[Federal Register Volume 61, Number 193 (Thursday, October 3, 1996)]
[Notices]
[Pages 51676-51681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25408]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-201-802
Preliminary Results of Antidumping Duty Administrative Review
Gray Portland Cement and Clinker From Mexico
AGENCY: International Trade Administration/Import Administration/
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: In response to requests from interested parties, the
Department of Commerce is conducting an administrative review of the
antidumping duty order on gray portland cement and clinker from Mexico.
The review covers exports of subject merchandise to the United States
during the period August 1, 1994, through July 31, 1995, and one firm,
CEMEX, S.A. The results of this review indicate the existence of
dumping margins for the period.
We invite interested parties to comment on these preliminary
results. Parties who submit arguments in this proceeding are requested
to submit with the argument (1) a statement of the issue and (2) a
brief summary of the argument.
EFFECTIVE DATE: October 3, 1996.
FOR FURTHER INFORMATION CONTACT: Steven Presing, Nithya Nagarajan, or
Dorothy Woster, Office VII, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue N.W., Washington, DC 20230; telephone (202) 482-
3793.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act)
[[Page 51677]]
by the Uruguay Round Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department's regulations are
to the current regulations, as amended by the interim regulations
published in the Federal Register on May 11, 1995 (60 FR 25130).
Background
On August 1, 1995, the Department of Commerce (the Department)
published in the Federal Register (60 FR 39150) a notice of
``Opportunity to Request Administrative Review'' for the August 1,
1994, through July 31, 1995, period of review (POR) of the antidumping
duty order on gray portland cement and clinker from Mexico (55 FR
35371, August 29, 1990). In accordance with 19 CFR 353.22, CEMEX, S.A.
(CEMEX) and the petitioners, the Ad Hoc Committee of AZ-NM-TX-FL
Producers of Gray Portland Cement and the National Cement Co. of
California, Inc., requested a review for the aforementioned period. On
September 15, 1995, the Department published a notice of ``Initiation
of Antidumping Review'' (60 FR 47931). The Department is now conducting
a review of this respondent pursuant to section 751 of the Act.
Scope of Review
The products covered by this review include gray portland cement
and clinker. Gray portland cement is a hydraulic cement and the primary
component of concrete. Clinker, an intermediate material product
produced when manufacturing cement, has no use other than of being
ground into finished cement. Gray portland cement is currently
classifiable under the Harmonized Tariff Schedule (HTS) item number
2523.29, and cement clinker is currently classifiable under number
2523.10. Gray portland cement has also been entered under number
2523.90 as ``other hydraulic cements.'' The HTS subheadings are
provided for convenience and U.S. Customs Service (the Customs Service)
purposes only. The written description remains dispositive as to the
scope of the product coverage.
Verification
As provided in Section 782(i) of the Act, we verified information
provided by the respondents, using standard verification procedures,
including on-site inspection of the manufacturer's facilities, the
examination of relevant sales and financial records, and selection of
original documentation containing relevant information. Our
verification results are outlined in public versions of the
verification reports.
Use of Facts Available
Section 776(a) of the Act requires that the Department use the
facts otherwise available when necessary information is not on the
record, or an interested party withholds requested information, fails
to provide such information in a timely manner, significantly impedes a
proceeding, or provides information that cannot be verified. Section
776(b) of the Act authorizes the Department to use as facts otherwise
available information derived from the petitioner, the final
determination, a previous administrative review, or other information
placed on the record.
We preliminarily determine, in accordance with section 776(a) of
the Act, that the use of partial facts available as the basis for the
weighted-average dumping margin is appropriate for CEMEX because
despite the Department's attempts to verify certain information
provided by CEMEX, the Department could not verify the information as
required under section 782(i) of the Act. Where a party provides
information requested by the Department but the information cannot be
verified, section 776(a)(2)(D) of the Act requires the Department to
use facts otherwise available. As more fully described below, we found
the following inaccuracies in the information provided by CEMEX which
render the responses for these variables unusable for purposes of
margin calculations: home market freight for sales of bagged Type I
cement; differences in merchandise (DIFMER) adjustments for the
comparison of Type I cement sales in the home market to Type II cement
sales in the United States; and, the interest rate used to calculate
inventory carrying costs and imputed credit in the home market.
