[Federal Register Volume 59, Number 241 (Friday, December 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30983]
[[Page Unknown]]
[Federal Register: December 16, 1994]
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DEPARTMENT OF COMMERCE
[A-791-802]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Furfuryl Alcohol From
the Republic of South Africa
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: December 16, 1994.
FOR FURTHER INFORMATION CONTACT: Lori Way or John Brinkmann, Office of
Antidumping Investigations, Import Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230; telephone (202) 482-0656 or 482-5288, respectively.
Preliminary Determination
We preliminarily determine that imports of furfuryl alcohol from
the Republic of South Africa (South Africa) are being, or are likely to
be, sold in the United States at less than fair value, as provided in
section 733 of the Tariff Act of 1930, as amended (the Act). The
estimated margins are shown in the ``Suspension of Liquidation''
section of this notice.
Case History
Since the initiation of this investigation on June 20, 1994 (59 FR
32953, June 27, 1994), the following events have occurred.
On July 15, 1994, the U.S. International Trade Commission (ITC)
issued an affirmative preliminary injury determination in this case
(see 59 FR 38201, July 27, 1994).
On July 19, 1994, officials of the Department of Commerce (the
Department) visited the petitioner's facilities to observe the furfuryl
alcohol production process for purposes of developing the
questionnaire.
On August 3, 1994, the Department issued an antidumping
questionnaire to Illovo Sugar Limited (ISL), which accounted for at
least 60 percent of the exports of the subject merchandise to the
United States during the period of investigation (POI). In August 1994,
officials from the Department presented this questionnaire to ISL in
South Africa.
On August 29, 1994, ISL submitted its response to Section A of our
questionnaire. On September 21, 1994, ISL submitted its response to
Sections B and C of our questionnaire. A supplemental questionnaire was
issued on October 19, 1994. On November 7, 1994, ISL submitted its
response to this supplemental questionnaire. QO Chemicals, Inc. (the
petitioner) submitted comments regarding deficiencies in the ISL's
questionnaire responses in September, October and November 1994. ISL
submitted comments regarding the petitioner's submissions in September
and November 1994.
On October 7, 1994, the petitioner requested that the preliminary
determination be postponed until December 9, 1994. We have done so in
accordance with 19 CFR 353.15(c) (1994).
Cost of Production Allegation
On October 25, 1994, the petitioner filed an allegation that ISL's
home market sales of furfuryl alcohol during the POI were sold at less
than the cost of production (COP). On November 9, 1994, we issued a
deficiency letter regarding the allegation. The petitioner filed
supplements to its COP allegation in October, November and December
1994. During November and December 1994, ISL filed numerous submissions
regarding the petitioner's COP allegation. Based on our analysis of
this allegation, we have determined that a COP investigation is
warranted. We will determine whether ISL had made sales below COP for
the final determination.
Postponement of Final Determination
Pursuant to section 735(a)(2)(A) of the Act, ISL requested on
December 2, 1994, that, in the event of an affirmative preliminary
determination in this investigation, the Department postpone the final
determination until no later than 135 days after the date of
publication of an affirmative preliminary determination in the Federal
Register. Pursuant to 19 CFR 353.20(b), because our preliminary
determination is affirmative, and no compelling reasons for denial
exist, we have done so.
Scope of the Investigation
The product covered by this investigation is furfuryl alcohol
(C4H3OCH2OH). Furfuryl alcohol is a primary alcohol, and
is colorless or pale yellow in appearance. It is used in the
manufacture of resins and as a wetting agent and solvent for coating
resins, nitrocellulose, cellulose acetate, and other soluble dyes.
The product subject to this investigation is classifiable under
subheading 2932.13.00 of the Harmonized Tariff Schedule of the United
States (HTSUS). Although the HTSUS subheading is provided for
convenience and Customs purposes, our written description of the scope
of this investigation is dispositive.
Period of Investigation
The period of investigation (POI) is December 1, 1993, through May
31, 1994.
Such or Similar Comparisons
We have determined that the products covered by this investigation
constitute a single category of such or similar merchandise. ISL
reported that it sold merchandise in the home market identical to that
sold in the United States. Accordingly, no difference in merchandise
information was reported in ISL's sales listings. In accordance with 19
CFR 353.58, we made comparisons at the same level of trade, where
possible.
Fair Value Comparisons
To determine whether sales by ISL of furfuryl alcohol to the United
States were made at less than fair value, we compared the United States
price (USP) to the foreign market value (FMV), as specified in the
``United States Price'' and ``Foreign Market Value'' sections of this
notice.
United States Price
For the purpose of this preliminary determination, we have found
that ISL and its exclusive selling agent, Harborchem, are related
parties pursuant to Section 771(13) of the Act (See concurrence
memorandum, dated December 7, 1994, on file in Room B-099 of the Main
Commerce Department building), and that all of ISL's U.S. sales to the
first unrelated purchaser took place after importation into the United
States. Therefore, we based USP on exporter's sales prices, in
accordance with section 772(c) of the Act. The claimed relationship
between ISL and Harborchem is based on one of agency. We will, however,
reexamine the issue of agency for the purpose of the final
determination.
We calculated ISL's exporter's sales price sales based on FOB U.S.
storage or delivered prices to unrelated customers in the United
States. We made deductions, where appropriate, for the following
movement charges in accordance with section 772(e) of the Act: foreign
loading on ship, foreign inland freight, ocean freight, marine
insurance, tank car rental, U.S inland freight, U.S. inland insurance,
U.S. brokerage and handling, and U.S. duty. We also made deductions,
where appropriate, for credit expenses, indirect selling expenses
incurred in South Africa, and indirect selling expenses incurred in the
United States, including quality control testing, inventory carrying
expenses, warehousing expenses, and U.S. storage insurance.
