[Federal Register Volume 62, Number 30 (Thursday, February 13, 1997)]
[Notices]
[Pages 6758-6761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3634]
[[Page 6758]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-557-805]
Notice of Preliminary Results of Antidumping Duty Administrative
Review: Extruded Rubber Thread From Malaysia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request by petitioner and four producers/
exporters of the subject merchandise, the Department of Commerce (the
Department) is conducting an administrative review of the antidumping
duty order on extruded rubber thread from Malaysia. The review covers
five manufacturers/exporters. The period of review (the POR) is October
1, 1993, through September 30, 1994.
We have preliminarily determined that sales have been made below
foreign market value (FMV) by all of the companies subject to this
review. If these preliminary results are adopted in the final results
of this administrative review, we will instruct the U.S. Customs
Service to assess antidumping duties on all appropriate entries.
We invite interested parties to comment on these preliminary
results. 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: February 13, 1997.
FOR FURTHER INFORMATION CONTACT: Laurel LaCivita or Robert
Blankenbaker, Office of Antidumping Investigations, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C.
20230; telephone: (202) 482-4740 or (202) 482-0989, respectively.
SUPPLEMENTARY INFORMATION:
Background
On October 7, 1992, the Department published in the Federal
Register (57 FR 46150) the antidumping duty order on extruded rubber
thread from Malaysia. In accordance with 19 CFR 353.22(a)(2), in
October 1994 the petitioner and the following producers and exporters
of extruded rubber thread requested an administrative review of the
antidumping order covering the period October 1, 1993, through
September 30, 1994: Heveafil Sdn. Bhd. (``Heveafil''), Rubberflex Sdn.
Bhd. (``Rubberflex''), Filati Lastex Elastfibre (Malaysia)
(``Filati''), Rubfil Sdn. Bhd. (``Rubfil'') and Rubber Thread (``Rubber
Thread'). On November 14, 1994, the Department published its notice of
initiation of an administrative review of the antidumping duty order on
extruded rubber thread from Malaysia for Heveafil, Filati, Rubberflex,
Rubfil and Rubber Thread (59 FR 56459). Rubber Thread reported that it
made no shipments of the subject merchandise during the POR.
Scope of the Review
The product covered by this review is extruded rubber thread.
Extruded rubber thread is defined as vulcanized rubber thread obtained
by extrusion of stable or concentrated natural rubber latex of any
cross sectional shape, measuring from 0.18 mm, which is 0.007 inch or
140 gauge, to 1.42 mm, which is 0.056 inch or 18 gauge, in diameter.
Extruded rubber thread is currently classified under subheading
4007.00.00 of the Harmonized Tariff Schedule of the United States
(HTSUS). The HTSUS subheadings are provided for convenience and Customs
purposes. Our written description of the scope of this review is
dispositive.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and to the
Department's regulations are in reference to the provisions as they
existed on December 31, 1994. We are conducting this administrative
review in accordance with section 751(a) of the Tariff Act of 1930, as
amended (the Act).
Such or Similar Merchandise
In determining similar merchandise comparisons, pursuant to section
771(16) of the Act, we considered the following physical
characteristics, which appear in order of importance: (1) quality
(i.e., first vs. second); (2) size; (3) finish; (4) color; (5) special
qualities; (6) uniformity; (7) elongation; (8) tensile strength; and
(9) modulus. With the exception of quality, these characteristics are
in accordance with matching criteria set forth in the January 26, 1994,
memorandum to the file on the record of this review. Regarding quality,
we have added this characteristic in order to address respondents'
concerns regarding differences in value related to significant
differences in quality.
Regarding color, respondents assigned separate codes to each shade
of color. We reassigned color codes to sales of subject merchandise, in
accordance with the instructions contained in the questionnaire. This
resulted in our treating all shades of a given color as equally similar
to each other instead of treating a specific shade as most similar to
another specific shade.
Fair Value Comparisons
To determine whether sales of extruded rubber thread from Malaysia
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
We based USP on purchase price (PP), in accordance with section
772(b) of the Act, when the subject merchandise was sold to unrelated
purchasers in the United States prior to importation and when the
exporter's sales price (ESP) methodology of section 772(c) of the Act
was not otherwise indicated. In addition, where sales to the first
unrelated purchaser took place after importation into the United
States, we based USP on ESP, in accordance with section 772(c) of the
Act.
