[Federal Register Volume 61, Number 192 (Wednesday, October 2, 1996)]
[Notices]
[Pages 51421-51424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25245]


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DEPARTMENT OF COMMERCE
[A-428-810]


High-Tenacity Rayon Filament Yarn From Germany; Final Results of 
Antidumping Duty Administrative Review

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

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

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SUMMARY: On July 3, 1996, the Department of Commerce (the Department) 
published the preliminary results of administrative review of the 
antidumping duty order on high-tenacity rayon filament yarn from 
Germany. The review covers one manufacturer/exporter of the subject 
merchandise to the United States for the period of review (POR) 
covering June 1, 1994 through May 31, 1995.
    We gave interested parties an opportunity to comment on our 
preliminary results. Based on our analysis of the comments and rebuttal 
comments received from Akzo Nobel Faser AG, Akzo Nobel Industrial 
Fibers Inc., and Akzo Nobel Fibers Inc. (collectively ``Akzo'') (the 
respondent), and the North American Rayon Corporation (the petitioner), 
we have corrected certain clerical errors in the margin calculations. 
The final weighted-average dumping margin for the reviewed firm is 
listed below in the section entitled ``Final Results of Review.''

EFFECTIVE DATE: October 2, 1996.

FOR FURTHER INFORMATION CONTACT: Matthew Blaskovich or Zev Primor, AD/
CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
5831/4114.

SUPPLEMENTARY INFORMATION:

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).

Background

    On July 3, 1996, the Department published the preliminary results 
of administrative review of the antidumping duty order on high-tenacity 
rayon filament yarn from Germany (61 FR 34792). The Department has now 
conducted this review in accordance with section 751 of the Act.

Scope of the Review

    The product covered by this administrative review is high-tenacity 
rayon filament yarn from Germany. During the review period, such 
merchandise was classifiable under Harmonized Tariff Schedule (HTS) 
item number 5403.10.30.40. High-tenacity rayon filament yarn is a 
multifilament single yarn of viscose rayon with a twist of five turns 
or more per meter, having a denier of 1100 or greater, and a tenacity 
greater than 35 centinewtons per tex. The HTS item numbers are provided 
for convenience and Customs purposes. The written description remains 
dispositive as to the scope of the product coverage. This review covers 
one manufacturer/exporter of the subject merchandise and the period 
June 1, 1994, through May 31, 1995.

Analysis of Comments Received

    Comment #1: Respondent contends that the antidumping duty order 
should be revoked upon completion of the instant review. Respondent 
states that the URAA changed the de minimis standard to two percent. 
Arguing that the URAA affects all reviews requested after January 1, 
1995, respondent maintains that it is now eligible for revocation, 
since it received margins of less than two percent for each of the last 
three review periods. Respondent also emphasizes that it filed the 
requisite certification pursuant to 19 CFR 353.25(b).
    Respondent contends that the Agreement on Implementation of Article 
VI of the General Agreement on Tariffs

[[Page 51422]]

