[Federal Register Volume 62, Number 237 (Wednesday, December 10, 1997)]
[Notices]
[Pages 65063-65067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32356]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-405-071]
Notice of Preliminary Results of Antidumping Duty Administrative
Review: Viscose Rayon Staple Fiber From Finland
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: In response to a request by the petitioners, the Department of
Commerce is conducting an administrative review of the antidumping duty
order on viscose rayon staple fiber from Finland. The review covers one
manufacturer/exporter, Kemira Fibres Oy, during the review period,
March 1, 1996, through February 28, 1997.
We invite interested parties to comment on these preliminary
results of review. Parties who submit comments in this proceeding are
requested to submit with each argument (1) a statement of the issue and
(2) a brief summary of the argument.
EFFECTIVE DATE: December 10, 1997.
FOR FURTHER INFORMATION CONTACT: For further information, please
contact Laurel LaCivita or Alexander Amdur at Import Administration,
International Trade Administration, U.S. Department of Commerce,
Washington, D.C. 20230; telephone: (202) 482-4740 or (202) 482-5346,
respectively.
SUPPLEMENTARY INFORMATION:
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). In addition, unless
otherwise indicated, all citations to the Department's regulations are
to 19 CFR Part 353 (April 1997).
Background
On March 21, 1979, the Treasury Department published in the Federal
Register (44 FR 17156) the antidumping duty finding on viscose rayon
staple fiber from Finland. This finding was revoked on November 7, 1994
(59 FR 55441), effective as of April 1, 1993. The revocation was
rescinded on February 22, 1997 (61 FR 6814). On March 28, 1997, the
petitioners, Courtalds Fibers Inc. (``Courtalds'') and Lenzing Fibers
Corporation (``Lenzing''), requested that the Department of Commerce
(``the Department'') conduct an antidumping administrative review of
Kemira Fibres Oy (``Kemira''), the only known producer of viscose rayon
fiber in Finland, and any related, affiliated, or successor company or
companies. On April 24, 1997, we published a notice of initiation of
this administrative review covering the period March 1, 1996, through
February 28, 1997, (62 FR 19988) for Kemira. We issued a questionnaire
on May 20, 1997. We received section A, B and C questionnaire responses
from Kemira on July 3, 1997. We issued a supplemental questionnaire on
August 15, 1997. We received a supplemental response from Kemira on
September 10, 1997. We issued a second supplemental questionnaire on
September 22, 1997. Kemira responded to this letter on October 6, 1997.
On October 27, 1997, Kemira submitted information concerning sales of
VISIL fiber, which it maintains are outside of the scope of the
finding.
On August 28, 1997, the Department solicited comments from all
interested parties concerning the model match criteria and methodology
to be used in this review. It received comments from the petitioners on
September 11, 1997 and October 24, 1997, and from the respondent on
September 16, 1997 and November 4, 1997.
We conducted a verification of home market and United States sales
at Kemira's headquarters in Valkeakoski, Finland from November 3, 1997
to November 7, 1997.
The Department is conducting this administrative review in
accordance with section 751(a) of the Act.
Scope of Review
The product covered by this review is viscose rayon staple fiber,
except solution dyed, in noncontinuous form, not carded, not combed and
not otherwise processed, wholly of filaments (except laminated
filaments
[[Page 65064]]
and plexiform filaments). The term includes both commodity and
speciality fiber. This product is currently classifiable under
Harmonized Tariff Schedules (HTS) item numbers 5504.10.00 and
5504.90.00. The HTS numbers are provided for convenience and customs
purposes. The written description of the scope of the finding remains
dispositive.
Scope Issues
Kemira claims that short-cut (LK) fibers and semi-viscose fire-
retardant (VISIL) fibers are excluded from the scope of the finding,
while petitioners claim that they are included.1
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\1\ Kemira also claims that hydrophobic fibers are excluded from
the scope of the order, but since Kemira did not sell these fibers
in the U.S. during the period of review, we have not addressed this
issue.
