[Federal Register Volume 61, Number 98 (Monday, May 20, 1996)]
[Notices]
[Pages 25190-25194]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-12501]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-557-805]
Notice of Preliminary Results and Termination in Part of
Antidumping Duty Administrative Review: Extruded Rubber Thread From
Malaysia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: May 20, 1996.
FOR FURTHER INFORMATION CONTACT: Cameron Werker or Shawn Thompson,
Office of Antidumping Investigations, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and
[[Page 25191]]
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-3874 or (202) 482-1776, respectively.
SUPPLEMENTARY INFORMATION:
Background
On October 18, 1993, the Department of Commerce (the Department)
published in the Federal Register a notice of ``Opportunity to Request
an Administrative Review'' of the Antidumping Duty Order on Extruded
Rubber Thread from Malaysia (58 FR 53709). In accordance with 19 CFR
353.22(a)(2), in October 1993, the following producers and exporters of
extruded rubber thread requested an administrative review of the
antidumping order covering the period April 2, 1992, through September
30, 1993: Heveafil Sdn. Bhd. (``Heveafil''), Rubberflex Sdn. Bhd.
(``Rubberflex''), Filati Lastex Elastfibre (Malaysia) (``Filati''), and
Rubfil Sdn. Bhd (``Rubfil''). On November 17, 1993, the Department
initiated an administrative review for Rubberflex (58 FR 60600). On
December 17, 1993, the Department initiated an administrative review
for Heveafil, Filati, and Rubfil (58 FR 65964).
On January 26, 1994, the Department issued sales and cost
questionnaires to the four companies requesting an administrative
review. On March 8, 1994, Filati and Rubfil withdrew their request for
administrative review in accordance with 19 CFR 353.22(a)(5).
Accordingly, we are terminating this review for Filati and Rubfil.
On March 21, 1994, Heveafil submitted a request to withdraw from
this administrative review with respect to sales made during the period
April 2, 1992, through August 25, 1992. This request was based on
Heveafil's assertion that the company was having difficulty in
collecting information for this period. On March 24, 1994, we rejected
Heveafil's partial termination request.
Heveafil and Rubberflex submitted questionnaire responses in April
1994. We issued supplemental questionnaires in May 1994 (to both
respondents), in April 1995 (to Heveafil) and in July 1995 (to
Rubberflex). Responses to these questionnaires were received in June
1994, May 1995, and August 1995, respectively.
In July and August 1995, the Department conducted sales and cost
verifications of Heveafil's questionnaire responses, in accordance with
19 CFR 353.36(a)(iv), based in part on Heveafil's assertion that it did
not maintain detailed sales and cost records during the first five
months of the review period. Regarding Rubberflex, we determined that
it was unnecessary to conduct verification, in accordance with 19 CFR
353.36, because (1) Rubberflex was involved in the original
investigation (and therefore had been verified during that proceeding);
and (2) no data collection problems were indicated for this company in
the instant proceeding.
Scope of the Review
The product covered by this review is extruded rubber thread.
Extruded rubber thread 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 inch or
140 gauge, to 1.42 mm, which is 0.056 inch or 18 gauge, in diameter.
Extruded rubber thread is currently classified under subheading
4007.00.00 of the Harmonized Tariff Schedule of the United States
(HTSUS). The HTSUS subheadings are provided for convenience and Customs
purposes. Our written description of the scope of this review is
dispositive.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the Statute and to the
Department's regulations are in reference to the provisions as they
existed on December 31, 1994.
We are conducting this administrative review for Heveafil and
Rubberflex in accordance with section 751(a) of the Tariff Act of 1930,
as amended (the Act).
Such or Similar Merchandise
In determining similar merchandise comparisons, in accordance with
section 771(16) of the Act, we considered the following physical
characteristics, which appear in order of importance: (1) Quality
(i.e., first vs. second); (2) size; (3) finish; (4) color; (5) special
qualities; (6) uniformity; (7) elongation; (8) tensile strength; and
(9) modulus. With the exception of quality, these characteristics are
in accordance with matching criteria set forth in the January 26, 1994,
memorandum to the file. Regarding quality, we have added this
characteristic in order to address respondents' concerns regarding
differences in value related to significant differences in quality.
