[Federal Register Volume 59, Number 163 (Wednesday, August 24, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20869]


[[Page Unknown]]

[Federal Register: August 24, 1994]


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DEPARTMENT OF COMMERCE
[A-421-806]

 

Color Negative Photographic Paper (CNPP) and Chemical Components 
Thereof From the Netherlands; Suspension of Investigation

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

ACTION: Notice.

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SUMMARY: The Department of Commerce has decided to suspend the 
antidumping investigation involving color negative photographic paper 
(CNPP) and chemical components thereof from the Netherlands. The basis 
for the suspension is an agreement by the Dutch producers/exporters, 
which account for substantially all of the known imports of these 
products from the Netherlands, to revise their prices to eliminate 
sales of this merchandise to the United States at less than fair value.

EFFECTIVE DATE: August 24, 1994.

FOR FURTHER INFORMATION CONTACT: Steven Presing, Office of Agreements 
Compliance, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-3793.

SUPPLEMENTARY INFORMATION: 

Case History

    On September 20, 1993, the Department initiated an AD investigation 
on CNPP and chemical components thereof from the Netherlands based on a 
petition filed by the Eastman Kodak Company. The International Trade 
Commission issued an affirmative preliminary injury determination on 
October 15, 1993. On March 29, 1994, the Department preliminarily 
determined that imports of CNPP from the Netherlands are being sold at 
less than fair value in the United States .

Scope of the Agreement

    The merchandise covered by this investigation consists of color 
negative photographic paper (CNPP) sensitized, unexposed silver-halide 
color negative photographic paper, whether in master rolls, smaller 
rolls or sheets. Subject chemical components are sensitized (whether 
chemically or spectrally) and unsensitized emulsions, couplers and 
coupler dispersions used in making color negative photographic paper.
    Unsensitized silver-halide emulsions consist of silver-halide 
microcrystals dispersed in a gelatin and water matrix after preparation 
and washing to remove soluble sales. Unsensitized emulsions are 
naturally sensitive to blue and ultraviolet light, but cannot 
efficiently convert light to form a color image without further 
processing. Sensitized emulsions have been treated to increase their 
sensitivity across the entire spectrum and/or treated by the addition 
of spectral sensitizing dyes to make the emulsions selectively 
sensitive to specific wavelengths of light. A coupler dispersion 
consists of a coupler dispersed in a water-gel solution, and may 
contain organic solvents, chemicals to stabilize the coupler and other 
substances.
    Specifically excluded from this suspension agreement are: (1) all 
paper and chemical products not used in the silver-halide process which 
are used in other imaging technologies; (2) precursors of sensitized 
(whether chemically or spectrally) and unsensitized emulsions 
(including ``seed emulsions'' that are used exclusively in the process 
of producing unsensitized emulsions and do not exceed 0.25 microns in 
grain size (in cubic edge length)), couplers and coupler dispersions; 
and (3) those items entered under the Harmonized Tariff Schedule of the 
United States (HTSUS) subheadings 3707.10.0000, 3707.90.3000, 
3707.90.6000, 2933.19.3000, 2933.90.2500 and 2934.90.2000, which are 
precursors of couplers, emulsions and coupler dispersions (except 
couplers dispersed in water gel solution) or are couplers, emulsions, 
and coupler dispersions not for actual use in the color negative 
photographic paper production process. Products outside the scope 
include toner and developer chemicals used in electrostatic or indirect 
imaging processes (e.g., xerography), products used in laser printing, 
and instant photography products.
    Also excluded from the scope of this investigation are paper that 
is designed exclusively for use in graphic arts proofing, equipment and 
does not exceed 160 microns in thickness, and emulsions classified 
under 3707.10.0000 of the Harmonized Tariff Schedule of the United 
States (HTSUS) that are used in the manufacture of monochrome graphic 
arts film or paper that are not used in the production of CNPP.
    The CNPP subject to this investigation are classifiable under HTSUS 
subheadings 3703.10.3030 and 3703.20.3030. Emulsions are currently 
classifiable under HTSUS subheadings 3707.10.0000 and 3707.90.3000. 
Couplers and coupler dispersions are currently classifiable under HTSUS 
subheadings 3707.90.3000, 3707.90.6000, 2933.19.3000, 2933.90.2500 and 
2934.90.2000.

