[Federal Register Volume 62, Number 119 (Friday, June 20, 1997)]
[Notices]
[Pages 33588-33601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16046]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-557-805]
Extruded Rubber Thread From Malaysia, Final Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On December 10, 1996, the Department of Commerce (the
Department) published in the Federal Register its preliminary results
of the administrative review of the antidumping duty order on extruded
rubber thread from Malaysia (61 FR 65019). This review covers Heveafil
Sdn. Bhd. (``Heveafil''), Rubberflex Sdn. Bhd. (``Rubberflex''), Filati
Lastex Elastofibre (Malaysia) (``Filati''), Rubfil Sdn. Bhd.
(``Rubfil'') (collectively ``respondents''), manufacturers/exporters of
the subject merchandise to the United States. The period of review
(POR) is October 1, 1994 through September 30, 1995. We gave interested
parties an opportunity to comment on our preliminary results.
Petitioner and respondents submitted case briefs on March 10, 1997 and
rebuttal briefs on March 17, 1997. Respondents requested a hearing on
January 2, 1997, but later withdrew their request for a hearing.
Therefore, we have based our analysis on the comments received, and
have changed the results from those presented in the preliminary
results of review.
EFFECTIVE DATE: June 20, 1997.
FOR FURTHER INFORMATION CONTACT:
Laurel LaCivita or James Terpstra, AD/CVD Enforcement Group II, Office
4, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone (202) 482-4740 or (202) 482-3965,
respectively.
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).
[[Page 33589]]
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 Elastofibre
(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. We conducted a vertification of Rubberflex in Malaysia from
September 23, 1996 until October 5, 1996, and of its U.S. affiliate in
Hickory, North Carolina from October 16 to 18, 1996. Our preliminary
results of review were published in the Federal Register on December
10, 1996 (61 FR 65019). Petitioner and all respondents filed case
briefs on March 10, 1997 and rebuttal briefs on March 17, 1997. The
Department has now completed this administrative review in accordance
with section 751(a) of the Act.
Scope of the 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 U.S.
Customs purposes. Our written description of the scope of this review
is dispositive.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the
preliminary results. We received comments and rebuttal comments from
North American Rubber Thread (petitioner), and Rubberflex, Rubfil,
Heveafil and Filati (respondents).
Facts Available for Rubberflex
We found that responses provided by Rubberflex could not be
verified within the meaning of section 776(a)(2)(D) of the Act, and
that the complete verification failure renders the response unusable
under section 782(e) of the Act. For a significant portion of the cost
and expense items reviewed at verification, the information provided in
the questionnaire response was inaccurate or could not be verified.
This includes, but is not limited to, indirect selling expenses,
overhead, selling, general and administrative (SG&A) expenses, labor,
materials, rebates, corporate structure, and the completeness of U.S.
sales reporting. For numerous items, Rubberflex attempted to present
revised information at verification. However, Rubberflex failed to
disclose the numerous errors in its response prior to, or at the start
of verification, as repeatedly requested by the Department. Rather,
Rubberflex attempted to present its new information in a piecemeal
manner, often late in the verification. This effectively precluded the
Department from having adequate time to evaluate the scope and
magnitude of the changes. Accordingly, we determined that Rubberflex
failed to demonstrate the completeness and accuracy of its
questionnaire response at verification and thus has failed
verification.
As discussed in comments 1 through 26 below, we carefully reviewed
Rubberflex's arguments in light of the verification report and the
supporting verification exhibits. This analysis reveals that
Rubberflex's brief systematically mischaracterizes, and seeks to
minimize the importance of, all of the myriad problems encountered at
verification. As described below, as in the preliminary results of
review, we find that, pursuant to sections 776(a) and 782(e) of the
Act, the errors and problems found at verification render Rubberflex's
questionnaire response unusable for purposes of calculating a margin.
Where a party provides information requested by the Department but
the information cannot be verified as required by section 782(i) of the
Act, section 776(a)(2)(D) of the Act requires the Department to use
facts otherwise available in reaching the applicable determination.
