[Federal Register Volume 62, Number 47 (Tuesday, March 11, 1997)]
[Notices]
[Pages 11150-11152]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-6039]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-427-812]


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

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to a request from one respondent, Lafarge 
Aluminates (LA), and its U.S. subsidiary, Lafarge Calcium Aluminates, 
Inc. (LCA) (collectively, Lafarge), the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on calcium aluminate (CA) flux from France. This review 
covers one manufacturer/exporter of the subject merchandise to the 
United States, Lafarge, for the period June 1, 1995 through May 31, 
1996.
    We have preliminarily determined that U.S. sales have been made 
below normal value (NV). If these preliminary results are adopted in 
our final results of administrative review, we will instruct the U.S. 
Customs Service (Customs) to assess antidumping duties equal to the 
differences between the United States Price (USP) and NV.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit arguments in this proceeding are requested 
to submit with the argument (1) a statement of the issues, and (2) a 
brief summary of the argument.

EFFECTIVE DATE: March 11, 1997.

FOR FURTHER INFORMATION CONTACT: Maureen McPhillips or Linda Ludwig, 
AD/CVD Enforcement Group III, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230, telephone: (202) 482-
3019.

The Applicable Statute

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

SUPPLEMENTARY INFORMATION:

Background

    On June 13, 1994, the Department published in the Federal Register 
(59 FR 30337) the antidumping duty order on CA flux from France. On 
June 6, 1996 (61 FR 28840), the Department published in the Federal 
Register a notice of opportunity to request an administrative review of 
the antidumping duty order on CA flux from France. In accordance with 
19 CFR 353.22(a)(1)(1995), we received a timely request for review from 
a respondent, Lafarge. We published a notice of initiation of this 
antidumping duty administrative review on August 8, 1996 (61 FR 41373), 
for the period June 1, 1995 through May 31, 1996.
    The Department is now conducting this administrative review in 
accordance with section 751 of the Act.

Scope of the Review

    Imports covered by this review are shipments of CA flux, other than 
white, high purity CA flux. This product contains by weight more than 
32 percent but less than 65 percent alumina and more than one percent 
each of iron and silica.
    CA flux is currently classifiable under the Harmonized Tariff 
Schedule of the United States (HTSUS) subheading 2523.10.0000. The 
HTSUS subheading is provided for convenience and U.S. Customs' purposes 
only. The written description of the scope of this order remains 
dispositive.

Constructed Export Price

    In calculating Lafarge's USP, the Department treated respondent's 
sales as constructed export price (CEP) sales, as defined in section 
772(b) of the Act, because the subject merchandise was sold to the 
first unaffiliated purchaser after importation into the United States.
    We calculated CEP based on packed or bulk, ex-U.S. warehouse or 
delivered prices to unaffiliated customers in the United States. We 
made deductions from the gross unit price, where appropriate, for the 
following movement charges: loading material at the Fos plant in 
France, foreign inland freight from plant to port, foreign brokerage 
and handling costs, international freight, marine insurance, U.S. 
brokerage and handling, inland freight from port to U.S. warehouse, 
unloading charges, inland freight to processors, demurrage and stop-off 
charges, and U.S. freight from the warehouse to the customer, in 
accordance with section 772(c)(2)(A) of the Act. Pursuant to section 
772(d)(1)(B), we also deducted credit expenses, product liability 
insurance, and travel expenses for technical services. Pursuant to 
section 772(d)(1)(D), we deducted U.S. indirect selling expenses, and 
inventory carrying costs incurred in the United States. We did not 
deduct indirect selling expenses (i.e., administrative expenses, 
inventory carrying costs, personnel costs for technicians) incurred by 
LA in France because these expenses were for commercial activity taking 
place outside the United States. We also deducted commissions in 
accordance with section 772(d)(1)(A) of the Act.
    We also deducted an amount for profit in accordance with section 
772 (d)(3) of the Act.

[[Page 11151]]

