[Federal Register Volume 62, Number 45 (Friday, March 7, 1997)]
[Notices]
[Pages 10524-10527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5700]
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DEPARTMENT OF COMMERCE
[A-421-805]
Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide (PPD-
T) From the Netherlands; Preliminary Results of Antidumping
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of the antidumping duty
administrative review; Aramid fiber formed of poly para-phenylene
terephthalamide from The Netherlands.
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SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on aramid fiber
formed of poly para-phenylene terephthalamide (PPD-T aramid) from the
Netherlands in response to requests by respondent, Akzo Nobel Aramid
Products, Inc. and Aramid Products V.o.F. (Akzo) and petitioner, E.I.
du Pont de Nemours and Company. This review covers sales of this
merchandise to the United States during the period June 1, 1995 through
May 31, 1996, by Akzo Nobel V.o.F. The results of the review indicate
the existence of dumping margins for the above period.
We invite interested parties to comment on these preliminary
results. Parties who submit arguments are requested to submit with the
argument (1) a statement of the issue and (2) a brief summary of the
argument.
EFFECTIVE DATE: March 7, 1997.
FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan at (202) 482-0193,
Eugenia Chu at (202) 482-3964, or Ellen Knebel at (202) 482-1398,
Import Administration, International Trade Administration, U.S.
Department of Commerce, Room 7866, 14th Street and Constitution Avenue,
N.W., Washington D.C. 20230.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995,
[[Page 10525]]
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 the Department's
regulations are to the current regulations, as amended by the interim
regulations published in the Federal Register on May 11, 1995 (60 FR
25130).
SUPPLEMENTARY INFORMATION:
Background
The Department published in the Federal Register the antidumping
duty order on PPD-T aramid from the Netherlands on June 24, 1994 (59 FR
32678). On June 6, 1996, we published in the Federal Register (61 FR
28840) a notice of opportunity to request an administrative review of
the antidumping duty order on PPD-T aramid from the Netherlands
covering the period June 1, 1995, through May 31, 1996.
In accordance with 19 CFR 353.22(a)(1), Akzo and petitioner
requested that we conduct an administrative review for the
aforementioned period. On August 8, 1996, the Department published a
notice of ``Initiation of Antidumping Review'' (60 FR 41373). The
Department is now conducting this administrative review pursuant to
section 751 of the Act.
Scope of Review
The products covered by this review are all forms of PPD-T aramid
from the Netherlands. These consist of PPD-T aramid in the form of
filament yarn (including single and corded), staple fiber, pulp (wet or
dry), spun-laced and spun-bonded nonwovens, chopped fiber, and floc.
Tire cord is excluded from the class or kind of merchandise under
review. This merchandise is currently classifiable under the Harmonized
Tariff Schedule (HTS) item numbers 5402.10.3020, 5402.10.3040,
5402.10.6000, 5503.10.1000, 5503.10.9000, 5601.30.0000, and
5603.00.9000. The HTS item numbers are provided for convenience and
Customs purposes. The written description of the scope remains
dispositive.
Verification
As provided in section 782(i) of the Act, we verified information
provided by the respondent, using standard verification procedures,
including on-site inspection of the manufacturer's facilities, the
examination of relevant sales and financial records, and selection of
original documentation containing relevant information. Our
verification results are outlined in public versions of the
verification reports, available to the public in Room B-099 of the H.C.
Hoover Building (the main Commerce Building).
Transactions Reviewed
In accordance with section 751 of the Act, the Department is
required to determine the normal value (NV) and export price (EP) or
constructed export price (CEP) of each entry of subject merchandise.
Because there can be a significant lag between entry date and sale date
for CEP sales, it has been the Department's practice to examine U.S.
CEP sales during the period of review. See Gray Portland Cement and
Clinker from Japan; Final Results of Antidumping Duty Administrative
Review, 58 FR 48826 (1993) (the Department did not consider ESP (now
CEP) entries which were sold after the POR). The Court of International
Trade (CIT) has upheld the Department's practice in this regard. See
The AD Hoc Committee of Southern California Producers of Gray Portland
Cement v. United States, Slip Op. 95-195 (CIT December 1, 1995).