Section 782(e) of the Act provides that the Department shall not
decline to consider information that is submitted by an interested
party and is necessary to the determination but does not meet all the
applicable requirements established by the Department if: (1) the
information is submitted by the deadline established for its
submission; (2) the information can be verified; (3) the information is
not so incomplete that it cannot serve as reliable basis for reaching
the applicable determination; (4) the interested party has demonstrated
that it acted to the best of its ability in providing the information
and meeting the requirements established by the Department with respect
to the information; and (5) the information can be used without undue
difficulties.
In this case we have determined that the information submitted
could not be verified and that Rubberflex did not act to the best of
its ability. Moreover, using Rubberflex's information would create
undue difficulty. Verification revealed numerous errors in Rubberflex's
information. Using this information would require the Department to use
information it knows is incorrect, unverified or both. At verification,
we determined that a substantial portion of the information submitted
by Rubberflex was incorrect and we were not always able to determine
the correct information for every error found at verification. Thus,
any attempt to use Rubberflex's data, in whole or in part, would be
unduly difficult. Accordingly, we must decline to consider information
submitted by Rubberflex.
Moreover, we determine that, pursuant to section 776(b) of the Act,
Rubberflex did not cooperate to the best of its ability to comply with
our requests for information and therefore we are using adverse facts
available to determine Rubberflex's margin. Such adverse inferences may
include information derived from: (1) the petition, (2) a final
determination in the investigation, (3) any previous review under
section 751 of the Act of determination under section 753 of the Act,
or (4) any other information placed on the record.
In selecting a margin would be sufficiently adverse, we considered
Rubberflex's degree of cooperation and the nature of the deficiencies
detected at verification. Further, we note that Rubberflex's normal
audit cycle coincided with verification in such a way as to hamper
Rubberflex's preparation for the verification of certain items. In
selecting a facts available margin which is appropriate in light of
these circumstances, we determine that (as we did in our preliminary
results) 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
[[Page 33590]]
probative value because it is Rubberflex's calculated rate from the
less than fair investigation. Furthermore, there is no evidence on the
record indicating that this selected margin in not appropriate as
adverse facts available (see, e.g., Antifriction Bearings (Other than
Tapered Roller Bearings) and Parts Thereof from France, Germany, Italy,
Japan, Singapore and the United Kingdom; Final Results of Antidumping
Duty Administrative Review, 62 FR 2081, 2088 (January 15, 1997)).
Section 776(c) of the Act requires the Department to corroborate
secondary information used as facts available to the extent
practicable. Secondary information is information derived from the
petition that gave rise to the investigation or review, the final
determination concerning the subject merchandise, or any previous
review under section 751 concerning the subject merchandise. The
Statement of Administrative Action, H.R. Doc. 316, Vol 1, 103d Cong.,
2d Sess. 870 (1994), (``SAA'') provides that ``corroborate'' means
simply that the Department will satisfy itself that the secondary
information to be used has probative value (see SAA at 870). Thus, to
corroborate secondary information, the Department will, to the extent
practicable, examine the reliability and relevance of the information
used. However, unlike other type of information, such as input costs or
selling expenses, there are no independent sources for calculated
dumping margins. The only source for margins is an administrative
determination . After reviewing the record, we are satisfied that this
rate has probative value because it is Rubberflex's calculated rate
from the less than fair value proceeding. Thus, we have determined that
information and inferences which we have applied are reasonable to use
under the circumstances of this review. See SAA at 869. Further, there
is no reliable evidence on the record indicating that this selected
margin is not appropriate as adverse facts available. (See, e.g., Fresh
Cut Flowers from Mexico; Final Results of Antidumping Duty
Administrative Review, 61 FR 6812, 6814 (February 22, 1996).
Comments Concerning Rubberflex
Rubberflex argues that the Department was not justified in
disregarding its responses and assigning facts available in the
preliminary results. Rubberflex contends that the Department verified
Rubberflex's questionnaire responses, and that, at most, the Department
should use partial facts available for certain aspects of its dumping
calculations. Rubberflex made numerous detailed arguments refuting and
rebutting the Department's preliminary results, verification report,
and verification failure memo. We have addressed these to the greatest
extent practicable in this notice. However, many of the comments are
extremely detailed and many can only be completely addressed by
reference to proprietary data. Accordingly, we addressed each comment
in complete detail in a proprietary analysis memorandum to the file
dated June 9, 1997.
