[Federal Register Volume 63, Number 45 (Monday, March 9, 1998)]
[Notices]
[Pages 11408-11411]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5992]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[AA-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.
-----------------------------------------------------------------------
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.
DuPont de Nemours and Company. This review covers sales of this
merchandise to the United States during the period June 1, 1996,
through May 31, 1997, by Akzo. 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 9, 1998.
FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan at (202) 482-1324 or
Eugenia Chu at (202) 482-3964, 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, 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 19 CFR
part 353 (1997).
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 11, 1997, we published in the Federal Register (62 FR
31786) 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, 1996, through May 31, 1997.
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 1, 1997, the Department published a
notice of ``Initiation of Antidumping Review'' (62 FR 41339). 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.
See Section 751(a)(2)(A). Because there can be a significant lag
between entry date and sale date for CEP sales, it has been the
Department's
[[Page 11409]]
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 covered by the Scope of the Review, which were produced and
sold by the respondent in the home market during the POR, 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.
On January 8, 1998, the Court of Appeals of the Federal Circuit
issued a decision in Cemex, S.A. v. United States, No. 97-1151, 1998 WL
3626 (Fed. Cir. Jan. 8, 1998). In that case, based on the pre-URAA
version of the Act, the Court discussed the appropriateness of using
constructed value (``CV'') as the basis for foreign market value when
the Department finds home market sales to be outside the ordinary
course of trade. This issue was not raised by any party in this
proceeding. However, the URAA amended the definition of sales outside
the ``ordinary course of trade'' to include sales disregarded as below
cost. See section 771(15) of the Act. Consequently, the Department has
reconsidered its practice in accordance with this court decision and
has determined that it would be inappropriate to resort directly to CV,
in lieu of foreign market sales, as the basis for NV if the Department
finds foreign market sales of merchandise identical or most similar to
that sold in the United States to be outside the ``ordinary course of
trade.'' Instead, the Department will use sales of similar merchandise,
if such sales exist. The Department will use CV as the basis for NV
only when there are no above-cost sales that are otherwise suitable for
comparison. We have implemented the Court's decision in this case, to
the extent that the data on the record permitted.
Constructed Export Price
The Department based its margin calculation on CEP, as defined in
section 772(b), (c), and (d) of the Act, because all sales to the first
unaffiliated purchaser in the United States took place after
importation.
We calculated CEP based on delivered prices to unaffiliated
purchasers in the United States. When appropriate, the Department made
adjustments for discounts and rebates. We deducted credit expenses,
direct selling expenses and indirect selling expenses, including
inventory carrying costs, which 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)(B) and (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.
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.
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 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 permitted 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 section 773(b)(2)(B) and (D) where 20 percent or
more of home market sales of a given product during the POR were at
prices less than the COP, we found that such sales were made in
substantial quantities within an extended period of time. Because the
sales prices would not permit recovery of all costs within a reasonable
period of time, we disregarded those below cost sales and used the
remaining above-cost sales to determine NV 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
[[Page 11410]]
where there were sales at prices above COP, as discussed above.
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), as described in the ``Constructed Export Price'' section of
this notice, to the NV.
We made adjustments, where appropriate, for physical differences in
merchandise (DIFMER) in accordance with section 773(a)(6)(C)(ii) of the
Act. In addition, in accordance with section 773(a)(6), we deducted
home market packing costs and added U.S. packing costs.
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, selling, general and
administrative expenses, 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 deducted from CEP under section 772(d) of the Act.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade as the EP or CEP. The NV level of trade is that
of the starting-price sales in the comparison market or, when NV is
based on CV, that of the sales from which we derive selling, general
and administrative expenses (SG&A) expenses and profit. For EP, the
U.S. level of trade is also the level of the starting-price sale, which
is usually from exporter to importer. For CEP, it is the level of the
constructed sale from the exporter to the importer.
To determine whether NV sales are at a different level of trade
than EP or CEP, we examine stages in the marketing process and selling
functions along the chain of distribution between the producer and the
unaffiliated customer. If the comparison-market sales are at a
different level of trade, and the difference affects price
comparability, as manifested in a pattern of consistent price
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a
level of trade adjustment under section 773(a)(7)(A) of the Act.
Finally, for CEP sales, if the NV level is more remote from the factory
than the CEP level and there is no basis for determining whether the
difference in the levels between NV and CEP affects price
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the
CEP offset provision). See Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61731 (November 19, 1997).
In the present case, we were not able to compare U.S. CEP sales to
HM sales at the same level of trade. First we compared the CEP to the
HM sales to determine whether a level-of-trade adjustment was
appropriate, in accordance with the principles discussed above. For
purposes of our analysis, we examined information regarding the
distribution systems in both the United States and the Netherlands
markets, including the selling functions, classes of customer, and
selling expenses. Upon consideration of the above mentioned factors,
the Department determined that there is one level of trade and one
channel of distribution in the home market (direct to end users/
converters) and a different level of trade in the U.S. market (sales to
an affiliated importer). However, the data available do not provide an
appropriate basis to determine a level of trade adjustment. Further, we
determined that Akzo's NV sales to end-users/converters in the home
market, as well as CV, are at a more advanced stage of distribution
than sales to affiliated importers in the United States. As a result,
the Department has preliminarily determined to grant Akzo an adjustment
to NV and CV in the form of a CEP Offset. For a complete analysis of
the Department's methodology see the Level of Trade Memorandum dated
March 2, 1998.
Currency Conversion
For purposes of the preliminary results, we made currency
conversions based on the exchange rates in effect on the dates of the
U.S. sales as certified by the Federal Reserve Bank of New York. See
Change in Policy Regarding Currency Conversions, 61 FR 9434 (March 8,
1996). Section 773A(a) of the Act directs the Department to use a daily
exchange rate in order to convert foreign currencies into U.S. dollars,
unless the daily rate involves a ``fluctuation.'' In accordance with
the Department's practice, we have determined as a general matter that
a fluctuation exists when the daily exchange rate differs from a
benchmark by 2.25 percent. See Notice of Final Determination of Sales
at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61971 (November 19, 1997). The benchmark is defined
as the rolling average of rates for the past 40 business days. When we
determine that a fluctuation exists, we substitute the benchmark for
the daily rate, in accordance with established practice. Therefore, for
purposes of the current review, we have made currency conversions based
on the official exchange rates in effect on the dates of the U.S. sales
based on the methodology discussed above.
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)
------------------------------------------------------------------------
Akzo.................................... 06/01/96-05/31/97 17.10
------------------------------------------------------------------------
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
[[Page 11411]]
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. We calculated an importer-specific
ad valorem duty assessment rate for the 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 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 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.
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.
Dated: March 2, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-5992 Filed 3-6-98; 8:45 am]
BILLING CODE 3510-DS-P
