[Federal Register Volume 63, Number 35 (Monday, February 23, 1998)]
[Notices]
[Pages 8948-8953]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4539]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-307-813]
Suspension of Antidumping Duty Investigation: Steel Wire Rod From
Venezuela
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
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[[Page 8949]]
SUMMARY: The Department of Commerce (the Department) has suspended the
antidumping duty investigation involving steel wire rod from Venezuela.
The basis for this action is an agreement between the Department and
C.V.G. Siderurgica del Orinoco, C.A. (Sidor) to revise their prices to
eliminate completely sales of this merchandise to the United States at
less than fair value.
EFFECTIVE DATE: February 13, 1998.
FOR FURTHER INFORMATION CONTACT: Lyn Baranowski, Lesley Stagliano,
Elisabeth Urfer, or Edward Yang, Office of AD/CVD Enforcement III,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th & Constitution Avenue N.W., Washington, DC
20230; telephone (202) 482-1385, (202) 482-0648, (202) 482-4236, or
(202) 482-0406, respectively.
SUPPLEMENTARY INFORMATION:
Background
On March 18, 1997, the Department initiated an antidumping
investigation under section 732 of the Tariff Act of 1930, (the Act),
as amended, to determine whether imports of steel wire rod from
Venezuela are being or are likely to be sold in the United States at
less than fair value (62 FR 13854 (March 18, 1997)). On April 14, 1997,
the United States International Trade Commission (ITC) notified the
Department of its affirmative preliminary injury determination (see ITC
Investigation Nos. 701-TA-368-371 and 731-TA-763-766). On October 1,
1997, the Department preliminarily determined that steel wire rod is
being, or is likely to be, sold in the United States at less than fair
value (LTFV), as provided in section 733 of the Tariff Act of 1930, as
amended by the Uruguay Round Agreements Act (62 FR 51584 (October 1,
1997) (``LTFV Prelim'')).
The Department and Sidor initialed a proposed agreement suspending
this investigation on January 14, 1998. On January 14, 1998, we invited
interested parties to provide written comments on the agreement and
received comments from Connecticut Steel Corporation, Co-Steel Raritan,
GS Industries, Inc., Keystone Steel & Wire Company, North Star Steel
Texas, Inc. and Northwestern Steel and Wire Company.
The Department and Sidor signed the final suspension agreement on
February 13, 1998.
Scope of Investigation
The products covered by the investigation are certain hot-rolled
carbon steel and alloy steel products, in coils, of approximately round
cross section, between 5.00 mm (0.20 inch) and 19.0 mm (0.75 inch),
inclusive, in solid cross-sectional diameter. Specifically excluded are
steel products possessing the above noted physical characteristics and
meeting the Harmonized Tariff Schedule of the United States (``HTSUS'')
definitions for a) stainless steel; b) tool steel; c) high nickel
steel; d) ball bearing steel; e) free machining steel that contains by
weight 0.03 percent or more of lead, 0.05 percent or more of bismuth,
0.08 percent or more of sulfur, more than 0.4 percent of phosphorus,
more than 0.05 percent of selenium, and/or more than 0.01 percent of
tellurium; or f) concrete reinforcing bars and rods. The following
products are also excluded from the scope of this investigation:
Coiled products 5.50 mm or less in true diameter with an
average partial decarburization per coil of no more than 70 microns in
depth, no inclusions greater than 20 microns, containing by weight the
following: carbon greater than or equal to 0.68 percent; aluminum less
than or equal to 0.005 percent; phosphorous plus sulfur less than or
equal to 0.040 percent; maximum combined copper, nickel and chromium
content of 0.13 percent; and nitrogen less than or equal to 0.006
percent. This product is commonly referred to as ``Tire Cord Wire
Rod.''
Coiled products 7.9 to 18 mm in diameter, with a partial
decarburization of 75 microns or less in depth and seams no more than
75 microns in depth, containing 0.48 to 0.73 percent carbon by weight.
This product is commonly referred to as ``Valve Spring Quality Wire
Rod.''