Regarding color, both respondents assigned separate codes to each
shade of color. We reassigned color codes to sales of subject
merchandise, in accordance with the instructions contained in the
questionnaire. This resulted in our treating all shades of white as
equally similar to each other, all shades of black as equally similar,
etc., instead of treating a specific shade as most similar to another
specific shade.
Fair Value Comparisons
To determine whether sales of extruded rubber thread from Malaysia
to the United States were made at less than fair value, we compared the
United States price (USP) to the foreign market value (FMV) for
Rubberflex and Heveafil, as specified in the ``United States Price''
and ``Foreign Market Value'' sections of this notice.
Respondents reported bad debt as indirect selling expenses.
Therefore, because bad debt was included in the indirect selling
expenses, we disregarded sales to all markets (i.e., United States and
third country) which were written off as bad debt in order to avoid
double-counting these transactions.
United States Price
For sales by both respondents, we based USP on purchase price, in
accordance with section 772(b) of the Act, when the subject merchandise
was sold to unrelated purchasers in the United States prior to
importation and when the exporter's sales price (ESP) methodology of
section 772(c) of the Act was not otherwise indicated. In addition,
where sales to the first unrelated purchaser took place after
importation into the United States, we based USP on ESP, in accordance
with section 772(c) of the Act.
A. Heveafil
We removed all sales from the sales database with entry dates after
the period of review (POR). In addition, at verification, we found that
certain sales Heveafil had designated as U.S. sales were actually sales
to a U.S. customer but shipped to Hong Kong to be further manufactured
into non-subject merchandise before entering the United States.
Accordingly, the merchandise that eventually entered the United States
was not subject to the dumping order. Therefore, we consider these
sales to be third country sales and have eliminated them from the U.S.
sales listing.
We based purchase price on packed, CIF prices to the first
unrelated purchaser in the United States. We revised Heveafil's data
based on our findings at verification. We made deductions from USP,
where appropriate, for rebates. In addition, where appropriate, we made
deductions for foreign inland freight, foreign brokerage and handling,
ocean freight, marine insurance, U.S. customs duty, harbor maintenance
and merchandise
[[Page 25192]]
processing fees, and U.S. brokerage and handling expenses, in
accordance with section 772(d)(2) of the Act.
At verification, we found that Heveafil did not report certain
purchase price sales of extruded rubber thread which entered the United
States during the POR. Because we specifically instructed Heveafil to
report all entries into the United States during the POR as well as all
sales made during the POR, we based the margin for these unreported
sales on the best information otherwise available (BIA) in accordance
with section 776(c) of the Act. As BIA, we applied the weighted-average
margin found in the this first administrative review, because it is the
highest rate ever determined for Heveafil. This is consistent with the
Department's general application of partial BIA (see, e.g., Final
Results of Antidumping Duty Administrative Reviews and Revocation in
Part of an Antidumping Duty Order; Antifriction Bearings (Other Than
Tapered Roller Bearings) and Parts Thereof From France, et al, 60 FR
10900, 10907 (February 28, 1995) (AFBs)).
For sales made from the inventory of the U.S. branch office, we
based USP on ESP, in accordance with section 772(c) of the Act. In
addition, we reclassified certain purchase price sales as ESP sales
because we found at verification that they were canceled by the
original purchaser after shipment and resold after importation into the
United States.
We calculated ESP based on packed, delivered prices to unrelated
customers in the United States. We revised the reported data based on
our findings at verification. We made deductions, where appropriate,
for rebates. We also made deductions for foreign inland freight,
foreign brokerage, ocean freight, marine insurance, U.S. inland
freight, U.S. brokerage, entry fees, harbor maintenance and processing
fees, and inspection charges. In accordance with section 772(e)(2) of
the Act, we made additional deductions, where appropriate, for credit
and indirect selling expenses.
