98-24598. Industrial Nitrocellulose From France: Final Results of Antidumping Duty Administrative Review  

  • [Federal Register Volume 63, Number 177 (Monday, September 14, 1998)]
    [Notices]
    [Pages 49085-49089]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 98-24598]
    
    
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    DEPARTMENT OF COMMERCE
    
    International Trade Administration
    [A-427-009]
    
    
    Industrial Nitrocellulose From France: 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 May 11, 1998, the Department of Commerce published the 
    preliminary results of administrative review of the antidumping duty 
    order on industrial nitrocellulose from France. The review covers 
    Bergerac, N.C. (formerly identified by the name of its parent company, 
    Societe Nationale des Poudres et Explosifs), and its affiliates for the 
    period August 1, 1996, through July 31, 1997.
        We gave interested parties an opportunity to comment on the 
    preliminary results. Based on our analysis of comments received, we 
    have made a change in the margin calculations and corrected a 
    ministerial error. Therefore, the final results differ from the 
    preliminary results.
    
    EFFECTIVE DATE: September 14, 1998.
    
    FOR FURTHER INFORMATION CONTACT: William Zapf or Lyn Johnson, Import 
    Administration, International Trade Administration, U.S. Department of 
    Commerce, Washington, D.C. 20230; telephone: (202) 482-4733.
    
    SUPPLEMENTARY INFORMATION:
    
    The Applicable Statute and Regulations
    
        Unless otherwise indicated, all citations to the Tariff Act of 
    1930, as amended (the Tariff 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 codified at 19 CFR Part 351 (62 FR 27295 (May 19, 
    1997)).
    
    Background
    
        On May 11, 1998, the Department of Commerce (the Department) 
    published in the Federal Register (63 FR 25828) the preliminary results 
    of review of the antidumping duty order on industrial nitrocellulose 
    (INC) from France. The period of review (the POR) is August 1, 1996, 
    through July 31, 1997. We invited parties to comment on our preliminary 
    results of review. On June 10, 1998, and June 15, 1998, we received 
    case and rebuttal briefs from the respondent, Bergerac, N.C. 
    (Bergerac), and the petitioner, Hercules Incorporated (Hercules). A 
    public hearing was held on June 18, 1998. Subsequently, we requested 
    that Bergerac revise its case brief which contained new and untimely 
    information. We also requested that Bergerac provide additional 
    information. Bergerac filed responses to our requests on July 13, 1998, 
    and July 20, 1998, respectively. The Department has conducted this 
    administrative review in accordance with Section 751 of the Tariff Act.
    
    Scope of Review
    
        The product covered by this review is INC containing between 10.8 
    and 12.2 percent nitrogen. INC is a dry, white, amorphous synthetic 
    chemical produced by the action of nitric acid on cellulose. The 
    product comes in several viscosities and is used to form films in 
    lacquers, coatings, furniture finishes and printing inks. Imports of 
    this product are classified under the HTS subheadings 3912.20.00 and 
    3912.90.00. The HTS item numbers are provided for convenience and 
    customs purposes. The written descriptions of the scope of this 
    proceeding remain dispositive.
    