Comment 1: Reconciliation of Sales, Profit and Expenses.
Rubberflex maintains that it provided the Department with a
reconciliation of its calendar year 1994 and 1995 trial balances to the
appropriate audited, consolidated financial statements at verification.
Rubberflex states that, contrary to the verification report, total
sales, profit, financing expenses, and indirect selling expenses were
reconciled to the audited financial statements.
DOC Position: We agree that Rubberflex was able to reconcile its
audited financial statements to its trial balance for the above-
mentioned figures. We disagree that this had any bearing on the
verification of specific items. This reconciliation was not what was
requested of them at verification. Rubberflex voluntarily provided all
of this information in response to the Department's request that it
demonstrate that the indirect selling expenses reported in the revised
response provided at verification tied to the audited financial
statements. Rubberflex did not demonstrate that the figures reported in
its revised response for indirect selling expenses and G&A tied to its
audited financial statements.
Comment 2: Reconciliation of Rubberflex's Affiliates' Financial
Statements.
Rubberflex disputes the Department's determination that its home
market indirect selling expenses did not reconcile to its current
financial statement due to the fact that indirect selling expenses
incurred in Rubberlex's U.K. and German branch offices (expenses which
account for differences between the home market indirect selling
expenses and the financial statement) could not be verified. Rubberflex
contends that during verification it demonstrated how total sales,
expenses, and profits of the U.K. and German branches accounted for
differences between consolidation totals and totals for Rubberflex in
Malaysia. Further, Rubberflex claims that it should not be held
accountable for providing original copies of the auditors'
consolidation worksheets in the short time permitted at verification.
Rubberflex also contends that it stressed during verification that
information involving its U.K. and German branches could only be
accurately verified on site in those particular countries.
DOC Position: We disagree. It is one of the primary requirements of
verification that a company is required to tie the information in its
questionnaire response to its audited consolidated financial
statements. Rubberflex failed to do so at verification. Rubberflex is
essentially arguing that we should accept their attempt, but ultimate
failure. We disagree. Given the circumstances of this review, where
Rubberflex provided numerous, inadequately explained or documented,
revisions to its questionnaire response, Rubberflex's failure in this
regard undermines the entire verification.
Comment 3: Home Market Sales List.
Rubberflex states that verification demonstrated that all home
market sales were correctly reported and traced through the accounting
records. In addition, Rubberflex maintains that the Department found
that Rubberflex's date-of-sale methodology accurately reflected the
date that all material terms of the sale were established and that all
credit memos for returned and defective merchandise were accurately
reported.
DOC Position: We agree with Rubberflex in general that the home
market sales list verified. The verification report identifies the
minor discrepancies noted.
Comment 4: Home Market Movement Expenses.
Rubberflex states that the verification report indicates that home
market movement expenses were traced to the general ledger and that all
freight expenses were properly accounted for. Further, Rubberflex
argues that the Department confused the facts in this review with
verification difficulties regarding home market movement expenses in
the 1993/1994 administrative review and that this confusion resulted in
the Department's erroneous decision to use adverse facts available on
issues relating to another review.
DOC Position: We agree with Rubberflex's characterization of the
verification of home market movement expenses. We disagree that any of
the information presented in the 1993-1994 review influenced the use of
adverse facts available in the instant review.
Comment 5: Home Market Credit Expenses.
[[Page 33591]]
Rubberflex states that its original response contained the
information needed to calculate home market credit expenses and that
this response was neither revised nor found to contain any significant
errors during verification. Rubberflex states that the one clerical
error found by the Department at verification resulted in an increase
to the short-term interest rate.
DOC Position: We agree with Rubberflex that we found only small
clerical error at verification which resulted in an increase to the
short-term interest rate. However, we disagree that this was the only
error found at verification. We also found that Rubberflex failed to
include certain expenses related to export credit refinancing (ECR)
expenses in its calculation of the interest rate used to impute credit
expenses on home market sales.
