[Federal Register Volume 63, Number 136 (Thursday, July 16, 1998)]
[Notices]
[Pages 38373-38382]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18884]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-504]
Porcelain-on-Steel Cookware From Mexico: Final Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Final Results of Antidumping Duty Administrative
Review.
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SUMMARY: On January 9, 1998, the Department of Commerce published the
preliminary results of the administrative review of the antidumping
duty order on certain porcelain-on-steel cookware from Mexico (63 FR
1430). The review, the tenth review of the underlying order, covers
Cinsa, S.A. de C.V. and Esmaltaciones de Norte America, S.A. de C.V.,
manufacturers/exporters of the subject merchandise to the United States
and the period December 1, 1995, through November 30, 1996. We gave
interested parties an opportunity to comment on the preliminary
results. Based on our analysis of the comments received and the
correction of certain clerical and computer program errors, we have
changed the preliminary results. The final results are listed below in
the section ``Final Results of Review.''
EFFECTIVE DATE: July 16, 1998.
FOR FURTHER INFORMATION CONTACT:
Kate Johnson or David J. Goldberger, Office 5, AD/CVD Enforcement Group
II, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230, telephone:
[[Page 38374]]
(202) 482-4929 or (202) 482-4136, respectively.
SUPPLEMENTARY INFORMATION:
Background
On January 9, 1998, the Department of Commerce (the Department)
published in the Federal Register the preliminary results of the 1995-
96 administrative review of the antidumping duty order on certain
porcelain-on-steel (POS) cookware from Mexico (63 FR 1430) (preliminary
results). During February 3-4, 1998, the Department verified the
respondents' submissions concerning the allegation of duty
reimbursement. On February 25, 1998, and March 4, 1998, General
Housewares Corp. (GHC) (the petitioner) and, Cinsa, S.A. de C.V.
(Cinsa) and Esmaltaciones de Norte America, S.A. de C.V. (ENASA)
submitted case and rebuttal briefs. The Department held a hearing on
March 11, 1998. On April 9, 1998, Columbian Home Products, LLC (CHP)
informed the Department that it is the legal successor-in-interest to
GHC pursuant to the March 31, 1998, sale of all of GHC's porcelain-on-
steel cookware production assets, product lines, inventory, real
estate, and brand names to CHP. The Department has now completed its
administrative review in accordance with section 751 of the Tariff Act
of 1930, as amended (the Act).
Applicable Statute
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 Act by the Uruguay Round Agreements
Act (URAA). In addition, unless otherwise indicated, all citations to
the Department's regulations are to the provisions codified at 19 CFR
Part 353 (April 1997). Where we cite the Department's new regulations
(19 CFR Part 351, 62 FR 27926 (May 19, 1997) (New Regulations)) as an
indication of current Department practice, we have so stated.
Scope of the Review
Imports covered by this review are shipments of porcelain-on-steel
cookware, including tea kettles, which do not have self-contained
electric heating elements. All of the foregoing are constructed of
steel and are enameled or glazed with vitreous glasses. This
merchandise is currently classifiable under Harmonized Tariff Schedule
of the United States (HTSUS) subheading 7323.94.00. Kitchenware
currently classifiable under HTSUS subheading 7323.94.00.30 is not
subject to the order. Although the HTSUS subheadings are provided for
convenience and Customs purposes, our written description of the scope
of this proceeding is dispositive.
Changes Since the Preliminary Results
We have made the following changes in these final results for both
Cinsa and ENASA:
1. We deducted commissions from constructed export price (CEP)
sales. The adjustment for commission expenses was inadvertently omitted
from the preliminary margin calculations.
2. We converted Mexican peso-denominated brokerage and inland
freight expenses to U.S. dollars.
3. We corrected the U.S. price calculation for export price (EP)
sales by not deducting CEP profit and selling expenses, which were
inadvertently deducted in the preliminary results.
4. We increased direct materials costs to reflect adjustments to
reported frit costs based on verification findings. See Comment 2,
below.
5. We used the Federal Reserve Bank's actual daily exchange rates
for currency conversion purposes because Mexico experienced significant
inflation during the period of review.
6. We recalculated CIC's indirect selling expenses. See Comments 4
and 9, below.
7. We tested home market sales for below-cost prices before
determining the most appropriate match for each U.S. model sold (we
continued to match on a monthly basis). See Comment 6, below.
8. We corrected a clerical error in calculating U.S. inland freight
expenses. See Comment 8, below.
9. We corrected a computer programming error associated with the
cost test because some data were incorrectly replaced from the computer
sales file when the summary cost file was merged back into the home
market database.
10. We applied the cost test on a period-wide as opposed to a
monthly basis.
Interested Party Comments
Comment 1: Alleged Reimbursement of U.S. Affiliate CIC for Antidumping
Duties
The petitioner argues that the record of this review clearly
demonstrates that Cinsa and ENASA are reimbursing Cinsa's and ENASA's
U.S. affiliate, Cinsa International Corporation (CIC), for antidumping
duties. The petitioner states that Cinsa and ENASA admit on the record
that their affiliated holding company, Grupo Industrial Saltillo (GIS),
which functions as corporate treasurer, transferred funds to CIC
expressly to pay antidumping duties. In addition, the petitioner states
that the Department confirmed that the holding company's payment to CIC
was a grant and not a loan because CIC was not required to repay these
funds.
The petitioner further argues that the Department's preliminary
results ignore long-standing principles that (1) money is fungible
within a corporate family, and (2) expenses incurred by holding
companies without operations are for the benefit of their affiliates
with operations. Moreover, the petitioner states that the Department
verified that the funds transferred to CIC contained monies to which
Cinsa and ENASA contributed. Accordingly, the petitioner argues that
the Department should find reimbursement of antidumping duties based on
these facts and assess double the calculated antidumping margin upon
liquidation of the entries subject to this review, pursuant to 19 CFR
353.26(a).
The respondents argue that, for purposes of the final results, the
Department should continue to reject the proposition that a capital
contribution to the importer of record by a corporate entity that is
not the producer or exporter of the subject merchandise constitutes a
reimbursement of antidumping duties within the meaning of the
Department's regulations. Cinsa and ENASA contend that the Department's
regulations require that, in order to trigger the reimbursement
provision, the producer or reseller must have either (1) directly paid
antidumping duties or deposits on behalf of the importer, or (2)
reimbursed the importer for the payment of antidumping duties or
deposits. In addition, Cinsa and ENASA argue that the Department
verified that neither respondent reimbursed CIC for its payment of
antidumping duty deposits or assessments to the U.S. Customs Service.