B. Rubberflex
We based purchase price on packed, CIF prices to the first
unrelated purchaser in the United States. We made deductions from USP,
where appropriate, for foreign inland freight, foreign brokerage,
containerization expenses, ocean freight, marine insurance, U.S.
customs duties, harbor maintenance and merchandise processing fees, and
U.S. inland freight expenses, in accordance with section 772(d)(2) of
the Act. Rubberflex did not report certain movement charges, although
the company reported that it incurred them on all purchase price
transactions. Accordingly, we based the amount of the unreported
expenses on BIA. As BIA, we used the highest amount reported in the
purchase price sales listing for each specific charge (see e.g.,
Chrome-Plated Lug Nuts From the People's Republic of China; Final
Results of Antidumping Administrative Review 60 FR 48687 (September 20,
1995)). We disregarded a rebate reported for one purchase price sale,
because Rubberflex stated in its questionnaire response that the
company did not grant any U.S. rebates during the POR.
For sales made from the inventory of the U.S. subsidiary, we based
USP on ESP, in accordance with section 772(c) of the Act. We calculated
ESP based on packed, delivered prices to unrelated customers in the
United States. We made deductions, where appropriate, for foreign
inland freight, foreign brokerage, containerization expenses, ocean
freight, marine insurance, U.S. customs duties, harbor maintenance and
processing fees, and U.S. inland freight. In accordance with section
772(e)(2) of the Act, we made additional deductions, where appropriate,
for credit and indirect selling expenses.
Rubberflex did not report complete data for certain ESP sales.
Accordingly, we used BIA to determine these data, as follows: Where
price and/or credit expense data was missing for sales of second
quality merchandise, we used the average price and expense data
reported for other second quality sales. Where the date of sale was
missing and/or the control number was missing, we applied the weighted-
average margin found in the LTFV investigation, because it is the
highest rate ever determined for Rubberflex. This is consistent with
the Department's general application of partial BIA (see, e.g., AFBs).
Foreign Market Value
In order to determine whether the home market was viable during the
POR, (i.e., whether there were sufficient sales of extruded rubber
thread in the home market to serve as a viable basis for calculating
FMV), we compared the volume of each of the respondent's home market
sales to the volume of its third country sales, in accordance with
section 773(a)(1)(B) of the Act and 19 CFR 353.48. Based on this
comparison, we determined that neither respondent had a viable home
market during the POR. Consequently, we based FMV on third country
sales.
In accordance with 19 CFR 353.49(b), we selected the appropriate
third country markets for Heveafil and Rubberflex based on the
following criteria: similarity of merchandise sold in the third country
to the merchandise exported to the United States, the volume of sales
to the third country, and the similarity of market organization between
the third country and U.S. markets. Specifically, we chose, as the
appropriate third country markets, Italy for Heveafil and Hong Kong for
Rubberflex.
Because the Department disregarded sales below the cost of
production (COP) for both Heveafil and Rubberflex in the original
investigation (see Final Determination of Sales at Less Than Fair
Value: Extruded Rubber Thread from Malaysia, 57 FR 38465 (August 25,
1992)), in accordance with our standard practice, there were reasonable
grounds to believe or suspect that both Heveafil and Rubberflex had
made third country sales at prices below its COP in this review.
In accordance with section 773(b) of the Act, and longstanding
administrative practice (see, e.g., Final Determination of Sales at
Less Than Fair Value: Polyethylene Terephthalate Film, Sheet, and Strip
from Korea, 56 FR 16306 (April 22, 1991) and Final Results
Administrative Review: Mechanical Transfer Presses from Japan, 59 FR
9958 (March 2, 1994)), if over ninety percent of respondent's sales of
a given model were at prices above the COP, we did not disregard any
below-cost sales because we determined that the below-cost sales were
not made in substantial quantities. Where we found between ten and
ninety percent of respondent's sales of a given product were at prices
below the COP, and the below cost sales were made over an extended
period of time, we disregarded only the below-cost sales. Where we
found that more than ninety percent of respondent's sales were at
prices below the COP, and the sales were made over an extended period
of time, we disregarded all sales for that product and calculated FMV
based on constructed value (CV), in accordance with section 773(e) of
the Act.
