[Federal Register Volume 64, Number 130 (Thursday, July 8, 1999)]
[Notices]
[Pages 36841-36844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-17395]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-421-805]
Preliminary Results of Antidumping Duty Administrative Review;
Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide From the
Netherlands
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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EFFECTIVE DATE: July 8, 1999.
SUMMARY: The Department of Commerce (``the Department'') is conducting
an administrative review of the antidumping duty order on aramid fiber
formed of poly para-phenylene terephthalamide (``PPD-T aramid'') from
the Netherlands in response to requests by respondent, Akzo Nobel
Aramid Products, Inc. and Aramid Products V.o.F. (``Akzo'') and
petitioner, E.I. DuPont de Nemours and Company. This review covers
sales of this merchandise to the United States during the period June
1, 1997, through May 31, 1998, by Akzo. The results of the review
indicate the existence of dumping margins for the above period.
We invite interested parties to comment on these preliminary
results. Parties who submit arguments are requested to submit with the
argument (1) a statement of the issue and (2) a brief summary of the
argument.
FOR FURTHER INFORMATION CONTACT: Russell Morris, Office of AD/CVD
Enforcement VI, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; Telephone: (202) 482-
1775.
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (``the Act''), 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 regulations at 19 CFR Part 351 (April 1998).
SUPPLEMENTARY INFORMATION:
Background
The Department published in the Federal Register the antidumping
duty order on PPD-T aramid from the Netherlands on June 24, 1994 (59 FR
32678). On June 10, 1998, we published in the Federal Register (63 FR
31717) a notice of ``Opportunity to Request an Administrative Review''
of this order covering the period June 1, 1997, through May 31, 1998.
In accordance with 19 CFR 351.213(b), Akzo and petitioner requested
that we conduct an administrative review for the aforementioned period.
On July 28, 1998, the Department published a notice of ``Initiation of
Antidumping Review'' (63 FR 40258). The Department is now conducting
this administrative review pursuant to section 751 of the Act.
Scope of Review
The products covered by this review are all forms of PPD-T aramid
from the Netherlands. These consist of PPD-T aramid in the form of
filament yarn (including single and corded), staple fiber, pulp (wet or
dry), spun-laced and spun-bonded nonwovens, chopped fiber, and floc.
Tire cord is excluded from the class or kind of merchandise under
review. This merchandise is currently classifiable under the Harmonized
Tariff Schedule of the United States (``HTSUS'') item numbers
5402.10.3020, 5402.10.3040, 5402.10.6000, 5503.10.1000, 5503.10.9000,
5601.30.0000, and 5603.00.9000. The HTSUS item numbers are provided for
convenience and Customs purposes. The written description of the scope
remains dispositive.
Transactions Reviewed
In accordance with section 751 of the Act, the Department is
required to determine the normal value (``NV'') and export price
(``EP'') or constructed export price (``CEP'') of each entry of subject
merchandise. See Section 751(a)(2)(A). Because there can be a
significant lag between entry date and sale date for CEP sales, it has
been the Department's practice to examine U.S. CEP sales during the
period of review (``POR''). See Gray Portland Cement and Clinker From
Japan; Final Results of Antidumping Duty Administrative Review, 58 FR
48826 (1993) (the Department did not consider ESP (now CEP) entries
which were sold after the
[[Page 36842]]
POR). The Court of International Trade (``CIT'') has upheld the
Department's practice in this regard. See The AD Hoc Committee of
Southern California Producers of Gray Portland Cement v. United States,
914 F. Supp. 535, 544-45 (CIT 1995).
Comparisons to NV
In accordance with section 771(16) of the Act, we considered all
products covered by the Scope of the Review which were sold by the
respondent in the home market during the POR to be foreign like
products for purposes of product comparisons to U.S. sales. Where there
were no sales of identical or similar merchandise in the home market to
compare to U.S. sales, we compared U.S. sales to the constructed value
(``CV'') of the product sold in the home market during the comparison
period.
Furthermore, pursuant to section 777A(d)(2) of the Act, where there
were home market sales that passed the cost of production (``COP'')
test, as discussed below, we compared the CEPs of individual U.S.
transactions to the monthly weighted-average NV of the foreign like
product.
Constructed Export Price
The Department based its margin calculation on CEP, as defined in
sections 772(b), (c), and (d) of the Act, because all sales to the
first unaffiliated purchaser in the United States took place after
importation.
We calculated CEP based on delivered prices to unaffiliated
purchasers in the United States. Where appropriate, we reduced these
prices to reflect rebates. In accordance with section 772(d)(1) of the
Act, we deducted direct selling expenses, e.g., credit expenses, and
indirect selling expenses, including inventory carrying costs, which
related to commercial activity in the United States. We also made
deductions for movement expenses (international freight, brokerage and
handling, U.S. duties, domestic inland freight, and insurance) in
accordance with section 772(c)(2) of the Act. Finally, we also deducted
from CEP an amount for profit in accordance with sections 772(d)(3) and
(f) of the Act.