Moreover, the respondents argue that the Department also verified that
no written agreement exists for the reimbursement of antidumping duties
between CIC and Cinsa or ENASA and that the funds transferred to CIC
from GIS and GISSA Holding USA did not originate from Cinsa and ENASA.
Furthermore, the respondents contend that the Department has
consistently held that the mere existence of intercompany transfers of
funds among affiliated parties does not constitute reimbursement of
antidumping duties. Lastly, Cinsa and ENASA submit that the cases cited
by the petitioner with regard to the principle of the ``fungibility of
money'' relate to the calculation of cost of production (COP)
[[Page 38375]]
and are not relevant to the issue of reimbursement.
DOC Position
We do not believe that it is appropriate to apply the reimbursement
regulation for purposes of this administrative review. Pursuant to its
regulations, the Department will deduct from export price ``the amount
of any antidumping duty which the producer or reseller: (1) Paid
directly on behalf of the importer; or (2) reimbursed to the
importer.'' 19 CFR 353.26(a).
The Department verified during the instant review and previous
administrative review periods that CIC or its predecessor company,
Global Imports, Inc. (Global), paid all antidumping duty deposits and
antidumping duty assessments. The petitioner's claim for a deduction
rests on the April 1997 capital contribution by GISSA Holding USA to
CIC. The monies at issue were paid by GIS (the ultimate parent company
of Cinsa, ENASA, and several other producing entities, as well as of
the importer, CIC) to GISSA Holding USA (which is a holding company for
CIC but not for Cinsa or ENASA). GISSA Holding USA then provided these
funds to CIC for purposes that included payment of antidumping duties
assessed on entries imported by Global during the 5th and 7th review
periods, which were liquidated during 1996.
The Department preliminarily determined not to apply the
reimbursement regulation based on a literal construction of that
regulation and the fact that the transfer in question was not provided
directly by a producer or exporter. Therefore, it took no position on
whether a finding of reimbursement as to the 5th and 7th review entries
could serve as the basis for application of the reimbursement
regulation as to 10th review entries. As a result, the parties have not
had an opportunity to comment on and provide evidence in connection
with any new policy that might involve a finding of reimbursement as to
either the 5th and 7th review entries or as to subsequent entries. Even
if the Department were to agree with petitioners that Cinsa and ENASA
reimbursed CIC for antidumping duties paid on 5th and 7th review
entries, it could not apply the reimbursement regulation to these 10th
review entries. To do so would be equivalent to imposing an
irrebuttable (in this review) presumption that a pattern of
reimbursement of duties paid on entries from earlier periods would be
continued as to entries in later periods. This issue was not raised
during the 10th review. It is well established that potentially
affected parties must be given an opportunity to submit evidence
specifically to rebut a presumption established by the Department,
especially when, as in this case, the Department took a position in the
preliminary results that made the submission of such evidence
unnecessary during the administrative proceeding. See, e.g., British
Steel plc v. United States, 879 F. Supp. 1254, 1316-17 (CIT 1995),
Sigma Corp. v. United States, 841 F. Supp. 1255, 1267 (CIT 1993). The
facts underlying this issue have not changed from the 9th review final
results in which we determined that the reimbursement regulation did
not apply. Therefore, the Department will maintain, for purposes of
this review, the position taken in the 9th review and in the 10th
review preliminary results based on the rationale given therein.
The Department has concerns about the nature of the cash transfer
at issue in this case and intends to reconsider, in future reviews,
whether reimbursement by Cinsa's and ENASA's corporate parent would
constitute reimbursement under the Department's regulations. In the
future, the Department may find it appropriate to apply the
reimbursement regulation in instances in which a parent or other
affiliate of a producer or exporter provided funds specifically for the
payment of antidumping duties. Thus, the Department will examine
closely transfers of funds between the producer/exporter, its
affiliates, and the importer, made for the purpose of paying
antidumping duties and cash deposits.
Further, we disagree with petitioner's arguments that we should
find reimbursement based on (1) the principle of the fungibility of
money and (2) the idea that expenses incurred by holding companies
without operations are for the benefit of their subsidiaries with
operations. See ``Issues Memo for the Final Results'' dated July 8,
1998, for additional information. In antidumping cases, the Department
uses both of these concepts to deal with allocation of expenses
associated with a parent company to the COP and constructed value (CV)
of the company producing subject merchandise. In antidumping cases, the
so-called ``fungibility principle'' is an aspect of the Department's
methodology for calculating financial costs incurred in producing and
selling subject merchandise based on an interest expense ratio
reflecting the overall corporate borrowing experience. E.g., Final
Determination of Sales at Less than Fair Value: New Minivans from
Japan, 57 FR 21937, 21946 (Comment 18) (May 26, 1992). Just as the
``fungibility principle'' is used in dealing with interest expense, the
holding company rule relates to the allocation of a portion of the
general and administrative (G&A) expenses incurred by a non-producing
parent company to the cost calculations for a firm producing subject
merchandise that benefits from the activities/services generating such
expenses. In the Final Determination of Sales at Less Than Fair Value:
Certain Hot-Rolled Carbon Steel Flat Products * * * From Canada, 58 FR
37099, 37114 (Comment 47) (July 9, 1993), the Department expressed this
principle as follows: ``The general expenses incurred by a parent
company, without operations, relate to all of its subsidiaries with
operations.'' This simply allows the Department to allocate a portion
of general costs to the cost of producing subject merchandise.
Comment 2: Enamel Frit Cost
For purposes of the final results, respondents Cinsa and ENASA
argue that the Department should use the transfer prices reported for
enamel frit obtained from their affiliated supplier, ESVIMEX, without
adjustment. However, the respondents state that, if the Department
decides to adjust materials costs to reflect an ``adjusted market
price,'' both the respondents and the petitioner agree that the
Department erred in calculating the amount of the differential between
market price and adjusted market price. The respondents believe that
the Department improperly focused solely on the price difference
between ESVIMEX's prices to Cinsa and ENASA, and ESVIMEX's prices to
unaffiliated customers, rather than comparing the price paid by Cinsa
and ENASA for ESVIMEX's frit, and the price paid by those producers for
the enamel frit purchased from an unaffiliated producer, in order to
determine whether ESVIMEX's prices to Cinsa and ENASA reflect fair
market prices.