In order to determine whether third country prices were above the
COP, we calculated the COP for each model based on the sum of the
respondent's cost of materials, labor, other fabrication costs, and
general expenses and packing. We calculated CV for each model based on
the sum of respondent's cost of manufacture (COM), plus general
expenses, profit and U.S. packing. For general expenses, which includes
selling and financial expenses (SG&A), we used the greater of the
reported general expenses or the statutory minimum of ten percent of
the COM.
[[Page 25193]]
For profit, we used the greater of the weighted-average third country
profit during the POR or the statutory minimum of eight percent of the
COM and SG&A, in accordance with section 773(e)(B) of the Act.
A. Heveafil
We made the following adjustments to Heveafil's reported COP and CV
data based on our findings at verification. We increased direct
material costs to account for yield loss during production. We
increased direct labor to include accrued retirement benefits and other
labor costs that had been excluded from COP and CV. We also
reclassified certain variable labor costs to fixed overhead. We revised
Heveafil's net financing costs to account for the financing cost
incurred by its parent company. We recomputed Heveafil's G&A expense to
include certain non-production labor costs, general depreciation, the
write-off of idle equipment, and a portion of Heveafil's parent
company's G&A expense. For further discussion of these adjustments, see
the cost calculation memorandum from Stan Bowen and Dennis McClure,
accountants in the Office of Accounting, to Christian Marsh, Director
of the Office of Accounting, dated April 30, 1996.
Where FMV was based on third country sales, as in the original
investigation, we based FMV on CIF prices to unrelated Italian
customers in comparable channels of trade as the U.S. customer.
Specifically, FMV was based on direct sales from Malaysia for purchase
price sales comparisons, and on sales from the inventory of Heveafil's
Italian branch office for ESP sales comparisons, in accordance with
section 773(a)(1)(B) of the Act. We made adjustments to Heveafil's
reported sales data based on our findings at verification. We made no
adjustment to FMV for credits issued by the Italian branch office based
on our finding at verification that these credits were incorrectly
reported (see the Italian Branch's sales verification report, dated
August 30, 1995).
For third country price-to-purchase price comparisons, we made
deductions, where appropriate, for rebates. We also deducted post-sale
home market movement charges from FMV under the circumstance of sale
provision of section 773 (a)(4)(B) of the Act and 19 CFR 353.56. This
adjustment included Malaysian foreign inland freight, brokerage, ocean
freight, marine insurance, Italian brokerage, and inland freight to
Heveafil's unrelated customers in Italy, where appropriate. Pursuant to
19 CFR 353.56(a)(2), we made circumstance of sale adjustments, where
appropriate, for differences in credit expenses.
For third country price-to-ESP comparisons, where appropriate, we
made deductions for rebates and credit expenses. We deducted the third
country market indirect selling expenses, including inventory carrying
costs, pre-sale freight (i.e., foreign inland freight, brokerage, ocean
freight, marine insurance, Italian brokerage, and Italian freight to
Heveafil's warehouse) and other indirect selling expenses, up to the
amount of indirect selling expenses incurred on U.S. sales, in
accordance with 19 CFR 353.56(b)(2).
For all price-to-price comparisons, we deducted third country
packing costs and added U.S. packing costs, in accordance with section
773(a)(1) of the Act. At verification, we found that Heveafil had
incorrectly reported its third country and U.S. packing material
expenses. Therefore, we based the adjustment for packing materials on
BIA. As BIA, we used the lowest packing material expense reported for
any Italian sale and the highest packing expense reported for any U.S.
sale (see Concurrence Memorandum to Barbara R. Stafford from Team,
dated April 30, 1996). In addition, where appropriate, we made
adjustments to FMV to account for differences in physical
characteristics of the merchandise, in accordance with section
773(a)(4)(c) of the Act and 19 CFR 353.57.
