02-2990. Notice of Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review: Extruded Rubber Thread From Indonesia

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results and partial rescission of antidumping administrative review.

SUMMARY:

In response to a request by the petitioner and one producer/exporter of the subject merchandise, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on extruded rubber thread (rubber thread) from Indonesia for the period May 1, 2000 through April 30, 2001 (hereafter referred as the period of review).

We preliminary determine that during the period of review (POR), P.T. Swasthi Parama Mulya (Swasthi) did not make sales of the subject merchandise at less than normal value. If these preliminary results are adopted in our final results of this administrative review, we will instruct the U.S. Customs Service to liquidate entries of subject merchandise by these companies without regard to antidumping duties.

Interested parties are invited to comment on these preliminary results. Parties who submit comments in this proceeding should also submit with them: (1) A statement of the issues; (2) a brief summary of their comments; and (3) a table of authorities. Further, parties submitting written comments, should provide the Department with an additional electronic copy of the public version of any such comments on a 3.5″ floppy diskette.

EFFECTIVE DATE:

February 7, 2002.

FOR FURTHER INFORMATION CONTACT:

James Terpstra or Lyman Armstrong, AD/CVD Enforcement, Office 6, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to Department regulations refer to the regulations codified at 19 CFR part 351 (2001).

Case History

On May 21, 1999, the Department published in the Federal Register the antidumping duty order on rubber thread from Indonesia (64 FR 27755). On May 1, 2001, we published in the Federal Register the notice of “Opportunity to Request an Administrative Review” of this order, for the period May 1, 2000, through April 30, 2001 (66 FR 21740).

On May 31, 2001, we received a request to review the antidumping duty order with respect to Swasthi from North American Rubber Thread, the petitioner in this case, in accordance with 19 CFR 351.213(b)(1). On May 31, 2001, we also received a request to review the antidumping order from Filati Lastex Sdn. Bhd. (Filati), an exporter/producer of rubber thread, in accordance with 19 CFR 351.213(b)(2). On June 19, 2001, we published the notice of initiation of this antidumping duty administrative review of Filati and Swasthi covering the period May 1, 2000, through April 30, 2001. See Notice of Initiation, 66 FR 32934 (June 19, 2001).

On July 23, 2001, we sent the antidumping duty questionnaires to Filati and Swashti.

On August 17, 2001, Filati withdrew its request for review. Thus, we are rescinding the review of Filati, because Filati withdrew its request and there were no additional requests for a review of Filati from any other interested party. See the Partial Rescission section below.

For Swasthi, the Department disregarded sales that failed the cost test during the most recently completed segment of the proceeding in which Swasthi participated. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Extruded Rubber Thread From Indonesia, 64 FR 27755 (May 21, 1999). Therefore, pursuant to section 773(b)(2)(A)(ii) of the Act, we had reasonable grounds to believe or suspect that Swasthi sales of the foreign like product were made at prices below the cost of production (COP). Therefore, we initiated a cost investigation at the time we initiated an antidumping review.

Swasthi submitted its section A through D questionnaire response on September 21, 2001.

The Department issued a supplemental section A through D questionnaire to Swasthi on November 9, 2001. Swasthi submitted its response to our supplemental questionnaire on December 11, 2001. The Department issued a second supplemental section A through D questionnaire to Swasthi on December 27, 2001. We received Swasthi's response to our second supplemental questionnaire on January 14, 2002.

Partial Rescission of Antidumping Duty Administrative Review

On August 17, 2001, Filati withdrew its request for a review. Because there were no other request for review for Filati, and because Filati's letter withdrawing its request was timely filed, we are rescinding the review with respect to Filati in accordance with 19 CFR 351.213(d)(1).

Scope of Review

For purposes of this review, the product covered is extruded rubber thread (ERT) from Indonesia. ERT 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 inches or 140 gauge, to 1.42 mm, which 0.056 inch or 18 gauge, in diameter.

ERT is currently classified under subheading 4007.00.00 of the Harmonized Tariff Schedule (HTS). Although the HTS subheading is provided for convenience and customs purposes, the written description of the scope of this review is dispositive.

Comparisons to Normal Value

To determine whether sales of extruded rubber thread from Indonesia to the United States were made at less than normal value (NV), we compared the export price (EP) to (EP) to the NV for Swasthi, as specified in the Export Price and Normal Value sections of this notice, below.

When making comparisons in accordance with section 771(16) of the Act, we considered all products sold in the home market as described in the Scope of Review section of this notice, above, that were in the ordinary course of trade for purposes of determining appropriate product comparisons to U.S. sales. In accordance with section 771(16) of the Act, the Department first attempted to match contemporaneous sales of products sold in the U.S. and the home market that were identical with respect to the following characteristics: (1) Size; (2) finish; (3) color; (4) special qualities (5) uniformity; (6) elongation; (7) tensile strength; and (8) modulus. Where there were no sales of identical merchandise in the home market made in the ordinary course of trade (i.e., sales within the contemporaneous window which passed the cost test), we compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade, or constructed value (CV), as appropriate.

Export Price

For the price to the United States, we used EP in accordance with section 772(a) of the Act because the merchandise was sold by the producer or exporter outside the United States to the first unaffiliated purchaser in the United States prior to importation and constructed export price was not otherwise warranted based on the facts on the record. We based EP on the packed delivered prices to the first unaffiliated customer in the United States. Where appropriate, we reduced these prices to reflect discounts and rebates. We also added interest revenue.

In accordance with section 772(c)(2) of the Act, we made deductions, where appropriate, for movement expenses including inland freight from plant or warehouse to port of exportation, insurance, foreign brokerage handling and fumigation charges, and international freight.