The respondents argue that the Department improperly concluded that
the difference between ESVIMEX's prices to affiliated parties and those
to unaffiliated parties was not attributable entirely to cost savings
to ESVIMEX on its sales to affiliated parties, because the preliminary
results failed to take into account prompt payment discounts, the
existence of which was verified by the Department. Furthermore, the
respondents argue that, even if prompt payment discounts are not taken
into consideration, any remaining portion of the price differential not
accounted for by verified cost savings represented a quantity discount
granted to affiliated
[[Page 38376]]
purchasers because such purchasers accounted for a large majority of
ESVIMEX's sales of enamel frit. Therefore, the transfer prices paid by
Cinsa and ENASA to ESVIMEX would be fair market prices, according to
the respondents.
Finally, Cinsa and ENASA contend that, even if it were appropriate
for the Department to adjust Cinsa's and ENASA's reported raw material
costs, the preliminary results overstated the adjustment. The
respondents argue that, rather than corresponding to the percent of
list price that is not documented by cost savings, the Department's
adjustment incorrectly corresponds to the percent of list price that is
documented by verified cost savings.
The petitioner maintains that Cinsa's and ENASA's cost of enamel
frit purchased from its affiliate, ESVIMEX, should be based on
unadjusted market prices, defined as the prices that unrelated parties
paid ESVIMEX for frit, which is equivalent to the list prices less only
the general discount given to all unrelated parties. The petitioner
contends that the Department cannot conclude that Cinsa's and ENASA's
transfer prices reflect market value, as claimed by the respondents,
because the record demonstrates that ESVIMEX's prices for frit to Cinsa
and ENASA were lower than the prices charged to unaffiliated customers.
Moreover, the petitioner claims that the respondents base their claim
on a comparison with a de minimis volume purchased from an unaffiliated
supplier.
Alternatively, the petitioner argues that the Department should
correct its preliminary calculation for purposes of the final results
so that it adjusts Cinsa's and ENASA's material costs upward by what it
terms the full difference between the market prices for frit and the
adjusted market prices for frit, and provides a calculation which it
claims will have this effect.
Furthermore, the petitioner asserts that regarding discounts (1)
the Department should disregard the prompt payment discount because the
respondents did not even allege the existence of such a discount prior
to verification and provided no evidence indicating how often ESVIMEX
granted this discount, and (2) there is no evidence to support the
respondents' claimed quantity discount.
Finally, the petitioner contends that the Department should reject
Cinsa's and ENASA's alternate calculation of the adjustment to
materials costs because it calculates the percentage difference between
market prices and theoretical transfer prices, not actual transfer
prices, and therefore understates the appropriate percentage increase
to Cinsa's and ENASA's materials costs.
DOC Position
For purposes of the preliminary results, we intended to increase
the frit portion of the direct materials cost to account for difference
between market prices and reported transfer prices that is not
accounted for by documented cost savings. However, we agree with the
respondents that we inadvertently overstated the amount necessary to
increase the transfer price to equal an ``adjusted market price''
corresponding to the situation in which ESVIMEX sells to Cinsa and
ENASA. Accordingly, for purposes of the final results, we have used in
our calculation the percent of list price that is not documented by
cost savings, as opposed to the percent of list price that is
documented by verified cost savings, which we incorrectly used in our
preliminary calculations.
We disagree with the petitioner's suggestion that the Department
should make an adjustment to material costs based on the difference
between the market prices for frit and the Department's calculation of
an ``adjusted market price'' (i.e., a price that the Department
believes Cinsa and ENASA would have paid had they been unaffiliated
purchasers). The adjustment made by the Department is intended to
increase Cinsa's and ENASA's submitted frit costs (i.e., transfer
prices) so that they include the portion of the ``affiliates'' discount
off list price which was not supported at verification as being
attributable to cost savings. Therefore, the appropriate calculation
measures the difference between the reported transfer price and the
Department's adjusted market price.
With regard to the petitioner's argument that the reported prices
are ``theoretical'' prices as opposed to ``actual prices,'' we verified
invoices showing that the reported transfer prices (prices from ESVIMEX
to Cinsa and ENASA) correspond to list prices minus the standard
discount to affiliated parties.
In addition, we do not agree with Cinsa's and ENASA's argument that
the Department must accept ESVIMEX's frit transfer prices as reported
on the theory that the transfer price sales were made at a fair market
value. Pursuant to section 773(f)(2) of the Act, a transaction between
affiliated parties is considered an appropriate source of ascertaining
the value of an input if it fairly represents the amount usually
reflected in sales of subject merchandise in the relevant market. Based
on the documents examined at verification, we have determined that,
although the respondents adequately supported their claim with respect
to all cost efficiencies listed on the schedule submitted at
verification, these costs efficiencies did not account for the full
extent of the discount accorded only to affiliated parties. Although
Cinsa and ENASA then claimed that the unaccounted for portion of the
affiliated party discount should be attributed to a volume discount,
they were unable to quantify and support how the volume of their
purchases resulted in market-based savings equivalent to that
unaccounted for portion. Therefore, in accordance with the Department's
longstanding policy of considering that transactions between affiliated
parties are not at arm's length in the absence of sufficient evidence
to the contrary, the Department reasonably determined that this
standard had not been met with respect to ESVIMEX's frit transfer
prices to Cinsa and ENASA, and based its cost calculations instead upon
the ``adjusted market price'' described above.
We have also rejected Cinsa's and ENASA's suggestion that, in
measuring the extent to which market forces do not account for the
difference between the discount off list price given to affiliates and
the discount off list price given to unaffiliated parties, we should
take into account prompt payment discounts. Although the Department
verified that such discounts are offered, Cinsa and ENASA have not
provided any information on the frequency with which such discounts are
actually given. In addition, such discounts constitute a recognition
that a limited number of customers will require a lesser extension of
credit by Cinsa and ENASA, not a general adjustment to price. Thus, the
Department reasonably did not assume the existence of such a discount
in calculating the normal market price for unaffiliated purchasers of
frit.
Similarly, we decline to find that the prices for Cinsa's minimal
purchases of enamel frit from an unaffiliated producer are an
appropriate basis for determining whether their purchases from ESVIMEX
reflect fair market prices. Because certain information regarding these
transactions is business proprietary, see the Issues Memo.