    Analysis of Comments Received
    
        Comment 1: Bergerac argues that, in applying the ``special rule'' 
    for merchandise with value added after importation under Section 772(e) 
    of the Tariff Act, the Department should use as a proxy for these sales 
    the margin calculated for sales to an unaffiliated customer which 
    purchased identical merchandise, rather than the margin the Department 
    calculated on all sales of subject merchandise. To support its 
    argument, Bergerac cites Section 772(e) of the Tariff Act which 
    provides that, for further-manufactured merchandise in which the value 
    added in the United States is likely to exceed substantially the value 
    of the subject merchandise, the Department shall use either the price 
    of identical merchandise sold to an unaffiliated person or the price of 
    other subject merchandise sold to an unaffiliated person to determine 
    constructed export price (CEP). While recognizing that the statute does 
    not express a clear preference for either of these options, Bergerac 
    notes that, in the preamble to the new regulations, the Department has 
    stated ``whether merchandise is identical may be a factor to consider 
    in selecting the sales to be substituted for the value added sales,'' 
    citing Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 
    27296, 27296 (May 19, 1997) (Final Rule). Bergerac also cites to 19 CFR 
    351.402 which states that, for the purposes of determining dumping 
    margins under the special rule above, ``the Secretary may use the 
    weighted-average dumping margins calculated on sales of identical or 
    other subject merchandise sold to unaffiliated persons.''
        Furthermore, Bergerac insists, the use of the term ``unaffiliated 
    person'' in the statute requires the use of a margin calculated on 
    sales to the first purchaser of subject merchandise in the United 
    States. However, Bergerac contends, by including the margin calculated 
    for its sales through SNPE N.A., an affiliated company, in its 
    calculation of the proxy margin, the Department is using a margin 
    calculated on resales by an affiliated distributor. To interpret 
    ``unaffiliated person'' to mean unaffiliated customers of SNPE, 
    Bergerac continues, would render the term ``unaffiliated person'' 
    superfluous in the statute since all margins are based on sales to 
    unaffiliated persons.
        Hercules responds that, in the preamble to the Department's new 
    regulations to which Bergerac refers, the Department merely restates 
    the content of Section 772(e) of the Tariff Act, citing Final Rule at 
    27353. Hercules notes that, in this same discussion, the Department 
    stated that it had little experience with this new statutory provision 
    and, therefore, was not in a position to provide a great deal of 
    guidance at that time. Nevertheless, Hercules notes that the Department 
    subsequently enunciated a preference for using both identical and other 
    merchandise in 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, 
    Preliminary Results of Antidumping Duty Administrative Reviews, 62 FR 
    47452 (September 9, 1997).
        Moreover, Hercules argues that, had the Department looked only to 
    sales to one unaffiliated customer, as suggested by Bergerac, the 
    Department would have
    
    [[Page 49086]]
    