First, after repeated requests by the Department, CEMEX refused to
provide home market freight expenses for bagged Type I sales on a
plant-specific basis. The Department has, therefore, not allowed a
deduction for home market freight on sales of bagged Type I cement.
Second, despite our repeated requests for DIFMER based solely on
physical differences in merchandise, CEMEX was unwilling to isolate the
differences in cost solely attributable to physical differences in
merchandise. Therefore, we calculated a weighted-average DIFMER
adjustment based on the verified data reported by CEMEX's affiliate,
Cementos de Chihuahua (CDC), and, as an adverse assumption, a twenty
percent upward DIFMER adjustment to normal value (NV) See CEMEX v.
United States, Slip Op. 96-132 at 9 (CIT August 13, 1996) (upholding a
twenty percent DIFMER adjustment under similar circumstances) to be
applied in connection with our comparisons to all U.S. sales. Third, as
facts available the Department is utilizing the interest rate reported
by CEMEX's affiliated party, CDC, in lieu of the interest rate provided
by CEMEX, in the calculation of NV. At verification it was discovered
that CEMEX included long-term loans in the calculation of interest.
However, CEMEX chose not to revise the reported interest rate using
only short-term loans, therefore we used CDC's interest rate in our
calculation.
Transactions Reviewed
In accordance with section 751 of the Act, the Department is
required to determine the NV and export price (EP) or constructed
export price (CEP) of each entry of subject merchandise during the
relevant review period. Because there can be a significant lag between
entry date and sale date for CEP sales, it has been the Department's
practice to examine U.S. CEP sales during the period of review. See
Gray Portland Cement and Clinker from Japan; Final Results of
Antidumping Duty Administrative Review, 58 FR 48826 (1993) (Department
did not consider ESP (now CEP) entries which were sold after the POR).
The Court of International Trade has upheld the Department's practice
in this regard. See The Ad Hoc Committee of Southern California
Producers of Gray Portland Cement v. United States, Slip Op. 95-195
(CIT December 1, 1995).
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced and sold by the respondent in the home market during
the POR, (and covered by the Scope of the Review) to be foreign like
products for purposes of product comparisons to U.S. sales. Where there
were no sales of identical or similar merchandise in the home market to
compare to U.S. sales, we compared U.S. sales to the constructed value
of the product sold in the U.S. market during the month of comparison.
Fair Value Comparisons
To determine whether sales of gray portland cement by respondent to
the United States were made at less than fair value, we compared the EP
or CEP to the NV, as described in the ``Export Price and Constructed
Export Price'' and ``Normal Value'' sections of this notice. In
accordance with section 777A(d)(2), we calculated monthly weighted-
average prices for NV and compared
[[Page 51678]]
these to individual U.S. transactions, during the same month at the
same level of trade.
Export Price and Constructed Export Price
We used EP, in accordance with subsections 772(a) and (c) of the
Act, where the subject merchandise was sold directly or indirectly to
the first unaffiliated purchaser in the United States prior to
importation and CEP was not otherwise warranted based on the facts of
the record. In addition, we used CEP in accordance with subsections
772(b), (c), and (d) of the Act, for those sales to the first
unaffiliated purchaser that took place after importation into the
United States.
We made adjustments as follows:
We calculated EP based on delivered prices to unaffiliated
customers in the United States. Where appropriate, we made adjustments
from the starting price for early payment discounts, foreign inland
freight, foreign brokerage and handling, international freight, U.S.
inland freight, U.S. brokerage and handling, and U.S. Customs duties.
We also adjusted the starting price for billing adjustments to the
invoice price.