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced and sold by the respondent in the home market during
the POR, (and covered by the Scope of the Review) to be foreign like
products for purposes of product comparisons to U.S. sales. Where there
were no sales of identical or similar merchandise in the home market to
compare to U.S. sales, we compared U.S. sales to the constructed value
(CV) of the product sold in the U.S. market during the comparison
period.
Normal Value Comparisons
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 Akzo'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 Akzo'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 provides a
viable basis for calculating NV for Akzo.
To determine whether sales of PPD-T aramid by Akzo to the United
States were made at less than NV, we compared the CEP (Akzo had no EP
sales) to the NV, as described in the ``Constructed Export Price'' and
``Normal Value'' sections of this notice. In accordance with section
777A(d)(2), we calculated monthly weighted-average prices for NV and
compared them to individual U.S. transactions.
Constructed Export Price
The Department based its margin calculation on CEP, as defined in
section 772 (b), (c), and (d) of the Act, for those sales to the first
unaffiliated purchaser that took place after importation into the
United States.
We calculated CEP based on delivered prices in connection with
sales to unaffiliated purchasers in the United States. When
appropriate, the Department made adjustments for discounts, rebates,
credit expenses, and direct selling expenses. We deducted those
indirect selling expenses, including inventory carrying costs, that
related to commercial activity in the United States. We also made
deductions for movement expenses (international freight, brokerage and
handling, U.S. duties, domestic inland freight, and insurance).
Finally, pursuant to section 772(d)(3), an adjustment was made for CEP
profit.
Normal 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 NV,
we compared 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 Akzo's
aggregate volume of the home market sales of the foreign like product
was greater than five percent of its aggregate volume of U.S. sales for
the subject merchandise, we determined that the home market provides a
viable basis for calculating NV on home market sales.
Where appropriate, we adjusted for discounts, credit expenses,
warranty expenses, inland freight, and inland insurance. We also
adjusted the starting price for billing adjustments to the invoice
price.
We made adjustments, where appropriate, for physical differences in
merchandise (DIFMER) in accordance with section 773(a)(6)(C)(ii) of the
Act. A weighted-average (upward, if applicable) DIFMER adjustment was
applied, as reported by respondent. In addition, in accordance with
section 773(a)(6), we deducted home market packing costs and added U.S.
packing costs.
[[Page 10526]]
Arm's Length Sales
Sales to affiliated customers in the home market not made at arm's
length were excluded from our analysis, in accordance with 19 CFR
353.45(a). To test whether these sales were made at arm's length, we
compared the starting prices of sales to affiliated and unaffiliated
customers, net of all movement charges, direct selling expenses,
discounts, and packing. Where the price to the affiliated party was, on
average, 99.5 percent or more of the price to the unaffiliated party,
we determined that the sales made to the affiliated party were at arm's
length.
Cost of Production Analysis
In the most recently completed administrative review of Akzo, we
disregarded sales found to be below the cost of production (COP).
Therefore, in accordance with section 773(b)(2)(A)(ii) of the Act, the
Department has reasonable grounds to believe or suspect that sales
below the COP may have occurred during this review period. Thus,
pursuant to section 773(b) of the Act, we initiated a COP investigation
of Akzo in the instant review.
In accordance with section 773(b)(3) of the Act, we calculated an
average COP, by model, based on the sum of the cost of materials and
fabrication employed in producing the foreign like product, plus
amounts for home market general and administrative expenses (G&A) and
packing costs in accordance with section 773(b)(3) of the Act. We used
the home market sales data and COP information provided by Akzo in its
questionnaire responses.
After calculating a weighted-average COP, we tested whether home
market sales of PPD-T aramid were made at prices below COP within an
extended period of time in substantial quantities, and whether such
prices permit recovery of all costs within a reasonable period of time.
We compared model-specific COP to the reported home market prices less
any applicable movement charges, discounts, rebates, and direct and
indirect selling expenses.
Pursuant to section 773(b)(2)(C), where less than 20 percent of
Akzo's sales of a given model were at prices less than 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.''