    taken into account only a small fraction of respondent's U.S. sales and 
    ignored the majority of Bergerac's U.S. sales. Therefore, Hercules 
    concludes that the Department's use of the weighted-average margin for 
    all other U.S. sales as a proxy margin for sales of merchandise with 
    value added was reasonable and proper under the statute and 
    regulations.
        Department's Position: The purpose of the special rule is to reduce 
    the Department's administrative burden. See the Statement of 
    Administrative Action accompanying the Uruguay Round Agreements Act, 
    H.R. Doc. 316, Vol. 1, 103d Congress (1994) (SAA) at 826. Moreover, the 
    statute does not specify a hierarchy between the alternative methods of 
    using identical or other subject merchandise to establish export price 
    (EP). Id. Therefore, it is within the Department's discretion to select 
    an appropriate method to determine the assessment rate for merchandise 
    the Department has not examined under the special rule.
        After reviewing Bergerac's submitted data, we have determined that 
    the use of both identical and other subject merchandise is an 
    appropriate basis for determining the dumping margins for Bergerac's 
    sales subject to the special rule. If we were to use only the margin we 
    calculated on sales to one unaffiliated customer of merchandise 
    identical to the value-added merchandise, as suggested by Bergerac, we 
    would ignore the majority of U.S. sales and the pricing practices that 
    these sales entail. This is consistent with the statutory language and 
    legislative history which explicitly permit the Department to reject a 
    particular alternative when there is not a sufficient quantity of sales 
    to provide a reasonable basis for comparison. See Section 772(e) of the 
    Tariff Act and the SAA at 826.
        We also disagree with Bergerac's argument that we should not use 
    sales in the United States made by its U.S. affiliate. In accordance 
    with Section 772(b) of the Act, such sales are used as the basis for 
    establishing U.S. price. Therefore, it is appropriate to include such 
    sales in the alternative methodology. See also 19 CFR 351.402(c).
        Comment 2: Bergerac argues that the Department should include the 
    sales value of the imported subject merchandise which was further-
    manufactured and the estimated duties on those entries in the weighted-
    average margin calculations. As support for its argument, Bergerac 
    points to the Department's analysis memorandum dated April 17, 1998, 
    which states that the Department calculated the weighted-average margin 
    based on the total value of sales in the United States and their total 
    antidumping duties; however, Bergerac argues that, contrary to the 
    statement in the April 17, 1998, memorandum, the calculations do not 
    include the value of sales of imported merchandise with value added or 
    the estimated duties attributed to these sales. Bergerac requests that 
    the Department revise its weighted-average margin to include such sales 
    value and duties.
        Hercules asserts that the Department was correct in not including 
    the sales value of imported merchandise with value added or the amount 
    of the antidumping duty margin attributed to the sales of these 
    products in the weighted-average margin calculations. In this case, 
    Hercules contends, the sales of merchandise with value added are, by 
    definition, calculated on a surrogate basis under the ``special rule'' 
    provisions of Section 772(e) in order to save the Department the 
    administrative burden of factoring out an exact margin on INC subject 
    to the special rule.
        Department's Position: We disagree with Bergerac that we should 
    change our methodology for calculating its weighted-average margin. 
    Based on our methodology, adding surrogate numbers to the numerator and 
    denominator in our margin calculations would not change the results. As 
    explained in our response to Comment 1, we are using the margin 
    calculated on all of Bergerac's other sales as the surrogate for 
    Bergerac's further-manufactured sales subject to the special rule. 
    Consequently, any figures added to both the numerator and denominator 
    of the margin calculation would only ensure the same result. Also, we 
    disagree with Bergerac's comment that our analysis memorandum 
    misleadingly refers to the use of total value of U.S. sales and their 
    total duties. We stated clearly in a footnote on page 1 of that 
    memorandum that ``the total dumping margin and U.S. value are based 
    solely on products sold as entered into the United States.'' It is 
    clear that this statement excludes further-manufactured merchandise 
    since such merchandise was not ``sold as entered.''
        Comment 3: Bergerac argues that the Department should use sales to 
    distributors in France, who in turn sold the foreign like product to 
    third countries, to calculate a level-of-trade adjustment instead of 
    making a CEP-offset adjustment to normal value. Bergerac claims that 
    the Department should not reject such sales on the grounds that 
    Bergerac had knowledge of the ultimate destination. Bergerac notes that 
    one of the statutory requirements for making a CEP-offset adjustment, 
    instead of a level-of-trade adjustment, is that the data available do 
    not provide an appropriate basis to determine whether the difference in 
    levels of trade affects price comparability, citing 19 CFR 351.412(d). 
    Bergerac argues that, since information is available, the application 
    of a CEP offset is inappropriate and that a level-of-trade adjustment 
    is required.
        Bergerac argues that, unless it can be proven that there is a 
    reason to believe that sales to distributors in France are not 
    representative, such sales should be used for the purpose of 
    determining a level-of-trade adjustment. Bergerac insists that the use 
    of the term ``sold for consumption'' in the definition of normal value 
    should not lead to the conclusion that such sales cannot be used for 
    quantifying a level-of-trade adjustment. Bergerac also argues that, in 
    a future administrative review, the ultimate destination of these sales 
    may be unknown since there is no restriction on distributors to prevent 
    them from selling the merchandise in France.
        Bergerac points out that the SAA (at 830) gives the Department 
    considerable discretion in determining levels of trade. Similarly, 
    Bergerac notes that, in situations in which there may be no usable 
    sales of the foreign like product at a level of trade comparable to the 
    EP or CEP level of trade, the preamble to the new regulations states: 
    ``...the Department will examine price differences in the home market 
    either for sales of broader or different product lines or for sales 
    made by other companies'' (Final Rule at 27372). Bergerac argues that, 
    if the Department may use sales of other producers, or other products 
    in different time periods, then the Department should be able to use 
    sales of the same product by the same producer, despite the fact that 
    sales in the home market are later sold for export. Bergerac concludes 
    by urging the Department to exercise its considerable discretion in 
    this new area of the law so that a fair comparison can be achieved for 
    Bergerac's U.S. distributor sales.
        Hercules responds that the Department denied a level-of-trade 
    adjustment to Bergerac properly. Citing Section 773(a)(7)(A) of the 
    Tariff Act, Hercules argues that the amount of a level-of-trade 
    adjustment should be based on the price difference ``between the two 
    levels of trade in the country in which normal value is determined.'' 
    Hercules points out that the additional distributor sales that Bergerac 
    reported belatedly in a supplemental response do not constitute a 
    second level of trade. These sales, Hercules contends, are clearly 
    export sales and Hercules points
    
