[Federal Register Volume 61, Number 164 (Thursday, August 22, 1996)]
[Notices]
[Pages 43341-43345]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-21465]


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

DEPARTMENT OF COMMERCE
[A-583-825]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Melamine Institutional 
Dinnerware Products From Taiwan

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

EFFECTIVE DATE: August 22, 1996.

FOR FURTHER INFORMATION CONTACT: Everett Kelly, David J. Goldberger, or 
Barbara Wojcik-Betancourt, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-4194, (202) 482-4136, or (202) 482-0629, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act'') are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act (``URAA'').

Preliminary Determination

    We preliminarily determine that melamine institutional dinnerware 
products (``MIDPs'') from Taiwan are being, or are likely to be, sold 
in the United States at less than fair value (``LTFV''), as provided in 
section 733 of the Act. The estimated margins of sales at LTFV are 
shown in the ``Suspension of Liquidation'' section of this notice.

Case History

    Since the initiation of this investigation (Notice of Initiation of 
Antidumping Duty Investigations: Melamine Institutional Dinnerware 
Products from Indonesia, Taiwan and the People's Republic of China (61 
FR 8039, March 1, 1996), the following events have occurred:
    On March 22, 1996, the United States International Trade Commission 
(``ITC'') issued an affirmative preliminary injury determination in 
this case (see ITC Investigation Nos. 731-TA-741, -742, and -743).
    In March 1996, through counsel, the Department identified Chen Hao 
Plastic Industrial Co., Ltd (``Chen Hao Taiwan''); Taiwan Melamine 
Products Industrial Co., Ltd (``Taiwan Melamine''); Yu Cheer Industrial 
Co., Ltd (``Yu Cheer''); Gin Harvest Enterprises (``Gin Harvest'') and 
Tar Hong Melamine (``Tar Hong'') as producers/exporters of the subject 
merchandise. In addition, Taiwan's Association of Plastic Producers 
identified to the Department, Gallant Chemical Corporation 
(``Gallant''); Hao Way Enterprise Co., Ltd (``Hao Way''); Sun Rudder 
Ind. (``Sun Rudder''); Win Great Trading Co., Ltd (``Win Great''); and 
IKEA Trading Far East Ltd. (``IKEA''), as producers/exporters of the 
subject merchandise.
    On March 29, 1996, we requested sales information regarding exports 
of the subject merchandise to the United States from the above-
referenced companies. During April and May 1996, Hao Way, Win Great, 
and Sun Rudder informed the Department that they did not ship the 
subject merchandise to the United States during the period of 
investigation (``POI''). In addition, in information submitted in the 
concurrent MIDP investigation from the People's Republic of China, Gin 
Harvest and Tar Hong reported that they made no sales of Taiwan-
produced MIDP to the United States during the POI.
    On April 15, 1996, the Department issued an antidumping duty 
questionnaire to the following companies, as exporters of the subject

[[Page 43342]]

merchandise: Taiwan Melamine, Chen Hao Taiwan, Yu Cheer, IKEA, Gallant, 
and Sun Rudder. The questionnaire is divided into four sections: 
Section A requests general information concerning a company's corporate 
structure and business practices, the merchandise under investigation 
that it sells, and the sales of the merchandise in all of its markets. 
Sections B and C request home market sales listings and U.S. sales 
listings, respectively. Section D requests information on the cost of 
production (``COP'') of the foreign like product and constructed value 
(``CV'') of the subject merchandise.
    On May 30, 1996, after responding to section A of the antidumping 
questionnaire, Taiwan Melamine requested that the Department exclude it 
as a mandatory respondent and not require it to respond to the 
remainder of the questionnaire in this investigation based on its small 
volume of exports of the subject merchandise to the United States 
during the POI. On June 3, 1996, petitioner stated that, based on the 
small volume of exports and its desire for an expeditious 
determination, it had no objection to Taiwan Melamine's request. 
Accordingly, on June 7, 1996, the Department excluded Taiwan Melamine 
as a mandatory respondent and excused it from completing the 
antidumping questionnaire.
    On May 31, and June 12, 1996, IKEA requested that the Department 
exclude it as a mandatory respondent in this investigation and excuse 
it from the obligation to respond to the questionnaire because it had 
shipped only a small volume of Taiwan-produced MIDPs to the United 
States during the POI. IKEA's request came after IKEA had already 
missed the deadline for responding to section A of the antidumping 
questionnaire. Further, petitioner did not indicate that it had no 
objection to IKEA's request. Accordingly, the Department has not 
granted IKEA's request.
    On June 6, 1996, the Department postponed the preliminary 
determination of this investigation and the companion investigations on 
MIDPs from the People's Republic of China and Indonesia until August 
14, 1996, in accordance with section 733(c)(1)(B) of the Act (61 FR 
30219, June 14, 1996).
    Based on a timely allegation by the petitioner, the American 
Melamine Institutional Tableware Association (``AMITA''), the 
Department began an investigation into whether Chen Hao Taiwan had made 
sales in the home market at prices that were below COP, pursuant to 
section 773(b) of the Act (see July 11, 1996, Memorandum from MIDP Team 
to Louis Apple).
    Yu Cheer and Chen Hao Taiwan submitted questionnaire responses in 
May and June 1996. We issued a supplemental request for information in 
June 1996, and received the supplemental responses to this request in 
July 1996, respectively. Chen Hao Taiwan provided its response to the 
COP section of the questionnaire on July 26, 1996.
    Petitioner filed comments on the Chen Hao Taiwan and Yu Cheer 
questionnaire responses in May and July 1996.