Comment 6: Home Market Packing Expenses.
Rubberflex claims that at the beginning of verification, it
disclosed to the Department that it had erroneously allocated the cost
of all factory workers' benefits in the category of fixed overhead
costs, rather than allocating that cost among direct labor costs, fixed
overhead costs, and packing labor costs. Rubberflex stated that a
corrected worksheet reflecting this reallocation was submitted to the
department at the beginning of the cost verification, and subsequently
verified. Rubberflex contends that a comparison of the original to the
corrected worksheets reveals only minor changes in the calculation of
packing labor costs. Further, Rubberflex also contends that it
submitted an additional worksheet which proved that the reallocation
did not affect the total cost of production (COP) or constructed value
(CV).
DOC Position: We agree with Rubberflex that we found only minor
discrepancies in Rubberflex's calculation of packing material and
labor. However, we disagree that Rubberflex presented any documentation
at the beginning of verification to demonstrate what changes it made to
the classification of labor expenses in its sale and cost response.
Rubberflex did make a general oral statement that it had reallocated
some labor costs across packing, indirect overhead and factory labor,
but it did not spell out those changes. The Department then directly
and repeatedly requested Rubberflex to provide this information in
writing, which it said it would do. However, Rubberflex failed to
report any of its changed allocations until each subject arose in the
course of the verification.
Comment 7: Home Market Indirect Selling Expenses.
Rubberflex states that the worksheets provided in its questionnaire
response regarding home market indirect selling expenses and general
and administrative expenses (G&A) were based on its auditor's
presentation of G&A expenses, which in turn were based on Rubberflex's
trial balance and general ledger. Rubberflex contends that the titles
of the concepts listed in the auditor's presentation did not always
relate directly to the titles of the accounts used by Rubberflex in the
ordinary course of business because the auditor collapsed several
accounts into a single concept. Rubberflex further contends that while
preparing for verification, it discovered that the worksheets in its
response required two corrections. However, Rubberflex maintains that:
(1) it disclosed these changes on the first day of verification, (2)
the Department reviewed these revisions, and (3) these revisions were
tied to the financial statements.
DOC Position: As we explained in the Facts Available for Rubberflex
section of this notice and the Department's position to Comments 1 and
2, Rubberflex failed to demonstrate that it reported all of the
appropriate indirect selling expenses and G&A expenses to the
Department, despite three separate submissions, and that it failed to
tie the reported expenses to its audited financial statements. It
failed to provide a worksheet, or any other type of document,
reconciling the ``titles and concepts'' used in its trial balance to
those on the audited financial statements. (See page 2 of the
Department's December 12, 1996 memorandum concerning the verification
failure for Rubberflex.) Therefore, Rubberflex failed to demonstrate
that it included all appropriate indirect selling expenses and G&A
expenses in its revised exhibit, and that those expenses tied to the
total amount of expenses recorded for Rubberflex Malaysia on
Rubberflex's financial statements.
Comment 8: U.S. Sales Listing.
Rubberflex contends that it demonstrated at the verification in
Malaysia that (1) all export price (EP) sales entered into the United
States during the review period were reported; (2) it accurately
reported the date of sale for EP sales as the Malaysian bill of lading
date; and (3) it accurately reported foreign inland freight, packing,
indirect selling expenses, brokerage and handling, international
freight and marine insurance pertaining to U.S. sales that were
incurred in Malaysia.