Coiled products 11 mm to 12.5 mm in diameter, with an
average partial decarburization per coil of no more than 70 microns in
depth, no inclusions greater than 20 microns, containing by weight the
following: carbon greater than or equal to 0.72 percent; manganese
0.50-1.10 percent; phosphorus less than or equal to 0.030 percent;
sulfur less than or equal to 0.035 percent; and silicon 0.10-0.35
percent. This product is free of injurious piping and undue
segregation. The use of this excluded product is to fulfill contracts
for the sale of Class III pipe wrap wire in conformity with ASTM
specification A648-95 and imports of this product must be accompanied
by such a declaration on the mill certificate and/or sales invoice.
This excluded product is commonly referred to as ``Semifinished Class
III Pipe Wrap Wire.''
The products under investigation are currently classifiable under
subheadings 7213.91.3000, 7213.91.4500, 7213.91.6000, 7213.99.0030,
7213.99.0090, 7227.20.0000, and 7227.90.6050 of the HTSUS. Although the
HTSUS subheadings are provided for convenience and customs purposes,
our written description of the scope of this investigation is
dispositive.
Exclusion of Pipe Wrap Wire
As stated in the LTFV Prelim, North American Wire Products
Corporation (``NAW''), an importer of the subject merchandise from
Germany, requested that the Department exclude steel wire rod used to
manufacture Class III pipe wrapping wire from the scope of the
investigations of steel wire rod from Canada, Germany, Trinidad and
Tobago, and Venezuela. On December 22, 1997, NAW submitted to the
Department a proposed exclusion definition. On December 30, 1997, and
January 7, 1998, the petitioners submitted letters concurring with the
definition of the scope exclusion and requesting exclusion of this
product from the scope of the investigation. We have reviewed NAW's
request and petitioners' comments and have excluded steel wire rod for
manufacturing Class III pipe wrapping wire from the scope of this
investigation (see Memorandum to Richard W. Moreland dated January 9,
1998).
Suspension of Investigation
The Department consulted with parties to the proceeding and has
considered the comments submitted with respect to the proposed
suspension agreement. In accordance with Section 734(b) of the Act,
exporters of the subject merchandise who account for substantially all
of the imports of that merchandise agree to revise their prices to
eliminate completely any amount by which the normal value of the
subject merchandise exceeds the export price or constructed export
price of that merchandise. We are satisfied that suspension of the
investigation pursuant to section 734(b) of the Act is in the public
interest and have concluded that the agreement can be monitored
effectively. See Public Interest Memorandum, February 13, 1998. We
find, therefore, that the criteria for suspension of an investigation
pursuant to section 734(b) of the Act have been met. The terms and
conditions of this agreement, signed February 13, 1998, are set forth
in Annex I to this notice.
Pursuant to section 734(f)(2)(A)(ii) of the Act, the suspension of
liquidation of all entries of steel wire rod from Venezuela entered or
withdrawn from warehouse, for consumption, as directed in our LTFV
Prelim is hereby
[[Page 8950]]
terminated. Pursuant to section 734(f)(2)(A)(iii) and 733(d)(1)(B) of
the Act, any cash deposits on entries of steel wire rod from Venezuela
pursuant to that suspension of liquidation shall be refunded and any
bonds shall be released.
Notwithstanding the suspension agreement, the Department will
continue the investigation if we receive a request for continuation of
the investigation from an appropriate party in accordance with section
734(g) of the Act within 20 days after the date of publication of this
notice. In accordance with section 734(g) of the Act, if we receive
such a request for continuation, we will complete the investigation and
notify the ITC of our final determination. If the ITC's injury
determination is negative, the agreement will have no force or effect,
and the investigation will be terminated (See section 734(f)(3)(A) of
the Act). If the ITC's determination is affirmative, the Department
will not issue an antidumping duty order as long as the suspension
agreement remains in force, the agreement continues to meet the
requirements of subsections (b) and (d) of section 734 of the Act, and
the parties to the agreement carry out their obligations under the
agreement in accordance with its terms (see section 734(f)(3)(B) of the
Act).
