[Federal Register Volume 60, Number 141 (Monday, July 24, 1995)]
[Notices]
[Pages 37872-37875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18136]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-122-047]
Elemental Sulphur From Canada; Preliminary Results of Antidumping
Finding Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Preliminary Results of Antidumping Finding
Administrative Review.
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SUMMARY: In response to a request by a U.S. producer, the Department of
Commerce (the Department) is conducting an administrative review of the
antidumping finding on elemental sulphur from Canada. The review covers
15 manufacturers/exporters of the subject merchandise to the United
States and the period December 1, 1991 through November 30, 1992.
As a result of the review, we have preliminarily determined that
dumping margins exist for certain of these respondents. If these
preliminary results are adopted in our final results of administrative
review, we will instruct U.S. Customs to assess antidumping duties at
the prescribed rates.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: July 24, 1995.
FOR FURTHER INFORMATION CONTACT: Thomas O. Barlow, Office of
Antidumping Compliance, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue NW, Washington, DC 20230, telephone: (202) 482-
0410.
SUPPLEMENTARY INFORMATION:
Background
On December 17, 1973, the Department of the Treasury published in
the Federal Register (38 FR 34655) an antidumping finding with respect
to elemental sulphur from Canada. On December 4, 1992, the Department
published a notice of ``Opportunity to Request an Administrative
Review'' of this antidumping finding for the period December 1, 1991
through November 30, 1992 (57 FR 57419). We received a timely request
from Pennzoil Sulphur Company (Pennzoil), a domestic producer of
elemental sulphur, for review of the finding with respect to Alberta
Energy Co., Ltd. (Alberta), Allied Corporation (Allied), Brimstone
Export (Brimstone), Burza Resources (Burza), Canamex, Delta Marketing
(Delta), Drummond Oil & Gas, Ltd. (Drummond), Fanchem, Husky Oil, Ltd.
(Husky), Mobil Oil Canada, Ltd. (Mobil), Norcen Energy Resources
(Norcen), Petrosul International (Petrosul), Real International (Real),
Saratoga Processing Co., Ltd. (Saratoga), and Sulbow Minerals (Sulbow).
Pennzoil is a producer of elemental sulphur, and, thus, an ``interested
party'' as defined by 771(9)(C) of the Tariff Act of 1930, as amended
(the Act) and Sec. 353.2(k)(3) of the Department's regulations. This
review was initiated on February 23, 1993 (58 FR 11026) with respect to
all 15 of the companies listed above. On March 25, 1993, the Department
issued antidumping sales questionnaires to respondents. On June 23,
1993, Pennzoil filed allegations of sales below the cost of production
(COP) against Mobil, Husky, and Petrosul. On December 3, 1993, the
Department initiated cost investigations of these three respondents and
issued COP questionnaires on December 6, 1993. The Department is
conducting this review in accordance with section 751 of the Act.
Scope of the Review
The period of review (POR) is December 1, 1991 through November 30,
1992. Imports covered by this review are shipments of elemental sulphur
from Canada. This merchandise is classifiable under Harmonized Tariff
Schedule (HTS) subheadings 2503.10.00, 2503.90.00, and 2802.00.00.
The HTS subheading is provided for convenience and for U.S. Customs
purposes. The written description of the scope of this order remains
dispositive as to product coverage.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and to the
Department's regulations are references to the provisions as they
existed on December 31, 1994.
United States Price (USP)
The Department has calculated a dumping margin only for Husky. (see
explanations below for analyses of remaining firms.)
In calculating USP for Husky, the Department used purchase price as
defined in section 772(b) of the Act, because the merchandise was sold
to unrelated U.S. purchasers prior to importation. Husky sold primarily
liquid sulphur to the United States during the POR but also had sales
of bagged and powdered elemental sulphur.
We calculated purchase price based on an ex-factory f.o.b. Canadian
plant, or customer's specific delivery point bases. We made
adjustments, where applicable, for discounts and movement expenses in
accordance with section 772(d)(2) of the Act.
Foreign Market Value (FMV)
Husky did not have a viable home market during the POR. Therefore,
Husky reported third-country sales of formed (e.g., prilled) elemental
sulphur. Section 773(a)(4)(C) of the Act provides that a difference-in-
merchandise (DIFMER) allowance may be made when a product on which FMV
is based is not identical to that exported to the United States.