Normal Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared the respondent's volume of home market sales of the foreign
like product to the volume of its U.S. sales of the subject
merchandise. Pursuant to sections 773(a)(1)(B) and (C) of the Act,
because Akzo's aggregate volume of the home market sales of the foreign
like product was greater than five percent of its aggregate volume of
U.S. sales for the subject merchandise, we determined that the home
market provides a viable basis for calculating NV on home market sales.
We calculated NV based on packed, ex-factory or delivered prices to
unaffiliated purchasers in the home market. We made adjustments for
discounts and rebates. Where applicable we deducted home market packing
costs and added U.S. packing costs. In accordance with section
773(a)(6) of the Act, where applicable, we made deductions from the
starting price for inland freight and inland insurance. In addition, we
made a circumstances of sale adjustment for imputed credit expenses, in
accordance with section 773(a)(6)(C)(iii) of the Act. Prices were
reported net of value added taxes (``VAT'') and, therefore, no
deduction for VAT was necessary. We made adjustments, where
appropriate, for physical differences in merchandise in accordance with
section 773(a)(6)(C)(ii) of the Act. We based this adjustment on the
difference in the variable costs of manufacturing for the foreign like
product and the subject merchandise.
We derived the CEP offset amount from the amount of the indirect
selling expenses on sales in the home market. We limited the home
market indirect selling expense deduction by the amount of the indirect
selling expenses deducted from CEP under section 772(d) of the Act.
Cost of Production Analysis
In the most recently completed administrative review of Akzo, we
disregarded sales found to be below the COP. Therefore, in accordance
with section 773(b)(2)(A)(ii) of the Act, the Department has reasonable
grounds to believe or suspect that sales below the COP may have
occurred during this review period. Thus, pursuant to section 773(b) of
the Act, we initiated a COP investigation of Akzo in the instant
review.
In accordance with section 773(b)(3) of the Act, we calculated the
weighted average COP, by model, based on the sum of the cost of
materials and fabrication employed in producing the foreign like
product, plus amounts for home market selling, general and
administrative expenses and packing costs in accordance with section
773(b)(3) of the Act. We used the home market sales data and COP
information provided by Akzo in its questionnaire responses.
After calculating a weighted-average COP, we tested whether home
market sales of PPD-T aramid were made at prices below COP within an
extended period of time in substantial quantities, and whether such
prices permitted recovery of all costs within a reasonable period of
time. We compared model-specific COP to the reported home market prices
less any applicable movement charges, discounts, rebates, and indirect
selling expenses.
Pursuant to section 773(b)(2)(C), where less than 20 percent of
Akzo's sales of a given model were at prices less than COP, we did not
disregard any below-cost sales of that product because we determined
that the below-cost sales were not made in ``substantial quantities.''
In accordance with section 773(b)(2)(B) and (D) where 20 percent or
more of home market sales of a given product during the POR were at
prices less than the COP, we found that such sales were made in
substantial quantities within an extended period of time. Because the
sales prices would not permit recovery of all costs within a reasonable
period of time, we disregarded those below-cost sales and used the
remaining above-cost sales to determine NV in accordance with section
773(b)(1). For those models of PPD-T aramid for which there were no
home market sales available for matching purposes, we compared CEP to
CV.
Constructed Value
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of Akzo's cost of materials and fabrication employed
in producing the subject merchandise, selling, general and
administrative expenses (``SG&A''), and profit incurred and realized in
connection with production and sale of the foreign like product, and
U.S. packing costs. In accordance with section 773(e)(2)(A), we based
SG&A and profit on the amounts incurred and realized by Akzo in
connection with the production and sale of the foreign like product in
the ordinary course of trade, for consumption in the foreign country.
We used the costs of materials, fabrication, and SG&A as reported
in the CV portion of Akzo's questionnaire response. We used the U.S.
packing costs as reported in the U.S. sales portion of Akzo's
questionnaire response. We based selling expenses and profit on the
information reported in the home market sales portion of Akzo's
questionnaire response. See Certain Pasta from Italy; Notice of
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination, 61 FR 1344,
[[Page 36843]]
1349 (January 19, 1996). For selling expenses, we used the average of
the home market selling expenses weighted by the respective quantities
sold. For actual profit, we first calculated the difference between the
home market sales value and home market COP for all home market sales
in the ordinary course of trade, and divided the sum of these
differences by the total home market COP for these sales. We then
multiplied this percentage by the COP for each U.S. model to derive an
actual profit.
We derived the CEP offset amount from the amount of the indirect
selling expenses on sales in the home market. We limited the home
market indirect selling expense deduction by the amount of the indirect
selling expenses deducted from CEP under section 772(d) of the Act.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade as the EP or CEP. The NV level of trade is that
of the starting-price sales in the comparison market or, when NV is
based on CV, that of the sales from which we derive SG&A expenses and
profit. For EP, the U.S. level of trade is also the level of the
starting-price sale, which is usually from exporter to importer. For
CEP, it is the level of the transaction between the exporter to the
importer for which we construct the import price.