    [[Page 49087]]
    
    out that Bergerac acknowledged this fact in statements throughout its 
    original questionnaire.
        Department's Position: We agree with Hercules that Bergerac's sales 
    to distributors in France for export should not be used as a basis for 
    determining a level-of-trade adjustment. As we noted on page 3 of our 
    analysis memorandum dated April 17, 1998, Section 773(a)(7)(A)(ii) of 
    the Tariff Act requires us to evaluate the basis for a level-of-trade 
    adjustment based on sales at different levels of trade in the country 
    in which normal value is determined. According to Section 
    773(a)(1)(B)(i), the sales at issue could not be used to calculate 
    normal value since Bergerac knew that the products were sold for 
    export; i.e., they were not sold for consumption in the exporting 
    country. Moreover, it would be inappropriate to compare prices to two 
    or more different markets (Bergerac's home-market sales with its export 
    sales) to calculate a level-of-trade adjustment since it would not be 
    possible to distinguish the price differences due to the different 
    markets from the price differences due to any level-of-trade 
    differences. For these reasons, we have not made any changes to our 
    level-of-trade determination for these final results of review.
        Comment 4: Bergerac contends that the Department included certain 
    sample and trial sales in its home-market database improperly. The 
    Department should exclude these sample and trial sales from its 
    calculation of normal value, Bergerac argues, because respondent has 
    provided sufficient evidence that such sales are outside the ordinary 
    course of trade. Regarding sample transactions, Bergerac asserts that, 
    while the Department excluded free samples from its calculations 
    properly, it should also have eliminated samples which were sold for 
    monetary consideration (priced samples). As evidence to support its 
    argument, Bergerac points out that the product code included on the 
    invoices for these sales contains a suffix which demonstrates that they 
    are samples. Furthermore, Bergerac states the price for these samples 
    was high to cover the relatively high cost of shipping and packaging 
    small quantities.
        In addition, Bergerac asserts that its trial sales were outside the 
    ordinary course of trade. Bergerac argues that, in a supplemental 
    response, it submitted letters from the customers which demonstrate 
    that each transaction was for testing purposes only. Bergerac also 
    contends that the grade of nitrocellulose sold in these cases is a 
    grade that normally is not sold in France.
        While recognizing that the Department determined properly that its 
    priced samples and trial sales were ``sales'' because they did not lack 
    consideration in accordance with NSK Ltd. v. United States, 115 F. 3d 
    965, 975 (CAFC 1997) (NSK), Bergerac contends that, in its 
    determination to retain these transactions, the Department relied 
    improperly on this qualification alone and did not determine whether 
    the sales were outside the ordinary course of trade. Bergerac asserts 
    that NSK is inapplicable to this situation because it dealt with 
    certain transactions which were not sales and did not address whether 
    certain sales were outside the ordinary course of trade.
        Bergerac asserts that, in determining whether these sales are 
    outside the ordinary course of trade, the Department must consider all 
    of the circumstances surrounding the sales in question, citing 19 
    C.F.R. 351.102(b), Murata Mfg. Co. v. United States, 820 F. Supp. 603, 
    606-7 (Court of International Trade (C.I.T.) 1993) (Murata), and 
    Laclede Steel Co. v. United States, 18 C.I.T. 965, 1994 WL 591949 
    (C.I.T. 1994). Bergerac explains that ``the purpose of the ordinary 
    course of trade provision is to prevent dumping margins from being 