In accordance with sections 773(b)(2) (B) and (D), where 20 percent or
more of home market sales of a given product were at prices less than
the COP, we disregarded only the below-cost sales where such sales were
found to be made within an extended period of time and at prices which
would not permit recovery of all costs within a reasonable period of
time.
We found that, for certain types of PPD-T aramid, more than 20
percent of the home market sales were sold at below-cost prices in
substantial quantities within the period of review. We therefore find
that these below-cost sales were made in substantial quantities within
an extended period of time. To determine whether prices were such as to
provide for recovery of costs within a reasonable period of time, we
tested whether the per unit price was above the weighted average per
unit cost of production for the POR. If it was, we disregarded those
below cost sales and used the remaining above-cost sales as the basis
of determining NV if such sales existed, in accordance with section
773(b)(1). For those models of PPD-T aramid for which there were no
above-cost sales available for matching purposes, we compared CEP to
CV.
Price-to-Price Comparisons
Pursuant to section 777A(d)(2), we compared the CEPs of individual
U.S. transactions to the monthly weighted-average NV of the foreign
like product where there were sales at prices above COP, as discussed
above. We based NV on packed, ex-factory or delivered prices to
unaffiliated purchasers in the home market. We made adjustments, where
applicable, in accordance with section 773(a)(6) of the Act. Where
applicable, we made adjustments to home market price for discounts,
rebates, inland freight and insurance. To adjust for differences in
circumstances of sale between the home market and the United States, we
reduced home market prices by an amount for home market credit
expenses. In order to adjust for differences in packing between the two
markets, we adjusted home market price by deducting HM packing costs
and adding U.S. packing costs. Prices were reported net of value added
taxes (VAT) and, therefore, no deduction for VAT was necessary. We made
adjustments, where appropriate, for physical differences in merchandise
in accordance with section 773(a)(6)(C)(ii) of the Act.
Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Act and in the
Statement of Administrative Action (SAA) at 829-831, to the extent
practicable, the Department will calculate NV based on sales at the
same level of trade as U.S. sales. (For both EP and CEP, ``U.S. Sale''
refers to the transition between the foreign exporter and the importer,
whether affiliated or independent.) When the Department is unable to
find sales in the comparison market at the same level of trade as the
U.S. sales, the Department will adjust the NV to account for the
difference in level of trade if two conditions are met. First, there
must be differences between the actual selling functions performed by
the seller at the level of trade of the U.S. sale and at the level of
trade of the NV sale. Second, the difference must affect price
comparability as evidenced by a pattern of consistent price differences
between sales at different levels of trade in the country in which NV
is determined.
When CEP is applicable, section 773(a)(7)(B) of the Act establishes
the procedure for making a CEP offset when NV is established at level
of trade which constitutes a more advanced stage of distribution than
the CEP level of trade, but the data available does not provide an
appropriate basis for a level of trade adjustment. In addition, to
qualify for a CEP offset, the level of trade in the home market must
also constitute a more advanced stage of distribution than the level of
trade of the CEP sale.
Akzo reported one level of trade and one channel of distribution in
the home market (direct to end users/converters). For the U.S. market,
Akzo reported that all sales were made on a CEP basis. The level of
trade of the U.S. sale is determined for the CEP rather than for the
starting price. The CEP sales do not reflect certain selling functions
such as customer sales contacts, technical services, and inventory
maintenance, that are reflected in Akzo's home market sales to end
users/converters. Therefore, the selling functions performed for Akzo's
CEP sales are sufficiently different than those performed for Akzo's
home market sales to consider CEP sales and home market sales to be at
a different level of trade.
Because we compared these CEP sales to home market sales at a
different level of trade, we examined whether a level of trade
adjustment may be appropriate. In this case, Akzo only sold at one
level of trade in the home market; therefore, there is no basis upon
which to discern whether there is a pattern of consistent price
differences between levels of trade. Further, we do not have
information which would allow us to examine pricing patterns on Akzo's
sales of other products and there are no other respondents or other
record information on which such an analysis could be based.
Because the data available do not provide an appropriate basis for
making a level of trade adjustment but the level of trade of the home
market sale is a more advanced stage of distribution
[[Page 10527]]
than the level of trade of the CEP sale, a CEP offset is appropriate.