This notice is published pursuant to section 734(f)(1)(A) of the
Act.
Dated: February 19, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
Suspension Agreement Carbon Steel Wire Rod from Venezuela
Under section 734(b) of the Tariff Act of 1930, as amended (19
U.S.C. 1673c(b)) (the Act), and 19 CFR 353.18, the U.S. Department of
Commerce (the Department) and the signatory producers/exporters of
carbon steel wire rod from Venezuela enter into this suspension
agreement (the Agreement). On the basis of the Agreement, the
Department shall suspend its antidumping investigation initiated on
March 24, 1997(62 FR 13854), with respect to carbon steel wire rod from
Venezuela, subject to the terms and provisions set out below.
(A) Product Coverage
The products covered by this Agreement (``subject merchandise'')
are certain hot-rolled carbon steel and alloy steel products, in coils,
of approximately round cross section, between 5.00 mm (0.20 inch) and
19.0 mm (0.75 inch), inclusive, in solid cross-sectional diameter.
Specifically excluded are steel products possessing the above noted
physical characteristics and meeting the Harmonized Tariff Schedule of
the United States (HTSUS) definitions for (a) stainless steel; (b) tool
steel; (c) high nickel steel; (d) ball bearing steel; (e) free
machining steel that contains by weight 0.03 percent or more of lead,
0.05 percent or more of bismuth, 0.08 percent or more of sulfur, more
than 0.4 percent of phosphorus, more than 0.05 percent of selenium,
and/or more than 0.01 percent of tellurium; or (f) concrete reinforcing
bars and rods.
The following products are also excluded from the scope of this
Agreement:
Coiled products 5.50 mm or less in true diameter with an average
partial decarburization per coil of no more than 70 microns in depth,
no inclusions greater than 20 microns, containing by weight the
following: carbon greater than or equal to 0.68 percent; aluminum less
than or equal to 0.005 percent; phosphorous plus sulfur less than or
equal to 0.040 percent; maximum combined copper, nickel and chromium
content of 0.13 percent; and nitrogen less than or equal to 0.006
percent. This product is commonly referred to as ``Tire Cord Wire
Rod.''
Coiled products 7.9 to 18 mm in diameter, with a partial
decarburization of 75 microns or less in depth and seams no more than
75 microns in depth; containing 0.48 to 0.73 percent carbon by weight.
This product is commonly referred to as ``Valve Spring Quality Wire
Rod.''
Coiled products 11 mm to 12.5 mm in diameter, with an average
partial decarburization per coil of no more than 70 microns in depth,
no inclusions greater than 20 microns, containing by weight the
following: carbon greater than or equal to 0.72 percent; manganese
0.50--1.10 percent; phosphorus less than or equal to 0.030 percent;
sulfur less than or equal to 0.035 percent; and silicon 0.10--0.35
percent. This product is free of injurious piping and undue
segregation. The use of this excluded product is to fulfill contracts
for the sale of Class III pipe wrap wire in conformity with ASTM
specification A648-95 and imports of this product must be accompanied
by such a declaration on the mill certificate and/or sales invoice.
This excluded product is commonly referred to as ``Semifinished Class
III Pipe Wrap Wire.''
The products subject to this Agreement are currently classifiable
under subheadings 7213.91.3000, 7213.91.4500, 7213.91.6000,
7213.99.0030, 7213.99.0090, 7227.20.0000, and 7227.90.6050 of the
HTSUS. Although the HTSUS subheadings are provided for convenience and
customs purposes, the written description of the scope of this
Agreement is dispositive.
(B) U.S. Import Coverage
The signatory producers/exporters collectively are the producers
and exporters in Venezuela which, during the antidumping investigation
of the merchandise subject to the Agreement, accounted for
substantially all (not less than at least 85 percent) of the subject
merchandise imported into the United States. The Department may at any
time during the period of the Agreement require additional producers/
exporters in Venezuela to sign the Agreement in order to ensure that
not less than substantially all imports of subject merchandise into the
United States are covered by the Agreement.