Postponement of Final Determination

    On August 5, 1996, Chen Hao Taiwan and Yu Cheer requested that, 
pursuant to section 735(a)(2)(A) of the Act, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination until not later than 135 
days after the publication of the affirmative preliminary determination 
in the Federal Register. In accordance with 19 U.S.C. 1673d(a)(2) and 
19 CFR 353.20(b), inasmuch as our preliminary determination is 
affirmative, the respondents account for a significant proportion of 
exports of the subject merchandise, and we are not aware of the 
existence of any compelling reasons for denying the request, we are 
granting the respondents' request and postponing the final 
determination. Suspension of liquidation will be extended accordingly. 
See Preliminary Determination of Sales at Less Than Fair Value: Large 
Newspaper Printing Presses and Components Thereof, Whether Assembled or 
Unassembled, from Japan (61 FR 8029, March 1, 1996).

Scope of Investigation

    This investigation covers all items of dinnerware (e.g., plates, 
cups, saucers, bowls, creamers, gravy boats, serving dishes, platters, 
and trays) that contain at least 50 percent melamine by weight and have 
a minimum wall thickness of 0.08 inch. This merchandise is classifiable 
under subheadings 3924.10.20, 3924.10.30, and 3924.10.50 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Excluded from 
the scope of investigation are flatware products (e.g., knives, forks, 
and spoons).
    Although the HTSUS subheadings are provided for convenience and 
customs purposes, our written description of the scope of this 
investigation is dispositive.

Period of Investigation

    The POI is January 1, 1995, through December 31, 1995.

Fair Value Comparisons

A. IKEA and Gallant

    We did not receive a response to our questionnaire from either IKEA 
or Gallant. Section 776(a)(2) of the Act provides that if an interested 
party withholds information that has been requested by the Department, 
fails to provide such information in a timely manner and in the form 
requested, significantly impedes a proceeding, or provides such 
information but the information cannot be verified, the Department 
shall use the facts otherwise available in reaching the applicable 
determination. Because IKEA and Gallant failed to submit the 
information that the Department specifically requested, we must base 
our determinations for those companies on the facts available.
    Section 776(b) of the Act provides that adverse inferences may be 
used against a party that has failed to cooperate by not acting to the 
best of its ability to comply with a request for information. The 
Department has determined that, in selecting from among the facts 
otherwise available, an adverse inference is warranted.
    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. The Statement of 
Administrative Action accompanying the URAA, H.R. Doc. No. 316, 103d 
Cong., 2d Sess. (1994) (hereinafter, the ``SAA''), states that the 
petition is ``secondary information'' and that ``corroborate'' means to 
determine that the information used has probative value. See SAA at 
870.
    In this proceeding, we considered the petition as the most 
appropriate information on the record to form the basis for a dumping 
calculation for these uncooperative respondents. In accordance with 
section 776(c) of the Act, we sought to corroborate the data contained 
in the petition.
    The petitioner based its allegation of both normal value and export 
price in the petition on a market research report which utilized price 
quotations from a manufacturer/exporter of MIDPs in Taiwan. The 
petitioner also submitted a published price list of comparable 
merchandise sold during the POI in Taiwan. The Department has 
determined that the price list corroborates normal value used in the 
petition.
    The export price in the petition is consistent with export prices 
reported

[[Page 43343]]

by responding companies on the record of this investigation. Therefore, 
we determine that further corroboration of the facts available margin 
is unnecessary.