    based on sales which are not representative,'' citing Monsanto Co. v. 
    United States, 698 F. Supp. 275, 278 (C.I.T. 1988). Furthermore, 
    Bergerac argues that the Department has recognized that trial and 
    sample sales must be excluded from normal value, citing Final 
    Determination of Sales at Less Than Fair Value: Antifriction Bearings 
    (Other Than Tapered Roller Bearings) from the Federal Republic of 
    Germany, 54 FR 18992, 19087 (May 3, 1989), and Antidumping Manual, 
    Import Administration, revised February 10, 1998, Chapter 8, pages 9-
    10.
        Hercules disagrees with Bergerac, arguing that the Department 
    included priced samples and trial sales in its analysis properly. 
    Hercules contends that the burden of proof to demonstrate that these 
    sales are outside the ordinary course of trade rests clearly on 
    Bergerac, citing 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, Final 
    Results of Antidumping Duty Administrative Reviews, 63 FR 2558 (January 
    15, 1998) (Tapered Roller Bearings).
        Citing Murata, Hercules contends that the C.I.T. has found that a 
    respondent did not meet its burden of proof merely by claiming that the 
    relevant sales were in smaller quantities and at higher prices than 
    sales of a different model. Hercules argues that Bergerac did not 
    provide certain information regarding these sample and trial 
    transactions which the Department requested in a supplemental 
    questionnaire. Finally, citing Tapered Roller Bearings, Hercules argues 
    that the Department has previously disallowed the requested exclusion 
    of sample sales where the respondent has merely stated that the product 
    is coded as a sample and that the sample prices are generally higher 
    than for larger-volume shipments. Hercules asserts that this is a 
    similar situation and that Bergerac has also failed to meet its burden 
    of proof in this regard.
        Department's Position: We disagree with Bergerac that we should 
    exclude certain home-market sales because they are outside the ordinary 
    course of trade. Regarding priced samples, while it is clear that the 
    invoices for these sales indicated that they were sample sales, such 
    indication is not sufficient to demonstrate that the sale is unique or 
    unusual or otherwise outside the ordinary course of trade. See 
    Antifriction Bearings (Other Than Tapered Roller Bearings and Parts 
    Thereof from France, Germany, Italy, Japan, Singapore, and the United 
    Kingdom, Final Results of Antidumping Duty Administrative Reviews, 62 
    FR 2081 (January 15, 1997) (where, although we verified that certain 
    sales were designated as samples in a respondent's records, we 
    determined this was insufficient to find them outside the ordinary 
    course of trade since such evidence ``merely proves that respondent 
    identified sales recorded as samples in its own records''). Such 
    evidence does not indicate that the sales were made outside the 
    ordinary course of trade for purposes of calculating normal value in 
    this review. Bergerac's argument that these sales were at a high price 
    to cover the high cost of shipping small packages does not address the 
    Department's ``unique or unusual'' standard concerning ordinary course 
    of trade. See Large Newspaper Printing Presses and Components Thereof, 
    Whether Assembled or Unassembled, From Germany (61 FR 38166, July 23, 
    1996) as discussed in Antifriction Bearings (Other Than Tapered Roller 
    Bearings) and Parts Thereof from France, et. al.; Final Results of 
    Antidumping Duty Administrative Reviews (62 FR 54043, at 54065-54066, 
    October 17, 1997).
        Regarding trial sales which Bergerac claims are outside the 
    ordinary course of trade, the respondent has not met its burden to 
    demonstrate that these sales are unique or unusual or otherwise outside 
    the ordinary course of trade.
    
