[Federal Register Volume 63, Number 90 (Monday, May 11, 1998)]
[Notices]
[Pages 25830-25833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12317]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-423-602]
Industrial Phosphoric Acid From Belgium; Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review of industrial phosphoric acid from Belgium.
-----------------------------------------------------------------------
SUMMARY: In response to requests from one respondent, petitioner and
one
[[Page 25831]]
domestic producer, the Department of Commerce is conducting an
administrative review of the antidumping duty order on industrial
phosphoric acid from Belgium. The period of review is August 1, 1996
through July 31, 1997. This review covers imports of industrial
phosphoric acid from one producer, Societe Chimique Prayon-Rupel S.A.
(``Prayon'').
We have preliminarily found that sales of subject merchandise have
been made below normal value. If these preliminary results are adopted
in our final results, we will instruct the Customs Service to assess
antidumping duties based on the difference between the export price and
normal value.
Interested parties are invited 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. We will issue the final results not later than 120 days from
the date of publication of this notice.
EFFECTIVE DATE: May 11, 1998.
FOR FURTHER INFORMATION CONTACT:
Robert Blankenbaker or Thomas Futtner, AD/CVD Enforcement Office 4,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone (202) 482-0989, and 482-3814,
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 the Department of Commerce's (the
Department's) regulations refer to the regulations codified at 19 CFR
Part 351, 62 FR 27296 (May 19, 1997).
Background
On August 20, 1987, the Department published in the Federal
Register (52 FR 31439) the antidumping duty order on industrial
phosphoric acid (``IPA'') from Belgium. On August 4, 1997, the
Department published in the Federal Register (62 FR 41925) a notice of
opportunity to request an administrative review of this antidumping
duty order. On August 29, 1997, in accordance with 19 CFR 351.213(b),
Prayon, the petitioner FMC Corporation (``FMC''), and Albright & Wilson
Americas Inc. (``Wilson''), a domestic producer of the subject
merchandise, requested that the Department conduct an administrative
review of Prayon's exports of subject merchandise to the United States.
We published the notice of initiation of this review on September 25,
1997 (62 FR 50292).
Scope of the Review
The products covered by this review include shipments of IPA from
Belgium. This merchandise is currently classifiable under the
Harmonized Tariff Schedule (HTS) item numbers 2809.2000 and 4163.0000.
The HTS item number is provided for convenience and Customs purposes.
The written description remains dispositive.
Product Comparisons
We calculated monthly, weighted-average, normal values (NVs). The
industrial phosphoric acid exported by Prayon to the United States is
PRAYPHOS P5, a refined industrial phosphoric acid, and is the identical
merchandise sold by Prayon in its home market in Belgium. Therefore, we
have compared U.S. sales to contemporaneous sales of identical
merchandise in Belgium.
Export Price
Prayon sells to end-users in the United States through its
affiliated sales agent. For these sales, we used export price (EP). In
accordance with sections 772 (a) and (c) of the Act, we calculated and
EP because Prayon sold the merchandise directly to the first
unaffiliated purchaser in the United States prior to importation.
Additional factors used to determine EP include: (1) Whether the
merchandise was shipped directly from the manufacturer to the
unaffiliated U.S. customer; (2) whether this was the customary
commercial channel between the parties involved; and (3) whether the
function of the U.S. affiliate was limited to that of a processor of
sales-related documentation and a communications link with the
unrelated buyer. Where the facts indicate that the activities of the
U.S. affiliate were ancillary to the sale (e.g., arranging
transportation or customs clearance, invoicing), we treat the
transactions as EP sales. See e.g., Certain Corrosion Resistant Steel
Flat Products From Canada: Final Results of Antidumping Duty
Administrative Review, 63 FR 12725, 12738 (March 16, 1998). The record
in this case indicates that Prayon has correctly classified its U.S.
sales as EP sales. Prayon's affiliated sales agent in the United
States, Quadra Corporation (USA) (``Quadra''), served as a processor of
sales-related documentation.