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Specifically, Kemira argues that LK fiber is excluded from the
scope of the finding because it is cut in small sizes (specifically,
\1/4\-inch to \1/2\-inch sizes), has a unique production line, and is
used by the paper industry, rather than the textile industry.
Petitioners claim that the scope of the finding does not limit the
definition of rayon staple fiber based on fiber length or end use and
that, consequently, LK fiber should be included in the scope of the
review.
Kemira claims that VISIL fiber is excluded from the scope of the
finding because it is a hybrid fiber containing substantial non-viscose
content; and is a patented product that is not produced by any other
manufacturer. Kemira also notes that this fiber has been ``finished/
laminated with aluminum.'' However, Kemira notes that VISIL fiber is
classified for Customs purposes under HTS 5504.10.00, the same tariff
classification as viscose rayon staple fiber. The petitioners claim
that VISIL fiber should be included within the scope of the finding.
They argue that there is nothing in the scope of the finding that
limits the applicability of the finding to ``standard'' fiber.
For the purposes of the preliminary results of review, we have
included both LK and VISIL fibers within the scope of the finding, and
have included sales of both LK and VISIL fibers in our margin analysis.
However, because of the complexity of the issues relating to LK and
VISIL fibers, the Department is commencing a scope inquiry to determine
whether LK and VISIL fibers are covered by the scope of the finding.
Verification
We conducted verification of home market and U.S. sales information
provided by Kemira using standard verification procedures, including
on-site inspection of Kemira's sales and production facility, the
examination of relevant sales and financial records, and original
documentation containing relevant information.
Fair Value Comparisons
To determine whether sales of viscose rayon staple fiber to the
United States were made at less than fair value, we compared the export
price (EP) or constructed export price (CEP) to the normal value (NV),
as described in the ``Export Price'', ``Constructed Export Price'' and
``Normal Value'' sections of this notice. In accordance with section
777A(d)(2), we calculated monthly weighted-average prices for normal
value and compared these to individual U.S. transactions. We made
corrections to the reported U.S. and home market sales data for
clerical errors found at verification, as appropriate.
We excluded certain U.S. sales from our calculations. First, we
excluded any zero-priced sample sales in accordance with NSK LTD., et
al v. United States, 969 F. Supp. 34 (CIT 1997). Second, we excluded
any sales that were shipped to the United States by a third country
reseller if the respondent did not have any reason to know at the time
of sale to the reseller that the merchandise was destined for the
United States (for a detailed explanation, see Concurrence Memorandum,
December 1, 1997). Third, we excluded any U.S. sales of entries that
were liquidated prior to the period of review (POR), i.e., prior to
suspension of liquidation. Such sales were only excluded if we were
able to make a direct link to an entry prior to suspension of
liquidation (see, e.g., Certain Stainless Steel Wire Rods From France:
Final Results of Antidumping Duty Administrative Review, 61 FR 177
(September 11, 1996)).
We excluded a home market sale to an affiliated party because this
sale failed to pass the Department's arm's-length test in accordance
with 19 CFR 353.45(a) (see Concurrence Memorandum, December 1, 1997).
Facts Available
During the current POR, the Department requested that Kemira report
all of its home market and U.S. sales of subject merchandise in
accordance with the instructions in the questionnaire. Kemira did not
report its home market and U.S. sales of second quality and sub-
standard merchandise. Kemira stated in its narrative response that it
sold second quality and sub-standard merchandise only to customers in
Europe. On August 15, 1997, the Department issued a supplemental
questionnaire to Kemira, requesting again that Kemira report all sales
of viscose rayon fiber that are not specifically excluded from the
scope of the finding. In its response to the supplemental
questionnaire, Kemira again did not report its home market and U.S.
sales of second quality and sub-standard merchandise. In both requests
for information, the Department advised Kemira that failing to provide
the requested information could result in the application of facts
available (FA).