(C) Basis of the Agreement
On and after the effective date of the Agreement, each signatory
producer/exporter individually agrees to make any necessary price
revisions to eliminate completely any amount by which the normal value
(NV) of this merchandise exceeds the U.S. price of its merchandise
subject to the Agreement. For this purpose, the Department will
determine the NV in accordance with section 773(e) of the Act and U.S.
price in accordance with section 772 of the Act.
(1) For all sales occurring on or after the effective date of the
Agreement through June 30, 1998, each signatory producer/exporter
agrees not to sell its merchandise subject to the Agreement, whether in
the form imported or as further manufactured subsequent to importation,
to unaffiliated purchasers in the United States; and
(2) For all sales occurring from July 1, 1998 through September 30,
1998, each signatory producer/exporter agrees not to sell its
merchandise subject to the Agreement, whether in the form imported or
as further manufactured subsequent to importation, to unaffiliated
purchasers in the United States at prices that are less than its NV, as
determined by the Department based on cost information for the period
October 1, 1997 through December 31, 1997, and provided to parties not
later than June 20, 1998; and
(3) For all sales occurring on or after October 1, 1998, each
producer/exporter agrees not to sell its merchandise subject to the
Agreement, whether in the form imported or as further manufactured
subsequent to
[[Page 8951]]
importation, to any unaffiliated purchaser in the United States at
prices that are less than its NV of the merchandise, as determined by
the Department on the basis of information submitted to the Department
not later than the dates specified in Section D of the Agreement and
provided to parties not later than September 20, December 20, March 20,
and June 20 of each year. This NV shall apply to sales occurring during
the fiscal quarter beginning on the first day of the month following
the date the Department provides the NV, as stated in this paragraph.
(D) Monitoring
Each signatory producer/exporter will supply to the Department all
information that the Department decides is necessary to ensure that the
producer/exporter is in full compliance with the terms of the
Agreement. As explained below, the Department will provide each
signatory producer/exporter a detailed request for information and
prescribe a required format and method of data compilation, not later
than the beginning of each reporting period.
(1) Sales Information
The Department will require each producer/exporter to report, on
computer tape in the prescribed format and using the prescribed method
of data compilation, each sale (which includes further manufactured
sales) of the merchandise subject to the Agreement, either directly or
indirectly to unaffiliated purchasers in the United States, including
each adjustment applicable to each sale, as specified by the
Department.
The first report of sales data shall be submitted to the
Department, on computer tape in the prescribed format and using the
prescribed method of data compilation, not later than October 15, 1998,
and shall contain the specified sales information covering the period
of July 1 through September 30, 1998. Each subsequent report of sales
data shall be submitted to the Department not later than January 15,
April 15, July 15, and October 15 of each year, and each report shall
contain the specified sales information for the quarterly period ending
one month prior to the due date, except that if the Department receives
information that a possible violation of the Agreement may have
occurred, the Department may request sales data on a monthly, rather
than quarterly basis.
(2) Cost Information
Producers/exporters must request NVs for all subject merchandise
that will be sold in the United States. For those products for which
the producer/exporter is requesting NVs, the Department will require
each producer/exporter to report: their actual cost of manufacturing;
selling, general and administrative (SG&A) expenses; further
manufacturing costs; and profit data on a quarterly basis, in the
prescribed format and using the prescribed method of data compilation.
Further manufacturing costs plus an allocable portion of profit, as
provided in section 772(d)(2) and (3) of the Act, will be subtracted
from the U.S. sale price to determine compliance with the NV. Each such
producer/exporter also must report anticipated increases in production
costs and may report anticipated decreases in production costs in the
quarter in which the information is submitted resulting from factors
such as anticipated changes in production yield, changes in production
process, changes in production quantities or changes in production
facilities. Extraordinary cost items related to the privatization will
be considered, consistent with the Department's regulations and
policies. If they meet our statutory and regulatory criteria, such
items may include shutdowns of facilities, environmental cleanups, and
workforce reductions. (For example, see the Side Letter to the
Suspension Agreement for Grey Portland Cement and Clinker from
Venezuela (initialed version dated December 22, 1991, finalized
February 11, 1992).)