EP sales were based on the delivered price to unaffiliated
purchasers in, or for exportation to, the United States. As
appropriate, we made deductions for discounts and rebates, including
early payment discounts. We made deductions for movement expenses in
accordance with section 772(c)(2)(A) of the Act; these included foreign
inland freight, foreign brokerage and handling, ocean freight, marine
insurance, U.S. customs brokerage fees, merchandise processing fees,
and U.S. inland freight expenses.
Normal Value
We compared the aggregate quantity of home market and U.S. sales
and determined that the quantity of the company's sales in its home
market was more than five percent of the quantity of its sales to the
U.S. market. Consequently, in accordance with section 773(a)(1)(B) of
the Act, we based NV on home market sales.
We also excluded from our NV analysis sales to affiliated home
market customers where the weighted-average sales prices to the
affiliated parties were less than 99.5 percent of the weighted-average
sales prices to unaffiliated parties. See Usinor Sacilor v. United
States, 872 F. Supp. 1000, 1004 (CIT 1994).
We also made adjustments, consistent with section 773(a)(6)(B) of
the Act, for inland freight. In addition, we made adjustments for
differences in circumstances of sale (COS) in accordance with section
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410.
In calculating credit expense, Prayon reported the discount on
accounts receivable sold to its affiliated coordination center. Since
the reported credit expense is greater than the credit expense
calculated using the standard credit calculation (i.e., (date of
payment less date of shipment/ 365)* monthly home market short-term
interest rates* gross price), we have determined that the discount
transaction between Prayon and its affiliated coordination center is
not conducted at arm's-length. Accordingly, we have used the standard
credit calculation when calculating the amount of credit to deduct from
normal value. We used the monthly home market short-term borrowing
rates provided by Prayon in calculating inventory carrying costs as the
basis for the monthly home market short-term interest rates used in the
credit calculation.
No other adjustments were claimed or allowed.
[[Page 25832]]
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 (LOT) as the export price (EP) or the
(constructed export price (CEP) transaction. The NV LOT is that of the
starting-price sales in the comparison market or, when NV is based on
constructed value, that of the sales from which we derive selling,
general and administrative expenses and profit. For EP, the U.S. LOT 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 LOT 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 sale are at a different
LOT, 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 LOT of the export
transaction, we make a LOT 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, 61732 (November 19, 1997).
Prayon did not claim a LOT adjustment; however, we requested
information concerning Prayon's distribution system, including selling
functions, to determine whether such an adjustment was necessary.
Prayon reported that all sales during the period of review (POR), in
both the comparison market (the home market in this case) and the
United States, were to end-users and distributors. In the U.S. market,
Prayon sells to end-users through its affiliated sales agent. The
subject merchandise is shipped from tankage in a storage facility in
Canada directly to the customer. In the home market, Prayon sells
through several channels of distribution. The first channel includes
direct sales made to end-users. For the other channels, Prayon sells to
either end-users or distributors through its affiliated sales agent.
For all home market customers, Prayon ships the subject merchandise via
independent carriers directly to the customer from its storage
facilities at the plant. We have examined information provided by
Prayon concerning these sales and determined that the selling functions
are the same in the home market and U.S. market. Prayon negotiates all
final prices and quantities, and bears the cost of storage and
handling, surveys and delivery to customer. Prayon does not maintain
inventories for its customers, provide after-sales service, or offer
advertising or other sales support activities to its customers in
either market. Therefore, we preliminarily determine that sales in the
home market and sales in the United States are at the same LOT and that
no adjustment is warranted.
Commissions
The Department operates under the assumption that commission
payments to affiliated parties (in either the United States or home
market) are not at arm's length. The Court of International Trade has
held that this is a reasonable assumption. See Outokumpu Copper Rolled
Products AB v. United States, 850 F. Supp. 16,22 (1994).
Accordingly, the Department has established guidelines to determine
whether affiliated party commissions are paid on an arm's-length basis
such that an adjustment for such commissions can be made. See Tapered
Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter,
and Components Thereof, From Japan, 61 FR 57,629 (November 7, 1996).