We did not make one of the adjustments for freight claimed by
Harborchem because there is not adequate information on the record to
support this adjustment. Further, we did not make an adjustment to the
margin for export incentive payments received by ISL from the
Government of the Republic of South Africa through the Government's
General Export Incentive Scheme because there is no on-going companion
countervailing duty investigation and no such duties are currently
being collected (see concurrence memorandum, dated December 7, 1994).
We adjusted USP for taxes in accordance with our practice, pursuant
to the U.S. Court of International Trade (CIT) decision in Federal-
Mogul Corp. v. United States, 834 F. Supp. 1391 (CIT 1993). (See Notice
of Final Determination of Sales at Less Than Fair Value: Calcium
Aluminate Cement, Cement Clinker and Flux from France, 59 FR 14136
(March 25, 1994).)
Foreign Market 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
FMV, we compared the volume of home market sales of the subject
merchandise to the volume of third country sales of subject
merchandise, in accordance with section 773(a)(1)(B) of the Act. Since
the total volume of subject merchandise sold by ISL in South Africa
during the POI was greater than five percent of the aggregate volume of
third country sales for such or similar merchandise, we determined that
the home market was viable within the meaning of 19 CFR 353.48(a).
Therefore, we based FMV on home market sales.
In accordance with 19 CFR 353.46, we calculated FMV based on FOB
storage or delivered prices to unrelated customers. We treated both
pre-sale home market movement expenses and pre-sale home market
warehousing expenses as indirect expenses and adjusted for these
expenses under the exporter's sales price offset provision set forth in
19 CFR 353.56(b)(2), as appropriate.
We treated post-sale home market inland freight as a direct expense
and deducted this expense from FMV. Pursuant to 19 CFR 353.56(a)(2), we
made circumstance-of-sale adjustments, where appropriate, for
differences in credit expenses. We recalculated home market credit
expenses based on gross prices exclusive of imputed value added tax
expenses. We also deducted from FMV rebates and the weighted-average
home market indirect selling expenses including, where appropriate,
inventory carrying costs, pre-sale warehousing expenses and certain
home market inland freight expenses. The deduction for home market
indirect selling expenses was capped by the sum of U.S. indirect
selling expenses, in accordance with 19 CFR 353.56(b)(1) and (2). We
deducted home market packing and added U.S. packing costs, in
accordance with section 773(a)(1) of the Act.
We adjusted for taxes in accordance with our practice. (See the
``United States Price'' section of this notice, above.)
Although we allowed a discount, we did not deduct an amount for
quantity discounts because ISL failed to place adequate information on
the record to demonstrate that the discount met the criteria for
quantity discounts set forth in 19 CFR 353.55(b) (see concurrence
memorandum). We did not exclude home market sales of furfuryl alcohol
packed in drums from the base of home market sales used for comparison
to U.S. sales, as requested by ISL, because ISL did not demonstrate
that these sales were outside its ordinary course of business.
Currency Conversion
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.
Verification
As provided in section 776(b) of the Act, we will verify all
information that we determine is acceptable for use in making our final
determination.
Suspension of Liquidation
In accordance with section 733(d)(1) of the Act, we are directing
the Customs Service to suspend liquidation of all entries of furfuryl
alcohol from South Africa that are entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
notice in the Federal Register. The Customs Service shall require a
cash deposit or posting of a bond equal to the estimated preliminary
dumping margins, as shown below. This suspension of liquidation will
remain in effect until further notice. The less than fair value margins
are as follows:
------------------------------------------------------------------------
Weighted-
average
Producer/manufacturer/exporter margin
percentage
------------------------------------------------------------------------
Illovo Sugar Limited........................................ 10.84
All others.................................................. 10.84
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine whether these imports are materially injuring,
or threaten material injury to, the U.S. industry before the later of
120 days after the date of this preliminary determination or 45 days
after our final determination.
Public Comment
Interested parties who wish to request a hearing must submit a
written request to the Assistant Secretary for Import Administration,
U.S. Department of Commerce, Room B-099, within ten days of the
publication of this notice. Requests should contain: (1) the party's
name, address and telephone number; (2) the number of participants; and
(3) a list of the issues to be discussed.
In accordance with 19 CFR 353.38, case briefs or other written
comments in at least ten copies must be submitted to the Assistant
Secretary no later than March 17, 1995, and rebuttal briefs no later
than March 22, 1995. A public hearing, if requested, will be held on
March 24, 1995, at 9:30 a.m. at the U.S. Department of Commerce, in
Room 1414, 14th Street and Constitution Avenue, NW, Washington, DC
20230. Parties should confirm by telephone the time, date, and place of
the hearing 48 hours prior to the scheduled time. In accordance with 19
CFR 353.38(b), oral presentations will be limited to issues raised in
the briefs.
If this investigation proceeds normally, we will make our final
determination no later than 135 days after publication of this notice
in the Federal Register.
This determination is published pursuant to section 733(f) and
735(d) of the Act and 19 CFR 353.15(a)(4) and 353.20(b)(2).
Dated: December 9, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-30983 Filed 12-15-94; 8:45 am]
BILLING CODE 3510-DS-P