The first report of cost data related to the relevant period of
July 1, 1998, through September 30, 1998 shall be submitted to the
Department not later than April 30, 1998, and shall contain the
specified cost data covering the period October 1, 1997, through
December 31, 1997. Each subsequent report shall be submitted to the
Department not later than July 31, October 31, January 31, and April 30
of each year, and each report shall contain specified information for
the quarter ending one month prior to the due date.
(3) Special Adjustment of Normal Value
If the Department determines that the NV it determined for a
previous quarter was erroneous because the reported costs for that
period were inaccurate or incomplete, or for any other reason, the
Department may adjust NV in a subsequent period or periods, unless the
Department determines that Section F of the Agreement applies.
(4) Verification
Each producer/exporter agrees to permit full verification of all
cost and sales information semi-annually, or more frequently, as the
Department deems necessary.
(5) Bundling or Other Arrangements
Producers/exporters agree not to circumvent the Agreement. In
accordance with the date set forth in Section D(1) of the Agreement,
producers/exporters will submit a written statement to the Department
certifying that the sales reported herein were not, or are not part of
or related to, any bundling arrangement, on-site processing
arrangement, discounts/free goods/financing package, swap, or other
exchange where such arrangement is designed to circumvent the basis of
the Agreement.
Where there is reason to believe that such an arrangement does
circumvent the basis of the Agreement, the Department will request the
producers/exporters to provide, within 15 days, all particulars
regarding any such arrangement, including, but not limited to, sales
information pertaining to covered and non-covered merchandise that is
manufactured or sold by producers/exporters. The Department will accept
written comments, not to exceed 30 pages, from all parties no later
than 15 days after the date of receipt of such producer/exporter
information.
If the Department, after reviewing all submissions, determines that
such arrangement circumvents the basis of the Agreement, it may, as it
deems most appropriate, utilize one of two options: (1) the cumulative
amount of the effective price discount resulting from such arrangement
shall be reflected in NV in accordance with Section D(3), or (2) the
Department shall determine that the Agreement has been violated and
take action according to the provisions under Section F.
(6) Rejection of Submissions
The Department may reject any information submitted after the
deadlines set forth in this section or any information which it is
unable to verify to its satisfaction. If information is not submitted
in a complete and timely fashion or is not fully verifiable, the
Department may calculate fair value, NV, and/or U.S. price based on
facts otherwise available, as it determines appropriate, unless the
Department determines that Section F applies.
(E) Disclosure and Comment
(1) The Department may make available to representatives of each
domestic party to the proceeding, under appropriately drawn
administrative protective orders, business proprietary information
submitted to the
[[Page 8952]]
Department during the reporting period as well as the results of its
analysis under section 773 of the Act.
(2) Not later than May 31, August 31, November 31, and the last day
in February of each year, the Department will disclose to each
producer/exporter the results and the methodology of the Department's
calculations of its NV. At that time, the Department may also make
available such information to the domestic parties to the proceeding,
in accordance with this section.
(3) Not later than 7 days after the date of disclosure under
paragraph E(2), the parties to the proceeding may submit written
comments to the Department, not to exceed 15 pages. After reviewing
these submissions, the Department will provide to each producer/
exporter its NV as provided in paragraph C(2). In addition, the
Department may provide such information to domestic interested parties
as specified in this section.
(F) Violations of the Agreement
If the Department determines that the Agreement is being or has
been violated or no longer meets the requirements of section 734 (b) or
(d) of the Act, the Department shall take action it determines
appropriate under section 734(i) of the Act and the regulations.
(G) Other Provision
In entering into the Agreement, the signatory producer/exporter
does not admit that any sales of the merchandise subject to the
Agreement have been made at less than fair value.