Akzo has claimed a CEP offset. We applied the CEP offset to NV or CV,
as appropriate.
We based the CEP offset amount on the amount of the home market
indirect selling expenses. We limited the home market indirect selling
expense deduction by the amount of the indirect selling expenses
incurred on sales to the United States, in accordance with section
772(d)(1)(D).
Constructed Value
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of Akzo's cost of materials and fabrication employed
in producing the subject merchandise, SG&A and profit incurred and
realized in connection with production and sale of the foreign like
product, and U.S. packing costs. In accordance with section
773(e)(2)(A), we based SG&A and profit on the amounts incurred and
realized by Akzo in connection with the production and sale of the
foreign like product in the ordinary course of trade, for consumption
in the foreign country. We used the costs of materials, fabrication,
and SG&A as reported in the CV portion of Akzo's questionnaire
response. We used the U.S. packing costs as reported in the U.S. sales
portion of Akzo's questionnaire response. We based selling expenses and
profit on the information reported in the home market sales portion of
Akzo's questionnaire response. See Certain Pasta from Italy; Notice of
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination, 61 FR 1344, 1349 (January 19,
1996). For selling expenses, we used the average of the home market
selling expenses weighted by the total quantity sold. For actual
profit, we first calculated the difference between the home market
sales value and home market COP for all home market sales in the
ordinary course of trade, and divided the sum of these differences by
the total home market COP for these sales. We then multiplied this
percentage by the COP for each U.S. model to derive an actual profit.
We derived the CEP offset amount from the amount of the indirect
selling expenses on sales in the home market. We limited the home
market indirect selling expense deduction by the amount of the indirect
selling expenses incurred on sales to the United States.
Preliminary Results of the Review
As a result of our comparison of CEP and NV, we preliminarily
determine that the following weighted-average dumping margin exists:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Period (percent)
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Akzo.................................... 06/01/95-05/31/96 28.40
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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 publication. Any hearing, if
requested, will be held 44 days after the publication of this notice,
or the first workday thereafter. Interested parties may submit case
briefs within 30 days of the date of publication of this notice.
Rebuttal briefs, which must be limited to issues raised in the case
briefs, may be filed not later than 37 days after the date of
publication. Parties who submit argument are requested to submit with
the argument (1) a statement of the issue and (2) a brief summary of
the argument. The Department will publish a notice of final results of
this administrative review, including its analysis of issues raised in
any written comments or at a hearing, not later than 120 days after the
date of publication of this notice.
Upon issuance of the final results of review, the Department shall
determine, and the U.S. Customs Service shall assess, antidumping
duties on all appropriate entries. Because the inability to link sales
with specific entries prevents calculations of duties on an entry-by-
entry basis, we will calculate an importer-specific ad valorem duty
assessment rate for each class or kind of merchandise based on the
ratio of the total amount of antidumping duties calculated for the
examined sales made during the POR to the total customs value of the
sales used to calculate those duties. This rate will be assessed
uniformly on all entries of that particular importer made during the
POR. (This is equivalent to dividing the total amount of the
antidumping duties, which are calculated by taking the difference
between statutory NV and statutory CEP, by the total statutory CEP
value of the sales compared, and adjusting the result by the average
difference between CEP and customs value for all merchandise examined
during the POR).
Furthermore, the following deposit requirements will be effective
for all shipments of PPD-T aramid from the Netherlands entered, or
withdrawn from warehouse, for consumption on or after the publication
date, as provided for by section 751(a)(2)(c) of the Act: (1) The cash
deposit rate for the reviewed company will be the rate established in
the final results of this review; (2) if the exporter is not a firm
covered in this 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 (3)
for all other producers and/or exporters of this merchandise, the cash
deposit rate shall be 66.92 percent, the ``all others'' rate
established in the LTFV investigation (59 FR 32678, June 24, 1994), as
explained before. These deposit rates, when imposed, shall remain in
effect until publication of the final results of the next
administrative review.
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.
This administrative review and notice are published pursuant to
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22(c)(5).
Dated: February 27, 1997.
Robert S. LaRussa
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-5700 Filed 3-6-97; 8:45 am]
BILLING CODE 3510-DS-P
