[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]
BILLING CODE 3510-DS-P