B. Chen Hao Taiwan and Yu Cheer

    To determine whether sales of the subject merchandise by Chen Hao 
Taiwan and Yu Cheer to the United States were made at less than fair 
value, we compared the Export Price (``EP'') to the Normal Value 
(``NV''), as described in the ``Export Price'' and ``Normal Value'' 
sections of this notice. In accordance with section 777A(d)(1)(A)(i), 
we compared POI-wide weighted-average EPs to weighted-average NVs. In 
determining averaging groups for comparison purposes, we considered the 
appropriateness of such factors as physical characteristics and level 
of trade.
(i) Physical Characteristics
    In accordance with section 771(16) of the Act, we considered all 
products covered by the description in the Scope of Investigation 
section, above, produced in Taiwan and sold in the home market during 
the POI, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the next most similar foreign like 
product on the basis of the characteristics listed in the Department's 
antidumping questionnaire. In making the product comparisons, we relied 
on the following criteria (listed in order of preference): shape type 
(i.e., flat--e.g., plates, trays, saucers etc.; or container--e.g., 
bowls, cups, etc.), specific shape, diameter (where applicable), length 
(where applicable), capacity (where applicable, thickness, design 
(i.e., whether or not a design is stamped into the piece), and glazing 
(i.e., where a design is present, whether or not it is also glazed). 
See also Model Match Methodology for the Preliminary Determinations, 
memorandum from MIDP team to Louis Apple, Acting Office Director, dated 
August 12, 1996.
(ii). Level of Trade
    As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA 
at 829-831, to the extent practicable, the Department will calculate 
normal values based on sales at the same level of trade as the U.S. 
sales. When the Department is unable to find sales in the comparison 
market at the same level of trade as the U.S. sale(s), the Department 
may compare sales in the U.S. and foreign markets at different levels 
of trade. See also Final Determination of Sales at Less Than Fair 
Value: Certain Pasta from Italy (61 FR 30326, June 14, 1996) (``Pasta 
from Italy''). See, also, Final Determination of Sales at Less Than 
Fair Value: Certain Pasta from Italy (61 FR 30326, June 14, 1996) 
(``Pasta from Italy'').
    In accordance with section 773(a)(7)(A), if sales at different 
levels of trade are compared, the Department will adjust the normal 
value to account for the difference in level 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 the level of trade of the normal value sale. Second, the 
difference 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 normal value is determined.
    Pursuant to section 773(a)(1)(B)(i) of the Act, and the SAA at 827, 
in identifying levels of trade for directly observed (i.e., not 
constructed) export price and normal values sales, we considered the 
selling functions reflected in the starting price, before any 
adjustments. Where possible, we further examined whether the selling 
function was performed on a substantial portion of sales.
    Chen Hao Taiwan and Yu Cheer reported that sales within both the 
home and U.S. markets involve essentially the same selling functions. 
We examined the record evidence and confirmed that selling functions in 
the aggregate are the same despite customer categories--trading company 
and distributor--being somewhat different (see Notice of Proposed 
Rulemaking and Request for Public Comments, 61 FR 7303, 7348 (February 
27, 1996)) (``Proposed Regulations''). Accordingly, we preliminarily 
find that no level of trade differences exist for either company 
between any sales in either the home market or the U.S. market. 
Therefore, all price comparisons are at the same level of trade and an 
adjustment pursuant to section 773(a)(7)(A) is unwarranted.

Export Price

    We calculated EP, in accordance with subsections 772(a) and (c) of 
the Act, where the subject merchandise was sold directly to the first 
unaffiliated purchaser in the United States prior to importation and 
where CEP was not otherwise warranted based on the facts of record.
    We made company-specific adjustments as follows:

Chen Hao Taiwan

    We calculated EP based on packed, ex-works, FOB port, and delivered 
prices to unaffiliated customers in the United States. Where 
appropriate, we made deductions from the starting price (gross unit 
price) for foreign inland freight and Taiwan brokerage and handling. We 
also deducted reported discounts.

Yu Cheer

    We calculated EP based on packed, FOR customer's warehouse prices 
to unaffiliated customers in the United States. Where appropriate, we 
made deductions from the starting price (gross unit price) for foreign 
inland freight.