Moreover, we do not agree with the respondents that it is
sufficient to show that ESVIMEX's frit prices to affiliates are above
ESVIMEX's COP. The respondents' argument to this effect ignores the
provisions of section 773(f)(2) of the Act, which requires a comparison
of transfer prices and market prices when the latter are available, and
permits the use of the
[[Page 38377]]
higher of those prices. Thus, we compared the transfer prices Cinsa and
ENASA paid to prices charged to unaffiliated customers. We noted that
the prices charged to unaffiliated customers were greater than both the
affiliated transfer prices and the actual costs incurred to produce the
frit supplied to Cinsa and ENASA. Because the prices charged to
unaffiliated customers did not reflect certain market-based savings
unique to ESVIMEX's affiliates, however, we constructed an ``adjusted
market price'' which did reflect these elements. Because this price was
higher than both ESVIMEX's COP and the transfer price, in conformity
with section 773(f)(2) and (3) of the Act, we based Cinsa's and ENASA's
frit cost on the ``adjusted market price.''
Comment 3: Cinsa's and ENASA's Classification of Certain U.S. Sales as
EP Rather Than CEP
The petitioner argues that Cinsa's and ENASA's classification of
certain sales as EP is incorrect because, it claims, this
classification is based only on the first of the three factors used by
the Department for determining the classification of sales made through
affiliated importers, i.e., the fact that the merchandise in question
was shipped directly from the manufacturer to the unrelated buyer,
without being introduced into the physical inventory of the related
selling agent. The petitioner claims that, in order to classify U.S.
sales through an affiliated importer as EP sales, the respondent must
also provide evidence that EP was the customary commercial channel for
sales of this merchandise between the parties involved, and that the
affiliated importer acted only as a processor of documentation and a
communication link with the unaffiliated U.S. buyer.
With regard to the second criterion, the petitioner argues that the
relative volumes and values of sales direct from Mexico are not high
enough for EP sales channel to be considered customary. With regard to
the third criterion, the petitioner asserts that CIC's level of
activity with respect to all U.S. sales, including those sales
classified as EP sales, was far beyond what would be undertaken by a
mere ``processor of sales documentation.'' Accordingly, the petitioner
believes that the Department should reclassify as CEP sales all sales
reported as EP sales.
Cinsa and ENASA argue that all three factors the Department uses to
classify certain sales as EP were present with respect to the sales
they classified as EP, claiming that the EP channel of trade with the
participation of its U.S. affiliate is customary because it has been
present since the initial investigation and in all subsequent reviews
and that, although perhaps significant, the affiliate's activities
consist of ministerial functions, such as the processing of purchase
orders, collection of payment, arrangement of transportation, etc., as
opposed to setting sales terms and prices and negotiating sales
contracts.
DOC Position
We agree with the respondents that the facts on the record of this
review shows that the sales reported as EP sales in this review should
continue to be classified as EP sales. Pursuant to section 772(a) and
(b) of the Act, an EP sale is a sale of merchandise by a producer or
exporter outside the United States for export to the United States that
is made prior to importation. A CEP sale is a sale made in the United
States, before or after importation, by or for the account of the
producer or exporter or by an affiliate of the producer or exporter. In
determining whether the sales activity in the United States warrants
using the CEP methodology, the Department has examined the following
criteria: (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 is limited to that of a
``processor of sales-related documentation'' and a ``communication
link'' with the unrelated U.S. buyer. See e.g., Final Results of
Antidumping Duty Administrative Review: Certain Corrosion-Resistant
Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate
From Canada (Canadian Steel) 63 FR 12725, 12738 (March 16, 1998). In
the Canadian Steel case, the Department clarified its interpretation of
the third prong of this test, as follows. ``Where the factors indicate
that the activities of the U.S. affiliate are ancillary to the sale
(e.g., arranging transportation or customs clearance, invoicing), we
treat the transactions as EP sales. Where the U.S. affiliate has more
than an incidental involvement in making sales (e.g., solicits sales,
negotiates contracts or prices) or providing customer support, we treat
the transactions as CEP sales.''
With respect to the first prong, it is undisputed that the
merchandise associated with these sales was shipped directly to the
unaffiliated customer, without passing through the U.S. affiliate.
With respect to the second prong, this is the customary commercial
channel between the parties involved. We agree with the respondents
that it is not necessary for EP sales to be the predominant channel of
trade in a given review for it to be the customary channel between the
parties involved. EP sales have been made, with the participation of a
U.S. affiliate, in the investigation and in all subsequent reviews.
Thus, this is clearly a customary channel of trade.
With respect to the third prong, the verification report confirms
that, for the sales classified as EP, prices are set by the Cinsa
export office in Saltillo, Mexico. The participation of affiliate CIC
in these sales relates primarily to: issuing payment invoices,
accepting payment and forwarding it to Mexico, posting antidumping duty
deposits, and clearing products through Customs. These services are
clearly among those the Department considers ``ancillary'' to the sale.
CIC does not solicit or negotiate these sales, does not set the price
for these sales, and does not provide customer support in connection
with these sales.
Therefore, for the purposes of this review, we will continue to
treat as EP those sales which Cinsa and ENASA reported as EP sales. For
further details see the Issues Memo.
Comment 4: Reallocation of Indirect Selling Expenses
The petitioner argues that, if the Department accepts Cinsa's and
ENASA's designation of certain of their U.S. sales as EP sales, the
Department should revise the indirect selling expense calculations and
allocate CIC's total expenses over a sales value that excludes sales
designated as EP based on the respondents' claim that CIC had no role
in making EP sales. Otherwise, at a minimum, the petitioner maintains
that the Department should not allocate to EP sales any of the indirect
selling expenses incurred by CIC related to salesmen's salaries and
benefits, travel expenses, warehouse lease, office rental, advertising,
and any other expenses relating to functions that the respondents claim
were not performed by CIC in support of EP sales.
The respondents argue that they properly allocated these expenses
to all U.S. sales because indirect selling expenses are incurred on
overall operations, which necessarily include both EP and CEP sales.