We calculated CEP sales based on delivered prices to unaffiliated
customers. Where appropriate, we made adjustments for early payment
discounts, credit expenses, and direct selling expenses. We deducted
those indirect selling expenses, including inventory carrying costs,
that related to commercial activity in the United States. We also made
deductions for foreign brokerage and handling, foreign inland freight,
international freight, U.S. inland freight, U.S. brokerage and
handling, and U.S. duty. We also adjusted the starting price for
billing adjustments to the invoice price. Finally we made an adjustment
for CEP profit in accordance with section 772(d)(3) of the Act.
Further Manufacturing
With respect to subject merchandise to which value was added in the
United States prior to sale to unaffiliated U.S. customers (e.g.,
cement that was imported and further processed into finished concrete
by U.S. affiliates of foreign exporters), we determined that the
special rule for merchandise with value added after importation under
section 772(e) of the Act was applicable.
Section 772(e) of the Act provides that, where the subject
merchandise is imported by an affiliated person and the value added in
the United States by the affiliated person is likely to exceed
substantially the value of the subject merchandise, we shall determine
the CEP for such merchandise using the price of identical or other
subject merchandise if there is a sufficient quantity of sales to
provide a reasonable basis for comparison and we determine that the use
of such sales is appropriate. If there is not a sufficient quantity of
such sales or if we determine that using the price of identical or
other subject merchandise is not appropriate, we may use any other
reasonable basis to determine the CEP.
To determine whether the value added is likely to exceed
substantially the value of the subject merchandise, we estimated the
value added based on the difference between the averages of the prices
charged to the first unaffiliated purchaser for the merchandise as sold
in the United States and the averages of the prices paid for the
subject merchandise by the affiliated person. Based on this analysis,
we estimated that the value added was at least 60 percent of the price
charged to the first unaffiliated customer for the merchandise as sold
in the United States. Therefore, we determined that the value added is
likely to exceed substantially the value of the subject merchandise.
Accordingly, for purposes of determining dumping margins for these
sales, we have used the weighted-average CEP calculated on sales of
identical or other subject merchandise sold to unaffiliated persons.
No other adjustments to EP or CEP were claimed or allowed.
Normal Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared respondent's volume of home market sales of the foreign
like product to the volume of U.S. sales of the subject merchandise in
accordance with section 773(a)(1)(C) of the Act. Since respondent's
aggregate volume of home market sales of the foreign like product was
greater than five percent of its aggregate volume of U.S. sales for the
subject merchandise, we determined that the home market was viable.
Therefore, we have based NV on home market sales.
Where appropriate, we adjusted for discounts, credit expenses,
warranty expenses, inland freight, and inland insurance. We also
adjusted the starting price for billing adjustments to the invoice
price.
We made adjustments, where appropriate, for physical differences in
merchandise in accordance with section 773 (a)(6)(C)(ii) of the Act. A
weighted-average upward DIFMER adjustment was calculated using the
methodology described in the section on Use of Facts Available. In
addition, in accordance with section 773(a)(6), we deducted home market
packing costs and added U.S. packing costs.
Arm's-Length Sales
Sales to affiliated customers in the home market not made at arm's
length were excluded from our analysis. To test whether these sales
were made at arm's length, we compared the starting prices of sales to
affiliated and unaffiliated customers, net of all movement charges,
direct and indirect selling expenses, discounts and packing. Where the
price to the affiliated party was 99.5 percent or more of the price to
the unaffiliated party, we determined that the sales made to the
affiliated party were at arm's length.
Cost of Production Analysis
Petitioners alleged, on February 12, 1996, that CEMEX and its
affiliate CDC sold gray portland cement and clinker in the home market
at prices below COP. Based on these allegations, the Department
determined, on February 27, 1996, that it had reasonable grounds to
believe or suspect that CEMEX had sold the subject merchandise in the
home market at prices below the COP. Therefore, pursuant to section
773(b)(1) of the Act, we initiated a COP investigation in order to
determine whether CEMEX made home market sales during the POR at prices
below its COP.
In accordance with section 773(b)(3) of the Act, we calculated an
average monthly COP based on the sum of the costs of materials and
fabrication employed in producing the foreign like product plus
selling, general and administrative (SG&A) expenses and all costs and
expenses incidental to placing the foreign like product in condition
ready for shipment. In our COP analysis, we used the home market sales
and COP information provided by the respondent in its questionnaire
responses.