DOC Position: We disagree with Rubberflex's characterization of the
portion of the U.S. sales verification which took place in Malaysia. At
the Malaysian portion of verification, Rubberflex showed that it
reported all entries into the United States during the period of review
and that it used the Malaysian bill of lading date as the date of sale
for EP sales, including certain ``consignment'' sales. However, our
review of Rubberflex's U.S. sales reporting during the U.S. portion of
the verification revealed a great deal of confusion concerning the date
of sale and the accuracy of the computer sales listing. Rubberflex was
unable to demonstrate that the price, quantity and date of sale were
accurately reported on the computer sales listing. In Malaysia, and in
the questionnaire response, the date of sale for all EP sales was
identified as the Malaysian bill of lading date. However, in the United
States, company officials stated that for certain consignment sales,
Rubberflex used the date on which the rubber thread is withdrawn from
Rubberflex's customer's inventory as the date of sale. Thus, the
questionnaire response, and the Malaysian verification findings, were
contradicted. Moreover, because Rubberflex failed to indicate on its
computer tape which sales were consignment sales, it was not possible
to know what date of sale was operative for any of the sales listed on
the computer tape.
With respect to the accuracy of the other expenses: (1) the
problems with foreign inland freight and indirect selling expenses are
discussed elsewhere, and (2) we found only minor discrepancies with
ocean freight, marine insurance or brokerage and handling.
Comment 9: The Total Volume and Value of EP and Constructed Export
Price (CEP) Sales.
Rubberflex argues that the Department was able to reconcile the
quantity and value of Rubberflex's sales to the response after certain
adjustments were made at the U.S. verification. Rubberflex contends
that, at the U.S. verification, Rubberflex provided worksheets that
traced the reported quantities and values of the U.S. sales to
Rubberflex's audited financial statements.
DOC Position: We disagree. The verification report establishes that
Rubberflex was never able to conclusively demonstrate that its U.S.
sales were correctly reported. Rubberflex was not able to demonstrate
the validity of the information provided on the computer tapes by the
end of the verification.
As Rubberflex explains in its case brief, it presented a
reconciliation of the
[[Page 33592]]
volume and value of sales from its financial statements to the
response. We found a number of clerical errors and omissions, such as
credit memos that were initially omitted from the reconciliation
exercise because they were omitted from the response. We found that:
(1) certain sales were reported in two review periods; (2) others were
misclassified between EP and CEP sales; (3) the date of sale for
certain EP sales was misreported; and (4) Rubberflex could not
reconcile its credit memos to the specific line items on the computer
tape. Given that we found errors in almost every phase of the numerous
attempted reconciliations of U.S. sales, it is not accurate to claim,
as does Rubberflex, that the quantity of U.S. sales was in any way
reconciled completely. Consequently, we found that these errors and
omissions undermined the integrity of the response and made the
computer tape unusable for the purpose of calculating a margin.
Comment 10: Date of Sale Methodology for U.S. Sales in the 1993-
1994 Review.
Rubberflex notes that the Department's December 12, 1996 memorandum
stated that ``Rubberflex failed to use the appropriate date of sale
methodology for purchase price sales in the 1993-1994 review.''
Rubberflex contends that the date of sale issues relating to the 1993/
1994 review were erroneously considered in the Department's
determination to use ``adverse facts available'' in the 1994-1995
review.
DOC Position: We note that the December 12, 1996 memorandum applied
both to the 1993-1994 and the 1994-1995 reviews. In the example cited
by Rubberflex, the Department identified that the date of sale issue
applied clearly to the 1993-1994 review, based on the evidence on the
record in that segment of the proceeding. Rubberflex is incorrect that
such information was considered in our determination to use ``adverse
facts available'' in the instant review. The Department's determination
in the instant review is based only on information pertaining to the
1994-1995 period of review.
Comment 11: Review Classification According To Date of Entry.
Rubberflex states that its inadvertent error of classifying 37
sales under two different review periods can be easily rectified, and
should not form the basis for the assignment of total facts available.
Rubberflex disputes the Department's contention that Rubberflex was not
able to state with any clarity for which review the 37 sales should
have been reported. Rubberflex claims that the Department verified the
entry dates for the sales in question and noted no discrepancies.
Therefore, Rubberflex requests that the Department revisit this issue
and reclassify those 37 sales into the appropriate review period
according to date of entry.
