[Federal Register Volume 61, Number 238 (Tuesday, December 10, 1996)]
[Notices]
[Pages 65019-65022]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31355]
[[Page 65019]]
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DEPARTMENT OF COMMERCE
[A-557-805]
Notice of Preliminary Results of Antidumping Duty Administrative
Review: Extruded Rubber Thread From Malaysia
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 by petitioner and four producers/
exporters of the subject merchandise, the Department of Commerce (the
Department) is conducting an administrative review of the antidumping
duty order on extruded rubber thread from Malaysia. The review covers
four manufacturers/exporters. The period of review (the POR) is October
1, 1994, through September 30, 1995.
We have preliminarily determined that sales have been made below
normal value (NV) by all of the companies subject to this review. If
these preliminary results are adopted in the final results of this
administrative review, we will instruct the U.S. Customs Service to
assess antidumping duties on all appropriate entries.
We invite interested parties to comment on these preliminary
results. Parties who submit comments in this proceeding are requested
to submit with each argument (1) a statement of the issue and (2) a
brief summary of the argument.
EFFECTIVE DATE: December 10, 1996.
FOR FURTHER INFORMATION CONTACT: For further information, please
contact Laurel LaCivita or Robert Blankenbaker at Import
Administration, International Trade Administration, U.S. Department of
Commerce, Washington, D.C. 20230; telephone: (202) 482-4740 or (202)
482-0989, respectively.
SUPPLEMENTARY INFORMATION:
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). 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 October 7, 1992, the Department published in the Federal
Register (57 FR 46150) the antidumping duty order on extruded rubber
thread from Malaysia. On October 30, 1995, the petitioner, North
American Rubber Thread, requested that the Department conduct an
antidumping administrative review for the following producers and
exporters of extruded rubber thread: Heveafil Sdn. Bhd. (``Heveafil''),
Rubberflex Sdn. Bhd. (``Rubberflex''), Filati Lastex Elastfibre
(Malaysia) (``Filati''), and Rubfil Sdn. Bhd (``Rubfil''). On October
31, 1995, these same producers and exporters requested to be reviewed.
On November 16, 1995, we published a notice of initiation of an
administrative review of this order for the period October 1, 1994,
through September 30, 1995, (60 FR 57573) for the following producers
and exporters of extruded rubber thread: Heveafil, Rubberflex, Filati,
and Rubfil. The Department is conducting this administrative review in
accordance with section 751(a) of the Act.
Scope of Review
The product covered by this review is extruded rubber thread.
Extruded rubber thread is defined as vulcanized rubber thread obtained
by extrusion of stable or concentrated natural rubber latex of any
cross sectional shape, measuring from 0.18 mm, which is 0.007 inch or
140 gauge, to 1.42 mm, which is 0.056 inch or 18 gauge, in diameter.
Extruded rubber thread is currently classified under subheading
4007.00.00 of the Harmonized Tariff Schedule of the United States
(HTSUS). The HTSUS subheadings are provided for convenience and Customs
purposes. Our written description of the scope of this review is
dispositive.
Verification
We conducted a verification of information provided by Rubberflex
using standard verification procedures, including on-site inspection of
Rubberflex's sales and production facility, the examination of relevant
sales and financial records, and original documentation containing
relevant information.
Fair Value Comparisons
To determine whether sales of extruded rubber thread to the United
States were made at less than fair value, we compared the export price
(EP) or constructed export price (CEP) to the normal value (NV), as
described in the ``Export Price'', ``Constructed Export Price'' and
``Normal Value'' sections of this notice. In accordance with section
777A(d)(2), we calculated monthly weighted-average prices for normal
value and compared these to individual U.S. transactions.
Export Price
The Department used the EP, as defined in section 772(a) of the
Act, where the subject merchandise was sold by the manufacturer or
exporter to unaffiliated purchasers in the United States prior to
importation and the CEP was not otherwise warranted based on the facts
of record. For each of the companies, we calculated EP based on packed
C&F, CIF, or FOB prices. We made deductions, where appropriate, for
forwarding charges, insurance expenses, and ocean freight in accordance
with section 772(c)(2) of the Act.
Constructed Export Price
We calculated CEP, as defined in section 772(b) of the Act, based
on packed, F.O.B. or delivered prices to unaffiliated purchasers in the
United States (the starting price). We made deductions for movement
expenses as appropriate in accordance with section 772(c)(2)(A) of the
Act.
In accordance with section 772(d)(1) of the Act and the Uruguay
Round Agreements Act Statement of Administrative Action (SAA) (H. Doc.