First, we compare the commissions paid to affiliated and unaffiliated
sales agents in the same market. If there are no commissions paid to
unaffiliated parties, we then compare the commissions earned by the
affiliated selling agent on sales of merchandise produced by the
respondent to commissions earned on sales of merchandise produced by
unaffiliated sellers or manufacturers. If there is no benchmark which
can be used to determine whether the affiliated party commission is an
arm's-length value (i.e., the producer does not use an unaffiliated
selling agent and the affiliated selling agent does not sell subject
merchandise for an unaffiliated producer), the Department assumes that
the affiliated party commissions are not paid on an arm's-length basis.
In this case, Prayon used an affiliated sales agent in the home
market and a different affiliated sales agent in the United States.
Prayon did not use unaffiliated agents during the POR and did not place
on the record information that its affiliated home market and U.S.
selling agents acted as agents for unaffiliated producers of the
subject merchandise. As a result, we were unable to establish a
benchmark for use in determining whether commission payments Prayon
made to affiliated selling agents were at arm's length. Accordingly, we
preliminarily determine not to make a circumstance of sale adjustment
for commissions in either market.
Currency Conversion
We made currency conversions in accordance with section 773A of the
Act based on rates certified by the Federal Reserve Bank in effect on
the dates of U.S. sales. See Change in Policy Regarding Currency
Conversions, 61 FR 9434 (March 8, 1996).
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following margin exists for the period August 1, 1996 through July 31,
1997:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Prayon..................................................... 3.96
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Interested parties may also
request a hearing within ten days of publication. If requested, a
hearing will be held as early as convenient for the parties but not
later than 44 days after the date of publication or the first work day
thereafter. Interested parties may submit case briefs not later than 30
days after 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 of this notice.
The Department will issue a notice of the final results of this
administrative review, which will include the results of its analysis
of issues raised in any such briefs, within 120 days from the
publication of these preliminary results.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. In accordance
with the methodology in Final Results of Antidumping Duty
Administrative Review and Partial Termination of Administrative Review:
Circular Welded Non-Alloy Steel Pipe from the Republic of Korea (62 FR
55574, October 27, 1997), we calculated exporter/importer-specific
assessment
[[Page 25833]]
values by dividing the total dumping duties due for each importer by
the number of tons used to determine the duties due. We will direct
Customs to assess the resulting per-ton dollar amount against each ton
of the merchandise entered by these importers during the review period.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of this administrative review for
all shipments of industrial phosphoric acid from Belgium entered, or
withdrawn from warehouse, for consumption on or after the publication
date of the final results of this administrative review, as provided by
section 751(a)(1) of the Act: (1) The cash deposit rate for the
reviewed company will be the rate established in the final results of
this administrative review (except no cash deposit will be required
where the weighted-average margin is de minimis, i.e., less than 0.5
percent); (2) for merchandise exported by manufacturers or exporters
not covered in this review but covered in the original less-than-fair-
value (LTFV) investigation or a previous review, the cash deposit will
continue to be the most recent rate published in the final
determination or final results for which the manufacturer or exporter
received an individual rate; (3) if the exporter is not a firm covered
in this review, a previous review, or the original investigation, but
the manufacturer is, the cash deposit rate will be the rate established
for the most recent period for the manufacturer of the merchandise; and
(4) if neither the exporter nor the manufacturer is a firm covered in
this or any previous reviews or the original investigation, the cash
deposit rate will be 14.67 percent, the ``all others'' rate established
in the LTFV investigation.
This notice serves as a preliminary reminder to importers of their
responsibility to file a certificate regarding the reimbursement of
antidumping duties prior to liquidation of the relevant entries during
this review period. Failure to comply with this requirement could
result in the Secretary's presumption that reimbursement of antidumping
duties occurred and the subsequent assessment of double antidumping
duties.
This administrative review and notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: May 4, 1998.
Robert S. LaRussa,
Assistant Secretary, Import Administration.
[FR Doc. 98-12317 Filed 5-8-98; 8:45 am]
BILLING CODE 3510-DS-M