DOC Position: At verification, Rubberflex was unable to
appropriately classify all of its sales to the United States with
regard to review period and type of sale (export price (EP) or
constructed export price (CEP)). We asked Rubberflex to properly
classify 37, of the approximately 125 EP sales, that we found reported
in both reviews. Rubberflex claimed that all consignment sales should
be classified in the 1994-1995 review. However, this classification did
not coincide with the narrative of its response which indicated that it
used the Malaysian bill of lading date as the date of sale. Some of
these consignment sales had U.S. entry dates which occurred during the
1993-1994 review. Therefore, since the U.S. entry date always follows
the bill of lading date in Malaysia (since the ship arrives in the U.S.
after it leaves Malaysia), these sales could not properly be classified
in the 1994-1995 review. When the Department tried to examine the rest
of the computer sales listing for the treatment of the date of sale in
consignment sales, it found that Rubberflex did not indicate which
sales were consignment sales on the computer sales listing submitted to
the Department. Consequently, the Department cannot determine whether
the rest of the sales reported on the computer tape were appropriately
classified with respect to review period, and therefore, we have no
basis by which to accurately reclassify these 37 sales or to verify the
accuracy of respondent's classification of the remaining U.S. sales as
reported by respondent.
We note again that it is Rubberflex's responsibility, not the
Department's, to prepare the questionnaire response. The errors we
found at verification in the preparation of Rubberflex's U.S. sales
data were so wide-spread and pervasive that the Department could not
ensure that any of the reported information was correct unless we were
to undertake the task of reconstructing the questionnaire response
ourselves.
Comment 12: CEP and EP Sales.
Rubberflex disputes the Department's determination that it
misreported or duplicated the reporting of certain sales (i.e., certain
sales classified as both CEP and EP). Rubberflex explains that it
clarified during verification the reason why certain invoices were
referenced under different review periods and classified under
different U.S. databases. As an example, Rubberflex states that sales
must be reported under various U.S. classification because certain
consignment sales and sales made out of inventory normally result in a
number of invoices issued by the U.S. affiliate, whereas the container
corresponding to those sales is recorded in Rubberflex's books as a
single invoice. Moreover, Rubberflex claims that during verification,
the Department examined a few invoices having similar circumstances and
indicated its satisfaction with Rubberflex's explanations, and did not
request to view additional invoices. Rubberflex contends that it
properly reported all U.S. sales.
Petitioner contends Rubberflex misstates the standard for when
sales are EP versus CEP. If a subsidiary is fully responsible for
setting the terms of the sale (as Rubberflex's U.S. subsidiary is for
all U.S. sales), that alone makes the sales CEP sales according to
Final Determination of Sales at Less Than Fair Value: Brake Drums and
Brake Rotors From the People's Republic of China, 62 FR 9171, 9171-72
(February 28, 1997) (Comments 14 and 16).
DOC Position: We disagree with Rubberflex. the verification report
states that company officials were confused about the classification of
Rubberflex's U.S. sales with respect to CEP and EP and with respect to
review period. At the conclusion of the verification, company officials
were still unable to determine which sales should or should not be
reported, or whether they were EP or CEP sales.
Comment 13: Credit Memos in the U.S. Market.
Rubberflex contends that the Department overstates the impact of
the omitted credit memos during the POR. Rubberflex claims that its
U.S. affiliate identified the omitted credit memos, most of which had
no effect on unit price, and thus no effect on dumping margins of any
U.S. sales. Rubberflex disputes the Department's determination that the
omitted credit memos made it impossible to tie the U.S. sales listing
to the U.S. affiliate's financial statements.
DOC Position: We disagree. Rubberflex reported the U.S. price and
quantity net of credit notes, despite instructions in the questionnaire
to record price and quantity adjustments separately. Therefore, it is
not possible to determine which sales have price and quantity
adjustments attributed to them by examining the computer tape.
At verification, Rubberflex was unable to reconcile the credit
memos to the
[[Page 33593]]
computer sales listing. First, Rubberflex failed to have its
reconciliation (via the mechanism of credit memos) of the EP sales
value from the financial statements to the response prepared at the
beginning of the verification. Secondly, Rubberflex initially failed to
report all of its credit memos with respect to CEP sales on the
reconciliation from the financial statements to the computer sales
listing. Further examination revealed that Rubberflex had also failed
to revise the computer sales listing to account for these missing
credit memos. Finally, Rubberflex company officials in the United
States stated that they did not know how to tie the credit memos listed
in the verification exhibit 52 to the questionnaire responses since
Rubberflex company officials in Malaysia prepared that portion of the
response.