DOC Position
We agree with the petitioner that, for purposes of calculating
indirect selling expenses, CIC expenses are more properly allocated
over a U.S. sales value that excludes the EP sales. We
[[Page 38378]]
verified Cinsa's and ENASA's claim that CIC performed very limited
sales-related functions with respect to these EP sales, and equal
allocation of all CIC expenses across all U.S. sales in which CIC is
involved would disproportionately shift these costs from CEP to EP
sales. However, we disagree with the petitioner's suggested allocation
because it would allocate all EP expenses to CEP sales. The numerator
proposed by the petitioner would include all of CIC's expenses, i.e.,
expenses for both EP and CEP sales, whereas the denominator would
include the sales value of only CEP sales. We interpret the
petitioner's alternative allocation methodology to mean we should, to
the extent possible, allocate only to CEP sales (the only sales from
which indirect selling expenses are deducted) the expenses that are
only incurred on CEP sales. Accordingly, we have reallocated CIC's
indirect selling expenses by including in the numerator the indirect
selling expenses pertaining only to CEP sales (warehouse lease,
advertising, forklift rental, salesmen's salaries and salesmen
training) and a portion of the joint CEP and EP expenses (based on the
percentage that CEP sales represent, by value, of total CIC sales). The
new denominator is the value of only CEP sales. See also Final Results
Calculation Memorandum. (Calculation Memo). Thus, we have excluded EP
indirect selling expenses from the numerator and have excluded the
value of EP sales from the denominator.
We disagree with the respondents that (all) indirect selling
expenses are incurred on ``overall operations.'' Certain of CIC's
indirect selling expenses (see list above) are not incurred on EP
sales.
Comment 5: CEP Offset Adjustment
Cinsa and ENASA state they are entitled to a CEP offset because a
comparison of the normal value (NV) level of trade to the CEP level of
trade demonstrates that the NV level of trade is more advanced as well
as at a different point in the chain of distribution because it
includes a greater number of selling functions than the CEP level of
trade. Cinsa and ENASA state that the Department's regulations require
that when the CEP level of trade is determined, all economic activities
in the United States and the indirect selling expenses attributable
thereto are to be excluded. In contrast, when the normal value level of
trade is determined it is inclusive of substantive selling functions
and the indirect selling expenses necessary to execute a sale to
unaffiliated customers. Accordingly, for purposes of comparison to the
NV level of trade, Cinsa and ENASA argue that the selling functions and
the indirect selling expenses of the CEP level of trade are limited to
the initial sale by Cinsa's and ENASA's export department to CIC. Cinsa
and ENASA further state that they are entitled to the CEP offset under
the terms of the statute, 19 U.S.C. 1677b(a)(7)(B), because only one
level of trade has been determined to exist in the home market, and
Cinsa and ENASA are unable to quantify any pricing differential between
the home market level of trade and the nonexistent CEP level of trade
in the home market.
The petitioner argues that the Department should reject the
respondents' claim for a CEP offset adjustment in the final results,
based on the respondents' failure to establish that home market and CEP
sales are at different levels of trade. The petitioner states that the
record shows that the respondents sold to wholesalers and distributors
in both markets and that these customers are not at a more remote point
in the chain of distribution than CIC. In addition, the petitioner
concludes that the selling functions are the same in both markets.
DOC Position
We agree with the petitioner. Section 773(a)(1)(B) of the Act
requires that the Department establish NV, to the extent possible,
based on home market sales at the same level of trade as the CEP or the
EP sale. The SAA notes that if the Department is able to compare sales
at the same level of trade, it will not make any level of trade
adjustment or CEP offset in lieu of a level of trade adjustment. SAA at
829. Further, section 773(a)(7) expressly requires a difference in
level of trade between the U.S. and home market sales as a prerequisite
to a CEP offset. Specifically, sales in the home market must be at a
more advanced stage of distribution.
In the home market, Cinsa and ENASA sell directly to wholesalers,
distributors, large retailers and supermarkets. Cinsa and ENASA did not
identify which of their home market customers fell into which of these
categories and did not claim that there were differences in selling
functions with respect to these designations. In short, the respondents
treated these customers as being similarly situated for purposes of the
LOT analysis. CIC is also a wholesaler/distributor of POS cookware.
With regard to selling functions, Cinsa and ENASA reported in their
April 28, 1997, questionnaire response that they performed the
following selling functions for home market sales: freight and delivery
services, inventory maintenance, and order processing and billing
services. For sales to CIC, Cinsa's export department arranged freight
and delivery services, incurred inventory maintenance, and provided
sales support services such as invoice processing and billing.
Therefore, Cinsa and ENASA have not demonstrated that their home market
purchasers are at a different point in the chain of distribution than
CIC and that the selling functions associated with Cinsa's and ENASA's
sales to CIC were different from those associated with sales to
customers in the home market. Thus, our analyses leads us to conclude
that sales within each market and between markets are not made at
different levels of trade.
Finally, we disagree with Cinsa's and ENASA's argument that the
preliminary results failed to account for the fact that home market
indirect selling expenses are included in the price associated with the
``NV level of trade'', whereas CIC's indirect selling expenses are
excluded from the price associated with the ``CEP level of trade.''
First, the indirect selling expenses incurred in the United States by
CIC's sales departments are, pursuant to section 772(d)(1)(D) of the
statute, properly excluded from the price calculated for the U.S. CEP
sales. Pursuant to this and other section 772(d) adjustments, CIC's
price to its unaffiliated customer (the ``starting price'') is
transformed into a constructed export price, i.e., a constructed
equivalent of a market-based sale by Cinsa or ENASA to CIC. This is the
point at which the level of trade comparison is made. See New
Regulations, 62 FR at 27414.\1\ Second, Cinsa's and ENASA's itemized
home market indirect selling expenses and itemized indirect selling
expenses incurred in Mexico with respect to making sales to CIC are
virtually the same. Therefore, the record reflects no difference
between the functions performed by the respondents in selling to home
market customers and the functions performed in selling to CIC.
---------------------------------------------------------------------------
\1\ This approach was recently challenged in Borden, Inc. v.
United States (Borden) Slip Op. 98-36 (March 26, 1998), at 55-59
(rejecting the Department's practice of making 1677a(d) adjustments
prior to making the level of trade comparisons). The Department
intends to appeal this decision, and thus will continue to apply the
methodology set forth in the New Regulations. We note, however,
that, because the sales made by Cinsa and ENASA in the home market
are not at a more advanced stage in the chain of distribution than
either those made to CIC or those made by CIC (both are at a
wholesale/distributor level of trade), implementation of the Borden
decision would not affect the outcome in this case.
---------------------------------------------------------------------------
Accordingly, we can compare sales in the home market and the U.S.
market at
[[Page 38379]]
the same level of trade. Therefore, a CEP offset is not warranted.
Comment 6: Whether to Limit NV Comparisons to Sales Made in Same Month
Cinsa and ENASA argue that the Department's high inflation margin
calculation methodology, which limits NV comparisons to the month of
the U.S. sale, results in unduly high margins in the instant review
because the Department based NV on CV when there were no home market
sales of the most comparable model in the same month as the U.S. sale.