316, 103d Cong., 2nd Sess. 823-824 (1996)), we made additional
adjustments to the starting price by deducting selling expenses
associated with economic activities in the United States, including
movement expenses, commissions, direct selling expenses, and U.S.
indirect selling expenses. Finally, we made an adjustment for CEP
profit in accordance with sections 772(d)(3) and 772(f) of the Act.
Normal Value
A. Viability
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating
normal value (NV), we compared the respondent's volume of home market
sales of the foreign like product to the volume of U.S. sales of the
subject merchandise, in accordance with section 773(a)(1)(C) of the
Act. Because the aggregate volume of home market sales of the foreign
like product for each company was greater than five percent of its
aggregate volume of U.S. sales of the subject merchandise, we found
that the home market was viable for all companies. Therefore, we have
based NV on home market sales.
[[Page 65020]]
B. Model Match
In accordance with section 771(16) of the Act, we considered all
products sold in the home market, fitting the description specified in
the ``Scope of Review'' section above, to be foreign like products for
purposes of determining appropriate product comparisons to U.S. sales.
We first searched for the home market model which is identical in
characteristics to each U.S. model. When there were no contemporaneous
sales of identical merchandise, we searched for the home market model
which is most like or most similar in characteristics to each U.S.
model. In determining similar merchandise comparisons, in accordance
with section 771(16) of the Act, we considered the following physical
characteristics, which appear in order of importance: (1) Quality
(i.e., first vs. second); (2) size; (3) finish; (4) color; (5) special
qualities; (6) uniformity; (7) elongation; (8) tensile strength; and
(9) modulus. With the exception of quality, these characteristics are
in accordance with matching criteria set forth in the January 26, 1994,
memorandum to the file, on the record for this review. Regarding
quality, we have added this characteristic in order to address
respondents' concerns regarding differences in value related to
significant differences in quality.
Regarding color, respondents assigned separate codes to each shade
of color. We reassigned color codes to sales of subject merchandise, in
accordance with the instructions contained in the questionnaire. This
resulted in our treating all shades of a given color as equally similar
to each other instead of treating a specific shade as most similar to
another specific shade.
C. Cost of Production and Constructed Value
Because the Department disregarded third country sales below the
cost of production (COP) for both Heveafil and Rubberflex in the
original investigation (see Final Determination of Sales at Less Than
Fair Value: Extruded Rubber Thread from Malaysia, 57 FR 38465 (August
25, 1992)), in accordance with section 773(b)(2)(A)(ii) of the Act,
there were reasonable grounds to believe or suspect that both Heveafil
and Rubberflex had made home market sales at prices below their COP in
this review. Thus, the Department initiated a COP investigation with
respect to Heveafil and Rubberflex in accordance with section 773(b)(1)
of the Act. Additionally, upon petitioner's allegation of sales made
below the COP by Filati and Rubfil, the Department determined that it
had reasonable grounds to believe or suspect that sales by Filati and
Rubfil of the foreign product under consideration for the determination
of NV in this review may have been made at prices below the COP as
provided by section 773(b)(2)(A)(i) of the Act.
Therefore, pursuant to section 773(b)(1) of the Act, we initiated a
COP investigation of sales by Filati and Rubfil in the home market. See
COP Initiation Memorandum, dated August 8, 1996.
After calculating COP, we tested whether home market sales of the
foreign like product were made at prices below COP within an extended
period of time in substantial quantities and whether such prices
permitted the recovery of all costs within a reasonable period of time
in accordance with section 773(b)(1). We compared model-specific COPs
to the reported home market prices less any applicable adjustments.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of the respondent's sales of a given model were at prices less
than COP, we did not disregard any below-cost sales of that model
because the below-cost sales were not made in substantial quantities.
Where 20 percent or more of the respondent's sales of a given model
were at prices less than the COP, we disregarded the below-cost sales
if they (1) were made within an extended period of time in substantial
quantities in accordance with sections 773(b)(2) (B) and (C) of the Act
and (2) based on comparisons of prices to weighted-average COPs for the
POR, were at prices which would not permit recovery of all costs within
a reasonable period of time in accordance with section 773(b)(2)(D) of
the Act. Based on this test, we disregarded below-cost sales with
respect to Heveafil, Filati and Rubfil.
In accordance with section 773(a)(4) of the Act, we used
constructed value (CV) as the basis for NV when there were no useable
sales of comparable merchandise in the home market. In accordance with
section 773(e) of the Act, we calculated CV based on respondents' cost
of materials and fabrication employed in producing the subject
merchandise, selling, general and administrative expense (SG&A) and
profit incurred and realized in connection with the production and sale
of the foreign like product, and U.S. packing costs. We used the cost
of materials, fabrication, and G&A as reported in the CV portion of
each respondent's questionnaire response.
