[Federal Register Volume 61, Number 150 (Friday, August 2, 1996)]
[Notices]
[Pages 40396-40399]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-19726]


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INTERNATIONAL TRADE ADMINISTRATION

[A-427-812]


Calcium Aluminate Flux From France; Preliminary Results of 
Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: In response to a request from one respondent, Lafarge Fondu 
International (LFI) and its U.S. subsidiary, Lafarge Calcium 
Aluminates, Inc. (LCA) (collectively, Lafarge), the Department of 
Commerce (the Department) is conducting an administrative review of the 
antidumping duty order on calcium aluminate (CA) flux from France. This 
review covers one manufacturer/exporter of the subject merchandise to 
the United States, Lafarge, for the period June 15, 1994 through May 
31, 1995.
    We have preliminarily determined that U.S. sales have been made 
below normal value (NV). If these preliminary results are adopted in 
our final results of administrative review, we will instruct the U.S. 
Customs Service (Customs) to assess antidumping duties equal to the 
differences between the United States Price (USP) and NV.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit arguments in this proceeding are requested 
to submit with the argument (1) a statement of the issues, and (2) a 
brief summary of the argument.

EFFECTIVE DATE: August 2, 1996.

FOR FURTHER INFORMATION CONTACT: Maureen McPhillips or John Kugelman, 
Office 8 of the Deputy Assistant Secretary's Enforcement Group 3, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230, telephone: (202) 482-5253.

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

SUPPLEMENTARY INFORMATION:

Background

    On June 13, 1994, the Department published in the Federal Register 
(59 FR 30337) the antidumping duty order on CA flux from France. On 
June 6, 1995 (60 FR 29821), the Department published in the Federal 
Register a notice of opportunity to request an administrative review of 
the antidumping duty order on CA flux from France. In accordance with 
19 CFR 353.22(a)(1)(1995), we received a timely request for review from 
a respondent, Lafarge. We published a notice of initiation of this 
antidumping duty administrative review on July 14, 1995 (60 FR 36260), 
for the period June 15, 1994 through May 31, 1995.
    The Department is now conducting this administrative review in 
accordance with section 751 of the Act.

Scope of the Review

    Imports covered by this review are shipments of CA flux, other than 
white, high purity CA flux. This product contains by weight more than 
32 percent but less than 65 percent alumina and more than one percent 
each of iron and silica.

[[Page 40397]]

    CA flux is currently classifiable under the Harmonized Tariff 
Schedule of the United States (HTSUS) subheading 2523.10.0000. The 
HTSUS subheading is provided for convenience and U.S. Customs' purposes 
only. The written description of the scope of this order remains 
dispositive.

Constructed Export Price

    In calculating Lafarge's USP, the Department treated respondent's 
sales as CEP sales, as defined in section 772(b) of the Act, because 
the subject merchandise was sold to the first unaffiliated purchaser 
after importation into the United States.
    We calculated CEP based on packed or bulk, ex-U.S. warehouse or 
delivered prices to unaffiliated customers in the United States. We 
made deductions from the gross unit price, where appropriate, for the 
following movement charges: loading material at the Fos plant in 
France, foreign inland freight from plant to port, international 
freight, marine insurance, U.S. brokerage and handling, inland freight 
from port to U.S. warehouse, unloading costs, inland freight to 
processors, demurrage charges, and U.S. freight from the warehouse to 
the customer, in accordance with section 772(c)(2)(A) of the Act. 
Pursuant to section 772(d)(1)(B), we also deducted credit expenses, 
product liability insurance, and travel expenses for technical 
services. Pursuant to section 772(d)(1)(D), we deducted U.S. indirect 
selling expenses and inventory carrying costs incurred in the United 
States. We did not deduct indirect selling expenses (i.e., 
administrative expenses, inventory carrying costs, personnel costs for 
technicians) incurred by LFI in France because we did not deem these 
expenses to be specifically related to commercial activity in the 
United States. We also deducted commissions in accordance with section 
772(d)(1)(A) of the Act.
    For reasons stated in the level-of-trade section of this notice, we 
granted Lafarge a CEP offset under section 773(a)(7)(B) of the Act. 
Where applicable, in accordance with 19 CFR Sec. 353.56(b), we offset 
any commission paid on a U.S. sale by reducing the NV by any home 
market indirect selling expenses remaining after the deduction for the 
CEP offset.

