Final
Determination of Sales at Less Than Fair Value: Certain Hot-Rolled
Carbon Steel Flat Products, Certain Cold-Rolled Steel Flat Products,
Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain
Cut-to-Length Carbon Steel Plate From Brazil, 58 FR 37091 (July 9,
1993); Amended Order and Final Determination of Sales at Less Than Fair
Value: Ferrosilicon From Venezuela, 60 FR 64018 (December 13, 1995).)
Where changes in historically-utilized company practice are made
contemporaneous to the investigation, the burden plainly is on the
respondent to show that the change was made for business reasons other
than the AD proceeding and that the new methodology reasonably reflects
the company's costs of producing subject merchandise. In such
circumstances, the fact that a changed methodology is permissible under
GAAP will not automatically justify the change if there is no
legitimate business reason.
Robobond asserts that the change in depreciation methodology was
due to the opening of a new production facility at the beginning of the
fiscal year. However, the company's records and other record
information do not provide evidence in support of this assertion. As to
Robobond's assertion that the change in methodology was in accordance
with the UK's GAAP, Robobond has presented no information in support of
its arguments that the straight-line depreciation methodology more
reasonably reflects costs than its historically-used accelerated
methodology, which also is in accordance with UK's GAAP. With
[[Page 51419]]
regard to Robobond's comments on useful life, we note that both methods
use the same estimate of useful life; however, the accelerated method
allocates more of the expense in the early years. Additionally, the
notes to Robobond's May 31, 1995, financial statements state that the
change in depreciation methodologies reduces the depreciation expense
relative to the expense calculated according to the historically-
utilized methodology.
In sum, in light of the evidence of record, we find that Robobond
has not met its burden on this issue. The record evidence does not
reflect that this methodological change was done for business reasons.
Although Robobond provided post-hoc rationalizations for the change, it
did not provide record evidence from a time period prior to the
initiation of the investigation to show that the change was made for
business reasons. Additionally, the SAA indicates that the exporter
will be expected to demonstrate that it has historically utilized such
accounting practices. Robobond has not historically used the straight-
line method of depreciation in its accounting records. Further,
Robobond did not consistently apply this change in methodology to all
of its asset categories.
For purposes of the final determination, we therefore are adjusting
Robobond's reported depreciation expense to reflect depreciation
calculated according to its historically-utilized method.
Comment 13: G&A Expense
Petitioner contends that there is ample evidence on the record that
the various companies owned by the Simons family are related for
purposes of this dumping investigation. According to petitioner, in
such situations, the Department normally combines the G&A expense of
all related companies and then allocates the aggregate total across the
consolidated cost of sales of those companies. In addition, petitioner
notes that Robobond submitted for the record on June 6, 1996, the D&J
Simons and Sons, Ltd. financial statements for the fiscal year ending
October 31, 1995. The end of D&J Simons & Sons' 1995 fiscal year
extends approximately seven weeks beyond the initiation of this
investigation. The Department normally derives G&A and financial
expense ratios from data contained in the financial statements for the
fiscal year that most closely corresponds with the POI. However,
petitioner argues that these financial statements cannot be used
because Robobond has manipulated the information contained in them.
Specifically, petitioner notes that the historical amounts paid for
compensation decreased significantly in the October 31, 1995, financial
statements. Furthermore, it appears that some compensation was
purposefully shifted to dividends rather than normal methods in order
to further reduce period costs.
Robobond counters that the Department should use Robobond's
submitted G&A expense because they accurately represent the POI expense
associated with the subject merchandise. Robobond maintains that its
reported G&A expense included its own expense, as well as, those G&A
expenses incurred by affiliates on its behalf. Additionally, Robobond
notes that the Department verified that Robobond identified all G&A
expenses incurred by affiliates on the company's behalf. According to
Robobond, the fact that its affiliates neither produce nor sell the
subject merchandise defeats any presumption that the remaining G&A
expenses incurred by the affiliates are incurred on behalf of Robobond.
DOC Position
We agree with respondent in part. Verification showed no evidence
to indicate that Robobond misreported its G&A expenses for itself or
any of its affiliates.
While petitioner is correct in observing that directors'
compensation as reported was significantly lower in Robobond's October
31, 1995, financial statement than in previous years, it appears that
Robobond reallocated the difference in directors' compensation to its
pension fund, which is captured along with directors' salaries in
Robobond's reported G&A. Additionally, dividends were issued to
Robobond's shareholders as another portion of the directors'
compensation package.
Additionally, where a manager/owner in a closely-held company could
potentially reallocate costs through the issuance of dividends in lieu
of directors' salaries, we reviewed the Robobond's past practices on
issuing dividends and found that Robobond has never issued dividends in
prior years. This change in policy reallocates directors' compensation
to dividends. Further, this change in policy on issuing dividends
occurred following the initiation of this investigation. For purposes
of the final determination, we have adjusted Robobond's reported G&A
figure to include dividends.