Level of Trade and CEP Offset

    As set forth in section 773(a)(1)(B)(i) of the Act and in the 
Statement of Administrative Action (SAA) accompanying the Uruguay Round 
Agreements Act, at 829-831, the Department will, to the extent 
practicable, calculate NV based on sales at the same level of trade as 
the U.S. sales. When the Department is unable to find sales of the 
foreign like product in the comparison market at the same level of 
trade as the U.S. sale, the Department may compare the U.S. sale to 
sales at a different level of trade in the comparison market.
    In accordance with section 773(a)(7)(A) of the Act, if sales at 
different levels of trade are compared, the Department will adjust the 
NV to account for the difference in levels of trade if two conditions 
are met. First, there must be differences between the actual selling 
activities performed by the exporter at the level of trade of the U.S. 
sale and at the level of trade of the comparison market sale used to 
determine NV. Second, the differences must affect price comparability 
as evidenced by a pattern of consistent price differences between sales 
at the different levels of trade in the market in which NV is 
determined.
    Section 773(a)(7)(B) of the Act establishes that a CEP ``offset'' 
may be made when two conditions exist: First, NV is established at a 
level of trade which constitutes a more advanced stage of distribution 
than the level of trade of the CEP; and second, the data available do 
not provide an appropriate basis for a level-of-trade adjustment.
    To implement these principles in this case, we requested 
information on the selling activities of Lafarge in each of its 
markets. We asked Lafarge to establish any claimed levels of trade 
based on the selling activities provided to each proposed customer 
group, and to document and explain any claims for a level-of-trade 
adjustment. In its October 11, 1996 submission, and subsequent 
supplemental response of February 5, 1996, Lafarge explained that LA, 
acting as the national distributor in France for Lafarge's CA flux 
products, sold to distributors and end users in the home market. 
Lafarge's U.S. CEP sales were made through its subsidiary, LCA, which 
performed the same basic role in the United States that LA performed in 
the home market, selling to distributors and end users. For both 
channels of distribution the selling activities in both the home market 
and the United States were similar.
    To determine whether separate levels of trade existed in the United 
States and the home market, we reviewed the selling activities 
associated with each channel of distribution claimed by Lafarge. Since 
all of Lafarge's U.S. sales were CEP sales, we considered only the 
selling activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act.
    In the home market Lafarge reported two customer groups: end-users 
and distributors. We reviewed the sales activities between these two 
types of customers in the home market. There were no significant 
distinctions in the selling activities performed for end-users and 
distributors in the home market. The distribution systems, inventory 
maintenance, sales order processing, and sales agreements were very 
similar across customer groups in each market. Because channels of 
distribution do not qualify as separate levels of trade when the 
selling activities performed for each customer class are sufficiently 
similar, we concluded that Lafarge's home market sales to end-users and 
resellers were made at the same level of trade since the aggregate 
selling activities performed for both channels of distribution were 
essentially identical.
    We then examined the level of trade of the CEP sales in the U.S. 
market (i.e., the level of trade for sales from LA to LCA). Based on 
Lafarge's responses to the Department's questionnaires, we concluded 
that the selling activities of the level of trade of the home market 
sales were sufficiently different from the level of trade of Lafarge's 
CEP sales to establish a different level of trade between the two 
markets. For example, the level of trade of the CEP sales did not 
involve extensive technical assistance, credit insurance, inventory 
maintenance, and sales administration costs. Since the same level of 
trade as that of the CEP did not exist in the home market, we could not 
determine whether there was a pattern of consistent price differences 
between the levels of trade, in accordance with section 773(a)(7)(A) of 
the Act, based on Lafarge's home market sales of merchandise under 
review. Further, we do not have the information which would allow us to 
examine pricing patterns of Lafarge's sales of other products, and 
there is no other respondent's or other producer's information on the 
record to analyze whether the adjustment is appropriate. See SAA at 
830.
    Because the data available do not provide an appropriate basis for 
making a level-of-trade adjustment, but the level of trade in the home 
market is at a more advanced stage than the level of trade of the CEP 
sales, a CEP offset is appropriate in accordance with section 
773(a)(7)(B) of the Act. To calculate the CEP offset, we deducted from 
NV the general and administrative expenses, inventory carrying costs, 
and salaries and overhead expenses associated with technical service 
reported by Lafarge as home market indirect selling expenses. We 
limited the home market indirect selling expense deduction by the 
amount of the indirect selling expenses incurred in the United States 
as determined under section 772(d)(1)(D) of the Act.

Further Manufacture

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

Normal Value (NV)

A. Viability

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, and absent any information that a particular market 
situation in the exporting country does not permit a proper comparison, 
we determined that the quantity of the foreign like product sold in the 
exporting country by Lafarge was sufficient to permit a proper 
comparison with Lafarge's sales of the subject merchandise to the 
United States, pursuant to section 773(a)(1)(B)(i) of the Act. 
Therefore, in accordance with section 773(a)(1)(B)(i), we based NV on 
the prices at which the foreign like products were sold to the first 
unaffiliated purchaser for consumption in the exporting country.

B. Model Match

    In accordance with section 771(16)(B) of the Act, we considered all 
products produced by the respondent, covered by

[[Page 11152]]

the description in the Scope of the Review section above, and sold in 
the home market during the POR, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
Since there were no sales of identical merchandise in the home market 
to compare to U.S. sales, we matched U.S. sales to the most similar 
foreign like product based on the physical characteristics reported by 
the respondent, Lafarge. Among similar products sold in the home market 
we chose that product with the least difference in size (i.e., the type 
of crushing and screening performed) and packaging between the home 
market and the U.S. product. In any case, we did not use any home 
market product which, when compared to the U.S. model, resulted in a 
difference-in-merchandise adjustment in excess of 20 percent of the 
total cost of manufacture of the U.S. model.

C. Price to Price Comparisons

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

Preliminary Results of Review

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

------------------------------------------------------------------------
                                                                 Margin 
          Manufacturer/exporter             Period of review   (percent)
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Lafarge Aluminates......................    06/01/95-05/31/96       7.30
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    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held 44 days after the date of publication, or the 
first workday thereafter. Interested parties may submit case briefs 
within 30 days of the date of publication of this notice. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
the case briefs and comments, may be filed not later than 37 days after 
the date of publication. Parties who submit arguments in this 
proceeding are requested to submit with the argument (1) a statement of 
the issue and (2) a brief summary of the argument. The Department will 
issue the final results of this administrative review, including the 
results of its analysis of issues raised in any such written comments.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Individual differences 
between CEP and NV may vary from the percentage stated above. The 
Department will issue appraisement instructions directly to Customs. 
The final results of this review shall be the basis for the assessment 
of antidumping duties on entries of merchandise covered by the 
determination and for future deposits of estimated duties.
    Furthermore, the following deposit requirements will be effective 
upon the publication of the final results of this administrative review 
for all shipments of CA flux from France entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(2)(C) of the Act: (1) The cash deposit rate for Lafarge will be 
the rate established in the final results of this administrative 
review; (2) for merchandise exported by manufacturers or exporters not 
covered in these reviews but covered in the original 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 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) 
for all other producers and/or exporters of this merchandise, the cash 
deposit rate will be 37.93 percent, the rate established in the LTFV 
investigation (59 FR 5994, February 9, 1994).
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 353.26 to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: March 3, 1997.
Robert. S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-6039 Filed 3-10-97; 8:45 am]
BILLING CODE 3510-DS-P