(H) Termination
The Department will not consider requests for termination of this
suspended investigation prior to February 13, 2003. Termination will be
conducted in accordance with section 751(c) of the Act and the
Department's regulations.
Any producer/exporter may terminate the Agreement at any time upon
notice to the Department. Termination shall be effective 60 days after
such notice is given to the Department. Upon termination, the
Department shall follow the procedures outlined in section 734(i)(1) of
the Act.
(I) Definitions
For purposes of the Agreement, the following definitions apply:
(1) U.S. Price--means the export price or constructed export price
at which merchandise is sold by the producer or exporter to the first
unaffiliated party in the United States, including the amount of any
discounts, rebates, price protection or ship and debit adjustments, and
other adjustments affecting the net amount paid or to be paid by the
unaffiliated purchaser, as determined by the Department under section
772 of the Act.
(2) Normal Value--means the constructed value (CV) of the
merchandise, as determined by the Department under section 773 of the
Act and the corresponding sections of the Department's regulations.
(3) Producer/Exporter--means (1) the foreign manufacturer or
producer, (2) the foreign producer or reseller which also exports, and
(3) the affiliated person by whom or for whose account the merchandise
is imported into the United States, as defined in section 771(28) of
the Act.
(4) Date of Sale--means the date on which the essential terms of
the contract, including price and quantity, are agreed and
determinable.
The effective date of the Agreement is the date on which it is
published in the Federal Register.
For the Venezuelan Producers/Exporters.
Dated: February 13, 1998.
Oscar Montero,
Director for Strategic Planning.
For the U.S. Department of Commerce.
Dated: February 12, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
Appendix A--Carbon Steel Wire Rod from Venezuela Principles of Cost
General Framework
The cost information reported to the Department that will form
the basis of the NV calculations for purposes of the Agreement must
be:
Comprehensive in nature and based on a reliable
accounting system (i.e., a system based on well-established
standards and can be tied to the audited financial statements);
Representative of the company's costs incurred for the
general class of merchandise;
Calculated on a quarterly weighted-average basis of the
plants or cost centers manufacturing the product;
Based on fully-absorbed costs of production, including
any downtime;
Valued in accordance with generally accepted accounting
principles;
Reflective of appropriately allocated common costs so
that the costs necessary for the manufacturing of the product are
not absorbed by other products; and
Reflective of the actual cost of producing the product.
Additionally, a single figure should be reported for each cost
component.
Cost of Manufacturing (COM)
Costs of manufacturing are reported by major cost category and
for major stages of production. Weighted-average costs are used for
a product that is produced at more than one facility (including
further manufacturing in the United States); based on the cost at
each facility.
Direct materials--cost of those materials which are input into
the production process and physically become part of the final
product.
Direct labor--cost identified with a specific product. These
costs are not allocated among products except when two or more
products are produced at the same cost center. Direct labor costs
should include salary, bonus, and overtime pay, training expenses,
and all fringe benefits. Any contracted-labor expense should reflect
the actual billed cost or the actual costs incurred by the
subcontractor when the corporation has influence over the
contractor.
Factory overhead--overhead costs include indirect materials,
indirect labor, depreciation, and other fixed and variable expenses
attributable to a production line or factory. Because overhead costs
are typically incurred for an entire production line, an appropriate
portion of those costs must be allocated to covered products, as
well as any other products produced on that line. Acceptable cost
allocations can be based on labor hours or machine hours. Overhead
costs should also reflect any idle or downtime and be fully absorbed
by the products.
Cost of Production (COP)
Is equal to the sum of materials, labor, and overhead (COM) plus
SG&A expenses in the home market (HM).
SG&A--those expenses incurred for the operation of the
corporation as a whole and not directly related to the manufacture
of a particular product. They include corporate general and
administrative expenses, financing expenses, and general research
and development expenses. Additionally, direct and indirect selling
expenses incurred in the HM for sales of the product under
investigation are included. Such expenses are allocated over cost of
goods sold.