Further Manufacture

    In addition, we adjusted CEP, where appropriate, for all value 
added in the United States, including the proportional amount of profit 
attributable to the value added, pursuant to section 772(d)(2) and 
772(d)(3) of the Act. The value added consists of the costs associated 
with the production of the further manufactured products, other than 
costs associated with the imported products. To determine the costs 
incurred to produce the further manufactured products, we included (1) 
the costs of manufacture, (2) movement and repacking expenses, (3) 
selling, general and administrative expenses, and interest expenses. 
Profit was calculated by deducting all applicable costs, charges, 
adjustments, and expenses from the sales price. The total profit was 
then allocated proportionally to all components of cost. We deducted 
only the profit attributable to the value added in the United States. 
No other adjustments to CEP were claimed or allowed.

Normal Value (NV)

A. Viability

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined that the quantity of the foreign like product 
sold in the exporting country by Lafarge was sufficient to permit a 
proper comparison with Lafarge's sales of the subject merchandise to 
the United States, pursuant to section 773(a)(1)(B)(i) of the Act. 
Therefore, in accordance with sections 773(a)(1)(B)(i) and 773(a)(5), 
we based NV on the prices at which the foreign like products were sold 
to the first unaffiliated purchaser for consumption in the exporting 
country.

B. Model Match

    In accordance with section 771(16)(B) of the Act, we considered all 
products produced by the respondent, covered by the description in the 
Scope of the Review section above, and sold in the home market during 
the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Since there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we matched U.S. sales to the most similar foreign like product 
based on the physical characteristics reported by the respondent, 
Lafarge. Among similar products sold in the home market we chose that 
product with the least difference in variable costs of manufacture 
between the home market and the U.S. product. We did not use any home 
market product which, when compared to the U.S. model, had a variable 
cost of manufacture in excess of 20 percent of the total cost of 
manufacture of the U.S. model (see Certain Stainless Steel Cooking Ware 
from the Republic of Korea: Preliminary Results of Antidumping Duty 
Administrative Review, 61 FR 8253, 8254 (March 4, 1996)).

C. Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the 
Statement of Administrative Action (SAA) accompanying the URAA, at 829-
831, the Department will, to the extent practicable, calculate NV based 
on sales at the same level of trade as the U.S. sales. When the 
Department is unable to find a sale of the foreign like product in the 
comparison market at the same level of trade as the U.S. sale, the 
Department may compare the U.S. sales to sales at a different level of 
trade in the comparison market.
    In accordance with section 773(a)(7)(A) of the Act, if sales at 
different levels of trade are compared, the Department will adjust the 
NV to account for the difference in levels of trade if two conditions 
are met. First, there must be differences between the actual selling 
functions performed by the seller at the level of trade of the U.S. 
sale and at the level of trade of the comparison market sale used to 
determine NV. Second, the differences must affect price comparability 
as evidenced by a pattern of consistent price differences between sales 
at the different levels of trade in the market in which NV is 
determined.
    Section 773(a)(7)(B) of the Act establishes that a constructed 
export price (CEP) ``offset'' may be made when two conditions exist: 
(1) NV is established at a level of trade which constitutes a more 
advanced stage of distribution than the level of trade of the CEP; and 
(2) the data available do not provide an appropriate basis for a level-
of-trade adjustment.
    To implement these principles in this review, we requested 
information on the selling activities associated with each channel of 
distribution in each of Lafarge's markets. We asked Lafarge to 
establish any claimed levels of trade based on the selling functions 
provided to each proposed customer group, and to document and explain 
any claims for a level-of-trade adjustment.
    To determine whether a separate level of trade existed within or 
between the United States and the home market, we examined the selling 
functions performed by Lafarge for each of the customer groups. Since 
all of Lafarge's U.S. sales were CEP sales, we considered the selling 
functions reflected in the price after the deduction of expenses and 
profit under section 772(d) of the Act.
    In the home market Lafarge claimed two customer groups: end-users 
and distributors. We reviewed the sales