We based purchase price on packed, CIF prices to the first
unrelated purchaser in the United States. We made deductions from USP,
where appropriate, for rebates, foreign inland freight, foreign
brokerage and handling, ocean freight, marine insurance, U.S. customs
duty, harbor maintenance and merchandise processing fees, and U.S.
brokerage and handling expenses, in accordance with section 772(d)(2)
of the Act.
For sales made from the inventory of the U.S. branch office, we
based USP on ESP, in accordance with section 772(c) of the Act. We
calculated ESP based on packed, delivered prices to unrelated customers
in the United States. We made deductions, where appropriate, for
rebates. We also made deductions for foreign inland freight, foreign
brokerage, ocean freight, marine insurance, U.S. inland freight, U.S.
brokerage, entry fees, harbor maintenance and processing fees, and
inspection charges. In accordance with section 772(e)(2) of the Act, we
made additional deductions, where appropriate, for credit and indirect
selling expenses.
Best Information Available
Section 776(b) of the Act requires the Department to use the best
information available (BIA) if it is unable to verify the accuracy of
the information submitted. In deciding what to use as BIA, the
Department's regulations provide that the Department may take into
account whether a party refuses to provide requested information. See
19
[[Page 6759]]
CFR 353.37(b). Thus, the Department may determine, on a case-by-case
basis, what is the BIA.
In cases where we have determined to use total BIA, we apply a two
tier methodology of BIA depending on whether the companies attempted to
or refused to cooperate in these reviews. See Antifriction Bearings
(Other Than Tapered Roller Bearings) and Parts Thereof From France, et
al.; Final Results of Antidumping Duty Administrative Reviews, Partial
Termination of Administrative Reviews, and Revocation in Part of
Antidumping Duty Orders, 60 FR 10900 (February 28, 1995). When a
company refused to provide the information requested in the form
required, or otherwise significantly impeded the Department's
proceedings, we assigned that company first-tier BIA, which is the
higher of: (1) the highest of the rates found for any firm for the same
class or kind of merchandise in the same country of origin in the less-
than-fair-value (LTFV) investigation or a prior administrative review;
or (2) the highest calculated rate found in this review for any firm
for the same class or kind of merchandise in the same country of
origin.
When a company has substantially cooperated with our requests for
information including, in some cases, verification, but failed to
provide complete or accurate information, we assigned that company
second-tier BIA, which is the higher of: (1) The highest rate
(including the ``all others'' rate) ever applicable to the firm for the
same class or kind of merchandise from either the LTFV investigation or
a prior administrative review or, if the firm has never before been
investigated or reviewed, the ``all others'' rate from the LTFV
investigation; or (2) the highest calculated rate for any firm in this
review for the class or kind of merchandise from the same country of
origin. See Allied-Signal Aerospace Co. v. United States, 996 F.2d 1185
(Fed. Cir. 1993).
We applied second-tier BIA to Rubberflex. While Rubberflex
cooperated throughout the administrative review by submitting
questionnaire responses and with verification, we found that responses
provided by Rubberflex could not be verified and thus resorted to BIA
pursuant to section 776(b) of the Act. The inaccuracies which render
the response unusable for purposes of margin calculations include:
Rubberflex failed to reconcile its original questionnaire response with
its current financial statements and current trial balance; Rubberflex
did not report all PP sales that caused entries during the POR; due to
inconsistencies in Rubberflex's date of sale methodology, Rubberflex
failed to clarify which sales applied to this review period pursuant to
the Department's methodology; Rubberflex provided revised questionnaire
responses at verification for home market indirect selling expenses,
direct labor expense and packing labor, variable overhead, and cost of
goods sold; for these same expenses Rubberflex could not demonstrate
how the original response was supported by documentation, nor could it
document the difference between the original and revised submission for
these items; Rubberflex failed to have all the appropriate
documentation required to trace the pre-selected sales to its books and
records, and; Rubberflex failed to report a trade-bill financing
expense incurred on U.S. sales as an adjustment to U.S. price.
Furthermore, it failed to provide original source documentation for its
reported managerial labor expenses. The deficiencies are outlined in
detail in the public version of the memorandum on Rubberflex's Failed
Verification from Holly Kuga to Jeffrey P. Bialos, dated November 26,
1996.
In this case, the BIA rate is the highest calculated rate for any
firm in this review for the class or kind of merchandise from the same
country of origin. Thus, as a result of our review, we preliminarily
determine the dumping margin for Rubberflex to be 29.76 percent.