Period of Investigation

    The period of investigation (POI) is March 1, 1993 through August 
31, 1993.

Suspension of Investigation

    The Department consulted with the parties to the proceeding and has 
considered the comments submitted with respect to the proposed 
suspension agreement. We have determined that the agreement will 
eliminate sales of this merchandise to the United States at less than 
fair value, that the agreement can be monitored effectively, and that 
the agreement is in the public interest. We find, therefore, that the 
criteria for suspension of an investigation pursuant to section 734 of 
the Act have been met. The terms and conditions of the agreement, 
signed August 19, 1994, are set forth in Annex 1 to this notice.
    Pursuant to section 734(f)(2)(A) of the Act, effective (date of 
publication of Federal Register notice), the suspension of liquidation 
of all entries, entered or withdrawn from warehouse, for consumption of 
CNPP from the Netherlands, as directed in our notice of ``Antidumping 
Preliminary Determination of Sales at Less than Fair Value, Color 
Negative Photographic Paper and Chemical Components Thereof from the 
Netherlands'' is hereby terminated. Any cash deposits on entries of 
CNPP from the Netherlands pursuant to that suspension of liquidation 
shall be refunded and any bonds shall be released.
    Nothwithstanding the suspension agreement, the Department will 
continue the investigation if we receive such a request in accordance 
with section 734(g) of the Act within 20 days after the date of 
publication of this notice. This notice is published pursuant to 
section 734(f)(1)(A) of the Act.

    Dated: August 19, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.

Annex 1: Suspension Agreement; Color Negative Photographic Paper and 
Chemical Components Thereof From the Netherlands

    Under section 734 of the Tariff Act of 1930, as amended (19 U.S.C. 
1673c) (the Act), and 19 CFR 353.18, the U.S. Department of Commerce 
(the Department) and the signatory producers/exporters of color 
negative photographic paper and chemical components thereof from the 
Netherlands enter into this suspension agreement (the Agreement). On 
the basis of this suspension agreement, the Department shall suspend 
its antidumping investigation initiated on September 20, 1993 (58 FR 
50331), with respect to color negative photographic paper and chemical 
components thereof from the Netherlands, subject to the terms and 
provisions set out below.

(A) Product Coverage

    The merchandise subject to this Agreement is the following 
merchandise which has the Netherlands as its origin:
    (1) For purposes of the Agreement, color negative photographic 
paper is all sensitized, unexposed silver-halide color negative 
photographic paper, whether in master rolls, smaller rolls or sheets. 
Subject chemical components are sensitized (whether chemically or 
spectrally) and unsensitized emulsions, couplers, and coupler 
dispersions used in making color negative photographic paper.
    Unsensitized silver-halide emulsions consist of silver-halide 
microcrystals dispersed in a gelatin and water matrix after preparation 
and washing to remove soluble salts. Unsensitized emulsions are 
naturally sensitive to blue and ultraviolet light, but cannot 
efficiently convert light to form a color image without further 
processing. Sensitized emulsions have been treated to increase their 
sensitivity across the entire spectrum and/or treated by the addition 
of spectral sensitizing dyes to make the emulsions selectively 
sensitive to specific wavelengths of light. A coupler dispersion 
consists of a coupler dispersed in a water-gel solution, and may 
contain organic solvents, chemicals to stabilize the coupler, and other 
substances.
    Specifically excluded from the Agreement are: (1) all paper and 
chemical products not used in the silver-halide process which are used 
in other imaging technologies; (2) precursors of sensitized (whether 
chemically or spectrally) and unsensitized emulsions (including ``seed 
emulsions'' that are used exclusively in the process of producing 
unsensitized emulsions and do not exceed 0.25 microns in grain size (in 
cubic edge length)), couplers and coupler dispersions; and (3) those 
items entered under the Harmonized Tariff Schedule of the United States 
(HTSUS) subheadings 3707.10.0000, 3707.90.3000, 3707.90.6000, 
2933.19.3000, 2933.90.2500 and 2934.90.2000, which are precursors of 
couplers, emulsions and coupler dispersions (except couplers dispersed 
in water-gel solution) or are couplers, emulsions, and coupler 
dispersions not for actual use in the color negative photographic paper 
production process. Products outside the scope include toner and 
developer chemicals used in electrostatic or indirect imaging processes 
(e.g., xerography), products used in laser printing, and instant 
photography products.
    Also excluded from the scope of the Agreement is paper that is 
designed exclusively for use in graphic arts proofing equipment and 
does not exceed 160 microns in thickness, and emulsions classified 
under subheading 3707.10.0000 of the HTSUS that are used in the 
manufacture of monochrome graphic arts film or paper that are not used 
in the production of color negative photographic paper.
    (2) The color negative photographic papers subject to this 
Agreement are classifiable under HTSUS subheadings 3703.10.3030 and 
3703.20.3030. Emulsions are currently classifiable under HTSUS 
subheadings 3707.10.0000 and 3707.90.3000. Couplers and coupler 
dispersions are currently classifiable under HTSUS subheadings 
3707.90.3000, 3707.90.6000, 2933.19.3000, 2933.90.2500 and 
2934.90.2000.

