[Federal Register Volume 59, Number 122 (Monday, June 27, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15535]


[[Page Unknown]]

[Federal Register: June 27, 1994]


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DEPARTMENT OF COMMERCE
[A-570-835, A-549-812, A-791-802]

 

Initiation of Antidumping Duty Investigations: Furfuryl Alcohol 
From the People's Republic of China, the Republic of South Africa, and 
Thailand

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: June 27, 1994.

FOR FURTHER INFORMATION CONTACT: Erik Warga or Ellen Grebasch at (202) 
482-0922 or (202) 482-3773, respectively, Office of Antidumping 
Investigations, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C., 20230

Initiation of Investigations

The Petition

    On May 31, 1994, we received a petition in proper form filed by QO 
Chemicals, Inc. (petitioner), the sole U.S. producer of furfuryl 
alcohol. Petitioner filed supplements to the petition on June 6, 15, 
16, and 17, 1994.
    In accordance with 19 CFR 353.12, petitioner alleges that imports 
of furfuryl alcohol from the People's Republic of China (PRC), 
Thailand, and the Republic of South Africa (South Africa) are being, or 
are likely to be, sold in the United States at less than fair value 
within the meaning of section 731 of the Tariff Act of 1930, as amended 
(the Act), and that such imports are materially injuring, or threaten 
material injury to, a U.S. industry.
    Petitioner states that it has standing to file the petition because 
it is an interested party, as defined under section 771(9)(C) of the 
Act, and it is the sole domestic producer of furfuryl alcohol. If any 
interested party, as described under paragraphs (C), (D), (E), or (F) 
of section 771(9) of the Act, wishes to register support for, or 
opposition to, this petition, it should file a written notification 
with the Assistant Secretary for Import Administration.

Scope of Investigations

    The product covered by these investigations is furfuryl alcohol 
(C4H3OCH2OH). Furfuryl alcohol is a primary alcohol, and 
is colorless or pale yellow in appearance. It is used in the 
manufacturer of resins and as a wetting agent and solvent for coating 
resins, nitrocellulose, cellulose acetate, and other soluble dyes.
    The product subject to these investigations is classifiable under 
subheading 2932.13.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). Although the HTSUS subheading is provided for 
convenience and Customs purposes, our written description of the scope 
of these investigations is dispositive.

United States Price and Foreign Market Value

People's Republic of China

    Petitioner based United States Price (USP) on FOB PRC port, C&F 
U.S. port, and CIF U.S. port, price quotes from PRC producers through 
their representative U.S. trading companies. Adjustments were made for 
foreign inland freight, ocean freight, and marine insurance. Petitioner 
based inland freight on the distance from the PRC producers of the 
subject merchandise to the PRC port of export. Freight transportation 
charges were valued using Indian surrogate data. (See description of 
non-market economy (NME) below methodology). Ocean freight and marine 
insurance charges were estimated by comparing per-unit U.S. IM-145 
customs value import statistics to per-unit U.S. IM-145 customs value 
import statistics to per-unit U.S. IM-145 CIF import statistics.
    Petitioner asserts that the PRC is a NME within the meaning of 
sections 771(18)(A) and (C) of the Act and in accordance with section 
773(c) of the Act. Accordingly, foreign market value (FMV) should be 
based on the producer's factors of production, valued in a surrogate 
market economy country. The Department has determined in previous 
investigations that the PRC is a NME, and the presumption of NME status 
continues for the initiation of this investigation. See, e.g., Final 
Determination of Sales at Less Than Fair Value: Sebasic Acid from the 
People's Republic of China, (59 FR 28053, May 31, 1994).
    Absent evidence that a particular NME country government determines 
which of its factories shall produce for export to the United States, 
we intend, for purposes of the investigation from the PRC, to base FMV 
only on those factories that produced furfuryl alcohol sold to the 
United States during the period of investigation (POI).
    In the course of this investigation, parties will have the 
opportunity to provide relevant information related to the issues of 
the PRC's NME status and granting of separates rates to individual 
exporters. See Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the PRC (59 FR 22585, May 2, 1994).
    Petitioners based the factors of production on the production 
process used by PRC producers of the subject merchandise and valued 
these factors, where possible, on publicly available published 
information from the surrogate country, India. Where certain values 
were not available from Indian sources, petitioner has used values from 
Pakistan and Indonesia. These countries have been determined to be 
appropriate surrogates for the PRC. See November 29, 1993, memorandum 
from Rob Straw, Office of Policy to the File, Antidumping Investigation 
of Paper Clips from the PRC, A-570-826. For purposes of these 
initiations, we have accepted, pursuant to section 773 (c)(4) of the 
Act, petitioner's view that India, Pakistan, and Indonesia are 
appropriate surrogate countries.
    Pursuant to section 773(c)(1) of the Act, petitioner determined FMV 
on the basis of the value of factors of production specified in section 
773(c)(3) of the Act. These factors included materials, energy, labor 
costs and a percentage for factory overhead based on information from 
India. Petitioner then added the statutory minimum of ten percent for 
general expenses and eight percent for profit, as well as an amount for 
packing.
    We disregarded certain factor values where the inputs were based on 
prices in the United States because (1) petitioner failed to follow the 
Department's established hierarchy regarding selection of surrogate 
countries for the PRC, with respect to factor valuation, and (2) 
petitioner provided no basis for determining that United States values 
are representative of the appropriate surrogate country values.
    Based on a comparison of USP to FMV, the recalculated dumping 
margins ranged from 225.42 percent to 320.69 percent.

