[Federal Register Volume 59, Number 241 (Friday, December 16, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30983]


[[Page Unknown]]

[Federal Register: December 16, 1994]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE
[A-791-802]

 

Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Furfuryl Alcohol From 
the Republic of South Africa

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

EFFECTIVE DATE: December 16, 1994.

FOR FURTHER INFORMATION CONTACT: Lori Way or John Brinkmann, Office of 
Antidumping Investigations, Import Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone (202) 482-0656 or 482-5288, respectively.

Preliminary Determination

    We preliminarily determine that imports of furfuryl alcohol from 
the Republic of South Africa (South Africa) are being, or are likely to 
be, sold in the United States at less than fair value, as provided in 
section 733 of the Tariff Act of 1930, as amended (the Act). The 
estimated margins are shown in the ``Suspension of Liquidation'' 
section of this notice.

Case History

    Since the initiation of this investigation on June 20, 1994 (59 FR 
32953, June 27, 1994), the following events have occurred.
    On July 15, 1994, the U.S. International Trade Commission (ITC) 
issued an affirmative preliminary injury determination in this case 
(see 59 FR 38201, July 27, 1994).
    On July 19, 1994, officials of the Department of Commerce (the 
Department) visited the petitioner's facilities to observe the furfuryl 
alcohol production process for purposes of developing the 
questionnaire.
    On August 3, 1994, the Department issued an antidumping 
questionnaire to Illovo Sugar Limited (ISL), which accounted for at 
least 60 percent of the exports of the subject merchandise to the 
United States during the period of investigation (POI). In August 1994, 
officials from the Department presented this questionnaire to ISL in 
South Africa.
    On August 29, 1994, ISL submitted its response to Section A of our 
questionnaire. On September 21, 1994, ISL submitted its response to 
Sections B and C of our questionnaire. A supplemental questionnaire was 
issued on October 19, 1994. On November 7, 1994, ISL submitted its 
response to this supplemental questionnaire. QO Chemicals, Inc. (the 
petitioner) submitted comments regarding deficiencies in the ISL's 
questionnaire responses in September, October and November 1994. ISL 
submitted comments regarding the petitioner's submissions in September 
and November 1994.
    On October 7, 1994, the petitioner requested that the preliminary 
determination be postponed until December 9, 1994. We have done so in 
accordance with 19 CFR 353.15(c) (1994).

Cost of Production Allegation

    On October 25, 1994, the petitioner filed an allegation that ISL's 
home market sales of furfuryl alcohol during the POI were sold at less 
than the cost of production (COP). On November 9, 1994, we issued a 
deficiency letter regarding the allegation. The petitioner filed 
supplements to its COP allegation in October, November and December 
1994. During November and December 1994, ISL filed numerous submissions 
regarding the petitioner's COP allegation. Based on our analysis of 
this allegation, we have determined that a COP investigation is 
warranted. We will determine whether ISL had made sales below COP for 
the final determination.

Postponement of Final Determination

    Pursuant to section 735(a)(2)(A) of the Act, ISL requested on 
December 2, 1994, that, in the event of an affirmative preliminary 
determination in this investigation, the Department postpone the final 
determination until no later than 135 days after the date of 
publication of an affirmative preliminary determination in the Federal 
Register. Pursuant to 19 CFR 353.20(b), because our preliminary 
determination is affirmative, and no compelling reasons for denial 
exist, we have done so.

Scope of the Investigation

    The product covered by this investigation is furfuryl alcohol 
(C4H3OCH2OH). Furfuryl alcohol is a primary alcohol, and 
is colorless or pale yellow in appearance. It is used in the 
manufacture of resins and as a wetting agent and solvent for coating 
resins, nitrocellulose, cellulose acetate, and other soluble dyes.
    The product subject to this investigation 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 this investigation is dispositive.

Period of Investigation

    The period of investigation (POI) is December 1, 1993, through May 
31, 1994.

Such or Similar Comparisons

    We have determined that the products covered by this investigation 
constitute a single category of such or similar merchandise. ISL 
reported that it sold merchandise in the home market identical to that 
sold in the United States. Accordingly, no difference in merchandise 
information was reported in ISL's sales listings. In accordance with 19 
CFR 353.58, we made comparisons at the same level of trade, where 
possible.

Fair Value Comparisons

    To determine whether sales by ISL of furfuryl alcohol to the United 
States were made at less than fair value, we compared the United States 
price (USP) to the foreign market value (FMV), as specified in the 
``United States Price'' and ``Foreign Market Value'' sections of this 
notice.

United States Price

    For the purpose of this preliminary determination, we have found 
that ISL and its exclusive selling agent, Harborchem, are related 
parties pursuant to Section 771(13) of the Act (See concurrence 
memorandum, dated December 7, 1994, on file in Room B-099 of the Main 
Commerce Department building), and that all of ISL's U.S. sales to the 
first unrelated purchaser took place after importation into the United 
States. Therefore, we based USP on exporter's sales prices, in 
accordance with section 772(c) of the Act. The claimed relationship 
between ISL and Harborchem is based on one of agency. We will, however, 
reexamine the issue of agency for the purpose of the final 
determination.
    We calculated ISL's exporter's sales price sales based on FOB U.S. 
storage or delivered prices to unrelated customers in the United 
States. We made deductions, where appropriate, for the following 
movement charges in accordance with section 772(e) of the Act: foreign 
loading on ship, foreign inland freight, ocean freight, marine 
insurance, tank car rental, U.S inland freight, U.S. inland insurance, 
U.S. brokerage and handling, and U.S. duty. We also made deductions, 
where appropriate, for credit expenses, indirect selling expenses 
incurred in South Africa, and indirect selling expenses incurred in the 
United States, including quality control testing, inventory carrying 
expenses, warehousing expenses, and U.S. storage insurance.
    We did not make one of the adjustments for freight claimed by 
Harborchem because there is not adequate information on the record to 
support this adjustment. Further, we did not make an adjustment to the 
margin for export incentive payments received by ISL from the 
Government of the Republic of South Africa through the Government's 
General Export Incentive Scheme because there is no on-going companion 
countervailing duty investigation and no such duties are currently 
being collected (see concurrence memorandum, dated December 7, 1994).
    We adjusted USP for taxes in accordance with our practice, pursuant 
to the U.S. Court of International Trade (CIT) decision in Federal-
Mogul Corp. v. United States, 834 F. Supp. 1391 (CIT 1993). (See Notice 
of Final Determination of Sales at Less Than Fair Value: Calcium 
Aluminate Cement, Cement Clinker and Flux from France, 59 FR 14136 
(March 25, 1994).)