(B) U.S. Import Coverage

    The signatory producers/exporters collectively are the producers 
and exporters in the Netherlands which, during the antidumping 
investigation on the merchandise subject to the Agreement, accounted 
for substantially all (not less than 85 percent) of the subject 
merchandise imported into the United States, as provided in the 
regulations. The Department may at any time during the period of the 
Agreement require additional producers/exporters in the Netherlands to 
sign the Agreement in order to ensure that not less than substantially 
all imports into the United States are covered by the Agreement.
    In reviewing the operation of the Agreement for the purpose of 
determining whether this Agreement has been violated or is no longer in 
the public interest, the Department will consider imports into the 
United States from all sources of the merchandise described in Section 
A of the Agreement. For this purpose, the Department will consider 
factors including, but not limited to, the following: volume of trade, 
pattern of trade, whether or not the reseller is an original equipment 
manufacturer, and the reseller's purchase price (PP).

(C) Basis of the Agreement

    On and after the effective date of the Agreement, each signatory 
producer/exporter individually agrees to make any necessary price 
revisions to eliminate completely any amount by which the foreign 
market value (FMV) of this merchandise exceeds the U.S. price of its 
merchandise subject to the Agreement. For this purpose, the Department 
will determine the FMV in accordance with section 773(e) of the Act and 
U.S. price in accordance with section 772 of the Act.
    (1) For all sales occurring on or after the effective date of the 
Agreement through November 30, 1994, each signatory producer/exporter 
agrees not to sell its merchandise subject to the Agreement to 
unrelated purchasers in the United States at prices that are less than 
its FMV, as determined by the Department based on cost information for 
the period December 1, 1993, through May 31, 1994, and provided to 
parties not later than August 19, 1994; and
    (2) For all sales occurring on or after December 1, 1994, each 
producer/exporter agrees not to sell its merchandise subject to the 
Agreement to any unrelated purchaser in the United States at prices 
that are less than its FMV of the merchandise, as determined by the 
Department on the basis of information submitted to the Department not 
later than the dates specified in section D of the Agreement and 
provided to parties not later than November 20, February 20, May 20, 
and August 20 of each year. This FMV shall apply to sales occurring 
during the fiscal quarter beginning on the first day of the month 
following the date the Department provides the FMV, as stated in this 
paragraph.

(D) Monitoring

    Each signatory producer/exporter will supply to the Department all 
information that the Department decides is necessary to ensure that the 
producer/exporter is in full compliance with the terms of the 
Agreement. As explained below, the Department will provide each 
signatory producer/exporter a detailed request for information and 
prescribe a required format and method of data compilation, not later 
than the beginning of each reporting period.

(1) Sales Information

    The Department will require each producer/exporter to report, on 
computer tape in the prescribed format and using the prescribed method 
of data compilation, each sale (which includes further manufactured 
sales) of the merchandise subject to the Agreement, either directly or 
indirectly to unrelated purchasers in the United States, including each 
adjustment applicable to each sale, as specified by the Department.
    The reporting of further manufacturing costs shall be in accordance 
with Appendix A.
    The first report of sales data shall be submitted to the 
Department, on computer tape in the prescribed format and using the 
prescribed method of data compilation, not later than December 30, 
1994, and shall contain the specified sales information covering the 
period August 19, 1994, to November 30, 1994. Subsequent reports of 
sales data shall be submitted to the Department not later than March 
31, June 30, September 29, and December 30 of each year, and each 
report shall contain the specified sales information for the quarterly 
period ending one month prior to the due date, except that if the 
Department receives information that a possible violation of the 
Agreement may have occurred, the Department may request sales data on a 
monthly, rather than quarterly basis.