For CV-to-purchase price comparisons, we made circumstance of sale
adjustments, where appropriate, for credit expenses in accordance with
773 (a)(4)(B) and 19 CFR 353.56.
For CV-to-ESP comparisons, we made deductions, where appropriate,
for credit expenses. We also deducted the third country market indirect
selling expenses, including inventory carrying costs and other indirect
selling expenses, up to the amount of indirect selling expenses
incurred on U.S. sales, in accordance with 19 CFR 353.56(b)(2).
For all CV-to-price comparisons, we added U.S. packing expenses as
specified above, in accordance with section 773(a)(1) of the Act.
B. Rubberflex
We made adjustments to Rubberflex's reported COP and CV data as
follows: We recalculated general and administrative expenses, as well
as interest expenses, based on the data contained in Rubberflex's
audited financial statements. For further discussion of these
adjustments, see the cost calculation memorandum from Elizabeth
Lofgren, accountant in the Office of Accounting, to Christian Marsh,
Director of the Office of Accounting, dated April 30, 1996.
Where FMV was based on third country sales, as in the original
investigation, we based FMV on CIF prices to unrelated Hong Kong
customers in comparable channels of trade as the U.S. customer.
Specifically, FMV was based on direct sales from Malaysia for purchase
price sales comparisons, and on sales from the inventory of
Rubberflex's Hong Kong subsidiary for ESP sales comparisons.
For third country price-to-purchase price comparisons, we made
deductions, where appropriate, for rebates. We also deducted post-sale
home market movement charges from FMV under the circumstance of sale
provision of 19 CFR 353.56. This adjustment included Malaysian foreign
inland freight, brokerage and handling charges, containerization, ocean
freight, and marine insurance. Pursuant to 773(a)(4)(B) of the Act and
19 CFR 353.56(a)(2), we made circumstance of sale adjustments, where
appropriate, for differences in credit expenses.
For third country price-to-ESP comparisons, we made deductions for
rebates, where appropriate. We also made deductions for credit
expenses.
We deducted the third country market indirect selling expenses,
including inventory carrying costs, bank charges, pre-sale freight
expenses (i.e., foreign inland freight, brokerage and handling charges,
containerization, ocean freight, marine insurance, Hong Kong duty and
brokerage expenses, and freight from the port in Hong Kong to
Rubberflex's warehouse), and other indirect selling expenses, up to the
amount of indirect selling expenses incurred on U.S. sales, in
accordance with 19 CFR 353.56(b)(2).
Regarding Hong Kong duties, Rubberflex reported a combined amount
for document declaration fees, terminal handling charges, and bank
charges. Because the Department's practice is to treat bank charges as
a selling expense (rather than a movement charge), we reclassified bank
charges as indirect selling expenses and recalculated Hong Kong duties
accordingly (see, e.g., Final Determination of Sales at Less Than Fair
Value (LTFV); Oil Country Tubular Goods from Korea 60 FR 33561, 33562
(June 28, 1995) and Final Determination of Sales at LTFV; Dynamic
Random Access Memory Semiconductors of One Megabit and Above from Korea
58 FR 15467, 15467-70 (March 23, 1993)).
For all price-to-price comparisons, we deducted third country
packing costs and added U.S. packing costs, in accordance with section
773(a)(1) of the Act. In addition, where appropriate, we made
adjustments to FMV to account for
[[Page 25194]]
differences in physical characteristics of the merchandise, in
accordance with 19 CFR 353.57.
For CV-to-purchase price comparisons, we made circumstance of sale
adjustments, where appropriate, for credit expenses in accordance with
section 773(a)(4)(B) of the Act and 19 CFR 353.56.