After calculating an average monthly COP, we tested whether home
market sales of cement were made at prices below COP within an extended
period of time in substantial quantities and whether such prices permit
recovery of all costs within a reasonable period of time. We compared
model-specific average monthly COPs to the reported home market prices
less any applicable movement charges, discounts, and rebates. In
determining whether to disregard home market sales made at prices below
the average COP, we examined (1) whether, within an extended period of
time, such sales were made in substantial quantities, and
[[Page 51679]]
(2) whether such sales were made at prices which permitted the recovery
of all costs within a reasonable period of time in the normal course of
trade.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of the respondent's sales of a given product were at prices
less than COP, we did not disregard any below-cost sales of the product
because the below-cost sales were not made in substantial quantities.
Currency Conversion
The Department's preferred source for daily exchange rates is the
Federal Reserve Bank. For purposes of the preliminary results, we made
currency conversions based on the official exchange rates in effect on
the dates of the U.S. sales as certified by the Federal Reserve Bank of
New York pursuant to section 773(a) of the Act.
Section 773A(a) directs the Department to use a daily exchange rate
in order to convert foreign currencies into U.S. dollars, ignoring any
``fluctuations.'' We determine that a fluctuation exists when the daily
exchange rate differs from a benchmark rate by 2.25 percent or more.
The benchmark rate is defined as the rolling average of the rates for
the past 40 business days as reported by the Federal Reserve Bank of
New York. When we determined that a fluctuation existed, we substituted
the benchmark rate for the daily rate. For a complete discussion of the
Department's exchange rate methodology, see ``Change in Policy
Regarding Currency Conversions'' (61 FR 9434, March 8, 1996).
Further, section 773A(b) directs the Department to allow a 60-day
adjustment period when a currency has undergone 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. 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 Mexican peso did not appreciate against the U.S. dollar.
Ordinary Course of Trade
Section 773(a)(1)(B) of the Act states that the NV of the subject
merchandise is ``the price at which the foreign like product is first
sold (or in the absence of sales, offered for sale) for consumption in
the exporting country, in the usual commercial quantities and in the
ordinary course of trade.'' Section 771(15) defines ordinary course of
trade as ``the conditions and practices which, for a reasonable time
prior to the exportation of the subject merchandise have been normal in
the trade under consideration with respect to merchandise of the same
class or kind.''
In the second administrative review of this order CEMEX reported
home market sales of Type I, Type II, and Type V cement. Following
their receipt of this information, petitioners alleged that CEMEX's
home market sales of Type II and Type V cement were outside the
ordinary course of trade. See Gray Portland Cement and Clinker From
Mexico: Final Results of Antidumping Duty Administrative Review, 58 FR
47253, 47254 (Sept. 8, 1993). Pursuant to this allegation, we compared
CEMEX's home market sales of Type II and Type V cement with sales of
similar merchandise (namely, Type I cement) in order to analyze certain
factors regarding the nature of the sales of the different types of
cement, including freight expenses and profit levels. Id. at 47255-56.
Based on this comparison, and on other factors explained in our final
determination, we concluded in the second review that CEMEX's home
market sales of Type II and Type V cement were not made in the ordinary
course of trade. Thus, we did not use these sales in the calculation of
foreign market value.
In the third and fourth administrative reviews, the Department
again required CEMEX to report sales of subject merchandise in the home
market, including Type I cement. We determined that it was necessary to
compare Type II and Type V cement sales in the home market with Type I
cement sales in the home market in order to make the ordinary-course-
of-trade determination. We also determined that the Department needed
the data on home market sales of Type I cement in the event CEMEX'S
home market sales of Type II and Type V cement were found to be outside
the ordinary course of trade. As the Department explained in the final
results of the third review:
even if the Department had been able, using the information supplied
by CEMEX in this review, to determine that the Types II and V cement
sales were outside the ordinary course of trade, we would still have
needed the Type I data to conduct our antidumping duty analysis.