(2) Cost Information

    Producer/exporters must request FMVs for all subject merchandise 
that will be sold in the United States. For those products which the 
producer/exporter is requesting FMVs, the Department will require each 
producer/exporter to report: their actual cost of manufacturing; 
selling, general and administrative (SG&A) expenses; further 
manufacturing costs; and profit data on a quarterly basis, in the 
prescribed format and using the prescribed method of data compilation. 
Further manufacturing costs will be subtracted from the U.S. sale price 
to determine compliance with the FMV. As indicated in Appendix B, 
profit from sales to a third country\1\ will be utilized, and country-
specific and consolidated research and development costs will be 
reported by the producers/exporters on a quarterly basis. Each such 
producer/exporter also must report anticipated increases in production 
costs and may report anticipated decreases in production costs in the 
quarter in which the information is submitted resulting from factors 
such as anticipated changes in production yield, changes in production 
process, changes in production quantities or changes in production 
facilities.
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    \1\The Department calculated this figure based on information 
collected during the period of investigation.
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    The first report of cost data shall be submitted to the Department 
not later than September 29, 1994, and shall contain the specified cost 
data covering the period June 1, 1994, through August 31, 1994. Each 
subsequent report shall be submitted to the Department not later than 
December 30, March 31, June 30, and September 29 of each year, and each 
report shall contain specified information for the quarter ending one 
month prior to the due date.

(3) Special Adjustment of Foreign Market Value

    If the Department determines that the FMV is determined for a 
previous quarter was erroneous because the reported costs for that 
period were inaccurate or incomplete, or for any other reason, the 
Department may adjust FMV in a subsequent period or periods, unless the 
Department determines that Section F of the Agreement applies.

(4) Verification

    Each producer/exporter agrees to permit full verification of all 
cost and sales information semi-annually, or more frequently, as the 
Department deems necessary.

(5) Bundling or Other Arrangements

    Producers/exporters agree not to circumvent the Agreement. In 
accordance with the date set forth in Section D(1) of the Agreement, 
producers/exporters will submit a written statement to the Department 
certifying that the sales reported herein were not, or are not part of 
or related to, any bundling arrangement, on-site processing 
arrangement, discounts/free goods/financing package, swap, or other 
exchange where such arrangement is designed to circumvent the basis of 
the Agreement.
    Where there is reason to believe that such an arrangement does 
circumvent the basis of the Agreement, the Department will request 
producers/exporters to provide within 15 days all particulars regarding 
any such agreement, including, but not limited to, sales information 
pertaining to covered and non-covered merchandise that is manufactured 
or sold by producers/exporters. The Department will accept written 
comments, not to exceed 30 pages, from all parties no later than 15 
days after the date of receipt of such producer/exporter information.
    If the Department, after reviewing all submissions, determines that 
such arrangement circumvents the basis of the Agreement, it may, as it 
deems most appropriate, utilize one of two options: (1) the amount of 
the effective price discount resulting from such arrangement shall be 
reflected in FMV in accordance with Section D(3), or (2) the Department 
shall determine that the Agreement has been violated and take action 
according to the provisions under Section F.

(6) Rejection of Submissions

    The Department may reject any information submitted after the 
deadlines set forth in this section or any information which it is 
unable to verify to its satisfaction. If information is not submitted 
in a complete and timely fashion or is not fully verifiable, the 
Department may calculate fair value, FMV, and/or U.S. price based on 
best information available, as it determines appropriate, unless the 
Department determines that Section F applies.

(E) Disclosure and Comment

    (1) The Department may make available to representatives of each 
domestic party to the proceeding, under appropriately drawn 
administrative protective orders, business proprietary information 
submitted to the Department during the reporting period as well as the 
results of its analysis under section 773 of the Act.
    (2) Not later than November 1, February 1, May 1, and August 1 of 
each year, the Department will disclose to each producer/exporter the 
results and the methodology of the Department's calculations of its 
FMV. At that time, the Department may also make available such 
information to the domestic parties to the proceeding, in accordance 
with this section.
    (3) Not later than 7 days after the date of disclosure under 
paragraph E(2), the parties to the proceeding may submit written 
comments to the Department, not to exceed 15 pages. After reviewing 
these submissions, the Department will provide to each producer/
exporter its FMV as provided in paragraph C(2). In addition, the 
Department may provide such information to domestic interested parties 
as specified in this section.