Normal Value

A. Selection of Comparison Markets

In order to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared the respondent's volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise. Pursuant to section 773(a)(1)(B) of the Act, because the respondent's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise, we determined that the home market was viable for the producer.

B. Cost of Production Analysis

1. Calculation of Cost of Production

Before making any comparisons to NV, we conducted a COP analysis, pursuant to section 733(b) of the Act, to determine whether the respondent's home market sales were made below the COP. We calculated the COP based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for selling, general, and administrative expenses (SG&A), and packing, in accordance with section 773(b)(3) of the Act. We relied on the respondent's information as submitted. See Swasthi's Preliminary Calculation Memorandum (January 31, 2002) on file in the Central Records Unit (CRU), for a description of any changes that we made.

2. Test of Comparison Market Prices

As required under section 773(b) of the Act, for Swasthi, we compared the weighted-average COP to the weighted-average per unit price of the home market sales of the foreign like product, to determine whether their respective sales had been made at prices below the COP within an extended period of time in substantial quantities. For Swasthi, we determined the net home market prices for the below-cost test by subtracting from the gross unit price any applicable movement charges, direct and indirect selling expenses, and packing expenses.

3. Results of COP Test

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of sales of a given product were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in “substantial quantities.” Where 20 percent or more of Swasthi's sales of a given product during the twelve-month period were at prices less than the COP, in accordance with section 773(b)(2)(B) and (C) of the Act, we determined such sales to have been made in “substantial quantities” within an extended period of time. In such cases, because we compared prices to POR-average costs, we also determined that such sales were not made at prices which would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. Therefore, for purposes of this administrative review, for Swasthi we disregarded the below-cost sales and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1)(B) of the Act.

C. Calculation of Normal Value Based on Comparison Market Prices

We calculated NV based on delivered prices to home market customers. We made deductions from the starting price for inland freight and inland insurance. In accordance with sections 773(a)(6)(A) and (B) of the Act, we deducted home market packaging costs and added U.S. packing costs.

When comparing U.S. sales with home market sales of similar, but not identical, merchandise, we also made adjustments for physical differences in the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. Pursuant to section 351.411 of the Department's regulations, we based this adjustment on the difference in the variable cost of manufacturing (VCOM) for the foreign like product and subject merchandise, using twelve-month average costs for each month of the twelve-month period, as described in the Cost of Production Analysis section above.

D. Level of Trade

In accordance with section 773(a)(1)(B) of the Act, we determined NV based on sales in the home market at the same level of trade (LOT) as the U.S. EP sales, to the extent practicable. When there were no sales at the same LOT, we compared U.S. sales to home market sales at a different LOT.

Pursuant to section 351.412 of the Department's regulations, to determine whether home market sales were at a different LOT, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the affiliated (or arm's length) customers. If the home market sales were at a different LOT and the differences affected price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and home market sales at the LOT of the export transaction, we made a LOT adjustment under section 773(a)(7)(A) of the Act.

For Swasthi, there was only one home market LOT and one U.S. EP level of trade. The U.S. LOT differed from the home market LOT; however because there was only one LOT in the home market, we could not determine that there was a pattern of price differences between sales at different LOTs in the home market. See section 773(a)(7)(A)(ii) of the Act. Consequently, we have granted no LOT adjustment.

For a detailed description of our LOT methodology and a summary of company-specific LOT findings for these preliminary results, see Swasthi's January 31, 2002, Preliminary Calculation Memorandum on file in the CRU.

Currency Conversion

We made currency conversions into U.S. dollars based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank, in accordance with section 773(A) of the Act.

Preliminary Results of Review

As a result of our review, we preliminary determine that the following percentage weighted-average margin exists for the period May 1, 2000 through April 30, 2001:

Manufacturer/exporter	Margin (percent)
Swasthi	0.00

The Department will disclose the calculations performed within five days of the date of publication of this notice to the parties to this proceeding in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, will be held 44 days after the date of publication, or the first working day thereafter. Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than 37 days after the date of publication. Parties who submit arguments are requested to submit with the argument (1) a statement of the issue, (2) a brief of summary of the argument and (3) a table of authorities. Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette. The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, or at a hearing, if requested, within 120 days of publication of these preliminary results.

Assessments Rate

Pursuant to 19 CFR 351.212(b), the Department calculated an assessment rate for each importer of the subject merchandise. Upon issuance of the final results of this administrative review, if any importer-specific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.5 percent) the Department will issue appraisement instructions directly to the U.S. Customs Service to assess antidumping duties on appropriate entries by applying the assessment rate to the entered value of the merchandise reported by Swasthi. For assessment purposes, we calculated importer-specific assessment rates for the subject merchandise by aggregating the dumping margins for all U.S. sales to each importer and dividing the amount by the total entered value of the sales to that importer.

Cash Deposit Requirements

To calculate the cash deposit rate for Swasthi, we divided the total dumping margins for Swasthi by the total net value of Swasthi's sales during the review period.

The following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of ERT from Indonesia entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for the company listed above will be the rate established in the final results of this review; (2) for previously reviewed or investigated companies, the cash deposit rate will continue to be the company-specific rate published for the most recent final results in which that manufacturer or exporter participated; (3) if the exporter is not a firm covered in this review, a prior review, or the original less-than-fair-value (LTFV) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent final results 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 24.00 percent, the “All Others” rate established in the LTFV investigation. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Extruded Rubber Thread From Indonesia, 64 FR 27755 (May 21, 1999).

These cash deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Notification to Importers

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) 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.

The administrative review is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: January 31, 2002.

Faryar Shirzad,

Assistant Secretary for Import Administration.