Section 353.57 of the Department's regulations provides that the
allowance will normally be based on differences in cost of production,
but may be based on differences in market value. The Department makes
DIFMER adjustments on the basis of precise physical differences. In
addition, the cost differences which form the adjustment must be
related to those physical differences and not to
[[Page 37873]]
extraneous factors. Further, when the DIFMER is greater than twenty
percent of the U.S. product's total cost of manufacture (COM), the
Department resorts to constructed value (CV) to establish FMV. See
Differences in Merchandise; 20% Rule, Import Administration Policy
Bulletin: Number 92.2, July 29, 1992 (``Policy Bulletin No. 92.2'').
For purposes of these preliminary results, we determined that variable
manufacturing cost differences of formed elemental sulphur exceeded
twenty percent of the total average cost of manufacture, on a model-
specific basis, of the product exported to the United States (liquid,
powdered and bagged). Therefore, in accordance with Department policy
and section 773(a)(2) of the Act, we calculated FMV based on the CV of
the merchandise sold in the United States.
In accordance with section 773(e) of the Act, CV includes the costs
of materials and fabrication, general expenses, profit, and, where
relevant, packing for shipment to the United States. We adjusted
Husky's reported COM by disallowing the offset of processing income
against operating costs and increasing depreciation by basing it on a
cost basis allocation methodology as opposed to a net-realizable value
allocation methodology (See COP and CV Calculation Adjustment Memo for
the Preliminary Determination of Elemental Sulphur From Canada--Husky
Oil Ltd., July 7, 1995). We used Husky's third-country selling expenses
pursuant to section 773(e)(1)(B) of the Act. We used Husky's actual
general expenses as they were greater than the statutory minimum of ten
percent of COM but applied the statutory eight percent for profit to
COP.
We made circumstance-of-sale adjustments for differences in credit
and royalty expenses.
No other adjustments were claimed or allowed.
Non-Shippers
Based on the information on the record, the Department has
determined that Allied, Alberta, and Norcen had no shipments to the
United States during the POR. Because these firms have never been
subject to a review and, therefore, do not have their own rates in
place, entries of their merchandise will continue to enter under the
``All Others'' category.
Best Information Available
As a result of our review, we have preliminarily determined to
apply best information available (BIA) to various firms. (See company
specific descriptions below.)
Section 776(c) of the Act requires the Department to use BIA
``whenever a party or any other person refuses or is unable to produce
information requested in a timely manner or in the form required, or
otherwise significantly impedes an investigation.''
Department regulations provide that ``[t]he Secretary will use the
best information available whenever the Secretary (1) [d]oes not
receive a complete, accurate, and timely response to the Secretary's
request for factual information; or (2) [i]s unable to verify, within
the time specified, the accuracy and completeness of the factual
information submitted.'' 19 CFR 353.37(a).
In deciding what to use as BIA, the Department's regulations
provide that the Department may take into account whether a party
refuses to provide requested information. 19 CFR 353.37(b). Prior
Department practice has been to determine, on a case-by-case basis,
what constitutes BIA. This can be a decision to apply total BIA to a
respondent or partial BIA (the selective use of individual pieces of
data to substitute for missing or unreliable data in a dumping
analysis).
In Allied-Signal Aerospace Co. v. United States, 996 F.2d 1185,
1191-92 (Fed. Cir. 1993), the Court of Appeals for the Federal Circuit
held that it is within the Department's discretion to decide what
constitutes BIA in a particular case and that this decision must be
afforded considerable deference. In exercising this discretion, the
Department has established two tiers of BIA in situations where it is
unable to use a company's response for purposes of determining that
company's dumping margin and applies each tier based on whether the
respondent cooperated or failed to cooperate in the proceeding.
For first-tier BIA, applied when a company refuses to
cooperate with the Department or significantly impedes the proceeding,
the Department has used as BIA the higher of (1) the highest of the
rates found for any firm for the same class or kind of merchandise in
the same country of origin in the less than fair value (LTFV)
investigation or prior administrative reviews, or (2) the highest rate
found in this review for any firm for the same class or kind of
merchandise in the same country of origin.
For second-tier BIA, applied when a company substantially
cooperates with the Department's requests for information but fails to
provide the information requested in a timely manner or in the form
required, or the Department is unable to verify the accuracy and
completeness of the information submitted, the Department has used as
BIA the higher of (1) the highest rate (including the ``All Others''
rate) ever applicable to the firm for the same class or kind of
merchandise from either the LTFV investigation or a prior
administrative review, or (2) the highest calculated rate in this
review for the class or kind of merchandise for any firm from the same
country of origin.