and Trade 1994 (Antidumping Agreement) does not establish a clear-cut 
definition for the term ``investigation.'' In particular, respondent 
states that since an express limitation to the scope of the term 
``investigation'' is not established in the Antidumping Agreement, it 
contends that an ``investigation'' can be interpreted as applicable to 
both the initial investigation phase as well as the review phase of 
antidumping proceedings. Therefore it argues that the two percent de 
minimis standard for ``investigations'' should apply to an antidumping 
review proceeding. Moreover, respondent claims that the Department 
should apply this law retroactively to the two earlier reviews, in 
which case it will have three years of de minimis margins and 
revocation of the order would be required. Finally, respondent contends 
that such an approach would provide consistency between the 
investigation and review stage of an antidumping proceeding.
    The petitioner emphasizes that before the Department shall consider 
revoking an antidumping duty order, a de minimis margin (defined as 0.5 
percent or below) must be determined for three consecutive years. 
Petitioner contends that the Department was correct in its 
determination not to revoke the antidumping duty order with respect to 
Akzo because, of the three reviews conducted, there has been only one 
year during which Akzo received a margin of 0.5 percent or below (i.e., 
the administrative review period of June 1, 1993 through May 31, 1994).
    Department's Position: We agree with petitioner that the 0.5 
percent de minimis standard set forth in 19 CFR 353.6 continues to 
apply to reviews. As a matter of domestic law, the statute and the 
Statement of Administrative Action (SAA) which accompanied the passage 
of the URAA are very clear that the new two percent de minimis standard 
applies only to investigations initiated after January 1, 1995, the 
effective date of the URAA. See sections 733(b)(3) and 735(a)(4).
    The SAA clearly states that ``[t]he requirements of Article 5.8 
apply only to investigations, not to reviews of antidumping duty orders 
or suspended investigations.'' See H.R. Doc. No. 316, Vol. 1, Uruguay 
Round Trade Agreements, Texts of Agreements, Implementing Bill, 
Statement of Administrative Action, and Required Supporting Statements, 
103rd Cong., 2nd Sess. (Sept. 27, 1994), at 845. The two percent de 
minimis standard is applicable only to investigations: ``* * * in 
antidumping investigations, Commerce [shall] treat the weighted-average 
dumping margin of any producer or exporter which is below two percent 
ad valorem as de minimis.'' SAA at 844. Likewise, ``[t]he 
Administration intends that Commerce will continue its present practice 
in reviews of waiving the collection of estimated cash deposits if the 
deposit rate is below 0.5 percent ad valorem, the existing regulatory 
standard for de minimis.'' SAA at 845 (emphasis added), see also 19 CFR 
353.2(1) (an ``investigation'' is a distinct proceeding ending, inter 
alia, on publication of an order).
    Comment #2: Petitioner claims that the Department did not use the 
proper shipment dates (as reported in respondent's supplemental 
response) in the calculation of imputed credit costs incurred on those 
sales made from Germany but shipped from the respondent's warehouse in 
Canada.
    Respondent states that credit expenses for these transactions were 
indeed calculated based on the shipment dates submitted in the 
supplemental response, in accordance with the Department's 
questionnaire instructions, and not on the shipment dates originally 
submitted by respondent.
    Department's Position: We have confirmed that respondent correctly 
calculated the credit expense on these transactions by using the dates 
on which the subject merchandise was shipped from Germany. These dates 
were included in respondent's supplemental questionnaire response.
    Comment #3: Petitioner claims that the Department performed a 
programming error in identifying the period of review. Petitioner 
states that in order to remove from the margin analysis any U.S. sales 
made outside of the POR, the beginning and ending period dates should 
be June 1, 1994, and May 31, 1995, respectively.
    Respondent disagrees with petitioner's claim. Respondent contends 
that if petitioner's proposal is accepted, one of its export price (EP) 
sales would be eliminated from the Department's margin analysis since 
the date of sale for this transaction occurred prior to June 1, 1994, 
whereas the merchandise entered the United States subsequent to that 
date. In justifying why this particular sale should be included during 
the POR, respondent contends that it adhered to the Department's 
questionnaire instructions which state, ``Report each U.S. sale of 
merchandise entered for consumption during the POR, except: (1) For EP 
sales, if you do not know the entry dates, report each transaction 
involving merchandise shipped during the POR.'' Therefore, although the 
sale date fell outside the POR, respondent reported this transaction 
due to the fact that the merchandise entered the United States during 
the POR. Further, respondent claims that petitioner's proposed 
correction to the margin program would not advance the objective stated 
in the preamble to the Department's proposed regulations which is to 
liquidate entire periods of review and to avoid tying entries to sales.
    Department's Position: We agree with petitioner that we used 
improper dates in our margin program to identify the period of review. 
For these final results, we have corrected the dates to accurately 
reflect the POR. However, we agree with respondent that we should 
analyze the one U.S. sale made before the POR because the merchandise 
was entered into the United States during the POR and because the sale 
was not reviewed in the previous administrative review. Therefore, we 
have included the sale in this review.
    This decision comports with the Department's effort, as reflected 
in the preamble to the Department's Proposed Rule 353.212, to promote 
the objective of offering clarity and predictability to the antidumping 
law by normally requiring that duties be assessed on merchandise 
entering during a particular review period:

    With respect to the use of duty assessment rates, the Department 
believes that, except in unusual situations, we should assess duties 
on subject merchandise entered during each review period. Therefore, 
paragraph (b)(1) provides that the Department normally will 
calculate a duty assessment rate based on sales reviewed, and will 
apply those rates to entries made during the review period. In all 
cases, this will result in the assessment of duties on merchandise 
entered during the review period.

See Notice of Proposed Rulemaking and Requests For Public Comment, 61 
FR 7308, 7316 (Feb. 27, 1996).
    Comment #4: Petitioner contends that in the preliminary 
results, the Department incorrectly classified an ``emergency sale'' as 
an EP sale. Petitioner argues that since the subject merchandise was 
sold to a U.S. customer after its importation into the United States, 
this sale, which respondent terms as an emergency transaction, should 
therefore be classified as a constructed export price (CEP) sale. 
Petitioner argues that as a CEP sale, the Department is required to 
deduct selling expenses incurred by Akzo's U.S. subsidiaries as well as 
CEP profit in accordance with section 772(d)(3) of the Act. Further, 
petitioner contends that credit expenses are understated, since the 
Department did

[[Page 51423]]