Foreign Market Value
In order to determine whether the home market was viable during the
POR (i.e., whether there were sufficient sales of extruded rubber
thread in the home market to serve as a viable basis for calculating
FMV), we compared the volume of each of the respondent's home market
sales to the volume of its third country sales, in accordance with
section 773(a)(1)(B) of the Act and 19 CFR 353.48. Based on this
comparison, we determined that Heveafil and Rubfil did not have a
viable home market during the POR. Consequently, we based FMV on third
country sales for these companies.
In accordance with 19 CFR 353.49(b), we selected the appropriate
third country markets for Heveafil and Rubfil based on the following
criteria: Similarity of merchandise sold in the third country to the
merchandise exported to the United States, the volume of sales to the
third country, and the similarity of market organization between the
third country and U.S. markets. Specifically, we chose, as the
appropriate third country markets, Italy for Heveafil and Hong Kong for
Rubfil.
Cost of Production
Because the Department disregarded third country sales below the
COP for both Heveafil and Rubberflex in the original investigation (see
Final Determination of Sales at Less Than Fair Value: Extruded Rubber
Thread from Malaysia, 57 FR 38465 (August 25, 1992)) in accordance with
our standard practice, there were reasonable grounds to believe or
suspect that both Heveafil and Rubberflex had made third country sales
at prices below their COP in this review (see Notice of Final Results
of Antidumping Duty Administrative: Extruded Rubber Thread from
Malaysia, 61 FR 54767 (October 22, 1996)). Thus, the Department
initiated a COP investigation with respect to Heveafil and Rubberflex.
Additionally, upon petitioner's allegation of sales made below the COP
by Filati and Rubfil, the Department determined that it had reasonable
grounds to believe or suspect that sales by Filati and Rubfil of the
foreign product under consideration for the determination of FMV in
this review may have been made at prices below the COP as provided by
section 773(b) of the Act. Therefore, pursuant to section 773(b) of the
Act, we initiated a COP investigation of sales by Filati and Rubfil.
See COP Initiation Memorandum, dated August 2, 1995.
In order to determine whether home market or third country prices
were above the cost of production (COP), we calculated the COP for each
model based on the sum of the respondent's cost of materials, labor,
other fabrication costs, general expenses, and packing pursuant to 19
CFR 353.51(c).
In accordance with section 773(b) of the Act, and longstanding
administrative practice (see, e.g., Final Determination of Sales at
Less Than Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip
from Korea, 56 FR 16306 (April 22, 1991) and Final Results of
Antidumping Duty Administrative Review: Mechanical Transfer Presses
from Japan, 59 FR 9958 (March 2, 1994)), if over ninety percent of
respondent's sales of a given model were at prices above the cost of
production, we did not disregard any below-cost sales because we
determined that the below-cost sales were not made in substantial
quantities. Where we found between ten and ninety percent of
respondent's sales of a given product were at prices below the COP and
the below cost sales were made over an extended period of time, we
disregarded only the below-cost sales. Where we found that more than
ninety percent of
[[Page 6760]]
respondent's sales were at prices below the COP and the sales were made
over an extended period of time, we disregarded all sales for that
product and calculated FMV based on constructed value (CV), in
accordance with section 773(e) of the Act. Based on this test, we
disregarded below-cost sales with respect to Heveafil, Filati and
Rubfil.
In accordance with section 773(a)(2) of the Act, we used CV as the
basis for foreign market value where there were no usable sales of
comparable merchandise in the appropriate home, or third country,
markets. We calculated CV for each model based on the sum of
respondent's cost of manufacture (COM), plus general expenses, profit
and U.S. packing. In accordance with section 773(e)(1)(B) of the Act,
for general expenses, which include selling, general and administrative
expenses (SG&A), we used the greater of the reported general expenses
or the statutory minimum of ten percent of the COM. For profit, we used
the greater of the weighted-average home or third country market profit
during the POR or the statutory minimum of eight percent of the COM and
SG&A.
Where FMV was based on third country sales, we based FMV on CIF
prices to unrelated customers in comparable channels of trade as that
of the U.S. customer. Specifically, in accordance with section
773(a)(1)(B) of the Act, FMV was based on direct sales from Malaysia
for purchase price sales comparisons, and on sales from the inventory
of each respondent's branch office for ESP sales comparisons.