The Department's two-tiered BIA methodology also was upheld by the
court in Allied-Signal. Id.
Mobil
Mobil did not have a viable home market during the POR. Therefore,
Mobil reported third-country sales of formed (e.g., prilled) elemental
sulphur. During this administrative review, Mobil cooperated with the
Department's requests for information, including participating in
verification of its responses. However, during verification at Mobil,
the Department discovered significant discrepancies in Mobil's
submissions to the Department and company records, which are outlined
in detail in the sales verification report. See Verification of Sales
Questionnaire Response of Mobil Oil Canada Ltd., November 22, 1994
(Verification Report) (see also Memorandum to Joseph A. Spetrini, from
Holly A. Kuga, re: Use of Best Information Available for Mobil Oil
Canada, Ltd., in 1991-92 Administrative Review of Antidumping Finding
on Elemental Sulphur from Canada (May 10, 1995)). Therefore, because we
were unable to verify Mobil's response as required by 776(b) of the
Act, the Department determined that the use of total BIA is
appropriate. However, because Mobil substantially cooperated in this
segment of the proceeding by responding to the Department's requests
for information and participating in verification, the Department
determined that the second tier of BIA as described above should be
applied to Mobil for the preliminary results of review. The highest
rate previously applicable to Mobil is 5.56 percent. Therefore, the
rate calculated for Husky, the highest calculated rate in this review,
shall apply to Mobil as this rate is higher than the rate previously
applicable to Mobil.
Petrosul
Petrosul, a reseller of elemental sulphur, had a viable home market
during the POR and had home-market and U.S. sales of liquid sulphur.
Pennzoil alleged that Petrosul made home market sales at prices
below the cost of producing the elemental sulphur. Based on this
allegation, the Department found reasonable grounds to believe or
[[Page 37874]]
suspect that Petrosul's sales were below cost and initiated a cost
investigation pursuant to 772(b) of the Act. The statute is concerned
specifically with the cost of production of the merchandise, and
Petrosul does not itself produce the elemental sulphur it sells.
Department practice in such situations is to compare the production
costs of the producer (Petrosul's supplier/producers), plus the
producer's SG&A, plus the SG&A of the seller (Petrosul), to the
seller's home market sales to determine whether home market sales were
made below the COP. See Final Determination of Sales at Less Than Fair
Value: Fresh and Chilled Atlantic Salmon from Norway 56 FR 7661
(February 25, 1991); Final Results of Antidumping Duty Administrative
Reviews: Oil Country Tubular Goods from Canada 56 FR 38408 (August 13,
1991). Therefore, on May 3, 1994, the Department requested cost of
production information from the producers of the merchandise sold by
Petrosul. However, these producers refused to supply that information.
Because Petrosul's suppliers did not provide their production costs,
the only cost data on the record is Petrosul's SG&A. Because the
Department could not identify any other source of data that would
provide a reasonable surrogate for the missing supplier-producers' cost
of producing elemental sulphur, the only alternative open to the
Department is to apply total BIA to Petrosul. See Memorandum to Joseph
A. Spetrini, from Holly A. Kuga, re: 1991-92 Antidumping Administrative
Review of the Antidumping Finding on Elemental Sulphur from Canada: Use
of Best Information Available for Petrosul International Due to Lack of
Any Useable Cost of Production Information (July 11, 1995).
However, during this administrative review, Petrosul responded to
the Department's requests for information, including the initial and
supplementary sales questionnaires, as well as the request for limited
COP data. Given Petrosul's attempts to fully cooperate in this review,
the Department determined that second tier of BIA as described above be
applied to Petrosul for the preliminary results of review. The rate
previously applicable to Petrosul is zero percent. Therefore, the rate
calculated for Husky, the highest calculated rate in this review, shall
apply to Petrosul as this is higher than the rate previously applicable
to Petrosul.
Non-Responders/Untimely Responders
Based on a failure to respond or an untimely response to the
Department's questionnaire, we have determined that Brimstone, Burza,
Sulbow, Canamex, Delta, Drummond, Real, Fanchem, and Saratoga failed to
cooperate in this proceeding and, therefore, we have been assigned them
margins based on BIA. Furthermore, consistent with the Department's
two-tiered BIA methodology, the Department has determined that first-
tier BIA, as described above, applies to each of these companies. The
highest rate applicable to a firm is 28.9 percent. Therefore, this rate
shall apply to each of these respondents.