Constructed Value (CV)
Is equal to the sum of materials, labor, and overhead (COM) and
SG&A expenses plus profit in the comparison market and the cost of
packing for exportation to the United States.
Calculation of Suspension Agreement NVs
NVs (for purposes of the Agreement) are calculated by adjusting
the CV and are provided for both EP and CEP transactions. In effect,
any expenses uniquely associated with the covered products sold in
the HM are subtracted from the CV, and any such expenses which are
uniquely associated with the covered products sold in the United
States are added to the CV to calculate the NV.
Export Price--Generally, a U.S. sale is classified as an export
price sale when the first sale to an unaffiliated person occurs
before the goods are imported into the United States. In cases where
the foreign manufacturer knows or has reason to believe that the
merchandise is ultimately destined for the United States, the
manufacturer's sale is the sale subject to review. If, on the other
hand, the manufacturer sold the merchandise to a foreign trader
without knowledge of the
[[Page 8953]]
trader's intention to export the merchandise to the United States,
then the trader's first sale to an unaffiliated person is the sale
subject to review. For EP NVs, the CV is adjusted for movement costs
and differences in direct selling expenses such as commissions,
credit, warranties, technical services, advertising, and sales
promotion.
Constructed Export Price--Generally, a U.S. sale is classified
as a constructed export price sale when the first sale to an
unaffiliated person occurs after importation. However, if the first
sale to the unaffiliated person is made by a person in the United
States affiliated with the foreign exporter, constructed export
price applies even if the sale occurs prior to importation, unless
the U.S. affiliate performs only clerical functions in connection
with the sale. For CEP NVs, the CV is adjusted similar to EP sales,
with differences for adjustment to U.S. and HM indirect-selling
expenses.
Home market direct-selling expenses--expenses that are incurred
as a direct result of a sale. These include such expenses as
commissions, advertising, discounts and rebates, credit, warranty
expenses, freight costs, etc. The following direct-selling expenses
are treated individually:
Commission expenses--payments to unaffiliated parties for sales
in the HM.
Credit expenses--expenses incurred for the extension of credit
to HM customers.
Movement expenses--freight, brokerage and handling, and
insurance expenses.
U.S. direct-selling expenses--the same as HM direct-selling
expenses except that they are incurred for sales in the United
States.
Movement expenses--additional expenses incidental to importation
into the United States. These typically include U.S. inland freight,
insurance, brokerage and handling expenses, U.S. Customs duties, and
international freight.
U.S. indirect-selling expenses--include general fixed expenses
incurred by the U.S. sales subsidiary or affiliated exporter for
sales to the United States. They may also include a portion of
indirect expenses incurred in the HM for export sales.
For EP Transactions
+direct materials
+direct labor
+factory overhead
=Cost of Manufacturing
+home market SG&A
=Cost of Production
+U.S. packing
+Profit
=Constructed Value
+U.S. direct selling expense
+U.S. commission expense
+U.S. movement expense
+U.S. credit expense
-HM direct selling expense
-HM commission expense 1
---------------------------------------------------------------------------
\1\ If the company does not have HM commissions, HM indirect
expenses are subtracted only up to the amount of the U.S.
commissions.
---------------------------------------------------------------------------
-HM credit expense
=NV for EP sales
For CEP Transactions
+direct materials
+direct labor
+factory overhead
=Cost of Manufacturing
+home market SG&A
=Cost of Production
+U.S. packing
+profit
=Constructed Value
+U.S. direct selling expense
+U.S. indirect selling expense
+U.S. commission expense
+U.S. movement expense
+U.S. credit expense
+U.S. further manufacturing expenses (if any)
+CEP profit
-HM direct selling expense
-HM commission expense 2
---------------------------------------------------------------------------
\2\ If the company does not have HM commissions, HM indirect
expenses are subtracted only up to the amount of the U.S.
commissions.
---------------------------------------------------------------------------
-HM credit expense
=NV for CEP sales
[FR Doc. 98-4539 Filed 2-20-98; 8:45 am]
BILLING CODE 3510-DS-P