Comment 14: Building Depreciation
To avoid double counting for the same type of expense, Robobond
contends that the Department should include in COP and CV only building
maintenance and not building depreciation. Robobond notes that, under
UK accounting principles, a company may not report depreciation on a
freehold building (i.e., an estate held in fee) if it elects to
maintain the building in a manner that preserves or extends its useful
life and to record, as current expense, the cost of maintaining the
buildings. Accordingly, Robobond requests that the Department include
only building maintenance expense in calculating Robobond's COP
because: (1) Building maintenance expenses are recorded in Robobond's
normal cost accounting records, and (2) Robobond does not record
building depreciation in its normal course of business.
DOC Position
As noted in the previous comment concerning depreciation, Section
773(f)(1)(A) of the Act directs the Department to calculate COP based
on the company's records if those records are in accordance with the
country's accepted practice and reasonably reflect the costs associated
with the production of the subject merchandise. While the UK accounting
principles do not require companies to depreciate buildings, U.S.
accounting principles require building depreciation as a means of cost
allocation. Under UK GAAP the cost of the building is never recognized
as an expense, however, U.S. GAAP recognizes both the cost of the
building and the maintenance as expenses, in order to properly match
the expenses to revenues. Routine building maintenance expense,
therefore, does not capture associated building depreciation. In this
instance, we find that the accounting principles of the UK do not
reasonably reflect the costs associated with the production of the
subject merchandise. For the final determination, we have included
building maintenance expenses and building depreciation expense in
calculating Robobond's COP.
Ecoframe
Comment 15: Start-Up Costs
Petitioner argues that the Department should not make a startup
adjustment to Ecoframe's cost of production. Petitioner contends that
Ecoframe failed to provide sufficient evidence that it meets the
criteria under Section 773(f)(1)(C)(ii) of the Act. Specifically,
petitioner argues that Ecoframe failed to establish that it was still
in the start-up phase during the POI and that production levels were
limited by technical factors associated with the initial phase of
commercial production.
[[Page 51420]]
Petitioners argue that the POI in this case starts nine months after
Ecoframe commenced production of framing stock and was therefore well
into full operation during the POI.
Petitioner argues that the yield loss information provided by
Ecoframe is not evidence of technical factors associated with the
initial phase of commercial production. Further petitioner's own
analysis indicates that these yield losses are a normal part of routine
production, and are most probably indicative of the degree of
ornateness of the profiles produced. The more ornate the profile the
higher the yield loss. Finally, petitioner argues that respondent must
demonstrate that production levels were limited by technical factors
associated with the initial phase of commercial production and not by
factors unrelated to start-up such as chronic production problems,
demand, or business cycle.
Ecoframe argues that it provided sufficient information to warrant
a startup adjustment to the cost of production. Specifically, Ecoframe
points to the fact that the plant had been operational for less than
two years by the end of the POI and at that time even the major U.K.
manufacturer of framing stock was still producing substandard moulding.
Ecoframe also contends that numerous technical factors were limiting
initial production during the POI. Therefore, the Department should
make a startup adjustment to Ecoframe's cost of production.
DOC Position
We agree with petitioners. According to section 773(f)(1)(C)(ii) of
the Act adjustments ``shall be made for startup operations only where--
(I) a producer is using new production facilities or producing a
new product that requires substantial additional investment, and
(II) production levels are limited by technical factors
associated with the initial phase of commercial production.
For purposes of subclause (II), the initial phase of commercial
production ends at the end of the startup period. In determining
whether commercial production levels have been achieved, the
administering authority shall consider factors unrelated to startup
operations that might affect the volume of production processed,
such as demand, seasonality, or business cycles.''
The SAA also states ``any determination of the appropriate startup
period involves a fact-intensive inquiry.'' This includes a
consideration of ``factors unrelated to startup operations that may
have affected the volume of production processed, such as demand,
seasonality, or business cycles.'' The SAA further states that the
``start-up [period] will be considered to end at the time the level of
commercial production characteristic of the merchandise, producer, or
industry concerned is achieved. The attainment of peak production
levels will not be the standard for identifying the end of the start-up
period, because the start-up period may end well be for a company
achieves optimum capacity utilization.'' SAA at 836 (emphasis added).
Moreover, ``[t]o determine when a company reaches commercial production
levels, Commerce will consider first the actual production experience
of the merchandise in question.'' SAA at 836.
In this case, although Ecoframe was using new production facilities
and techniques, the Department does not have sufficient information on
the record to determine when the start-up period ended and the
commercial production period began. Specifically, Ecoframe did not
submit a production level analysis demonstrating that it had not yet
reached full commercial production levels. Such an analysis would
include information distinguishing the production levels, the product
cost levels, and the prices during the start-up phase and the
commercial phase. Furthermore, the analysis would have to address
``factors unrelated to start-up operations that may have affected the
volume of production processed, such as demand, seasonality, or
business cycles.'' SAA at 837.