To determine whether NV sales are at a different level of trade
than EP or CEP, we examine stages in the marketing process and selling
functions along the chain of distribution between the producer and the
unaffiliated customer. If the comparison-market sales are at a
different level of trade, and the difference affects price
comparability, as manifested in a pattern of consistent price
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a
level of trade adjustment under section 773(a)(7)(A) of the Act.
Finally, for CEP sales, if the NV level is more remote from the
factory than the CEP level and there is no basis for determining
whether the difference in the levels between NV and CEP affects price
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the
CEP offset provision). See Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61731, 61732-33 (November 19, 1997) (``South Africa
Final'').
In the present case, we were not able to compare U.S. CEP sales to
HM sales at the same level of trade. First we compared the CEP to the
HM sales to determine whether a level-of-trade adjustment was
appropriate, in accordance with the principles discussed above. For
purposes of our analysis, we examined information regarding the
distribution systems in both the United States and the Netherlands
markets, including the selling functions, classes of customer, and
selling expenses. Upon consideration of the above mentioned factors,
the Department determined that there is one level of trade and one
channel of distribution in the home market (direct to end users) and a
different level of trade in the U.S. market (sales to an affiliated
distributor). However, the data available do not provide an appropriate
basis to determine a level of trade adjustment. Further, we determined
that Akzo's NV sales to end-users/converters in the home market, as
well as CV, are at a more advanced stage of distribution than CEP
sales. As a result, the Department has preliminarily determined to
grant Akzo an adjustment to NV in the form of a CEP Offset.
For a detailed description of our level-of-trade analysis for these
preliminary results, see the June 30, 1999, Analysis Memorandum to The
File, on file in the Import Administration's Central Records Unit (Room
B-099) of the main Commerce building.
Currency Conversion
For purposes of the preliminary results, we made currency
conversions in accordance with section 773A of the Act, based on the
exchange rates in effect on the dates of the U.S. sales as certified by
the Federal Reserve Bank of New York. See Change in Policy Regarding
Currency Conversions, 61 FR 9434 (March 8, 1996). Section 773A(a) of
the Act directs the Department to use a daily exchange rate in order to
convert foreign currencies into U.S. dollars, unless the daily rate
involves a ``fluctuation.'' In accordance with the Department's
practice, we have determined as a general matter that a fluctuation
exists when the daily exchange rate differs from a benchmark by 2.25
percent. See South Africa Final. The benchmark is defined as the
rolling average of rates for the past 40 business days. When we
determine that a fluctuation exists, we substitute the benchmark for
the daily rate, in accordance with established practice. Therefore, for
purposes of the current review, we have made currency conversions based
on the official exchange rates in effect on the dates of the U.S. sales
based on the methodology discussed above.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following weighted-average dumping margin exists:
------------------------------------------------------------------------
Weighted-
Average
Exporter/manufacturer Margin
(percent)
------------------------------------------------------------------------
Akzo....................................................... 3.00
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We will disclose the calculations used in our analysis to parties
to this proceeding within five days of the publication date of this
notice. See 19 CFR 351.224(b). Any interested party may request a
hearing within 30 days of the date of publication of this notice. See
19 CFR 351.310(c). 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 of this notice. Parties who submit case briefs in this
proceeding should provide a summary of the arguments not to exceed five
pages and a table of statutes, regulations, and cases cited. 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 written comments or at the hearing, within 120 days from the
publication of these preliminary results.
Assessment Rate
Pursuant to 19 CFR 351.212(b), the Department calculated an
assessment rate for Akzo's entries of the subject merchandise. Upon
completion of this review, the Department will instruct the U.S.
Customs Service to assess antidumping duties on appropriate entries by
applying the assessment rate to the entered value of the merchandise.
If these preliminary results are adopted in our final results, we will
instruct the Customs Service to assess antidumping duties on Akzo's
entries of the merchandise subject to the review.
Cash Deposit Requirements
To calculate the cash-deposit rate for Akzo in this administrative
review, we divided the total dumping margins for Akzo by the total net
value of Akzo's sales during the review period. Furthermore, the
following deposit rates will be effective upon publication of the
[[Page 36844]]
final results of this administrative review for all shipments of aramid
fiber from the Netherlands entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided by section
751(a)(2)(C) of the Act: (1) The cash deposit rate for Akzo will be the
rate established in the final results of this review, except if the
rate is less than 0.5 percent and, therefore, de minimis, 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 final results
in which that manufacturer or exporter participated; (3) if the
exporter is not a firm covered in this review, a prior review, or the
original less-than-fair-value (``LTFV'') investigation, but the
manufacturer is, the cash deposit rate will be the rate established for
the most recent final results 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 66.26 percent, the ``All Others'' rate established
in the LTFV investigation. See Notice of Antidumping Duty Order and
Amended Final Determination of Sales at Less Than Fair Value: Aramid
Fiber Formed of Poly-Phenylene Terephthalamide From The Netherlands, 59
FR 32678-01 (June 24, 1996).
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 351.402 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 determination is issued and published in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
June 30, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-17395 Filed 7-7-99; 8:45 am]
BILLING CODE 3510-DS-P