(F) Violations of the Agreement

    If the Department determines that the Agreement is being or has 
been violated or no longer meets the requirements of section 734 (b) or 
(d) of the Act, the Department shall take action it determines 
appropriate under section 734(i) of the Act and the regulations. In the 
event that the Department determines that the investigation shall be 
resumed, it will be resumed on the basis of the original administrative 
record, and the statutes, regulations, policies, and practices in 
effect on the effective date of the Agreement.

(G) Provision for Existing Commitments

    Pursuant to Appendix C and the terms and conditions outlined below, 
producers/exporters may continue shipments under existing commitments 
and their existing terms for a period not to exceed 60 days after the 
effective date of the Agreement. Recognizing that certain long-term 
contracts must be renegotiated and that terminated customers may 
require time to find alternative suppliers, the producers/exporters may 
continue shipments under existing contract terms for a period, the 
deadline of which is equal to the earliest of: (1) the earliest date on 
which an alternative supplier can begin supplying the customer; (2) the 
earliest date, not to exceed 45 days, on which an existing customer has 
renegotiated the contract terms with the producer/exporter, or (3) 60 
days after the effective date of the Agreement to customers who are 
terminated.
    Appendix C contains a list of companies subject to this provision 
along with their corresponding requirements that have been approved for 
shipment by the producer/exporter under this provision. Total shipments 
to a specific company may not exceed that company's corresponding 
quantity listed on Appendix C or the aggregate for ``all other'', in 
the case for smaller customers. Appendix C also contains the total 
shipment quantity allowable under this provision for all companies; 
this amount is less than the sum of the individual company requirements 
listed on Appendix C. This difference is in anticipation of termination 
prior to all permitted shipments taking place to individual customers.
    If a company renegotiates or terminates its commitments with the 
producer/exporter prior to receiving and accepting its maximum 
shipments approved, this provision no longer applies and the company 
will be removed from those eligible under Appendix C. The remaining 
quantities that have not been shipped, but were approved for a certain 
customer, may not be used to increase another customer's corresponding 
requirements. The maximum customer-specific quantities listed in 
Appendix C cannot be increased to account for undershipments to other 
customers. If a customer would like to accept additional supply above 
and beyond its corresponding quantity listed in Appendix C, these sales 
must be made at or above the applicable FMV.
    If a company-specific shipment would bring the total shipments for 
all companies to an amount in excess of the total quantity allowable, 
the producer/exporter must only ship a quantity that ensures compliance 
with the total quantity allowable for all companies. Any quantities in 
excess of the total quantity allowable must be sold at or above the 
applicable FMV.
    The producer/exporter shall notify the Department weekly of each 
shipment made under this provision and provide a written statement from 
the producer/exporter certifying that each shipment is pursuant to 
commitments listed in Appendix C. The certification must contain all 
particulars concerning each specific shipment including, but not 
limited to, customer, date, quantity, price, and delivery and 
particulars concerning the terms and conditions under which the 
shipment is being made. The Department will review and approve the 
certification upon receipt, thereby monitoring on an individual basis 
all such shipments to ensure compliance with this provision. Where 
there is reason to believe that shipments, which do not meet the 
criteria described above, have nonetheless been shipped under this 
provision, and that certification has been made falsely, the producer/
exporter will share within 5 days of any such request from the 
Department all particulars regarding such shipment(s). After reviewing 
the information, the Department will determine whether the terms of 
this provision have been satisfied. If the Department determines that a 
certification has been provided falsely or does not meet the 
requirements of this provision, Section F of the Agreement applies.
    At the end of the 60 days, the Department will calculate upon 
request the total difference between the FMV in effect on the date of 
shipment and the actual net price at which the goods were sold. The 
total difference will be added to the FMV to be in effect during 
succeeding period(s). The resulting FMV will apply to a number of units 
identical to the number for which a difference was calculated. The 
specific units to which this resulting FMV will apply will be those 
units first sold in the succeeding quarter.
    To the extent necessary, this provision supersedes the dates set 
forth in Section C of the Agreement.