Normal Value

Cost of Production Analysis

    As noted in the ``Case History'' section above, based on the 
petitioner's allegation, on July 11, 1996, the Department found 
reasonable grounds to believe or suspect that Chen Hao Taiwan sales in 
the home market were made at prices below the cost of producing the 
merchandise. As a result, the Department initiated an investigation to 
determine whether Chen Hao Taiwan made home market sales during the POI 
at prices below their respective cost of production within the meaning 
of section 773(b) of the Act.
    Before making any fair value comparisons, we conducted the COP 
analysis described below.
A. Calculation of COP
    We calculated the COP based on the sum of Chen Hao Taiwan's cost of 
materials and fabrication for the foreign like product, plus amounts 
for home market general and administrative expenses (``G&A'') and 
packing costs in accordance with section 773(b)(3) of the Act.
B. Test of Home Market Prices
    We used Chen Hao Taiwan's adjusted weighted-average COP for the 
POI. We compared the weighted-average COP figures to home market sales 
of the foreign like product as required under section 773(b) of the Act 
in order to determine whether these sales had been made at below-cost 
prices within an extended period of time in substantial quantities, and 
were not at prices which permit recovery of all costs within a 
reasonable period of time. On a model-specific basis, we compared the 
COP to the home market prices, less any applicable movement charges and 
direct selling expenses. We did not deduct indirect selling expenses 
from the home

[[Page 43344]]

market price because these expenses were included in the G&A portion of 
COP.
C. Results of COP Test
    In determining whether to disregard home-market sales made at 
prices below COP, we examine (1) whether, within an extended period of 
time, such sales were made in substantial quantities and (2) whether 
such sales were made at prices which permitted the recovery of all 
costs within a reasonable period of time in the normal course of trade. 
Where less than 20 percent (by quantity) of a respondent's sales of a 
given product were at prices less than the COP, we do not disregard any 
below-cost sales of that product. Where 20 percent (by quantity) or 
more of a respondent's sales of a given product during the POI were at 
prices less than the COP, we determine such sales to have been made in 
substantial quantities within an extended period; where we determine 
that such sales were also not made at prices that permit recovery of 
cost within a reasonable period, we disregard the below-cost sales.
    In this case, we found that some products had no above-cost sales 
available for matching purposes. Accordingly, export prices that would 
have been compared to home market prices for these models were instead 
compared to CV.
D. Calculation of CV
    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the sum of a respondent's cost of materials, fabrication, 
selling, general, and administrative expenses (``SG&A''), profit and 
U.S. packing costs as reported in the U.S. sales databases. In 
accordance with section 773(e)(2)(A) of the Act, we based SG&A and 
profit on the amounts incurred and realized by the respondent in 
connection with the production and sale of the foreign like product in 
the ordinary course of trade for consumption in the foreign country. 
Where appropriate, we calculated each respondent's CV based on the 
methodology described in the calculation of COP above.

Adjustments to Prices

    We made company-specific adjustments to prices used as NV, as 
follows:

Chen Hao Taiwan

    We calculated NV based on packed, delivered prices to unaffiliated 
customers. Where appropriate, we made deductions from the starting 
price (gross unit price) for discounts and inland freight. In addition, 
where appropriate, we adjusted for differences in circumstances of sale 
for imputed credit expenses, and royalty expenses (home market).

Yu Cheer

    We calculated NV based on packed, delivered prices to unaffiliated 
customers. Where appropriate, we made deductions from the starting 
price (gross unit price) for inland freight. In addition, where 
appropriate, we adjusted for differences in circumstances of sale for 
imputed credit expenses. Yu Cheer's sales to the United States as well 
as those in the home market, were made in Taiwan dollars. Accordingly, 
Yu Cheer calculated its credit expenses in both markets by applying the 
average short term interest rates in Taiwan.
    For each respondent, we made adjustments, where appropriate, for 
physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act. Where the difference in merchandise 
adjustment for every comparison product exceeded 20 percent, we based 
NV on CV. In addition, in accordance with section 773(a)(6)(B), we 
deducted home market packing costs and added U.S. packing costs for all 
respondents.

Price to CV Comparisons

    Where we compared CV to export prices, we deducted from CV the 
weighted-average home market direct selling expenses and added the 
weighted-average U.S. product-specific direct selling expenses (where 
appropriate) in accordance with section 773(a)(8) of the Act.