Cinsa and ENASA suggest that, in order to obtain more price-to-price
matches, the Department should use home market matches within the full
90/60 window period surrounding each U.S. sale, but index prices when
it is necessary to compare a U.S. sale to a home market sale during a
different month.
Alternatively, Cinsa and ENASA argue that the Department should
expand the one-month window forward and use prices for identical
merchandise in one of the two months subsequent to the date of the U.S.
sales, without price adjustment.
The petitioner states that Cinsa's and ENASA's proposed methodology
is not in accordance with the Department's policy regarding high
inflation comparisons. In short, according to the petitioner, Cinsa and
ENASA have not demonstrated that there is anything in the way they
manufacture and sell subject merchandise that makes application of the
Department's high inflation price comparison methodology inappropriate
or unfair.
Finally, the petitioner believes the Department should reject
Cinsa's and ENASA's alternative request to expand the price comparison
window by two months because the further away from the same month the
Department looks for a comparable home market sale in a high inflation
case, the more likely it is that there would be distortion caused by
inflation.
DOC Position
We agree with the petitioner. As in our preliminary results, we
have limited our comparisons to sales in the same month rather than
applying the Department's 90/60 rule, whereby the Department may use as
NV comparison market prices from the three months prior to and the two
months after the month in which the U.S. sale was made. The same month
comparison rule accords with the Department's current practice in cases
involving high inflation.
We disagree with the respondents' claim that the Department's high
inflation methodology creates unduly high margins in this review. The
Department's inflation methodology is designed to eliminate distortion
caused by high inflation. It is neutral in purpose and is not designed
to punish or benefit anyone. However, as a result of a recent court
decision, the respondents' concerns have been addressed at least in
part, albeit indirectly. On January 8, 1998, the Court of Appeals for
the Federal Circuit issued a decision in CEMEX v. United States, 133
F.3d 897 (CEMEX). In that case, based on the pre-URAA version of the
Act, the Court addressed the appropriateness of using CV (rather than
similar merchandise) as the basis for foreign market value when the
Department finds home market sales of the most similar merchandise to
be outside the ``ordinary course of trade.'' This issue was not raised
by any party in this proceeding. However, in response to the Court's
decision in Cemex, the Department has revised its application of the
cost test and has determined that it would be inappropriate to resort
directly to CV, in lieu of foreign market sales, as the basis for NV
upon finding 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 we will match a given U.S. sale to foreign
market sales of the next most similar model sold during the same month
when all sales of the most comparable model are below cost. The
Department will use CV as the basis for NV only when there are no
above-cost sales in the appropriate comparison period that are
otherwise suitable for comparison.
Therefore, for the final results in this proceeding, when making
comparisons in accordance with section 771(16) of the Act, we
considered all products sold in the home market, as described above in
the ``Scope of Review'' section of this notice, that were in the
ordinary course of trade during the same month for purposes of
determining appropriate product comparisons to U.S. sales. Where there
were no sales of identical merchandise in the home market made in the
ordinary course of trade during the same month to compare with U.S.
sales, we compared U.S. sales to sales of the most similar foreign like
product made in the ordinary course of trade during the same month,
based on the characteristics listed in Sections B and C of our
antidumping questionnaire.
With regard to comparisons involving sets, where there were no
sales of identical merchandise in the home market in the same month to
compare to U.S. sales of subject merchandise sold in sets, we compared
U.S. sales of sets to the CV of the set as we do not have the
appropriate data in this review to compare non-identical sets. We will,
however, request such information for purposes of future reviews.
In a few instances involving comparisons of open stock merchandise,
we have still resorted to the use of CV due to the absence of
comparable above-cost matches in the same month for certain U.S. sales.
Finally, the respondent's suggestion that we account for the
effects of inflation by indexing prices for POS cookware is contrary to
the Department's high inflation methodology. Although it is necessary
to use cost indexing in high-inflation cases in order to calculate
meaningful POR-average costs, the Department has rejected the use of
indexed prices. It is the Department's position that price-to-price
margin calculations should be made based only on actual, rather than
indexed, prices, as using indexed prices would yield less accurate
results.
Comment 7: Home Market Freight Expense Allocation
The petitioner argues that Cinsa's and ENASA's claim for an
adjustment to NV for freight expenses incurred to ship subject
merchandise from the factories in Saltillo to (1) the remote warehouses
in Mexico City and Guadalajara, and (2) unaffiliated customers in the
Monterrey region is distortive and should be rejected because these
shipments contained both Cinsa- and ENASA-produced merchandise, as well
as both subject and non-subject merchandise. The petitioner further
argues that Cinsa billed ENASA for its share of the freight expenses
based on the number of boxes of ENASA merchandise in each shipment, as
opposed to the weight of the ENASA merchandise, which is heavier gauge
that Cinsa's merchandise, thus incorrectly shifting expense from ENASA
to Cinsa and artificially reducing Cinsa's NV.
In addition, with regard to post-sale freight expenses, the
petitioner contends that allocating the total expense over subject and
non-subject merchandise could inappropriately shift expense to subject
merchandise if non-subject merchandise customers are located farther
from the factories, on average, than customers of subject merchandise.
The petitioner urges the Department to either reject Cinsa's and
ENASA's claim for a freight adjustment or require them to revise their
freight expense allocation.
[[Page 38380]]
The respondents argue that they were unable to report transaction-
specific freight expenses because they received freight bills on a
monthly basis, rather than a shipment-by-shipment basis. According to
the respondents, the allocation of mixed-shipment freight expenses
between the companies was reasonable because the packing list generated
by the freight company indicated the number of boxes but not the weight
of boxes. Moreover, the respondents argue that, because the freight
expense was incurred on the basis of weight and the freight rate did
not vary by the type of merchandise shipped, inclusion of sales of non-
subject merchandise was not distortive to the calculation. Finally, the
respondents note that not only has the Department accepted Cinsa's and
ENASA's comparable allocations in all previous proceedings, but that
the respondents' reporting of warehouse-specific freight factors
represents a refinement in their reporting of pre- and post-sale
freight expenses.
DOC Position
We have accepted the respondents' methodology for the calculation
of home market freight expenses, including their allocation of such
expenses (1) between Cinsa and ENASA and (2) between subject and non-
subject merchandise.