(H) Non-Participating Signatories

    For signatories which did not receive a questionnaire in the less-
than-fair-value investigation on the subject merchandise, the 
Department will issue, if requested in a timely manner, the initial FMV 
9 months after the effect date of the Agreement. The total sales volume 
made during the 9-month period prior to the issuance of the initial FMV 
may not exceed the total sales volume made by the signatory during the 
period January 1994 through June 1994. All sales made by the 
signatories will be made during this 9-month period at prices that are 
not less than fair value.
    At the end of the initial 9 months, the Department may upon request 
review all sales made during this period. For those sales which have 
occurred, the Department will calculate an FMV using information for 
the most recent 9-month period available. The Department will calculate 
the total difference between the FMV and the actual price at which the 
goods were sold. The total difference will be added to the FMV to be in 
effect during the succeeding period(s). The resulting FMV will apply to 
a number of units identical to the number for which a difference was 
calculated. The specific units to which this resulting FMV will apply 
will be those units first sold in the succeeding quarter(s).
    For all sales of covered merchandise made after the 9-month period 
the producer/exporter must request an FMV consistent with Section D(2) 
of the Agreement. Signatories will collect and report all information 
required by the Department for the calculation of FMV in the format 
specified under the Agreement.
    The Department will consult with the signatories regarding data 
preparation and reporting format in order to ensure that all 
requirements are met.
    To the extent necessary, this provision supersedes the dates set 
forth in Section C of the Agreement.

(I) Re-Export Provision

    Imports into the United States of subject merchandise which are 
physically incorporated into a further manufactured product by a 
related party and are subsequently exported by the related party, are 
not covered by the Agreement if the following conditions apply. Upon 
request by the producer/exporter, the Department may approve a system 
which tracks imports of covered merchandise through production, to the 
point of re-export, and allows for verification.
    The approved system will reflect an understanding between the 
Department and the producer/exporter that there have been a historical 
volume of entries of covered merchandise imported into the United 
States and subsequently exported in the form of a further manufactured 
good by a related party. Understanding this history, and taking into 
consideration an element for growth, the Department and the producer/
exporter will agree that the volumes of entries for the duration of the 
Agreement will not be inconsistent with that history. The producer/
exporter agrees to provide quarterly reports detailing the entries and 
subsequent re-exports which will be subject to verification semi-
annually or more frequently as the Department deems appropriate.

(J) Other Provision

    (1) In entering into the Agreement, the signatory producers/
exporters do not admit that any sales of the merchandise subject to the 
Agreement have been made at less-than-fair-value.
    (2) Changes in U.S. legislation resulting from U.S. implementation 
of Article VI of GATT 1994, shall be applicable to the requirements and 
obligations of the Agreement for the period beginning on the first full 
quarter after the effective date of any such changes.

(K) Termination

    The Department will not consider requests for termination of this 
suspended investigation prior to August 1999. Termination will be 
conducted in accordance with section 353.25 of the Department's 
regulations.
    Any producer/exporter may terminate the Agreement at any time upon 
notice to the Department. Termination shall be effective 60 days after 
such notice is given to the Department. Upon termination, the 
Department shall follow the procedures outlined in section 734(i)(1) of 
the Act.

(L) Definitions

    For purposes of the Agreement, the following definitions apply:
    (1) U.S. PRICE--means the price at which merchandise is sold by the 
producer or exporter to the first unrelated party in the United States, 
including the amount of any discounts, rebates, price protection or 
ship and debit adjustments, and other adjustments affecting the net 
amount paid or to be paid by the unrelated purchaser, as determined by 
the Department under section 772 of the Act.
    (2) FOREIGN MARKET VALUE--means the constructed value (CV) of the 
merchandise, as determined by the Department under section 773 of the 
Act and the corresponding sections of the Department's regulations, as 
determined by the Department.
    (3) PRODUCER/EXPORTER--means (1) the foreign manufacturer or 
producer, (2) the foreign producer or reseller which also exports, and 
(3) the related person by whom or for whose account the merchandise is 
imported into the United States, as defined in section 771(13) of the 
Act.
    (4) DATE OF SALE--means the date on which the essential terms of 
the contract, including price, are agreed and determinable normally the 
date of confirmation of sale.
    The effective date of the Agreement is the date on which it is 
published in the Federal Register.

    For Dutch Producers/Exporters.

    Fuji Photo Film U.S.A. Inc., and Fuji Photo Film B.V.

