[Federal Register Volume 61, Number 164 (Thursday, August 22, 1996)]
[Notices]
[Pages 43341-43345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21465]
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DEPARTMENT OF COMMERCE
[A-583-825]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Melamine Institutional
Dinnerware Products From Taiwan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: August 22, 1996.
FOR FURTHER INFORMATION CONTACT: Everett Kelly, David J. Goldberger, or
Barbara Wojcik-Betancourt, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-4194, (202) 482-4136, or (202) 482-0629, respectively.
The Applicable Statute
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'').
Preliminary Determination
We preliminarily determine that melamine institutional dinnerware
products (``MIDPs'') from Taiwan are being, or are likely to be, sold
in the United States at less than fair value (``LTFV''), as provided in
section 733 of the Act. The estimated margins of sales at LTFV are
shown in the ``Suspension of Liquidation'' section of this notice.
Case History
Since the initiation of this investigation (Notice of Initiation of
Antidumping Duty Investigations: Melamine Institutional Dinnerware
Products from Indonesia, Taiwan and the People's Republic of China (61
FR 8039, March 1, 1996), the following events have occurred:
On March 22, 1996, the United States International Trade Commission
(``ITC'') issued an affirmative preliminary injury determination in
this case (see ITC Investigation Nos. 731-TA-741, -742, and -743).
In March 1996, through counsel, the Department identified Chen Hao
Plastic Industrial Co., Ltd (``Chen Hao Taiwan''); Taiwan Melamine
Products Industrial Co., Ltd (``Taiwan Melamine''); Yu Cheer Industrial
Co., Ltd (``Yu Cheer''); Gin Harvest Enterprises (``Gin Harvest'') and
Tar Hong Melamine (``Tar Hong'') as producers/exporters of the subject
merchandise. In addition, Taiwan's Association of Plastic Producers
identified to the Department, Gallant Chemical Corporation
(``Gallant''); Hao Way Enterprise Co., Ltd (``Hao Way''); Sun Rudder
Ind. (``Sun Rudder''); Win Great Trading Co., Ltd (``Win Great''); and
IKEA Trading Far East Ltd. (``IKEA''), as producers/exporters of the
subject merchandise.
On March 29, 1996, we requested sales information regarding exports
of the subject merchandise to the United States from the above-
referenced companies. During April and May 1996, Hao Way, Win Great,
and Sun Rudder informed the Department that they did not ship the
subject merchandise to the United States during the period of
investigation (``POI''). In addition, in information submitted in the
concurrent MIDP investigation from the People's Republic of China, Gin
Harvest and Tar Hong reported that they made no sales of Taiwan-
produced MIDP to the United States during the POI.
On April 15, 1996, the Department issued an antidumping duty
questionnaire to the following companies, as exporters of the subject
[[Page 43342]]
merchandise: Taiwan Melamine, Chen Hao Taiwan, Yu Cheer, IKEA, Gallant,
and Sun Rudder. The questionnaire is divided into four sections:
Section A requests general information concerning a company's corporate
structure and business practices, the merchandise under investigation
that it sells, and the sales of the merchandise in all of its markets.
Sections B and C request home market sales listings and U.S. sales
listings, respectively. Section D requests information on the cost of
production (``COP'') of the foreign like product and constructed value
(``CV'') of the subject merchandise.
On May 30, 1996, after responding to section A of the antidumping
questionnaire, Taiwan Melamine requested that the Department exclude it
as a mandatory respondent and not require it to respond to the
remainder of the questionnaire in this investigation based on its small
volume of exports of the subject merchandise to the United States
during the POI. On June 3, 1996, petitioner stated that, based on the
small volume of exports and its desire for an expeditious
determination, it had no objection to Taiwan Melamine's request.
Accordingly, on June 7, 1996, the Department excluded Taiwan Melamine
as a mandatory respondent and excused it from completing the
antidumping questionnaire.
On May 31, and June 12, 1996, IKEA requested that the Department
exclude it as a mandatory respondent in this investigation and excuse
it from the obligation to respond to the questionnaire because it had
shipped only a small volume of Taiwan-produced MIDPs to the United
States during the POI. IKEA's request came after IKEA had already
missed the deadline for responding to section A of the antidumping
questionnaire. Further, petitioner did not indicate that it had no
objection to IKEA's request. Accordingly, the Department has not
granted IKEA's request.