For home or third country market price-to-purchase price
comparisons, we made deductions, where appropriate, for rebates. We
also deducted post-sale home or third country market movement charges
from FMV under the circumstance of sale provision of section
773(a)(4)(B) of the Act and 19 CFR 353.56(a). This adjustment included
Malaysian foreign inland freight, brokerage, ocean freight, marine
insurance, brokerage, and inland freight to unrelated customers, where
appropriate. Pursuant to 19 CFR 353.56(a)(2), we made circumstance of
sale adjustments, where appropriate, for differences in credit
expenses.
For home or third country market price-to-ESP comparisons, we made
deductions for rebates and credit expenses where appropriate. We
deducted the home/third country market indirect selling expenses,
including inventory carrying costs, pre-sale freight (i.e., foreign
inland freight, brokerage, ocean freight, marine insurance, brokerage,
and foreign freight to warehouse) and other indirect selling expenses,
up to the amount of indirect selling expenses incurred on U.S. sales,
in accordance with 19 CFR 353.56(b)(2).
For all price-to-price comparisons, we deducted home or third
country market packing costs and added U.S. packing costs, where
appropriate, in accordance with section 773(a)(1) of the Act. In
addition, where appropriate, we made adjustments to FMV to account for
differences in physical characteristics of the merchandise, in
accordance with section 773(a)(4)(c) of the Act and 19 CFR 353.57 and
where possible, made comparisons at the same level in accordance with
19 CFR 353.58.
For CV-to-purchase price comparisons, we made circumstance of sale
adjustments, where appropriate, for credit expenses in accordance with
773(a)(4)(B) and 19 CFR 353.56.
For CV-to-ESP comparisons, we made deductions, where appropriate,
for credit expenses. We also deducted the home market or third country
market indirect selling expenses, including inventory carrying costs
and other indirect selling expenses, up to the amount of indirect
selling expenses incurred on U.S. sales, in accordance with 19 CFR
353.56(b)(2).
For all CV-to-price comparisons, we added U.S. packing expenses as
specified above, in accordance with section 773(a)(1) of the Act.
Currency Conversion
We made currency conversions in accordance with 19 CFR 353.60(a).
All currency conversions were made at the rates certified by the
Federal Reserve Bank.
Verification
As provided in section 776(b) of the Act, we conducted a
verification of information provided by Rubberflex by using standard
verification procedures including on-site inspection of the
manufacturer's facilities, examination of relevant sales and financial
records, and selection of original source documentation containing
relevant information.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the
following margins exist for the period October 1, 1993, through
September 30, 1994:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Heveafil Sdn. Bhd.......................................... 0.36
Rubberflex Sdn. Bhd........................................ 29.76
Rubfil Sdn. Bhd............................................ 29.76
Filati Lastex Elastfibre (Malaysia)........................ 0.00
Rubber Thread.............................................. 15.16
------------------------------------------------------------------------
*Rubber Thread reported that it made no shipments of the subject
merchandise during the period of review. Rubber Thread has not been
investigated or reviewed previously.
Interested parties may request a disclosure within 5 days of
publication of this notice and may request a hearing within 10 days of
the date of publication. Any hearing, if requested, will be held 44
days after the date of publication, or the first workday thereafter.
Interested parties may submit case briefs within 30 days of the date of
publication. Rebuttal briefs, limited to issues raised in the briefs,
may be filed not later than 37 days after the date of publication. The
Department will publish a notice of the final results of this
administrative review, which will include the results of its analysis
of issues raised in any such briefs.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between USP and FMV may vary from the percentages stated
above. The Department will issue appraisement instructions directly to
the U.S. Customs Service. Furthermore, the following deposit
requirements will be effective for all shipments of extruded rubber
thread from Malaysia 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 rates for the reviewed companies will be the
rates established in the final results of this review, except if the
rate was less than 0.50 percent and, therefore, de minimis within the
meaning of 19 CFR 353.6, in which case the cash deposit will be zero;
(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) if neither the exporter nor the manufacturer
is a firm covered in this or any previous review conducted by the
Department, the cash deposit rate will be the ``all others'' rate, as
set forth below.
[[Page 6761]]
On March 25, 1993, the U.S. 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 this decision, 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. Because this proceeding is governed by an
antidumping duty order, the ``all others'' rate for the purposes of
this review will be 15.16 percent, the ``all others'' rate established
in the LTFV investigation.
These cash deposit requirements, when imposed, shall remain in
effect until publication of the final results of the next
administrative review.
This notice 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
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: January 14, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-3634 Filed 2-12-97; 8:45 am]
BILLING CODE 3510-DS-P