The Department's preference is that, wherever possible, freight
adjustments should be reported on a sale-by-sale basis rather than
allocated over all sales. See Final Results of Antidumping Duty
Administrative Review: Replacement Parts for Self-Propelled Bituminous
Paving Equipment from Canada, 56 FR 47451 (September 19, 1991). If the
respondent does not maintain freight records on a sale-by-sale basis,
then our preference is to apply an allocation methodology at the most
specific level permitted by the respondent's records kept in the normal
course of business. See Final Determination of Sales at Less Than Fair
Value: Melamine Institutional Dinnerware Products from Indonesia, 62 FR
1719, 1724 (January 13, 1997).
Cinsa and ENASA stated in their June 2, 1997, supplemental response
that they do not maintain freight records on a sale-by-sale basis
because Cinsa, which handles freight arrangements for both itself and
ENASA, is billed only on a weight-per-truckload basis by its
unaffiliated freight carrier. The freight company does not provide a
weight-based breakout between Cinsa merchandise and ENASA merchandise.
However, the packing list for each shipment indicates how many boxes
contain Cinsa merchandise and how many boxes contain ENASA merchandise.
We disagree with the petitioner's claim that allocating the cost
for each truckload between the two companies on the basis of number of
boxes shifts freight expense to Cinsa. Although ENASA's products are
heavy gauge steel and Cinsa's are light and medium gauge steel, a Cinsa
``box'' is not necessarily lighter than an ENASA ``box''; different
boxes may contain different cookware items (i.e., different models and
sizes), and some boxes contain multiple items. In the absence of
weight-based data, the box-based comparison is the most reasonable
overall.
Likewise, we disagree with the petitioner's claim that the
respondents' allocation of freight costs between subject and non-
subject merchandise is distortive since the June 2, 1997, response
shows that subject and non-subject merchandise destined for the same
delivery point are charged the same weight-based rate. Further, the
record shows that the respondents reported warehouse-specific freight
factors. Thus, calculation of a weight-based factor based upon the
freight expense and shipping weight for all merchandise and application
of the resulting factor to the weight of subject merchandise yields a
non-distortive allocation of the freight expense attributable only to
subject merchandise. Finally, Cinsa and ENASA have used comparable
allocation methodologies in each of the previous segments of this
proceeding, in each of which the Department has determined that they
are reasonable in light of the objectives of the antidumping law.
Accordingly, we accepted Cinsa's and ENASA's freight calculations as
submitted in their sales databases in this review as reasonable and
non-distortive.
Comment 8: Freight Expenses on U.S. Sales
The petitioner states that Cinsa and ENASA reported freight
expenses incurred to ship subject merchandise to the United States by
allocating total freight expenses incurred over the weight of all
merchandise shipped. These freight expenses were reported in two steps:
(1) expenses incurred to ship merchandise from Saltillo to the U.S.
border (for EP and CEP sales), and (2) expenses incurred to ship
merchandise from the U.S. border to CIC's warehouse in San Antonio,
Texas (CEP sales only). The petitioner argues that the denominators in
the above-referenced calculations are incorrect because the weight of
the merchandise shipped in Step 1, which should contain both EP and CEP
sales, is significantly lower than the weight of the merchandise
shipped in Step 2, which should contain only CEP sales. Furthermore,
according to the petitioner, the weights used in these calculations do
not correspond to the weights of merchandise sold as reported on the
respondents' sales tapes. Accordingly, for purposes of the final
results, the petitioner maintains that the Department should reject
Cinsa's and ENASA's U.S. freight calculations and, as facts available,
recalculate the per kilogram expenses based on the weight of
merchandise sold as reported on the sales tapes.
Cinsa and ENASA concede that the weight amount reported by CIC for
shipment from Laredo to San Antonio was inadvertently overstated, but
state that the error can be corrected using information already in the
record. The respondents disagree with the petitioner's suggestion that
the weight of EP and CEP sales from the sale tape be used as the
denominator for Mexican inland freight because that freight factor was
calculated on the basis of expenses incurred upon sales of both subject
and non-subject merchandise, which were shipped together. Therefore,
according to the respondents, the reported weight of the merchandise
shipped must include both subject and non-subject merchandise.
Likewise, the respondents also disagree with using the weight of CEP
sales from the sales tape as the denominator for the U.S. inland
freight factor because in addition to the inclusion of non-subject
merchandise, the U.S. inland freight factor was calculated based on
freight expenses incurred on all merchandise shipped from Laredo to San
Antonio, regardless of whether it was resold to unrelated U.S.
customers during the period of review (POR) or whether it remained in
inventory in San Antonio.
DOC Position
The Department agrees that the denominator of the U.S. inland
freight ratio (Step 2, above) should be recalculated by subtracting the
weight of the merchandise shipped from Saltillo to Laredo, which was
inadvertently also included in the Step 2 weight calculation. The
petitioner's suggestion that the weight of CEP sales, as derived from
the sales tape, be used as the denominator for U.S. inland freight is
incorrect because it fails to take into consideration two important
details. First, the numerator in the calculation (freight expenses)
includes both subject and non-subject merchandise. Second, the
numerator also includes expenses incurred on all merchandise shipped
from Laredo to San Antonio, Texas,
[[Page 38381]]
regardless of whether it was resold to unrelated U.S. customers or
whether it remained in inventory in San Antonio. Accordingly, in order
to obtain a proper ratio, the denominator (weight shipped) must be
based correspondingly upon the weight of all subject and non-subject
merchandise as well as on the weight of both merchandise sold and that
remaining in inventory in San Antonio. The weight on the sales tapes
represents total CEP sales; thus this figure does not include non-
subject merchandise or merchandise remaining in inventory in San
Antonio. Therefore, for purposes of the final results, we have deducted
freight expenses, corrected as noted above, from U.S. price. See
Calculation Memo.
Comment 9: Calculation of Indirect Selling Expenses and CEP Profit
The petitioner argues that the Department's preliminary results
calculation of U.S. indirect selling expenses and CEP profit for Cinsa
and ENASA are understated because they do not include (1) all of CIC's
reported indirect selling expenses (depreciation, financial and bad
debt expenses were excluded), (2) expenses incurred by CIC to finance
antidumping duty cash deposits and assessments, and (3) indirect
selling expenses incurred in Mexico in support of sales to the United
States. The petitioner believes that the Department should include the
above-mentioned expenses in the calculation of U.S. indirect selling
expenses and CEP profit for purposes of the final results.
Cinsa and ENASA disagree with the petitioner's claim that the
Department should have deducted the above-referenced expenses from CEP.