Foreign Market Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating 
FMV, we compared the volume of home market sales of the subject 
merchandise to the volume of third country sales of subject 
merchandise, in accordance with section 773(a)(1)(B) of the Act. Since 
the total volume of subject merchandise sold by ISL in South Africa 
during the POI was greater than five percent of the aggregate volume of 
third country sales for such or similar merchandise, we determined that 
the home market was viable within the meaning of 19 CFR 353.48(a). 
Therefore, we based FMV on home market sales.
    In accordance with 19 CFR 353.46, we calculated FMV based on FOB 
storage or delivered prices to unrelated customers. We treated both 
pre-sale home market movement expenses and pre-sale home market 
warehousing expenses as indirect expenses and adjusted for these 
expenses under the exporter's sales price offset provision set forth in 
19 CFR 353.56(b)(2), as appropriate.
    We treated post-sale home market inland freight as a direct expense 
and deducted this expense from FMV. Pursuant to 19 CFR 353.56(a)(2), we 
made circumstance-of-sale adjustments, where appropriate, for 
differences in credit expenses. We recalculated home market credit 
expenses based on gross prices exclusive of imputed value added tax 
expenses. We also deducted from FMV rebates and the weighted-average 
home market indirect selling expenses including, where appropriate, 
inventory carrying costs, pre-sale warehousing expenses and certain 
home market inland freight expenses. The deduction for home market 
indirect selling expenses was capped by the sum of U.S. indirect 
selling expenses, in accordance with 19 CFR 353.56(b)(1) and (2). We 
deducted home market packing and added U.S. packing costs, in 
accordance with section 773(a)(1) of the Act.
    We adjusted for taxes in accordance with our practice. (See the 
``United States Price'' section of this notice, above.)
    Although we allowed a discount, we did not deduct an amount for 
quantity discounts because ISL failed to place adequate information on 
the record to demonstrate that the discount met the criteria for 
quantity discounts set forth in 19 CFR 353.55(b) (see concurrence 
memorandum). We did not exclude home market sales of furfuryl alcohol 
packed in drums from the base of home market sales used for comparison 
to U.S. sales, as requested by ISL, because ISL did not demonstrate 
that these sales were outside its ordinary course of business.

Currency Conversion

    We made currency conversions based on the official exchange rates 
in effect on the dates of the U.S. sales as certified by the Federal 
Reserve Bank.

Verification

    As provided in section 776(b) of the Act, we will verify all 
information that we determine is acceptable for use in making our final 
determination.

Suspension of Liquidation

    In accordance with section 733(d)(1) of the Act, we are directing 
the Customs Service to suspend liquidation of all entries of furfuryl 
alcohol from South Africa that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register. The Customs Service shall require a 
cash deposit or posting of a bond equal to the estimated preliminary 
dumping margins, as shown below. This suspension of liquidation will 
remain in effect until further notice. The less than fair value margins 
are as follows:

------------------------------------------------------------------------
                                                               Weighted-
                                                                average 
               Producer/manufacturer/exporter                   margin  
                                                              percentage
------------------------------------------------------------------------
Illovo Sugar Limited........................................       10.84
All others..................................................       10.84
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine whether these imports are materially injuring, 
or threaten material injury to, the U.S. industry before the later of 
120 days after the date of this preliminary determination or 45 days 
after our final determination.

Public Comment

    Interested parties who wish to request a hearing must submit a 
written request to the Assistant Secretary for Import Administration, 
U.S. Department of Commerce, Room B-099, within ten days of the 
publication of this notice. Requests should contain: (1) the party's 
name, address and telephone number; (2) the number of participants; and 
(3) a list of the issues to be discussed.
    In accordance with 19 CFR 353.38, case briefs or other written 
comments in at least ten copies must be submitted to the Assistant 
Secretary no later than March 17, 1995, and rebuttal briefs no later 
than March 22, 1995. A public hearing, if requested, will be held on 
March 24, 1995, at 9:30 a.m. at the U.S. Department of Commerce, in 
Room 1414, 14th Street and Constitution Avenue, NW, Washington, DC 
20230. Parties should confirm by telephone the time, date, and place of 
the hearing 48 hours prior to the scheduled time. In accordance with 19 
CFR 353.38(b), oral presentations will be limited to issues raised in 
the briefs.
    If this investigation proceeds normally, we will make our final 
determination no later than 135 days after publication of this notice 
in the Federal Register.
    This determination is published pursuant to section 733(f) and 
735(d) of the Act and 19 CFR 353.15(a)(4) and 353.20(b)(2).

    Dated: December 9, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-30983 Filed 12-15-94; 8:45 am]
BILLING CODE 3510-DS-P