[[Page 40398]]

functions between these two types of customers in the home market. 
There were no significant distinctions in the selling functions 
performed for end-users and distributors in the home market. The 
distribution systems, pricing policies, inventory maintenance, sales 
order processing, and sales agreements were very similar within 
customer groups in each market. We concluded, therefore, that Lafarge's 
home market sales were made at the same level of trade because the 
aggregate selling functions performed within each channel of 
distribution were essentially identical.
    We then examined the level of trade of the CEP sale in the U.S. 
market (i.e., the level of trade for sales from LFI to LCA). We 
determined that the selling functions of the level of trade of the home 
market sales were sufficiently different from the level of trade of 
Lafarge's CEP sales to establish a different level of trade. For 
example, the level of trade of the CEP sale did not involve extensive 
technical assistance, product liability, credit insurance, inventory 
maintenance, and sales administration costs. Since the same level of 
trade as that of the CEP did not exist in the home market, we could not 
match U.S. sales to home market sales at the same level of trade, nor 
could we determine whether there was a pattern of consistent price 
differences between the levels of trade, in accordance with section 
773(a)(7)(A) of the Act, based on Lafarge's home market sales of 
merchandise under review. However, the SAA states that ``if information 
on the same product and company is not available, the adjustment may 
also be based on sales of other products by the same company. In the 
absence of any sales, including those in recent time periods, to 
different levels of trade by the exporter or producer under 
investigation, Commerce may further consider the selling experience of 
other producers in the foreign market for the same product or other 
products.'' SAA at 830. Accordingly, we examined the alternative 
methods for calculating a level-of-trade adjustment. In this review, we 
did not have information that would allow us to apply these alternative 
methods.
    Because the data available do not provide an appropriate basis for 
making a level-of-trade adjustment, but the level of trade in the home 
market is at a more advanced stage than the level of trade of the CEP 
sales, a CEP offset is appropriate, in accordance with section 
773(a)(7)(B) of the Act. We also determined NV at the same level of 
trade as the starting price for the CEP and made a CEP offset 
adjustment. We deducted from NV the general and administrative overhead 
expenses and inventory carrying costs reported by Lafarge as home 
market indirect selling expenses. We limited the home market indirect 
selling expense deduction by the amount of indirect selling expenses 
incurred in the United States as determined under section 772(d)(1)(A).

D. Price to Price Comparisons

    Pursuant to section 777(A)(d)(2) of the Act, we compared the CEPs 
of individual transactions to the monthly weighted-average price of 
sales of the foreign like product.
    We based NV on the price at which the foreign like product is sold 
for consumption in the exporting country to the first unaffiliated 
party, in the usual commercial quantities and in the ordinary course of 
trade in accordance with sections 773(a)(1)(B)(i) and 773(a)(5) of the 
Act. Where appropriate, we deducted loading expenses, inland freight, 
credit, credit insurance, travel expenses incurred by technicians, 
product liability insurance, and packing. Prices were reported net of 
value-added taxes (VAT) and, therefore, no adjustment for VAT was 
necessary. No other adjustments were claimed or allowed.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                                Margin  
        Manufacturer/exporter            Period of review     (percent) 
------------------------------------------------------------------------
Lafarge Fondu Inter'l. Inc...........     06/15/94-05/31/95        16.15
All Others...........................     06/15/94-05/31/95        37.93
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held 44 days after the date of publication, or the 
first workday thereafter. Interested parties may submit case briefs 
within 30 days of the date of publication of this notice. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
the case briefs and comments, may be filed not later than 37 days after 
the date of publication. Parties who submit arguments in this 
proceeding are requested to submit with the argument (1) a statement of 
the issue and (2) a brief summary of the argument. The Department will 
issue 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 Customs shall assess, 
antidumping duties on all appropriate entries. Individual differences 
between CEP and NV may vary from the percentage stated above. The 
Department will issue appraisement instructions directly to Customs. 
The final results of this review shall be the basis for the assessment 
of antidumping duties on entries of merchandise covered by the 
determination and for future deposits of estimated duties.
    Furthermore, the following deposit requirements will be effective 
upon the publication of the final results of this administrative review 
for all shipments of CA flux from France 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)(2)(C) of the Act: (1) The cash deposit rate for Lafarge will be 
the rate established in the final results of this administrative 
review; (2) for merchandise exported by manufacturers or exporters not 
covered in these reviews but covered in the original LTFV investigation 
or a previous review, the cash deposit will continue to be the most 
recent rate published in the final determination or final results for 
which the manufacturer or exporter received a company-specific rate; 
(3) if the exporter is not a firm covered in this review, or the 
original less-than-fair-value 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) for all other 
producers and/or exporters of this merchandise, the cash deposit rate 
will be 37.93 percent, the rate established in the less-than-fair value 
investigation (59 FR 5994, February 9, 1994).

[[Page 40399]]

    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 26, 1996.
Robert. L. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-19726 Filed 8-1-96; 8:45 am]
BILLING CODE 3510-DS-P