The respondents claim that: (1) Depreciation, financial and bad debt
expenses are financial and operating expenses and do not involve
expenses related to the sale of the subject merchandise or overhead
expenses of the U.S. affiliate and, according to the statute, only
direct selling expenses, indirect selling expenses and general and
administrative expenses are to be deducted from CEP; (2) expenses
incurred in the payment of antidumping duties are not indirect selling
expenses that benefit U.S. sales of subject merchandise; and (3)
indirect selling expenses of Cinsa's export department and the
inventory carrying costs for the period in which the exported
merchandise was in Mexican inventory do not relate to economic activity
in the United States.
DOC Position
For purposes of the final results, we have deducted from CEP
depreciation, financial and bad debt expenses, as well as commissions.
We did not deduct the indirect selling expenses of Cinsa's export
department or the inventory carrying costs for the period in which the
exported merchandise was in Mexican inventory.
CIC's sole function is to sell merchandise produced by Cinsa,
ENASA, and their affiliates in the U.S. market. In such circumstances,
the Department's practice is to deduct CIC's selling, general, and
administrative expenses from CEP. See Notice of Final Determination of
Sales at Less Than Fair Value: Large Newspaper Printing Presses and
Components Thereof, Whether Assembled or Unassembled, from Germany, 61
FR 38166, 38176 (July 23, 1996). This includes CIC's depreciation,
financial and bad debt expenses, which are considered related to CIC
sales of the subject merchandise and thus deducted from CEP pursuant to
section 772(d)(1)(D). With regard to CIC's expenses to finance loans
from Cinsa used for payment of antidumping cash deposits, although we
have long maintained, and continue to maintain, that antidumping duties
and cash deposits of antidumping duties are not expenses that we should
deduct from U.S. price, it is also the Department's position that,
unlike the duties and cash deposits themselves, financial expenses
associated with cash deposits are not a direct, inevitable consequence
of an antidumping duty order. Therefore, we agree with the petitioner
that it is reasonable to include such financing expenses in the
indirect selling expense calculation for the CEP sales made by CIC. 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, 63 FR 2558, 2571 (January
15, 1998). However, the record of this review does not indicate whether
CIC's interest expenses with respect to intracorporate loans to pay
antidumping duties and cash deposits that were either incurred or
accrued during the POR were included in CIC's reported U.S. indirect
selling expense calculation. Therefore, the Department made no
adjustment to U.S. indirect selling expenses, which may already include
CIC's interest expenses to finance loans from Cinsa. We will, however,
request clarification of this issue on the record of future reviews.
With regard to indirect selling expenses incurred in Mexico in
support of sales to the United States, we agree with the respondents
that such expenses do not relate to economic activity in the United
States. The Department's current practice, as indicated by the preamble
to the Department's New Regulations, is to deduct indirect selling
expenses incurred in Mexico from the CEP calculation only if they
relate to sales to the unaffiliated purchaser in the United States. We
do not deduct from the CEP calculation indirect selling expenses
incurred in Mexico on the sale to the affiliated purchaser.
Accordingly, because Cinsa and ENASA reported that certain indirect
expenses incurred in Mexico are not associated with selling activity
occurring in the United States, but are limited to selling activities
associated with the sale of merchandise in Mexico to the affiliated
party, CIC, we have not deducted these Mexican indirect selling
expenses from the CEP calculation.
Comment 10: Calculation of U.S. Imputed Credit Expenses
According to the respondents, although the Department's analysis
memorandum for the preliminary results (see Antidumping Duty
Administrative Review of Porcelain-on-Steel Cookware from Mexico (95-
96): Adjustments to Submitted Data) stated that the Department modified
the calculation of reported credit cost to reflect U.S. imputed credit
cost based on unit prices net of discounts, the computer program used
for the preliminary results failed to reflect this intent. Therefore,
credit cost was overstated because imputed credit on U.S. sales was
based on gross price rather than net price.
The petitioner argues that the Department did not deduct any values
from gross unit price in its calculation of U.S. credit expense because
Cinsa and ENASA reported that they did not grant any discounts or
rebates on U.S. sales during the POR. According to the petitioner, the
values identified as rebates by Cinsa and ENASA are actually warranty
expenses and the calculation of U.S. credit expenses net of warranty or
any other direct selling expenses would be contrary to the Department's
policy.
DOC Position
We agree with Cinsa and ENASA that discounts should be deducted
from the U.S. imputed credit calculation. However, for purposes of this
review, the issue is moot because no discounts were reported in the
U.S. market. We also agree with the respondents that the rebates
reported by Cinsa and ENASA are not warranties, as claimed by the
[[Page 38382]]
petitioner. The respondents have characterized these rebates as ``post-
sale price adjustments to account for short-shipments or returned
merchandise.'' There is no information on the record to indicate that
the returned merchandise is defective--a prerequisite for a warranty
expense. However, this issue is also moot since we did not deduct
rebates or warranties from the price on which imputed credit is based.
Final Results of Review
As a result of this review, we have determined that the following
margins exist for the period December 1, 1995 through November 30,
1996:
------------------------------------------------------------------------
Margin
Manufacturer/Exporter (percent)
------------------------------------------------------------------------
Cinsa...................................................... 17.33
ENASA...................................................... 62.75
------------------------------------------------------------------------
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. We have
calculated an importer-specific assessment rate based on the ratio of
the total amount of antidumping duties calculated for the examined
sales to the total value of those same sales. This rate will be
assessed uniformly on all entries of that particular importer made
during the POR. The Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit requirements shall be effective,
upon publication of this notice of final results of administrative
review, for all shipments of the subject merchandise from Mexico that
are entered, or withdrawn from warehouse, for consumption on or after
the publication date, as provided for by section 751(a)(1) of the
Tariff Act: (1) The cash deposit rates for Cinsa and ENASA will be the
rates established above; (2) for previously 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, 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) The cash deposit rate for all other manufacturers
or exporters of this merchandise will continue to be 29.52 percent, the
all others rate established in the final results of the less than fair
value investigation (51 FR 36435, October 10, 1986). The cash deposit
rate has been determined on the basis of the selling price to the first
unaffiliated customer in the United States. For appraisement purposes,
where information is available, the Department will use the entered
value of the merchandise to determine the assessment rate.
The deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice serves as a final 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 notice serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d). Timely written notification of
return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulation and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 353.22.
Dated: July 8, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-18884 Filed 7-15-98; 8:45 am]
BILLING CODE 3510-DS-M