  Date-----------------------------------------------------------------
William H. Barringer, Esq.,
Willkie, Farr & Gallagher.
    For U.S. Department of Commerce.

  Date-----------------------------------------------------------------
Susan G. Esserman,
Assistant Secretary for Import Administration.

APPENDIX A--COLOR NEGATIVE PHOTOGRAPHIC PAPER (CNPP) AND CERTAIN 
CHEMICAL COMPONENTS FROM THE NETHERLANDS SUSPENSION AGREEMENT 
PRINCIPLES OF COST

General Framework

    The cost information reported to the Department that will form the 
basis of the FMV calculations for purposes of the Agreement must be:
     comprehensive in nature and based on a reliable accounting 
system (i.e., a system based on well-established standards and can be 
tied to the audited financial statements);
     representative of the company's costs incurred for the 
general class of merchandise;
      calculated on a quarterly weighted-average basis of the 
plants or cost centers manufacturing the product;
     based on fully-absorbed costs of production, including any 
downtime;
     valued in accordance with generally accepted accounting 
principles;
     reflective of appropriately allocated common costs so that 
the cost necessary for the manufacturing of the product are not 
absorbed by other products; and
     reflective of the actual cost of producing the product.
    Additionally, a single figure should be reported for each cost 
component.

Cost of Manufacturing

    Costs of manufacturing are reported by major cost category and for 
major stages of production. Weighted-average costs are used for a 
product that is produced at more than one facility (including further 
manufacturing in the United States); based on the cost at each 
facility.
    Direct materials--cost of those materials which are input into the 
production process and physically become part of the final product.
    Direct labor--cost identified with a specific product. These costs 
are not allocated among products except when two or more products are 
produced at the same cost center. Direct labor costs should include 
salary, bonus, and overtime pay, training expenses, and all fringe 
benefits. Any contracted-labor expense should reflect the actual billed 
cost or the actual costs incurred by the subcontractor when the 
corporation has influence over the contractor.
    Factory overhead--overhead costs include indirect materials, 
indirect labor, depreciation, and other fixed and variable expenses 
attributable to a production line or factory. Because overhead costs 
are typically incurred for an entire production line, an appropriate 
portion of those costs must be allocated to covered products, as well 
as any other products produced on that line. Acceptable cost 
allocations can be based on labor hours or machine hours. Overhead 
costs should also reflect any idle or downtime and be fully absorbed by 
the products.

Cost of Production (COP)

    Is equal to the sum of materials, labor, and overhead (COM) plus 
SG&A expenses in the home market (HM).
    SG&A--those expenses incurred for the operation of the corporation 
as a whole and not directly related to the manufacture of a particular 
product. They include corporate general and administrative expenses, 
financing expenses, financing expenses, and general research and 
development expenses. Additionally, direct and indirect selling 
expenses incurred in the HM for sales of the product under 
investigation are included. Such expenses are allocated over cost of 
goods sold.

Constructed Value

    Is equal to the sum of materials, labor, and overhead (COM) and 
SG&A expenses plus profit.

Calculation of Suspension Agreement FMVs

    FMVs (for purposes of the Agreement) are calculated by adjusting 
the CV and are provided for both PP and ESP transactions. In effect, 
any expenses uniquely associated with the covered products sold in the 
HM are subtracted from the CV, and any such expenses which are uniquely 
associated with the covered products sold in the United States are 
added to the CV to calculate the FMV.
    Purchase price--price at which the exported merchandise is sold to 
the first unrelated buyer when the sale occurs prior to the 
importation. Typically, when the producer sells directly to an 
unrelated U.S. importer or to a foreign trading company for export to 
the United States. For PP FMVs, the CV is adjusted for movement costs, 
packing costs, and differences in direct selling expenses such as 
commissions, credit, warranties, technical services, advertising, and 
sales promotion.
    Exporter's sales price--price at which the exported merchandise is 
sold to the first unrelated buyer after importation into the United 
States. Typically, when a related party in the United States makes the 
sale. For ESP FMVs, the CV is adjusted similar to PP sales, with 
differences for adjustments to U.S. and HM indirect-selling expenses.
    Home market direct-selling expenses--expenses that are incurred as 
a direct result of a sale. These include such expenses as commissions, 
co-op advertising, discounts and rebates, credit, warranty expenses, 
freight costs, etc. Certain direct-selling expenses are treated 
individually. They include:
    Commission expenses--payments to unrelated parties for sales in the 
HM.
    Credit expenses--expenses incurred for the extension of credit to 
the HM customers.
    Movement expenses--freight, brokerage and handling, packing, and 
insurance expenses.
    Home market indirect-selling expenses--fixed portion of a 
corporation's expenses and includes such items as salaries of 
administrative personnel, warehousing expenses, advertising expenses, 
and sales promotion. These expenses will not increase or decrease 
depending on production or sales.
    U.S. direct-selling expenses--the same as HM direct-selling 
expenses except that they are incurred in the United States for sales 
in the United States.
    Movement expenses--additional expenses incidental to importation 
into the United States. Typically include U.S. inland freight, 
insurance, brokerage and handling expenses, U.S. Customs duties, and 
international ocean, air, or land freight.
    U.S. indirect-selling expenses--include general-fixed expenses 
incurred by the U.S. sales subsidiary or related exporter for sales to 
the United States. They may also include a portion of indirect expenses 
incurred in the HM for export sales.