Currency Conversion

    We made currency conversions into U.S. dollars based on the 
official exchange rates in effect on the dates of the U.S. sales as 
certified by the Federal Reserve Bank.
    Section 773A(a) of the Act directs the Department to convert 
foreign currencies based on the dollar exchange rate in effect on the 
date of sale of the subject merchandise, except if it is established 
that a currency transaction on forward markets is directly linked to an 
export sale. When a company demonstrates that a sale on forward markets 
is directly linked to a particular export sale in order to minimize its 
exposure to exchange rate losses, the Department will use the rate of 
exchange in the forward currency sale agreement.
    Section 773A(a) also directs the Department to use a daily exchange 
rate in order to convert foreign currencies into U.S. dollars unless 
the daily rate involves a fluctuation. It is the Department's practice 
to find that a fluctuation exists when the daily exchange rate differs 
from the benchmark rate by 2.25 percent. The benchmark is defined as 
the moving average of rates for the past 40 business days. When we 
determine a fluctuation to have existed, we substitute the benchmark 
rate for the daily rate, in accordance with established practice. 
Further, section 773A(b) directs the Department to allow a 60-day 
adjustment period when a currency has undergone a sustained movement. A 
sustained movement has occurred when the weekly average of actual daily 
rates exceeds the weekly average of benchmark rates by more than five 
percent for eight consecutive weeks. (For an explanation of this 
method, see Policy Bulletin 96-1: Currency Conversions (61 FR 9434, 
March 8, 1996).) Such an adjustment period is required only when a 
foreign currency is appreciating against the U.S. dollar. The use of an 
adjustment period was not warranted in this case because the New Taiwan 
dollar did not undergo a sustained movement, nor were there currency 
fluctuations during the POI.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information determined to be acceptable for use in making our final 
determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
Customs Service to suspend liquidation of all imports--with the 
exception of those exported by Chen Hao Taiwan, Yu Cheer, or any other 
company except IKEA and Gallant--of subject merchandise that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. We will 
instruct the Customs Service to require a cash deposit or the posting 
of a bond equal to the weighted-average amount by which the NV exceeds 
the export price, as indicated in the chart below. These suspension of 
liquidation instructions will remain in effect until further notice.

------------------------------------------------------------------------
                                            Weighted-average margin     
        Exporter/manufacturer                      percentage           
------------------------------------------------------------------------
Chen Hao Taiwan......................  1.53 (de minimis).               
Yu Cheer.............................  0.                               
IKEA.................................  53.13.                           
Gallant..............................  53.13.                           
All Others...........................  1.55 (de minimis).               
------------------------------------------------------------------------


[[Page 43345]]



    Pursuant to section 733(d)(1)(A) and section 735(c)(5) of the Act, 
the Department normally may not include zero and de minimis weighted-
average dumping margins and margins determined entirely under section 
776 of the Act, in the calculation of the ``all-others'' deposit rate. 
However, such rates were the only margins available in this 
determination. Accordingly, the Department may, pursuant to section 
735(c)(5)(B) of the Act, use ``any reasonable method'' to calculate the 
all-others rate. In this case, the Department calculated the all-others 
rate by using a weighted average of the rates applicable to Chen Hao 
Taiwan, Yu Cheer, and IKEA (Gallant's deposit rate was not included in 
the all-others rate calculation because no weighting factor was 
available and our examination of PIERS import data and other record 
evidence indicates that Gallant's exports--if any--do not appear to be 
significant). See SAA at 873.

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 before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry.

Public Comment

    Case briefs or other written comments in at least ten copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than November 26, 1996, and rebuttal briefs, no later than 
December 3, 1996. A list of authorities used and an executive summary 
of issues should accompany any briefs submitted to the Department. Such 
summary should be limited to five pages total, including footnotes. In 
accordance with section 774 of the Act, we will hold a public hearing, 
if requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs. Tentatively, the hearing 
will be held on December 5, 1996, at 10:00 a.m. in Room 1412 at the 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, 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. Oral presentations will be limited to issues raised in the 
briefs. If this investigation proceeds normally, we will make our final 
determination by 135 days after the publication of this notice in the 
Federal Register.
    This determination is published pursuant to section 733(d) of the 
Act.

    Dated: August 14, 1996.
Jeffrey P. Bialos,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-21465 Filed 8-21-96; 8:45 am]
BILLING CODE 3510-DS-P