Gray Portland Cement and Clinker from Mexico: Final Results of
Antidumping Duty Administrative Review, 60 FR 26869 (May 19, 1995).
When CEMEX failed to provide the information on Type I sales in the
third and fourth reviews, the Department was required by the statute to
base its determination upon the ``best information available'' (BIA).
19 U.S.C. 1677e(b); 19 CFR 353.37 (a)(1). It should be noted that the
factors relied upon by the Department in making the BIA determination
in the third administrative review, and subsequently on a preliminary
basis in the fourth review, were upheld by the CIT. Slip Op. 95-72 at
6-14.
Given the Department's determination that CEMEX's sales of Type II
and Type V cement in the home market were outside the ordinary course
of trade during the second administrative review, we believe that it is
necessary (as was the case in the third and fourth administrative
reviews) to address the same issue in the fifth administrative review.
In the present administrative review, the Department sent CEMEX a
questionnaire on November 1, 1995, instructing CEMEX to report home
market sales of Type II and Type I cement. CEMEX submitted these sales
on January 30, 1996 and February 23, 1996, respectively.
We have considered the totality of circumstances surrounding
CEMEX's Type II sales. A full discussion of our conclusions,
necessitating reference to proprietary information, is contained in a
Departmental memorandum in the official file for this case (a public
version of this memorandum is on file in room B-099 of the Department's
main building). Generally, however, we have observed the following.
First, in Mexico, Type II cement is a speciality cement sold to a
``niche'' market. These sales represent a minuscule percentage of
CEMEX's total sales of cement. Second, shipping arrangements for home
market sales of Type II cement are abnormal. More than 95 percent of
cement shipments in Mexico are within a radius of 150 miles, yet during
the POR, CEMEX shipped Type II cement for the domestic market over
considerably greater distances and absorbed much of the freight costs
for these longer shipments. Third, CEMEX's profit on Type II cement
sales in the POR is abnormal in comparison to the company's profits on
sales of all types of cement. Finally, there are two items, historical
sales trends and the ``promotional quality'' of Type II cement sales,
which were cited previously as factors in the second review ordinary
course of trade analysis, but which are not discussed in the instant
review. On July 9, 1996, the Department issued a questionnaire which
requested CEMEX to support its position that home market Type II cement
sales are in the ordinary course of trade by addressing, among other
things, ``historical sales trends'' and ``marketing reasons for sales
other than profit.'' CEMEX's response
[[Page 51680]]
addressed all items in the questionnaire except these two items. Thus,
the Department makes the adverse assumption that the facts regarding
these items have not changed since the second review and that: (a)
CEMEX did not sell Type II until it began production for export in the
mid-eighties, despite the fact that a small domestic demand for such
existed prior to that time; and (b) sales of Type II cement continue to
exhibit a promotional quality that is not evidenced in CEMEX's ordinary
sales of cement (see memorandum from Holly A. Kuga to Joseph A.
Spetrini, dated August 31, 1993).
These observations lead us to conclude that CEMEX's home market
sales of Type II are not in the ordinary course of trade, and thus
should not be used for purposes of calculating NV. In this review,
CEMEX has provided the Department with extensive information concerning
the decision to produce Type II exclusively in the northwest corner of
Mexico. It claims that the decision to service the entire Mexican
market for Type II cement from this region was based on sound business
judgement. According to CEMEX, sales which are based on sound business
judgement must necessarily be in the ordinary course of trade. We
disagree. The purpose of the ordinary course of trade provision is ``to
prevent dumping margins from being based on sales which are not
representative'' of the home market. See Monsanto Co. v. United States,
698 F. Supp. 275, 278 (CIT 1988). Thus, the issue is not whether such
sales are based on sound business judgement, but whether sales of the
particular product at issue ``are normal in the trade under
consideration.'' See 19 U.S.C. 1677(15).