On June 6, 1996, the Department postponed the preliminary
determination of this investigation and the companion investigations on
MIDPs from the People's Republic of China and Indonesia until August
14, 1996, in accordance with section 733(c)(1)(B) of the Act (61 FR
30219, June 14, 1996).
Based on a timely allegation by the petitioner, the American
Melamine Institutional Tableware Association (``AMITA''), the
Department began an investigation into whether Chen Hao Taiwan had made
sales in the home market at prices that were below COP, pursuant to
section 773(b) of the Act (see July 11, 1996, Memorandum from MIDP Team
to Louis Apple).
Yu Cheer and Chen Hao Taiwan submitted questionnaire responses in
May and June 1996. We issued a supplemental request for information in
June 1996, and received the supplemental responses to this request in
July 1996, respectively. Chen Hao Taiwan provided its response to the
COP section of the questionnaire on July 26, 1996.
Petitioner filed comments on the Chen Hao Taiwan and Yu Cheer
questionnaire responses in May and July 1996.
Postponement of Final Determination
On August 5, 1996, Chen Hao Taiwan and Yu Cheer requested that,
pursuant to section 735(a)(2)(A) of the Act, in the event of an
affirmative preliminary determination in this investigation, the
Department postpone its final determination until not later than 135
days after the publication of the affirmative preliminary determination
in the Federal Register. In accordance with 19 U.S.C. 1673d(a)(2) and
19 CFR 353.20(b), inasmuch as our preliminary determination is
affirmative, the respondents account for a significant proportion of
exports of the subject merchandise, and we are not aware of the
existence of any compelling reasons for denying the request, we are
granting the respondents' request and postponing the final
determination. Suspension of liquidation will be extended accordingly.
See Preliminary Determination of Sales at Less Than Fair Value: Large
Newspaper Printing Presses and Components Thereof, Whether Assembled or
Unassembled, from Japan (61 FR 8029, March 1, 1996).
Scope of Investigation
This investigation covers all items of dinnerware (e.g., plates,
cups, saucers, bowls, creamers, gravy boats, serving dishes, platters,
and trays) that contain at least 50 percent melamine by weight and have
a minimum wall thickness of 0.08 inch. This merchandise is classifiable
under subheadings 3924.10.20, 3924.10.30, and 3924.10.50 of the
Harmonized Tariff Schedule of the United States (HTSUS). Excluded from
the scope of investigation are flatware products (e.g., knives, forks,
and spoons).
Although the HTSUS subheadings are provided for convenience and
customs purposes, our written description of the scope of this
investigation is dispositive.
Period of Investigation
The POI is January 1, 1995, through December 31, 1995.
Fair Value Comparisons
A. IKEA and Gallant
We did not receive a response to our questionnaire from either IKEA
or Gallant. Section 776(a)(2) of the Act provides that if an interested
party withholds information that has been requested by the Department,
fails to provide such information in a timely manner and in the form
requested, significantly impedes a proceeding, or provides such
information but the information cannot be verified, the Department
shall use the facts otherwise available in reaching the applicable
determination. Because IKEA and Gallant failed to submit the
information that the Department specifically requested, we must base
our determinations for those companies on the facts available.
Section 776(b) of the Act provides that adverse inferences may be
used against a party that has failed to cooperate by not acting to the
best of its ability to comply with a request for information. The
Department has determined that, in selecting from among the facts
otherwise available, an adverse inference is warranted.
Section 776(c) of the Act provides that where the Department
selects from among the facts otherwise available and relies on
``secondary information,'' the Department shall, to the extent
practicable, corroborate that information from independent sources
reasonably at the Department's disposal. The Statement of
Administrative Action accompanying the URAA, H.R. Doc. No. 316, 103d
Cong., 2d Sess. (1994) (hereinafter, the ``SAA''), states that the
petition is ``secondary information'' and that ``corroborate'' means to
determine that the information used has probative value. See SAA at
870.
In this proceeding, we considered the petition as the most
appropriate information on the record to form the basis for a dumping
calculation for these uncooperative respondents. In accordance with
section 776(c) of the Act, we sought to corroborate the data contained
in the petition.
The petitioner based its allegation of both normal value and export
price in the petition on a market research report which utilized price
quotations from a manufacturer/exporter of MIDPs in Taiwan. The
petitioner also submitted a published price list of comparable
merchandise sold during the POI in Taiwan. The Department has
determined that the price list corroborates normal value used in the
petition.