Further Manufacturing

    Further manufacturing costs are calculated by taking the sum of 
COM, plus SG&A expenses, plus profit in the U.S. market for further 
manufacturing. Where further manufacturing modifies the subject 
merchandise to the extent that the finished product is no longer within 
the scope of the investigation, the Department will provide its 
calculations of further manufacturing.
For ESP Transactions
 direct materials
+  direct labor
+  factory overhead
=  Cost of Manufacturing
+  home market SG&A\2\
---------------------------------------------------------------------------

    \2\Home market SG&A must be at least 10 percent of the cost of 
manufacturing.
---------------------------------------------------------------------------

=  Cost of Production
+  Profit\3\
---------------------------------------------------------------------------

    \3\Profit must be at least 8 percent of the cost of production.
---------------------------------------------------------------------------

=  Constructed Value
+  U.S. direct-selling expense
+  U.S. indirect-selling expense
+  U.S. commission expense
+  U.S. movement expense
+  U.S. credit expense
- HM direct-selling expense
- HM indirect-selling expense\4\
---------------------------------------------------------------------------

    \4\This expense is capped and can be no greater than either (1) 
the total of U.S indirect-selling expense or (2) the combined total 
of U.S. indirect-selling expense and U.S. commission when no HM 
commissions are paid.
---------------------------------------------------------------------------

- HM commission expense
- HM credit expense
=  FMV for ESP sales
For PP Transactions
 direct materials
+  direct labor
+  factory overhead
=  Cost of Manufacturing
+  home market SG&A\5\
---------------------------------------------------------------------------

    \5\Home market SG&A must be at least 10 percent of the cost of 
manufacturing.
---------------------------------------------------------------------------

=  Cost of Production
+  Profit\6\
---------------------------------------------------------------------------

    \6\Profit must be at least 8 percent of the cost of production.
---------------------------------------------------------------------------

=  Constructed Value
+  U.S. direct-selling expense
+  U.S. commission expense
+  U.S. movement expense
+  U.S. credit expense
- HM direct-selling expense
- HM commission expense\7\
---------------------------------------------------------------------------

    \7\If the company does not have HM commissions, HM indirects are 
subtracted only up to the amount of U.S. commissions.
---------------------------------------------------------------------------

- HM credit expense
=  FMV for PP sales
For Further Manufacturing
 direct materials
+  direct labor
+  factory overhead
=  Cost of Further Manufacturing
+  further manufacturing SG&A
=  Further Manufacturing Cost of Production
+  further manufacturing profit
=  Total Further Manufacturing Costs

Appendix B--Profit Calculation

    The profit figure represents the profit from sales of CNPP to 
unrelated customers in Germany during the period of Investigation 
(POI). The Department computed the profit percentage in the 
following manner:

Gross Sales Price
    --Discounts
    --Rebates
    --Movement Expenses
=Net Price
Less: Cost of Production (materials, labor, overhead, selling, 
general and administrative expenses, interest, other, packing)
=Profit per transaction
Profit percentage=Profit from all transactions/COP from all 
transactions
=[  ] percent

BILLING CODE 3510-DS-M

TN24AU94.000


[FR Doc. 94-20869 Filed 8-22-94; 8:45 am]
BILLING CODE 3510-DS-C