Ecoframe only provided information that its yield losses decreased
dramatically in March 1996. The start-up adjustment is not intended to
adjust for high yield losses experienced by respondent, but rather it
is intended to state product costs at amounts realized when commercial
production levels are reached. Yield losses are only one factor that
would have to be considered in such an analysis. In this regard, the
SAA states that ``Commerce will not extend the start-up period so as to
cover improvements and cost reductions that may occur over the entire
life cycle of a product.'' This suggests that improvements in product
yields over time do not constitute ``start-up costs.'' SAA at 836.
In sum, we reject Ecoframe's claim for a start-up adjustment
because it did not demonstrate the existence of a start-up phase that
warrants such treatment under section 773(f)(1)(C)(ii) of the Act.
Comment 16: Quantity Adjustment
Ecoframe stated that all its products are custom products and as
such are made to order. Because everything is made to order, Ecoframe
contends, numerous factors reduce the unit cost of the product as the
order size increases. Therefore, in order to make an accurate
comparison the Department must match at comparable quantities. Where a
match at comparable quantities is not possible, an adjustment should be
made to account for the price differences based on order size.
Petitioner contends that Ecoframe's request is untimely and
unsupported by evidence on the record. Specifically, petitioner cites
19 CFR 353.55(b) which states that the calculation of normal value
based on sales with quantity discounts will occur if:
(1) During the period examined or during a more representative
period, the producer or reseller granted quantity discounts of at
least the same magnitude on 20 percent or more of sales of such or
similar merchandise for the relevant country; or
(2) The producer or reseller demonstrates to the Secretary's
satisfaction that the discounts reflect saving specifically
attributable to the production of different quantities.
Petitioner argues that Ecoframe's responses fail to demonstrate a
clear and direct correlation between price differences and quantities
sold or costs incurred.
DOC Position
We agree with Ecoframe in part. Information on the record
demonstrates that the prices between the different quantity bands were
sufficiently varied to warrant comparisons at comparable quantity
bands, where possible as outlined in Ecoframe's September 5, 1996,
submission (see ``Fair Value Comparisons'' section of this notice).
Ecoframe, however, did not provide sufficient information to warrant a
quantity adjustment where a comparison sale at a comparable quantity
was not available.
Comment 17: Credit Expense Calculation
Ecoframe asserts that the method for verifying the reported rate
used for calculating the home market credit expense is highly
inaccurate. Because the bank calculates the interest on a daily basis,
the balance changes daily and, therefore, the interest expense charged
may be above or below the average interest rate. According to Ecoframe,
a more appropriate way to check Ecoframe's interest expense is to
compare it with Ecoframe's agreement with the bank, which notes the
interest rate given to Ecoframe.
DOC Position
For checking the reported interest rate used for figuring credit
expense for home market sales, we calculated the short-term interest
for the POI based on
[[Page 51421]]
the quarterly interest expense and outstanding balances which resulted
in an actual interest rate of approximately two percentage points
higher than the interest rate reported by Ecoframe. It is important to
note that Ecoframe's interest rate agreement with its UK bank was never
submitted to the Department prior to verification or presented at
verification for review. For purposes of the final determination, we
are calculating credit expense for home market sales based on the
quarterly interest expense and outstanding balances examined at
verification.
Suspension of Liquidation
In accordance with section 735(c) of the Act, we are directing the
Customs Service to continue to suspend liquidation of all entries of
the subject merchandise that are entered, or withdrawn from warehouse,
for consumption on or after May 13, 1996, the date of publication of
our preliminary determination in the Federal Register. Because Robobond
received a de minimis final dumping margin, entries of subject
merchandise from Robobond are excluded from these instructions. We will
instruct the Customs Service to require a cash deposit or the posting
of a bond equal to the weighted-average amount by which the NV exceeds
the export price, as indicated in the chart below. This suspension of
liquidation will remain in effect until further notice.
------------------------------------------------------------------------
Weighted-average margin
Exporter/manufacturer percentage
------------------------------------------------------------------------
Ecoframe.............................. 20.01
Robobond/Simons....................... de minimis
Magnolia.............................. 84.82
All Others............................ 20.01
------------------------------------------------------------------------
Pursuant to section 733(d)(1)(A) and section 735(c)(5) of the Act,
the Department has not included zero and de minimis weighted-average
dumping margins and margins determined entirely under section 776 of
the Act, from the calculation of the ``all others'' deposit rate.
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
ITC of our determination. As our final determination is affirmative,
the ITC will determine, within 45 days, whether these imports are
causing material injury, or threat of material injury, to an industry
in the United States. 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 Customs officials 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.
This determination is published pursuant to section 735(d) of the
Act.
Dated: September 25, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25242 Filed 10-1-96; 8:45 am]
BILLING CODE 3510-DS-P