South Africa

    Petitioner based USP for South Africa on IM-145 data. Petitioner 
adjusted for foreign inland freight, ocean freight and marine insurance 
charges. Ocean freight and marine insurance charges were estimated by 
comparing per-unit U.S. IM-145 customs value import statistics to per-
unit U.S. IM-145 CIF import statistics.
    Petitioner based FMV on a domestic price quote from a producer of 
the subject merchandise in South Africa to a home market customer. An 
adjustment was made for foreign inland freight to arrive at an ex-
factory price. Petitioner then added VAT to both the FMV and USP.
    Based on a comparison of USP to FMV, the dumping margin alleged by 
petitioner is 68 percent.

Thailand

    Petitioner based USP for Thailand on U.S. IM-145 Customs data. 
Petitioner adjusted for foreign inland freight, ocean freight and 
marine insurance charges. Petitioner calculated inland freight charges 
based on the distance from the Thai producer's plant to the port of 
export. Ocean freight and marine insurance charges were estimated by 
comparing per-unit U.S. IM-145 customs value import statistics to per-
unit U.S. IM-145 CIF import statistics.
    Petitioner based FMV on constructed value (CV) because it claimed 
that the Thai market was not viable and that home market and third 
country prices provided in the petition represented sales that were 
made below the cost of production (COP) and therefore were not 
appropriate bases for calculating FMV.
    Petitioner provided a sales price from a Thai producer to a home 
market customer, and third country prices to Germany and the 
Netherlands, based on 1993 Thai export statistics to these countries. 
We did not use the Thai sales price to the home market customer because 
the source of the information could not be substantiated. Petitioner's 
claim that the home market is not viable is moot because they have been 
unable to obtain a substantiated home market sales price in Thailand. 
We rejected prices to third countries because these prices were found 
to be below COP, as described below.

Allegations of Home Market and Third Country Sales Below Cost of 
Production: Thailand

    Petitioner alleged that a Thai producer is selling the subject 
merchandise in the home market at prices below its COP. This allegation 
is based on a comparison of a domestic price obtained in Thailand with 
the Thai producer's COP for the subject merchandise. Because the 
domestic sales price from Thailand is unsubstantiated, there is no need 
to address petitioner's home market COP allegation. See ``Review of 
Estimated COP and Constructed Value for Furfuryl Alcohol Memorandum,'' 
dated June 17, 1994, which is on file in the Central Records Unit, at 
the Department of Commerce.
    Petitioner also alleged that the Thai producer's sales prices to 
Germany and the Netherlands were also made at prices below COP. This 
allegation is based on a comparison of the third country prices to 
Germany and to the Netherlands (based on 1993 Thai export statistics to 
these countries) to the Thai producer's calculated COP. A comparison of 
prices to Germany and the Netherlands to the Thai producer's COP for 
the subject merchandise indicates sales below cost. If the Department 
determines after these initiations that the home market is not viable 
and the Department uses third country prices in Germany or the 
Netherlands for purposes of comparison to USP, we will initiate 
separate cost investigations at that time.
    Therefore, for purposes of this initiation, in accordance with 
773(e)(1) of the Act, we are accepting petitioner's estimate of CV as 
the only appropriate basis for FMV. Petitioners based CV on costs 
incurred by a Thai producer, and its own manufacturing experience 
adjusted for differences in costs between the United States and 
Thailand. An amount for selling, general and administrative expenses 
and the statutory minimum for profit were added to the cost of 
manufacturer. Petitioner added an amount for export packing to arrive a 
total CV.
    Based on a comparison of USP to FMV, the recalculated dumping 
margin is 72.35 percent.

Fair Value Comparisons

    Based on the data provided by the petitioner, there is reason to 
believe that imports to furfuryl alcohol from the PRC, the Republic of 
South Africa, and Thailand are being, or likely to be, sold at less 
than fair value. If it becomes necessary at a later date to consider 
the petition as a source of best information available, we may review 
the calculations used to derive the allegations.

Initiation of Investigations

    We have examined the petitions on furfuryl alcohol and have found 
that they meet the requirements of section 732(b) of the Act and 19 CFR 
353.13(a). Therefore, we are initiating antidumping duty investigations 
to determine whether imports of furfuryl alcohol from the PRC, the 
Republic of South Africa, and Thailand are being, or are likely to be, 
sold in the United States at less than fair value. If these 
investigations proceed normally, we will make our preliminary 
determinations by November 7, 1994.

ITC Notification

    Section 732(d) of the Act requires us to notify the ITC of these 
actions, and we have done so.

Preliminary Determination by the ITC

    The ITC will determine by July 15, 1994, whether there is a 
reasonable indication that imports to furfuryl alcohol from the PRC, 
Thailand, and the Republic of South Africa are causing material injury, 
or threaten to cause material injury, to a U.S. industry. A negative 
ITC determination will result in the investigations being terminated; 
otherwise, these investigations will proceed according to statutory and 
regulatory time limits.
    This notice is published pursuant to section 732(c)(2) of the Act 
and 19 CFR 353.13(b).

    Dated: June 20, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-15535 Filed 6-24-94; 8:45 am]
BILLING CODE 3510-D5-M