The statute expresses a preference for matching identical
merchandise. However, in situations where identical product types
cannot be matched, the statute expresses a preference for basing NV on
similar merchandise (see section 773(a)(1)(A) of the Act and section
353.46(a) of the Department's regulations). Therefore, we have based NV
on sales of Type I cement, since they are representative of CEMEX's
sales of similar merchandise adjusted for ``differences in
merchandise'' (DIFMER) based on the methodology discussed above. If,
over time, the facts pertaining to sales of Type II cement in the home
market change from those contained in the record of this review, we
will reconsider whether such sales can be used as the basis for NV.
Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Act and in the
Statement of Administrative Action (SAA) accompanying the Uruguay Round
Agreements Act at 829-831, to the extent practicable, the Department
will calculate NV based on sales at the same level of trade as the U.S.
sale. When the Department is unable to find sale(s) in the comparison
market at the same level of trade as the U.S. sale(s), the Department
may compare sales in the U.S. and foreign markets at a different level
of trade. See Final Determination of Sales at Less than Fair Value;
Certain Pasta from Italy, 61 FR 30326 (June 14, 1996).
In accordance with section 773(a)(7)(A) of the Act, if we compare
U.S. sales at one level of trade to NV sales at a different level of
trade, the Department will adjust the NV to account for the difference
in level of trade if two conditions are met. First, there must be
differences between the actual selling functions performed by the
seller at the level of trade of the U.S. sales and the level of trade
of the NV sale. Second, the difference must affect price comparability
as evidenced by a pattern of consistent price differences between sales
at the different levels of trade in the market in which NV is
determined.
When CEP is applicable, section 773(a)(7)(B) of the Act establishes
the procedures for making a CEP offset when (1) NV is at a more
advanced level of trade, and (2) the data available does not provide an
appropriate basis for a level of trade adjustment.
In order to determine that there is a difference in level of trade,
the Department must find that two sales have been made at different
stages of marketing, or the equivalent. Different stages of marketing
necessarily involve differences in selling functions, but differences
in selling functions (even substantial ones) are not alone sufficient
to establish a difference in the level of trade. Similarly, seller and
customer descriptions (such as ``distributor'' and ``wholesaler'') are
useful in identifying different levels of trade, but are insufficient
to establish that there is a difference in the level of trade.
Therefore, in addition to the questions related to level of trade
in our November 1, 1995, questionnaire, on February 14, 1996, we sent
respondent supplemental questions related to level of trade comparisons
and adjustments. We asked respondent to explain and document any
claimed levels of trade adjustment on the basis of complete information
about its system of distribution, including selling functions and
services offered to each customer or class of customers. The
information provided by respondent in response to this request was not
sufficient to establish that the home market sales used to determine
normal value were at a different level of trade than its sales in the
United States.
CEMEX reported two levels of trade in the home market (bulk sales
to end-users, distributors, and ready-mixers; and bagged sales to end-
users, distributors, and ready-mixers). We examined the selling
functions performed for each alleged level of trade and found that the
selling functions provided by CEMEX were the same for both. Therefore,
we determined that the two types of sales did not constitute different
levels of trade.
CEMEX also claimed that its further manufactured sales of concrete
by its subsidiary Sunward Materials Inc. were sold at a different level
of trade (to end-users) than sales of cement in the home market (to
end-users). Although these sales were not used for comparison purposes,
we examined and verified the selling functions performed for U.S. sales
of concrete to end-users and determined that the cement that is a
portion of the concrete is at the same level of trade, as adjusted, as
home market sales of cement to end-users. We then examined and verified
that the selling functions performed by CEMEX to end-users in the home
market and by Sunward Materials Inc., in the U.S., as adjusted, were
sufficiently similar to consider them to be at the same level of trade.
CEMEX's affiliated party, CDC, reported one level of trade in the
home market (to end-users, distributors, and ready-mixers). For the
U.S. market, CDC claimed that it sold to the same level of trade (end-
users and ready-mixers), but claimed a CEP offset based on significant
differences in the selling functions performed by its subsidiary Rio
Grande Portland Cement Company. We examined and verified that the
selling functions performed by CDC to end-users in the home market and
by Rio Grande Portland Cement Company in the U.S., after the CEP
deductions, were sufficiently similar to consider them to be at the
same level of trade.