Preliminary Results of the Review
As a result of our review, we preliminarily determine that the
following margins exist for the period December 1, 1991, through
November 30, 1992:
------------------------------------------------------------------------
Percent
Manufacturer/exporter margin
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Husky Oil Ltd................................................ 5.66
Mobil Oil Canada, Ltd........................................ (\1\)
5.66
Petrosul..................................................... (\1\)
5.66
Alberta...................................................... (\2\)
Allied....................................................... (\2\)
Norcen....................................................... (\2\)
Brimstone.................................................... (\3\)
28.9
Burza........................................................ (\3\)
28.9
Canamex...................................................... (\3\)
28.9
Delta........................................................ (\3\)
28.9
Drummond..................................................... (\3\)
28.9
Fanchem...................................................... (\3\)
28.9
Real......................................................... (\3\)
28.9
Saratoga..................................................... (\3\)
28.9
Sulbow....................................................... (\3\)
28.9
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\1\ Cooperative BIA rate.
\2\ No shipments or sales subject to this review. The firm has no
individual rate from any segment of this proceeding.
\3\ Non-cooperative BIA rate.
Interested parties may request disclosure within 5 days of the date
of publication of this notice and may request a hearing within 10 ten
days of the date of publication. Any hearing, if requested, will be
held as early as convenient for the parties but not later than 44 days
after the date of publication or the first work day thereafter. Case
briefs and/or other written comments from interested parties may be
submitted not later than 30 days after the date of publication of this
notice. Rebuttal briefs and rebuttals to written comments, limited to
issues raised in case briefs and written comments, may be filed not
later than 37 days after the date of publication of this notice. The
Department will publish the final results of this administrative
review, including the results of its analysis of issues raised in any
such written comments.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between USP and FMV may vary from the percentages stated
above. Upon completion of the review, the Department will issue
appraisement instructions on each exporter directly to the U.S. Customs
Service.
Furthermore, the following deposit requirements will be effective
for all shipments of elemental sulphur, entered or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided by section
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed
companies will be those rates established in the final results of this
review; (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 (LTFV) investigation, 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) if neither the
exporter nor the manufacturer is a firm covered in this or any previous
review, or the less-than-fair-value (LTFV) investigation, the cash
deposit rate will be the ``new shipper'' rate established in the first
review conducted by the Department in which a ``new shipper'' rate was
established, as discussed below.
On May 25, 1993, the Court of International Trade (CIT) in Floral
Trade Council v. United States, 822 F.Supp. 766 (CIT 1993) and Federal-
Mogul Corporation and The Torrington Company v. United States, 822
F.Supp. 782 (CIT 1993) decided that once an ``All Others'' rate is
established for a company it can only be changed through an
administrative review. The Department has determined that in order to
implement these decisions, it is appropriate to reinstate the ``All
Others'' rate from the LTFV investigation (or that rate as amended for
correction or clerical errors as a result of litigation) in proceedings
governed by antidumping duty orders. In proceedings governed by
antidumping findings, unless we are able to ascertain the ``All
Others'' rate from the Treasury LTFV investigation, the Department has
determined that it is appropriate to adopt the ``new shipper'' rate
established in the first final results of administrative review
published by the Department (or that rate as amended for correction or
clerical errors as a result of litigation) as the ``All Others'' rate
for the purposes of establishing
[[Page 37875]]
cash deposits in all current and future administrative reviews.
Because this proceeding is governed by an antidumping finding, and
we are unable to ascertain the ``All Others'' rate from the Treasury
LTFV investigation, the ``All Others'' rate for the purposes of this
review would normally be the ``new shipper'' rate established in the
first notice of final results of administrative review published by the
Department. However, a ``new shipper'' rate was not established or
ascertainable in that notice. Therefore, for the purposes of this
review, we have drawn the ``All Others'' rate of 5.56 percent from the
final results of administrative review of this finding conducted by the
Department generally for the period December 1, 1980 through November
30, 1982. See Elemental Sulphur from Canada; Final Results of
Administrative Review of Antidumping Finding, 48 FR 53592 (November 28,
1983).
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 353.26 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 Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: July 17, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-18136 Filed 7-21-95; 8:45 am]
BILLING CODE 3510-DS-P