Comment 14: Corrected Worksheets Should Be Part of the Record.
Rubberflex contends that given the time constraints, it was unable
to present corrected worksheets on the first day of verification, and
therefore, those worksheets, which Rubberflex contends were
subsequently submitted and verified, should not be disregarded.
Rubberflex disputes the Department's finding that it had no worksheets
to demonstrate how the original responses were prepared or why they
were changed or what the relationship was between the original and
revised submissions. Rubberflex contends that corrected worksheets were
submitted during verification, are referred to in the Department's
verification report and are found in the verification exhibits.
Rubberflex states that a side-by-side comparison of the original to the
revised worksheets clearly reveals the relationship between the
documents.
Rubberflex also contends that on the first day of verification, it
suggested to the Department that any corrected worksheets be included
as part of the verification exhibits normally submitted after
verification and that the Department did not object to its proposal.
Rubberflex also states that it repeatedly requested to submit revised
computer tapes to reflect corrections it claims to have presented
during the beginning of verification. However, Rubberflex claims that
the Department never responded to its request.
Petitioner emphasized that Rubberflex did not submit to the
Department a listing of reporting errors at the commencement of
verification, nor was petitioner served such a list, as required by the
Department's regulations. Petitioner contends that Rubberflex's claim
that the Department was advised at the commencement of verification of
certain errors in its submissions should be of no consequence.
DOC Position: As stated in our preliminary results, we found that
the responses provided by Rubberflex could not be verified. The
inaccuracies which render the response unusable for purposes of margin
calculations include the fact that Rubberflex attempted to provide
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 provide written disclosure of changes made to
its questionnaire response on the first day of verification, although
it was asked to do so. Rather, it provided verification exhibits which
constitute revised questionnaire responses throughout the course of the
verification. Rubberflex also failed to explain and/or quantify the
effects of these revisions, rending the Department unable to assess the
significance or impact of these changes. As we stated in Elemental
Sulphur From Canada: Preliminary Results of Antidumping Duty
Administrative Review, 62 FR 969, 970 (January 7, 1997), the Department
can accept new information at verification only when (1) the need for
that information was not evident previously, (2) the information makes
minor corrections to information already on the record, or (3) the
information corroborates, supports, or clarifies information already on
the record.
Rubberflex states in its brief that it submitted such revisions at
the beginning of the verification. This is directly contradicted by the
facts on the record. There were 38 verification exhibits covering the
verification in Malaysia. The document concerning packing cost is
exhibit number 18, that regarding direct labor is exhibit number 22 and
that regarding fixed overhead is exhibit number 33. As such, the record
clearly demonstrates that the information was provided piecemeal, and
late in the verification exercise.
We also disagree with Rubberflex's contention that the Department
engaged in any discussion whatsoever during verification concerning a
``suggestion'' that Rubberflex file any corrected worksheets with the
exhibits normally filed after verification. We further disagree that
Rubberflex engaged in any discussion what ever concerning the provision
of a revised computer tape. Given the pervasive errors and changes made
to the questionnaire response and the difficulties verifying those
changes, the Department has no reason to believe that a new computer
tape, submitted after verification, would accurately represent the
changes to the response that were presented during the verification.
Under the circumstances of this case, the Department would undermine
its purpose in verifying the questionnaire response by accepting such
new information after verification.
Comment 15: Corporate Structure.
Rubberflex disputes the Department's finding that Rubberflex failed
to identify the owners of its company and the existence of an
affiliated European company. Rubberflex claims that it demonstrated the
identify of its parent company through its ``annual return'' to the
Government of Malaysia which reports information regarding its
shareholders and directors. Further, Rubberflex contends that it tied
the shareholdings from the ``annual return'' to a corporate structure
worksheet provided in its response.
In addition, regarding any European affiliates, Rubberflex contends
that it could not provide documentation regarding the sale of these
companies, which it explained to the Department at verification.