To the extent practicable, we compared normal value at the same
level of trade as the U.S. sale. The level of trade methodology
employed by the Department in these preliminary results of review is
based on the facts particular to this review. The Department will
continue to examine its policy for making level of trade comparisons
and adjustments for its final results of review.
[[Page 51681]]
Hyperinflation
Due to the currency crisis that occurred during the POR, we
requested respondents to submit information on the rates of inflation
in our original questionnaire on November 1, 1995 and in our
supplemental questionnaire on February 14, 1996. The data submitted by
CEMEX indicated that the annual inflation rate in Mexico during the POR
exceeded 35 percent. The portion of the POR from August, 1994-December,
1994 was not considered hyperinflationary as the annualized inflation
rate did not exceed 50 percent. However, the portion of the POR from
January, 1995-July, 1995 was considered hyperinflationary due to the
fact that annualized inflation rate exceeded 50 percent see Certain
Fresh Cut Flowers from Mexico, 52 FR 6361 (March 3, 1987). Therefore,
consistent with our prior practice, we determined that a possible
hyperinflationary situation existed during the POR.
For purposes of our comparison we calculated a NV for each month of
the POR, converting the foreign currency using the methodology
discussed in the ``Currency Conversion'' section above, and comparing
the NV to each individual U.S. sale during the same month of the POR as
the comparison NV.
By using this methodology we have accounted for the effects of
hyperinflation that were present during the POR. The hyperinflationary
methodology employed by the Department in these preliminary results of
review is based on the facts particular to this review. The Department
will continue to examine its policy for its final results of review.
Preliminary Results of Review
Thus, as a result of our review, we preliminarily determine the
dumping margin for CEMEX for the period August 1, 1994, through July
31, 1995, to be 107.756 percent.
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44 days after the date of publication or the
first business day thereafter. Case briefs and/or other written
comments from interested parties may be submitted not later than 30
days after the date of publication. Rebuttal briefs and rebuttals to
written comments, limited to issues raised in those comments, may be
filed not later than 37 days after the date of publication of this
notice. The Department will publish its final results of this
administrative review, including its analysis of issues raised in any
written comments or at a hearing, not later than 180 days after the
date of publication of this notice.
Upon completion of this review, the Department shall determine, and
the Customs Service shall assess, antidumping duties on all appropriate
entries.
The Department will issue appropriate appraisement instructions
directly to the Customs Service upon completion of this review.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of review, as provided by section 751(a)(1) of the Tariff
Act: (1) The cash deposit rate for the reviewed company will be the
rate determined in the final results of review; (2) for previously
reviewed or investigated companies not mentioned above, the cash
deposit rate will continue to be the company-specific rate published
for the most recent period; (3) if the exporter is not a firm covered
in this review, a prior review, or the original LTFV investigation, but
the manufacturer is, the cash deposit rate will be the rate established
for the most recent period for the manufacturer of the merchandise; and
(4) the cash deposit rate for all other manufacturers or exporters will
be 59.91 percent, as explained below.
On May 25, 1993, the CIT in Floral Trade Council v. United States,
822 F. Supp. 766 (CIT 1993), and Federal-Mogul v. United States, 839 F.
Supp 864 (CIT 1993), determined that once an ``all others'' rate is
established for a company, it can only be changed through an
administrative review. The Department has determined that in order to
implement these decisions, it is appropriate to reinstate the original
``all others'' rate from the LTFV investigation (or that rate as
amended for correction of clerical errors or as a result of litigation)
in proceedings governed by antidumping duty orders for the purposes of
establishing cash deposits in all current and future administrative
reviews.
Because this proceeding is governed by an antidumping duty order,
the ``all others'' rate for this order will be 59.91 percent, which was
the ``all others'' rate established in the final notice of the LTFV
investigation by the Department (55 FR 29244, July 18, 1990).
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 353.26 to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are in accordance with the
Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: September 25, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25408 Filed 10-2-96; 8:45 am]
BILLING CODE 3510-DS-P