The export price in the petition is consistent with export prices
reported
[[Page 43343]]
by responding companies on the record of this investigation. Therefore,
we determine that further corroboration of the facts available margin
is unnecessary.
B. Chen Hao Taiwan and Yu Cheer
To determine whether sales of the subject merchandise by Chen Hao
Taiwan and Yu Cheer to the United States were made at less than fair
value, we compared the Export Price (``EP'') to the Normal Value
(``NV''), as described in the ``Export Price'' and ``Normal Value''
sections of this notice. In accordance with section 777A(d)(1)(A)(i),
we compared POI-wide weighted-average EPs to weighted-average NVs. In
determining averaging groups for comparison purposes, we considered the
appropriateness of such factors as physical characteristics and level
of trade.
(i) Physical Characteristics
In accordance with section 771(16) of the Act, we considered all
products covered by the description in the Scope of Investigation
section, above, produced in Taiwan and sold in the home market during
the POI, to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. Where there were no
sales of identical merchandise in the home market to compare to U.S.
sales, we compared U.S. sales to the next most similar foreign like
product on the basis of the characteristics listed in the Department's
antidumping questionnaire. In making the product comparisons, we relied
on the following criteria (listed in order of preference): shape type
(i.e., flat--e.g., plates, trays, saucers etc.; or container--e.g.,
bowls, cups, etc.), specific shape, diameter (where applicable), length
(where applicable), capacity (where applicable, thickness, design
(i.e., whether or not a design is stamped into the piece), and glazing
(i.e., where a design is present, whether or not it is also glazed).
See also Model Match Methodology for the Preliminary Determinations,
memorandum from MIDP team to Louis Apple, Acting Office Director, dated
August 12, 1996.
(ii). Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA
at 829-831, to the extent practicable, the Department will calculate
normal values based on sales at the same level of trade as the U.S.
sales. When the Department is unable to find sales in the comparison
market at the same level of trade as the U.S. sale(s), the Department
may compare sales in the U.S. and foreign markets at different levels
of trade. See also Final Determination of Sales at Less Than Fair
Value: Certain Pasta from Italy (61 FR 30326, June 14, 1996) (``Pasta
from Italy''). See, also, Final Determination of Sales at Less Than
Fair Value: Certain Pasta from Italy (61 FR 30326, June 14, 1996)
(``Pasta from Italy'').
In accordance with section 773(a)(7)(A), if sales at different
levels of trade are compared, the Department will adjust the normal
value to account for the difference in level of trade if two conditions
are met. First, there must be differences between the actual selling
functions performed by the seller at the level of trade of the U.S.
sale and the level of trade of the normal value sale. Second, the
difference must affect price comparability as evidenced by a pattern of
consistent price differences between sales at the different levels of
trade in the market in which normal value is determined.
Pursuant to section 773(a)(1)(B)(i) of the Act, and the SAA at 827,
in identifying levels of trade for directly observed (i.e., not
constructed) export price and normal values sales, we considered the
selling functions reflected in the starting price, before any
adjustments. Where possible, we further examined whether the selling
function was performed on a substantial portion of sales.
Chen Hao Taiwan and Yu Cheer reported that sales within both the
home and U.S. markets involve essentially the same selling functions.
We examined the record evidence and confirmed that selling functions in
the aggregate are the same despite customer categories--trading company
and distributor--being somewhat different (see Notice of Proposed
Rulemaking and Request for Public Comments, 61 FR 7303, 7348 (February
27, 1996)) (``Proposed Regulations''). Accordingly, we preliminarily
find that no level of trade differences exist for either company
between any sales in either the home market or the U.S. market.
Therefore, all price comparisons are at the same level of trade and an
adjustment pursuant to section 773(a)(7)(A) is unwarranted.
Export Price
We calculated EP, in accordance with subsections 772(a) and (c) of
the Act, where the subject merchandise was sold directly to the first
unaffiliated purchaser in the United States prior to importation and
where CEP was not otherwise warranted based on the facts of record.
We made company-specific adjustments as follows:
Chen Hao Taiwan
We calculated EP based on packed, ex-works, FOB port, and delivered
prices to unaffiliated customers in the United States. Where
appropriate, we made deductions from the starting price (gross unit
price) for foreign inland freight and Taiwan brokerage and handling. We
also deducted reported discounts.