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 in a timely manner or in the form
requested, significantly impedes a proceeding under the antidumping
statute, or provides information that cannot be verified, the
Department will use FA in reaching the applicable determination. Kemira
failed to report all the information requested by the Department, so
the Department will use FA in reaching the margin determination for
Kemira's sales of second quality and sub-standard merchandise.
Section 776(b) of the Act provides that adverse inferences may be
used with respect to 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 (SAA) at 870. Kemira's failure
to report the sales data requested by the Department, despite two
requests for data from the Department, demonstrates that Kemira has
failed to cooperate to the best of its ability in this review.
Additionally, the Department explicitly told Kemira the possible
consequences of not reporting the data. We find that, in selecting
among the FA for Kemira, an adverse inference is warranted. Section
776(b) states that an adverse inference may include reliance on
information derived from: (1) The petition; (2) the final determination
in the LTFV investigation; (3) any previous review under section 751 of
the Act or investigation under section 753 of the Act; or (4) any other
information placed on the record. See also SAA at 829-831.
Therefore, for sales of second quality and sub-standard
merchandise, we are applying as adverse FA, the higher of the margin
calculated for Kemira in this review or 8.7 percent, the highest
calculated rate for Kemira from any previous segment of the proceeding
(i.e., the margin calculated for Kemira in both the investigation and
in the first period of review (44 FR 2219, January 10, 1979 and 46 FR
19844, April 1, 1981)).
[[Page 65065]]
In the event that we apply as adverse FA the 8.7 percent rate,
section 776(c) of the Act provides that when the Department relies on
such secondary information in using FA, it must, to the extent
practicable, corroborate that information from independent sources
reasonably at its disposal. The SAA provides that ``corroborate'' means
simply that the Department will satisfy itself that the secondary
information to be used has probative value (see SAA at 870). To
determine probative value, we examine, to the extent practicable, the
reliability and relevance of the information to be used. However,
unlike other types of information such as input costs or selling
expenses, there are no independent sources for calculated dumping
margins. The only source for margins is administrative determinations
and reviews. However, if the Department relies on a calculated dumping
margin from a prior segment of the proceeding as FA, it is not
necessary to question the reliability of the margin. With respect to
relevance, the Department will consider information reasonably at its
disposal that would render a margin not relevant (see Anhydrous Sodium
Metasilicate from France; Preliminary Results of Review, 61 FR 30853
(June 18, 1996)). We have no information indicating that the 8.7
percent rate is inappropriate as FA; therefore, we consider the
corroboration requirements satisfied.
Export Price
The Department used the EP, as defined in section 772(a) of the
Act, where the subject merchandise was sold by the manufacturer or
exporter to unaffiliated purchasers in the United States prior to
importation and the CEP methodology was not otherwise warranted based
on the facts of record. We calculated EP based on packed, delivered
prices. We made deductions, where appropriate, for early payment
discounts, foreign inland freight, ocean freight, Finnish and U.S.
insurance expenses, and brokerage and handling fees in Finland and in
the United States, in accordance with section 772(c)(2) of the Act.
Constructed Export Price
We calculated CEP, as defined in section 772(b) of the Act, based
on packed, delivered prices to unaffiliated purchasers in the United
States (the starting price). We found that CEP was warranted for
certain sales in the United States that were made (before or after the
date of importation) by or for the account of the producer or exporter
(see Concurrence Memorandum, December 1, 1997). We calculated CEP based
on the price to the first unaffiliated customer in the United States.
We made deductions from the gross unit price (starting price) for early
payment discounts, foreign inland freight, ocean freight, insurance
expenses, brokerage and handling, U.S. duty, U.S. brokerage and U.S.
inland freight, as appropriate, in accordance with section 772(c)(2)(A)
of the Act.
In accordance with section 772(d)(1) of the Act and the Uruguay
Round Agreements Act Statement of Administrative Action (SAA at 823-
824), we made additional adjustments to the starting price by deducting
selling expenses associated with economic activities in the United
States, including commissions, warranty, and credit. We allocated the
total reported commission for the POR for VISIL fiber sales over the
total U.S. sales of VISIL fiber during the POR. We recalculated
warranty expenses based on such expenses incurred during the current
period (see Calculation Memorandum, December 1, 1997). Finally, we made
an adjustment for CEP profit in accordance with sections 772(d)(3) and
772(f) of the Act.