not take into consideration credit expenses incurred during the period 
beginning with the original date of shipment from Akzo's factory until 
the ``emergency transaction'' sale date in the United States.
    Respondent argues that what it describes as an ``emergency 
transaction'' of approximately several thousand pounds of yarn cannot 
be considered a CEP sale since the sale meets all the requirements of 
an EP sale. Respondent explains that this particular subject 
merchandise was sold to the original unrelated customer prior to 
importation into the United States, the sales procedure involved with 
this ``emergency transaction'' was no different from other EP sales 
made. In the alternative, respondent states that the original sale of 
this subject merchandise took place during the period of the second 
administrative review, whereupon, the merchandise was stored in the 
original customer's warehouse. In the subsequent review period, 
respondent issued a credit note to that customer, canceling the first 
sale, and resold the merchandise to another customer. The original 
transaction was previously reviewed by the Department, and was covered 
by liquidation instructions issued for that review. Therefore, 
respondent states that the Department has the discretion to exclude the 
``emergency transaction'' from this review.
    Department's Position: We have determined to exclude the sale at 
issue in this review from our margin calculations. Section 772 of the 
Act defines both EP and CEP as those sales made to the first unrelated 
buyer located in the United States. In this case, the original sale to 
the first unrelated U.S. buyer occurred during the previous review. The 
subject merchandise entered the United States during the previous POR. 
The Department captured this sale of approximately several thousand 
pounds of yarn in that review and subsequently assessed an antidumping 
duty on this sale. Thus, the ``emergency sale'' in question, which 
occurred during the instant review, is a resale of the merchandise 
within the United States and not subject to additional assessment. 
Therefore, we have excluded it from our analysis for these final 
results.
    Comment #5: Petitioner asserts that discrepancies exist between 
Akzo's reported POR quantity of U.S. sales and U.S. Customs data. 
Petitioner asserts that respondent was not able to convincingly 
demonstrate the reason for the quantity discrepancy. Moreover, 
petitioner states that the discrepancy is even larger than originally 
measured, since petitioner did not include the amount associated with 
the ``emergency transaction'' in its subsequent comparisons.
    Respondent contends that because the Department conducted a 
thorough verification of Akzo's reported sales, petitioner's comments 
in this regard hold no merit. Respondent claims that the Department 
substantiated the accuracy of its U.S. sales data base by reconciling 
the reported quantities to the 1994 fiscal year and POR financial 
statements. Further, respondent contends that according to petitioner's 
own calculations, the allegation of underreporting of sales is proven 
false. Respondent cites to petitioner's November 13, 1995 letter in 
which petitioner acknowledged that it neglected to account for a 
particular sale when matching respondent's reported data to U.S. 
Customs data. Respondent contends that when these sales are added, and 
the ``emergency transaction'' subtracted from its reported U.S. sales, 
its total quantity for U.S. sales exceeds U.S. Customs data.
    Department's Position: We agree with respondent. We conducted a 
thorough verification of the quantity and value of respondent's U.S. 
sales during verification and determined that respondent's reported 
U.S. quantity and value amounts reconciled to its general ledger and 
audited financial statement amounts. See Sales Verification Report, at 
7.
    Comment #6: Respondent contends that the Department's methodology 
used for model matching is ineffective. Specifically, respondent 
contends that certain models sold in its home market were not properly 
identifiable as having identical contemporaneous matches to models sold 
in the United States. Respondent proposes programming language which, 
in its estimation, would remedy the matching problems. Petitioner does 
not rebut respondent's comment.
    Department's Position: Overall, our model matching methodology 
properly identifies and matches identical merchandise in respondent's 
home market with contemporaneous U.S. sales.
    However, we detected a minor programing error which resulted in 
certain sales not being appropriately matched. Therefore, we made 
appropriate corrections to the program to remedy this error.
    Comment #7: Both petitioner and respondent allege clerical errors 
made in the margin program for the preliminary results. First, 
petitioner claims that the Department erred in its foreign inland 
freight and foreign brokerage currency conversion calculations. 
Respondent concurs with petitioner's claim.
    Second, respondent contends that the Department inadvertently 
misspelled a particular variable in the margin program with the result 
that home market and U.S. sales were not properly matched since the 
months included within the extended period of review are not utilized 
for matching purposes. Petitioner does not dispute respondent's 
contention.
    Department's Position: We agree with both petitioner and respondent 
and have made the appropriate corrections to the margin program for 
these final results.

Final Results of Review

    As a result of the comments received, we have changed the results 
from those presented in our preliminary results of review:

------------------------------------------------------------------------
                                                                Margin  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Akzo Nobel Faser A.G., Akzo Nobel Industrial Fibers, Inc.,              
 Akzo Nobel Fibers, Inc. (Akzo).............................        0.60
------------------------------------------------------------------------

    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. The Department will 
issue appraisement instructions directly to Customs.
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of these 
final results of this administrative review, as provided by section 
751(a) of the Act: (1) The cash deposit rate for Akzo will be the rate 
established above; (2) for merchandise exported by manufacturers or 
exporters not covered in this review but covered in the original less 
than fair value (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 investigation, but the 
manufacturer is, the cash deposit rate will be that established for the 
manufacturer of the merchandise in these final results of review or the 
less-than-fair-value (LTFV) investigation; and (4) if neither the 
exporter nor the manufacturer is a firm covered in this or any previous 
review, the cash deposit rate will be 24.58 percent, the ``all others'' 
rate established in the LTFV investigation.

[[Page 51424]]

    These deposit requirements shall remain in effect until publication 
of the final results of the next administrative review.
    This notice also serves as final reminder to importers of their 
responsibility 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 notice also is the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 353.34(d). Failure to 
comply is a violation of the APO.
    This administrative review and notice are in accordance with 
section 751(a)(1)(B) of the Act and 19 CFR 353.22.

    Dated: September 25, 1996.
Barbara R. Stafford,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25245 Filed 10-1-96; 8:45 am]
BILLING CODE 3510-DS-P