    [[Page 49088]]
    
    First, while Bergerac claims that it does not usually sell this grade 
    of INC in France, it sells this product to the U.S. market frequently 
    as indicated by its sales database. Furthermore, although Bergerac 
    argues that it submitted letters from each of the trial-sale customers 
    demonstrating that, in each case, the product was used for testing 
    purposes only, the letters it provided are not convincing. One of the 
    letters appears to be from Bergerac to the customer, rather than from 
    the customer to Bergerac (as the respondent claims), and does not 
    indicate that any testing was conducted (or was to be conducted) by the 
    customer. Also, while Bergerac claimed in its January 20, 1998, 
    supplemental response that this trial was unsuccessful, it did not 
    submit any evidence to establish this fact. Regarding other trial 
    sales, another letter from the customer to Bergerac does discuss 
    testing, but this letter is dated after our request for documentation 
    of the trial sales and not at the time of the sales. (Because of the 
    proprietary nature of the contents of these letters, please see the 
    August 31, 1998, analysis memorandum for a more detailed discussion of 
    this matter.) Finally, we found that these trial sales were made in 
    quantities similar to other sales, supporting the possibility that the 
    product was used for production purposes.
        Regarding both priced samples and trial transactions, Bergerac 
    failed to provide certain information which we requested in a 
    supplemental questionnaire specifically in order to determine whether 
    these transactions were outside the ordinary course of trade. For 
    example, regarding both types of sales at issue, Bergerac did not 
    respond as to whether the customer had purchased these particular items 
    previously. For these reasons, the record is incomplete as to whether 
    sales of these products were made to these customers prior to the dates 
    of the claimed sample and trial transactions and we have retained them 
    for use in our calculation of normal value.
        We also disagree with Bergerac's assertion that we relied on an 
    incorrect standard for determining whether to include claimed sample 
    and trial sales in our calculation of normal value. We first evaluated, 
    under the NSK standard, whether these transactions were in fact 
    ``sales'' involving monetary consideration. Where we determined that 
    the transactions involved monetary consideration, we then examined, 
    based upon information in Bergerac's response, whether these sales were 
    within the ordinary course of trade according to Section 771(a)(1)(B) 
    of the Tariff Act. (See page 5 of April 17, 1998, Analysis Memo.) 
    According to this standard and for reasons discussed above, we find 
    that Bergerac has not met its burden of proof in demonstrating that the 
    sales in question are outside the ordinary course of trade.
        Comment 5: Hercules argues that, although Bergerac denied that it 
    sold any subject merchandise which was below specification, its 
    responses demonstrate that Bergerac did not account properly for the 
    production of below-specification INC in its sales databases. Hercules 
    contends that the Department should instruct Bergerac to submit 
    supportive data regarding the production and sale of ``off-spec'' 
    merchandise in order to determine whether there were any sales of such 
    merchandise in the home market. This additional request for information 
    after the preliminary results is necessary, Hercules asserts, because 
    the Department must not compare sales of off-spec or less-than-prime 
    merchandise to U.S. sales of prime merchandise.
        Bergerac rebuts Hercules' comment by denying that a request for 
    supplemental information is necessary, stating that it reexamined its 
    quality-control records in response to Hercules' comment. As a result 
    of this search, Bergerac identified in its rebuttal brief where it had 
    sold off-spec merchandise in the home market. In addition, Bergerac 
    contends that it submitted information regarding the production and 
    sale of off-spec merchandise, including the proportion of off-spec 
    merchandise which it produced and, of that amount, what proportion was 
    sold at reduced prices and what proportion was recycled into the 
    manufacturing process.
        Department's Position: We agree with Hercules and have obtained 
    additional information regarding Bergerac's production and sale of off-
    spec merchandise. Based on this information and because there were no 
    sales of off-spec merchandise in the United States, we eliminated such 
    sales from the calculation of normal value. Consistent with our 
    practice, we have changed our methodology to ensure that we did not 
    compare home-market sales of off-spec merchandise to U.S. sales of 
    prime merchandise. See Steel Wire Rod From Canada; Final Determination 
    of Sales at Less Than Fair Value, 63 FR 9182, 9183 (February 24, 1998); 
    see also Certain Cold-Rolled Carbon Steel Flat Products from the 
    Netherlands; Final Results of Antidumping Duty Administrative Review, 
    61 FR 48465, 48466 (September 13, 1996).
        Comment 6: Bergerac argues that the Department should not have 
    considered a certain home-market customer to be an affiliated party for 
    purposes of its analysis and, therefore, should not have included its 
    sales to this customer in its arm's-length test. Bergerac contends 
    that, although technically affiliated to Bergerac under Section 771(33) 
    of the Tariff Act through a common board member, this company cannot 
    influence the prices it pays because there is no link between the board 
    member's membership on Bergerac's board and his membership on the 
    customer's board. Therefore, Bergerac asserts, the prices paid were at 
    arm's length and were not affected by the existence of a common board 
    member.
        Hercules argues that the Department was correct in performing the 
    arm's-length test on Bergerac's sales to the home-market customer in 
    question and that, under section 771(33) of the Tariff Act, a common 
    officer or director is sufficient to consider two firms to be 
    affiliated. Hercules argues further that, given that the sales failed 
    the arm's-length test, the Department excluded them from the 
    calculation of normal value properly.
        Department's Position: We disagree with Bergerac that it was 
    inappropriate to treat one of its home-market customers as affiliated 
    and, therefore, include all sales to that customer in our arm's-length 
    test. In its January 20, 1998, supplemental questionnaire response, 
    Bergerac reported that, because the chairman of its board of directors 
    is also a member of the board of directors of the customer in question, 
    the respondent is ``affiliated'' to the customer in question as the 
    term is used by the Department. Although it stated that it does not 
    consider the customer to be affiliated because the relationship is 
    maintained on an arm's-length basis, Bergerac did not raise this issue 
    until late in the proceeding and did not provide sufficient information 
    to allow the Department to analyze the affiliation issue. Thus, as 
    facts available, we are relying on the respondents' statement that the 
    customer is affiliated under our standards. Because the customer is 
    being treated as affiliated, it was appropriate to include all sales to 
    the customer in question in our arm's-length test.
        After conducting the arm's-length test, which is how we determine 
    whether an affiliation affects prices in such a way that they should be 
    excluded from the calculation of normal values, we found that 
    Bergerac's transactions with the customer in question failed the test 
    and, thus, it was appropriate to exclude these transactions from our 
    calculations.
    