Normal Value
A. Viability
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating
normal value (NV), we compared the 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. Because the aggregate volume of home market sales of the foreign
like product was greater than five percent of the aggregate volume of
U.S. sales of the subject merchandise, we found that the home market
was viable. Therefore, we have based NV on home market sales.
B. Model Match
In accordance with section 771(16) of the Act, we considered all
products sold in the home market, fitting the description specified in
the ``Scope of Review'' section above, to be foreign like products for
purposes of determining appropriate product comparisons to U.S. sales.
The petitioners recommended that we determine home market matches based
on the criteria of linear density (denier/decitex), fiber length,
luster and end-use. We found that the product model names used by
Kemira incorporated all such information. Therefore, where possible, we
matched each model sold in the United States with an identical home
market model, based on Kemira's product codes, that was sold within the
contemporaneous window which extends from three months prior to the
U.S. sale until two months after the sale. We found contemporaneous
home market sales of identical merchandise for all U.S. sales of non-
VISIL. Therefore, we did not establish a model match hierarchy to
determine the next most similar model in accordance with section
771(16) of the Act. With respect to U.S. sales of VISIL products for
which there were no home market sales of identical merchandise during
the contemporaneous window, we matched models based on most similar
size and made an adjustment to NV for differences in physical
characteristics (difmer). Because Kemira did not provide sufficient
supporting documentation for its reported model-specific cost data, we
could not determine the actual amount of any difmer. Therefore, as
facts available, we made a difmer adjustment equal to twenty percent of
the reported variable cost of manufacture (TCOM) of VISIL products sold
in the United States. Interested parties are invited to comment on the
appropriate difmer adjustment relevant to the sales at issue.
Furthermore, in conducting our margin calculations for Kemira, we
discovered a number of VISIL sales for which there were no
contemporaneous sales of identical or similar merchandise in the home
market.
Since Kemira did not provide constructed value (CV) information, we
are unable to calculate a margin for these sales. Therefore, we are
compelled to use FA with regard to these sales for the purposes of the
preliminary results. As FA we have selected the weighted-average margin
calculated for those U.S. VISIL sales with contemporaneous home market
matches.
C. Price-to-Price Comparisons
We based NV on the prices at which the foreign like products were
first sold for consumption in the home market to an unaffiliated party
in the usual commercial quantities and in the ordinary course of trade
and, to the extent practicable, at the same level of trade as the CEP
or EP, in accordance with section 773(a)(1)(B)(i) of the Act. For
purposes of this review, we determined that the same level of trade
exists for Kemira in both markets (see Concurrence Memorandum, December
1, 1997). Accordingly, pursuant to section 777A(d)(2) of the Act, we
compared the EP or CEP of the individual transactions to the monthly
weighted-average price of sales of the foreign like product. In
accordance with sections 773(a)(1)(B) of the Act, we
[[Page 65066]]
reduced home market price by deducting early payment discounts. We
increased home market price by U.S. packing costs in accordance with
section 773(a)(6)(A) of the Act and reduced it by home market packing
costs in accordance with section 773(a)(6)(B) of the Act. In accordance
with section 773(a)(6)(C) of the Act and 19 CFR 353.56(a), we made
circumstance of sale (COS) adjustments for direct selling expenses,
including credit and (recalculated) warranty expenses. In accordance
with 19 CFR 353.56(b), we made an offset to NV for U.S. commissions.
Since Kemira was not able to quantify the indirect selling expenses
incurred for home market sales, the amount of this offset, pursuant to
19 CFR 353.56(b), was the lesser of (the recalculated) home market
inventory carrying costs or U.S. commissions (see Concurrence
Memorandum and Calculation Memorandum, December 1, 1997). No other
adjustments were claimed or allowed.