For CV-to-ESP comparisons, we made deductions, where appropriate,
for credit expenses. We also deducted third country market indirect
selling expenses, including inventory carrying costs, bank charges, and
other indirect selling expenses, up to the amount of indirect selling
expenses incurred on U.S. sales, in accordance with 19 CFR
353.56(b)(2).
For all CV-to-price comparisons, we added U.S. packing expenses, in
accordance with section 773(a)(1) of the Act.
Currency Conversion
We made currency conversions in accordance with 19 CFR 353.60(a).
All currency conversions were made at the rates certified by the
Federal Reserve Bank.
Verification
As provided in section 776(b) of the Act, we verified information
provided by Heveafil by using standard verification procedures,
including on-site inspection of the manufacturer's facilities,
examination of relevant sales and financial records, and selection of
original source documentation containing relevant information. As
discussed in the ``Background'' section of this notice, we did not
conduct verification of the sales and cost data submitted by
Rubberflex.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the
following margin exists for the period April 2, 1992, through September
30, 1993:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Review period (percent)
------------------------------------------------------------------------
Heveafil Sdn. Bhd...................... 4/02/92-9/30/93 22.74
Rubberflex Sdn. Bhd.................... 4/02/92-9/30/93 1.59
------------------------------------------------------------------------
Interested parties may request a disclosure within 5 days of
publication of this notice and may request a hearing within 10 days of
the date of publication. Any hearing, if requested, will be held 44
days after the date of publication, or the first workday thereafter.
Interested parties may submit case briefs within 30 days of the date of
publication. Rebuttal briefs, limited to issues raised in the case
briefs, may be filed not later than 37 days after the date of
publication. The Department will publish a notice of the final results
of this administrative review, which will include the results of its
analysis of issues raised in any such case briefs.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between USP and FMV may vary from the percentages stated
above. The Department will issue appraisement instructions directly to
the U.S. Customs Service.
Furthermore, the following deposit requirements will be effective
for all shipments of extruded rubber thread from Malaysia 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 rates for Heveafil
and Rubberflex will be the rates established in the final results of
this review, except if the rate is less than 0.50 percent and,
therefore, de minimis within the meaning of 19 CFR 353.6, the cash
deposit will be zero; (2) for previously reviewed or investigated
companies not listed above, the cash deposit rate will continue to be
the company-specific rate published for the most recent period; (3) if
the exporter is not a firm covered in this review, a prior 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 (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 the
``all others'' rate, as set forth below.
On March 25, 1993, the U.S. Court of International Trade (CIT), in
Floral Trade Council v. United States, 822 F.Supp. 766 (CIT 1993), and
Federal-Mogul Corporation v. United States, 822 F.Supp. 782 (CIT 1993),
decided that once an ``all others'' rate is established for a company,
it can only be changed through an administrative review. The Department
has determined that in order to implement this decision, it is
appropriate to reinstate the original ``all others'' rate from the LTFV
investigation (or that rate as amended for correction of clerical
errors or as a result of litigation) in proceedings governed by
antidumping duty orders. In proceedings governed by antidumping
findings, unless we are able to ascertain the ``all others'' rate from
the original investigation, the Department has determined that it is
appropriate to adopt the ``new shipper'' rate established in the first
final results of administrative review published by the Department (or
that rate as amended for correction of clerical errors or as a result
of litigation) as the ``all others'' rate for the purposes of
establishing cash deposits in all current and future administrative
reviews. Because this proceeding is governed by an antidumping duty
order, the ``all others'' rate for the purposes of this review will be
15.16 percent, the ``all others'' rate established in the LTFV
investigation.
These cash deposit requirements, when imposed, shall remain in
effect until publication of the final results of the next
administrative review.
This notice 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 in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: May 10, 1996.
Paul L. Joffe,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-12501 Filed 5-17-96; 8:45 am]
BILLING CODE 3510-DS-P