Yu Cheer
We calculated EP based on packed, FOR customer's warehouse prices
to unaffiliated customers in the United States. Where appropriate, we
made deductions from the starting price (gross unit price) for foreign
inland freight.
Normal Value
Cost of Production Analysis
As noted in the ``Case History'' section above, based on the
petitioner's allegation, on July 11, 1996, the Department found
reasonable grounds to believe or suspect that Chen Hao Taiwan sales in
the home market were made at prices below the cost of producing the
merchandise. As a result, the Department initiated an investigation to
determine whether Chen Hao Taiwan made home market sales during the POI
at prices below their respective cost of production within the meaning
of section 773(b) of the Act.
Before making any fair value comparisons, we conducted the COP
analysis described below.
A. Calculation of COP
We calculated the COP based on the sum of Chen Hao Taiwan's cost of
materials and fabrication for the foreign like product, plus amounts
for home market general and administrative expenses (``G&A'') and
packing costs in accordance with section 773(b)(3) of the Act.
B. Test of Home Market Prices
We used Chen Hao Taiwan's adjusted weighted-average COP for the
POI. We compared the weighted-average COP figures to home market sales
of the foreign like product as required under section 773(b) of the Act
in order to determine whether these sales had been made at below-cost
prices within an extended period of time in substantial quantities, and
were not at prices which permit recovery of all costs within a
reasonable period of time. On a model-specific basis, we compared the
COP to the home market prices, less any applicable movement charges and
direct selling expenses. We did not deduct indirect selling expenses
from the home
[[Page 43344]]
market price because these expenses were included in the G&A portion of
COP.
C. Results of COP Test
In determining whether to disregard home-market sales made at
prices below COP, we examine (1) whether, within an extended period of
time, such sales were made in substantial quantities and (2) whether
such sales were made at prices which permitted the recovery of all
costs within a reasonable period of time in the normal course of trade.
Where less than 20 percent (by quantity) of a respondent's sales of a
given product were at prices less than the COP, we do not disregard any
below-cost sales of that product. Where 20 percent (by quantity) or
more of a respondent's sales of a given product during the POI were at
prices less than the COP, we determine such sales to have been made in
substantial quantities within an extended period; where we determine
that such sales were also not made at prices that permit recovery of
cost within a reasonable period, we disregard the below-cost sales.
In this case, we found that some products had no above-cost sales
available for matching purposes. Accordingly, export prices that would
have been compared to home market prices for these models were instead
compared to CV.
D. Calculation of CV
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of a respondent's cost of materials, fabrication,
selling, general, and administrative expenses (``SG&A''), profit and
U.S. packing costs as reported in the U.S. sales databases. In
accordance with section 773(e)(2)(A) of the Act, we based SG&A and
profit on the amounts incurred and realized by the respondent in
connection with the production and sale of the foreign like product in
the ordinary course of trade for consumption in the foreign country.
Where appropriate, we calculated each respondent's CV based on the
methodology described in the calculation of COP above.
Adjustments to Prices
We made company-specific adjustments to prices used as NV, as
follows:
Chen Hao Taiwan
We calculated NV based on packed, delivered prices to unaffiliated
customers. Where appropriate, we made deductions from the starting
price (gross unit price) for discounts and inland freight. In addition,
where appropriate, we adjusted for differences in circumstances of sale
for imputed credit expenses, and royalty expenses (home market).
Yu Cheer
We calculated NV based on packed, delivered prices to unaffiliated
customers. Where appropriate, we made deductions from the starting
price (gross unit price) for inland freight. In addition, where
appropriate, we adjusted for differences in circumstances of sale for
imputed credit expenses. Yu Cheer's sales to the United States as well
as those in the home market, were made in Taiwan dollars. Accordingly,
Yu Cheer calculated its credit expenses in both markets by applying the
average short term interest rates in Taiwan.
For each respondent, we made adjustments, where appropriate, for
physical differences in the merchandise in accordance with section
773(a)(6)(C)(ii) of the Act. Where the difference in merchandise
adjustment for every comparison product exceeded 20 percent, we based
NV on CV. In addition, in accordance with section 773(a)(6)(B), we
deducted home market packing costs and added U.S. packing costs for all
respondents.
Price to CV Comparisons
Where we compared CV to export prices, we deducted from CV the
weighted-average home market direct selling expenses and added the
weighted-average U.S. product-specific direct selling expenses (where
appropriate) in accordance with section 773(a)(8) of the Act.