Preliminary Results of Review
As a result of our review, we preliminarily determine the weighted-
average dumping margin for the period March 1, 1996, through February
28, 1997 to be as follows:
------------------------------------------------------------------------
Margin
Manufacturer (percent)
------------------------------------------------------------------------
Kemira Fibres Oy........................................... 13.63
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Cash Deposit Requirements
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 this administrative review, as provided by section
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed
company will be that rate established in the final results of this
review; (2) for previously reviewed or investigated companies not
listed 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 3.9 percent, the ``new shipper''
rate established in the first review conducted by the Department, as
explained below.
On March 25, 1993, the Court of International Trade (CIT) in Floral
Trade Council v. United States, 822 F.Supp. 766 (CIT 1993) and Federal-
Mogul Corporation v. United States, 822 F.Supp. 782 (CIT 1993) decided
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 the above-mentioned decisions, it
is appropriate to reinstate the ``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.
However, in proceedings governed by antidumping findings, unless we
are able to ascertain the ``all others'' rate from the Treasury LTFV
investigation, the Department has determined that it is appropriate to
adopt the ``new shipper'' rate established in the first final results
of administrative review published by the Department (or that rate as
amended for correction of clerical errors as a result of litigation) as
the ``all others'' rate for the purposes of establishing cash deposits
in all current and future administrative reviews (see, e.g., Final
Results of Antidumping Duty Administrative Review of Tapered Roller
Bearings, Four Inches or Less in Outside Diameter, and Components
Thereof, From Japan, 58 FR 64720, (December 9, 1993)).
Therefore, the ``all others'' rate applied is the rate of 3.9
percent from Viscose Rayon Staple Fiber From Finland, Final Results of
Administrative Review of Antidumping Finding (46 FR 19844, April 1,
1981), the first review conducted by the Department in which a ``new
shipper'' rate (or in this case, a rate for all shipments of the
subject merchandise, including new shippers) was established.
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of this administrative review.
Assessment Rates
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between export price and NV may vary from the percentages
stated above. The Department will issue appraisement instructions
directly to the U.S. Customs Service upon completion of this review.
The final results of this review shall be the basis for the assessment
of antidumping duties on entries of merchandise covered by the final
results of this review and for future deposits of estimated duties. For
assessment purposes, we intend to calculate importer-specific
assessment rates for viscose rayon staple fiber. For both EP and CEP
sales, we will divide the total dumping margins (calculated as the
difference between NV and EP (or CEP)) for each importer) by the
entered value of the merchandise. Upon the completion of this review,
we will direct Customs to assess the resulting ad valorem rates against
the entered value of each entry of the subject merchandise by the
importer during the POR.
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.
Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of the date of publication of this
notice. A hearing, if requested, will be held 44 days from the date of
publication of this notice at the main Commerce Department building.
Interested parties are invited to comment on these preliminary
results. In accordance with 19 CFR 353.38, case briefs from interested
parties are due within 30 days of publication of this notice. Rebuttal
briefs, limited to the issues raised in the respective case briefs, may
be submitted no later than 37 days of publication of this notice.
Parties who submit case briefs or rebuttal briefs in this proceeding
are requested to submit with each argument (1) a statement of the issue
and (2) a brief summary of the argument. The Department will
subsequently publish the final results of this administrative review,
including the results of its analysis of issues raised in any such
written briefs or hearing. The Department will issue final results of
this review within 120 days of publication of these preliminary
results.
Interested parties who wish to request a hearing or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, Room B-099, within ten days of the
date of publication of this notice. Requests should contain: (1) The
party's name, address and telephone number; (2) the number of
participants; (3) a list of issues to be discussed. In accordance
[[Page 65067]]
with 19 CFR 353.38(b), issues raised in hearings will be limited to
those raised in the respective case briefs and rebuttal briefs.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act and 19 CFR 353.22(c)(5).
Dated: December 1, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-32356 Filed 12-9-97; 8:45 am]
BILLING CODE 3510-DS-P