    [[Page 49089]]
    
    Final Results of Review
    
        As a result of our review, we determine the final weighted-average 
    dumping margin for the period August 1, 1996, through July 31, 1997 to 
    be as follows:
    
    ------------------------------------------------------------------------
                                                                    Margin  
                              Company                             (percent) 
    ------------------------------------------------------------------------
    Bergerac...................................................        13.35
    ------------------------------------------------------------------------
    
        The Department shall determine, and the U.S. Customs Service shall 
    assess, antidumping duties on all appropriate entries. Because the 
    inability to link sales with specific entries prevents calculation of 
    duties on an entry-by-entry basis, for CEP sales we have calculated an 
    ad valorem duty-assessment rate based on the ratio of the total amount 
    of antidumping duties calculated for the examined sales made during the 
    POR to the total customs value of the sales used to calculate those 
    duties. This rate will be assessed uniformly on all entries of that 
    particular importer made during the POR. (This is equivalent to 
    dividing the total amount of antidumping duties, which are calculated 
    by taking the difference between statutory NV and statutory EP or CEP, 
    by the total statutory EP or CEP value of the sales compared and 
    adjusting the result by the average difference between EP or CEP and 
    customs value for all merchandise examined during the POR.) For EP 
    sales, Bergerac could not identify the importer(s) of record for sales 
    to unaffiliated customers. Therefore, we have calculated a single, per-
    unit duty assessment rate by dividing the total dumping margins by the 
    total quantity sold to these customers.
        Furthermore, the following deposit requirements will be effective 
    for all shipments of the subject merchandise entered, or withdrawn from 
    warehouse, for consumption on or after the publication date of these 
    final results of this administrative review, as provided by section 
    751(a)(1) of the Tariff Act: (1) the cash-deposit rate for Bergerac 
    will be 13.35 percent; (2) for previously reviewed or investigated 
    companies not listed above, the cash-deposit rate will continue to be 
    the company-specific rate published for the most recent period; (3) if 
    the exporter is not a firm covered in this review, a prior review, or 
    the original less-than-fair-value investigation (LTFV), 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 will be 
    1.38 percent. This is the ``all others'' rate from the LTFV 
    investigation which we are reinstating in accordance with the decisions 
    of the Court of International Trade in Floral Trade Council v. United 
    States, Slip Op. 93-79 (May 25, 1993), and Federal-Mogul Corporation 
    and The Torrington Company v. United States, Slip Op. 93-83 (May 25, 
    1993).
        This notice serves as a final reminder to importers of their 
    responsibility under 19 C.F.R. 351.402(f) of the Final Rule 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 Department's 
    presumption that reimbursement of antidumping duties occurred and the 
    subsequent assessment of doubled antidumping duties.
        This notice also serves as the only reminder to parties subject to 
    administrative protective orders (APO) of their responsibility 
    concerning the return or destruction of proprietary information 
    disclosed under APO in accordance with 19 C.F.R. 353.34(d) or 
    conversion to judicial protective order is hereby requested. Failure to 
    comply with the regulations and terms of an APO is a violation which is 
    subject to sanction.
        We are issuing and publishing this determination and notice in 
    accordance with sections 751(a)(1) and 777(i)(1) of the Tariff Act.
    
        Dated: September 4, 1998.
    Joseph A. Spetrini,
    Acting Assistant Secretary for Import Administration.
    [FR Doc. 98-24598 Filed 9-11-98; 8:45 am]
    BILLING CODE 3510-DS-P
    
    
    

Document Information

Effective Date:
9/14/1998
Published:
09/14/1998
Department:
International Trade Administration
Entry Type:
Notice
Action:
Notice of final results of antidumping duty administrative review.
Document Number:
98-24598
Dates:
September 14, 1998.
Pages:
49085-49089 (5 pages)
Docket Numbers:
A-427-009
PDF File:
98-24598.pdf