Currency Conversion
We made currency conversions into U.S. dollars based on the
official exchange rates in effect on the dates of the U.S. sales as
certified by the Federal Reserve Bank.
Section 773A(a) of the Act directs the Department to convert
foreign currencies based on the dollar exchange rate in effect on the
date of sale of the subject merchandise, except if it is established
that a currency transaction on forward markets is directly linked to an
export sale. When a company demonstrates that a sale on forward markets
is directly linked to a particular export sale in order to minimize its
exposure to exchange rate losses, the Department will use the rate of
exchange in the forward currency sale agreement.
Section 773A(a) also 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. It is the Department's practice
to find that a fluctuation exists when the daily exchange rate differs
from the benchmark rate by 2.25 percent. The benchmark is defined as
the moving average of rates for the past 40 business days. When we
determine a fluctuation to have existed, we substitute the benchmark
rate for the daily rate, in accordance with established practice.
Further, section 773A(b) directs the Department to allow a 60-day
adjustment period when a currency has undergone a sustained movement. A
sustained movement has occurred when the weekly average of actual daily
rates exceeds the weekly average of benchmark rates by more than five
percent for eight consecutive weeks. (For an explanation of this
method, see Policy Bulletin 96-1: Currency Conversions (61 FR 9434,
March 8, 1996).) Such an adjustment period is required only when a
foreign currency is appreciating against the U.S. dollar. The use of an
adjustment period was not warranted in this case because the New Taiwan
dollar did not undergo a sustained movement, nor were there currency
fluctuations during the POI.
Verification
As provided in section 782(i) of the Act, we will verify all
information determined to be acceptable for use in making our final
determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all imports--with the
exception of those exported by Chen Hao Taiwan, Yu Cheer, or any other
company except IKEA and Gallant--of subject merchandise that are
entered, or withdrawn from warehouse, for consumption on or after the
date of publication of this notice in the Federal Register. We will
instruct the Customs Service to require a cash deposit or the posting
of a bond equal to the weighted-average amount by which the NV exceeds
the export price, as indicated in the chart below. These suspension of
liquidation instructions will remain in effect until further notice.
------------------------------------------------------------------------
Weighted-average margin
Exporter/manufacturer percentage
------------------------------------------------------------------------
Chen Hao Taiwan...................... 1.53 (de minimis).
Yu Cheer............................. 0.
IKEA................................. 53.13.
Gallant.............................. 53.13.
All Others........................... 1.55 (de minimis).
------------------------------------------------------------------------
[[Page 43345]]
Pursuant to section 733(d)(1)(A) and section 735(c)(5) of the Act,
the Department normally may not include zero and de minimis weighted-
average dumping margins and margins determined entirely under section
776 of the Act, in the calculation of the ``all-others'' deposit rate.
However, such rates were the only margins available in this
determination. Accordingly, the Department may, pursuant to section
735(c)(5)(B) of the Act, use ``any reasonable method'' to calculate the
all-others rate. In this case, the Department calculated the all-others
rate by using a weighted average of the rates applicable to Chen Hao
Taiwan, Yu Cheer, and IKEA (Gallant's deposit rate was not included in
the all-others rate calculation because no weighting factor was
available and our examination of PIERS import data and other record
evidence indicates that Gallant's exports--if any--do not appear to be
significant). See SAA at 873.
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
Case briefs or other written comments in at least ten copies must
be submitted to the Assistant Secretary for Import Administration no
later than November 26, 1996, and rebuttal briefs, no later than
December 3, 1996. A list of authorities used and an executive summary
of issues should accompany any briefs submitted to the Department. Such
summary should be limited to five pages total, including footnotes. In
accordance with section 774 of the Act, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs. Tentatively, the hearing
will be held on December 5, 1996, at 10:00 a.m. in Room 1412 at the
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230. Parties should confirm by telephone the time,
date, and place of the hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
B-099, within ten days of the publication of this notice. Requests
should contain: (1) The party's name, address, and telephone number;
(2) the number of participants; and (3) a list of the issues to be
discussed. Oral presentations will be limited to issues raised in the
briefs. If this investigation proceeds normally, we will make our final
determination by 135 days after the publication of this notice in the
Federal Register.
This determination is published pursuant to section 733(d) of the
Act.
Dated: August 14, 1996.
Jeffrey P. Bialos,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-21465 Filed 8-21-96; 8:45 am]
BILLING CODE 3510-DS-P