We used the U.S. packing costs as reported in the U.S. sales
portion of each respondent's questionnaire response. We based selling
expenses and profit on the information reported in the home market
sales portion of the respondent's questionnaire response. See Certain
Pasta from Italy; Notice of Preliminary Determination of Sales at Less
Than Fair Value and Postponement of Final Determination, 61 FR 1344,
1349 (January 19, 1996). For SG&A expenses and actual profit, we used
the average of actual amounts incurred and realized by respondents in
connection with the production and sale of the foreign like product in
the ordinary course of trade for consumption in the foreign country, in
accordance with section 773(e)(2)(A) of the Act.
D. Price-to-Price Comparisons
For those price-to-price comparisons where we did not resort to CV,
we based NV on the prices at which the foreign like products were first
sold for consumption in the home market to an unaffiliated party in the
usual commercial quantities and in the ordinary course of trade and, to
the extent practicable, at the same level of trade as the CEP or EP, in
accordance with section 773(a)(1)(B)(i) of the Act. Respondents
reported that they made all home market and CEP or EP sales of subject
merchandise at the same level of trade (i.e, to manufacturers). For
purposes of this review, we determine that the same level of trade
exists for all respondents in both markets. Accordingly, pursuant to
section 777A(d)(2) of the Act, we compared the EPs of individual
transactions to the monthly weighted-average price of sales of the
foreign like product. We increased home market price by U.S. packing
costs in accordance with section 773(a)(6)(A) of the Act and reduced it
by home market packing costs in accordance with section 773(a)(6)(B) of
the Act. In accordance with section 773(a)(6)(C) of the Act, we
increased NV by adding U.S. credit expense. We made circumstance of
sale (COS) adjustments, in accordance with section 773(a)(6)(C)(iii) of
the Act and 19 CFR 353.56(a), by deducting home market direct selling
expenses. We also made adjustments, where applicable, for certain home
market indirect selling expenses to offset U.S. commissions in
accordance with 19 CFR 353.56(b). No other adjustments were claimed or
allowed.
Facts Available
In accordance with section 776(a)(2)(D) of the Act, we
preliminarily determine that the use of the facts
[[Page 65021]]
available is appropriate as the basis for Rubberflex's weighted-average
dumping margin because, despite the Department's attempts to verify
information provided by Rubberflex, the Department could not verify the
information as required under section 782(i) of the Act. Where a party
provides information requested by the Department but the information
cannot be verified, section 776(a)(2)(D) of the Act requires the
Department to use facts otherwise available. Further, in accordance
with section 782(e)(2) of the Act, the Department has declined to
consider information submitted by Rubberflex because the information
cannot be verified. Moreover, we preliminarily determine that, pursuant
to section 776(b) of the Act, Rubberflex did not cooperate to the best
of its ability and that therefore we are required to use adverse facts
available.
We found that responses provided by Rubberflex could not be
verified. The inaccuracies which render the response unusable for
purposes of margin calculations include: Rubberflex failed to reconcile
its original questionnaire response with its current financial
statements and current trial balance; due to inconsistencies in
Rubberflex's date of sale methodology, Rubberflex failed to clarify
which sales applied to this review period pursuant to the Department's
methodology; Rubberflex provided revised questionnaire responses at
verification for home market indirect selling expenses, direct labor
and packing labor expense, variable overhead and cost of goods sold;
for these same expenses Rubberflex could not demonstrate how the
original response was supported by documentation, nor could it document
the difference between the original and revised submission for these
items; Rubberflex failed to have all the appropriate documentation
required to trace the pre-selected sales to its books and records, and;
Rubberflex failed to report a trade-bill financing expense incurred on
U.S. sales as an adjustment to U.S. price. Furthermore, it failed to
provide original source documentation for its reported managerial labor
expenses. The deficiencies are outlined in detail in the public version
of the memorandum on Rubberflex's Failed Verification from Holly Kuga
to Jeffrey P. Bialos, dated November 26, 1996.
Rubberflex has not cooperated to the best of its ability, as
demonstrated by the misreportings, inaccuracies, and omissions we found
at our attempted verification which resulted from inconsistencies in
data within Rubberflex's control. Therefore, as adverse facts available
for Rubberflex, we have used Rubberflex's own calculated rate from a
prior segment of this proceeding, (see Antidumping Duty Order and
Amendment of Final Determination of Sales at Less Than Fair Value;
Extruded Rubber Thread from Malaysia, 57 FR 46150 (October 7, 1992)),
which is considered secondary information within the meaning of section
776(c) of the Act.
Section 776(c) of the Act provides that the Department shall, to
the extent practicable, corroborate secondary information from
independent sources reasonably at its disposal. The Statement of
Administrative Action (SAA) provides that ``corroborate'' means that
the Department will satisfy itself that the secondary information to be
used has probative value (see SAA, H.R. Doc. 316, Vol. 1, 103d Cong.,
2d sess. 870 (1994)).
To corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information to be used. However, unlike for other types of information,
such as input costs or selling expenses, there are no independent
sources for calculated dumping margins. Thus, in an administrative
review, if the Department chooses as total adverse facts available a
calculated dumping margin from a prior segment of this proceeding, it
is not necessary to question the reliability of the margin for that
time period. With respect to the relevance aspect of corroboration,
however, the Department will consider information reasonably at its
disposal as to whether there are circumstances that would render a
margin not relevant. Where circumstances indicate that the selected
margin is not appropriate as adverse facts available, the Department
will disregard the margin and determine an appropriate margin (see,
e.g., Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty
Administrative Review, 61 FR 6812, 6814 (February 22, 1996) (Fresh Cut
Flowers) (where the Department disregarded the highest margin as
adverse best information available because the margin was based on
another company's uncharacteristic business expense resulting in an
unusually high margin)).
For Rubberflex, we examined the rates applicable to extruded rubber
thread from Malaysia throughout the course of the proceeding. Given
Rubberflex's level of participation in this segment of the proceeding,
we preliminarily determine that 20.38 percent, which is Rubberflex's
highest rate from a prior segment of this proceeding, is sufficiently
adverse to encourage full cooperation in future segments of the
proceeding. Moreover, this rate has probative value because it is
Rubberflex's calculated rate from the less than fair value (LTFV)
investigation. Furthermore, there is no evidence on the record
indicating that this selected margin is not appropriate as adverse
facts available. (See, e.g., Fresh Cut Flowers.)
In summary, section 776(a)(2)(D) states that the Department
``shall, subject to section 782(d), use the facts otherwise available
in reaching the applicable determination under this title'' if an
interested party or any other person provides such information but the
information cannot be verified. Because we were unable to verify the
information submitted by Rubberflex in this POR, we have used
Rubberflex's highest rate from a prior segment of this proceeding
(i.e., 20.38 percent).
Preliminary Results of Review
As a result of our review, we preliminarily determine the weighted-
average dumping margins for the period October 1, 1994, through
September 30, 1995 to be as follows:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Filati Lastex Elastfibre (Malaysia).......................... 13.86
Heveafil Sdn. Bhd............................................ 9.75
Rubberflex Sdn. Bhd.......................................... 20.38
Rubfil Sdn. Bhd.............................................. 44.44
------------------------------------------------------------------------
Interested parties may request disclosure within 5 days of the date
of publication of this notice. Any interested party may request a
hearing within 10 days of the date of publication of this notice. A
hearing, if requested, will be held 44 days from the date of
publication of this notice at the main Commerce Department building.
In accordance with 19 CFR 353.38, case briefs from interested
parties are due within 30 days of publication of this notice. Rebuttal
briefs, limited to the issues raised in the respective case briefs, may
be submitted no later than 37 days of publication of this notice.
Parties who submit case briefs or rebuttal briefs in this proceeding
are requested to submit with each argument (1) a statement of the issue
and (2) a brief summary of the argument. The Department will
subsequently publish the final results of this administrative review,
including the results of its analysis of issues raised in any such
written briefs or hearing. The Department will issue final results of
this review within 180 days of publication of these preliminary
results.
Interested parties who wish to request a hearing or to participate
if one is
[[Page 65022]]
requested, must submit a written request to the Assistant Secretary for
Import Administration, Room B-099, within ten days of the date of
publication of this notice. Requests should contain: (1) the party's
name, address and telephone number; (2) the number of participants; (3)
a list of issues to be discussed. In accordance with 19 CFR 353.38(b),
issues raised in hearings will be limited to those raised in the
respective case briefs and rebuttal briefs.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between export price and NV may vary from the percentages
stated above. The Department will issue appropriate appraisement
instructions directly to the U.S. Customs Service upon completion of
this review.
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 the
final results of this administrative review, as provided by section
751(a)(1) of the Act: (1) The cash deposit rates 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
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) the cash deposit rate for all other
manufacturers or exporters will be 15.16 percent, the ``all others''
rate made effective by the final determination of sales at LTFV, as
explained below.
On March 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 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 of clerical
errors or as a result of litigation) in proceedings governed by
antidumping duty orders. Therefore, the Department is reinstating the
``all others'' rate made effective by the final determination of sales
at LTFV (see Antidumping Duty Order and Amendment to Final
Determination of Sales at Less Than Fair Value; Certain Internal-
Combustion, Industrial Forklift Trucks From Japan, 53 FR 20882 (June 7,
1988)).
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 and 19 CFR 353.22(c)(5).
Dated: November 26, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-31355 Filed 12-9-96; 8:45 am]
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