Rubberflex further states that, regardless, the sale of affiliated
European resellers have no relevance to Rubberflex's sales verification
in the home and U.S. markets.
DOC Position: We disagree with Rubberflex that corporate structure
was adequately verified. Rubberflex provided new information at
verification by introducing the existence of a previously unreported
corporate owner. We asked Rubberflex to provide information regarding
whether this company had any affiliation with Rubberflex's customers or
suppliers. However, Rubberflex declined to produce such information.
Rubberflex merely stated, as it does in its case briefs, that the
affiliated European resellers have no relevance to Rubberflex's sales
in the home market and the United States. Consequently, the Department
was unable to satisfy itself regarding whether any related-party sales,
loans, equipment purchases or raw material purchases occurred during
the POR. As the U.S. Court of International Trade stated Krupp Stahl
A.G. v. United States, 17 CIT 450; 822 F. Supp. 789, 792 (1993), it is
inappropriate for respondents to limit or control which information
they present to the Department in a way that it impedes the
Department's ability to confirm the accuracy of the questionnaire
response or forces the
[[Page 33594]]
Department to use information most beneficial to them.
Comment 16: Direct Material Costs.
Rubberflex claims that the Department verified the direct material
costs used in its cost of production (COP) and constructed value (CV)
submissions. Rubberflex contends that the Department examined the
following steps Rubberflex used to calculate the direct material costs:
(1) the compound recipes of direct materials latex and chemicals used
as the basis for determining product-specific cost of productions for
all types of rubber thread; (2) the budgeted costs used to derive the
standard per-unit costs; (3) the actual cost of materials used; and (4)
the variance between standard and actual material costs. Rubberflex
argues that the Department verified the steps by examining batch
records (computer listings which aggregate a number of invoices that
will appear as a single line item in the general ledger), testing
inventory formulas, and determining that Rubberflex accurately captured
and reflected all direct material costs incurred during the review
period.
Rubberflex notes that the Department questioned the budgeted costs
because they were derived in 1991 and differed from the weighted-
average costs of materials in inventory. Rubberflex stated that these
budgeted costs had not been revised since 1991 because they were still
a reasonable estimation of the costs of the various materials used to
produce rubber thread and none of the costs had changed significantly.
Rubberflex argues that the budgeted costs are a reasonably accurate
tool for predicting costs over time.
DOC Position: We disagree with Rubberflex that per-unit direct
materials cost was verified. We did verify the total material cost
during the POR as well as the actual quantity of materials used.
However, neither of these figures alone is sufficient to calculate the
per-unit cost reported in the questionnaire response. Rubberflex
reported its per-unit material cost by multiplying actual material used
per product by standard material prices to arrive at a standard cost.
To calculate a variance Rubberflex calculated the total material cost
at standard; it then made a factory-wide adjustment for the difference
between total actual material cost and the total material cost at
standard. This methodology is not, in itself, a problem.
There are two problems which arise from Rubberflex's use of the
1991 standard prices. The first is that Rubberflex was unable to
substantiate how those prices were calculated in 1991 and what those
figures represent. Therefore, it is not possible to evaluate the
accuracy of the per-unit cost calculations. Rubberflex made no attempt
to demonstrate that these prices were reasonable, or that the use of
1991 prices to calculate costs for 1995 products was non-distortive.
The second problem is that the 1991 standard prices presumably
reflect the relative prices sometime prior to that time. However, these
relative prices have changed. As the verification report on page 16
states, we compared the 1991 standard prices with the actual POR prices
and found that the prices of individual materials increased or
decreased at different rates. Because each product uses a different mix
of materials, the cost of producing each different product would change
relative to the cost of other products produced in the factory.
However, by applying as a factory-wide variance the total actual
material cost as compared with the 1991 standard prices, Rubberflex
reported per-unit material costs failed to account for the changes in
the relative costs. Thus, these costs are inaccurate.
Comment 17: Direct Labor Costs.
Rubberflex contends that the Department verified its labor costs in
full. Rubberflex argues that it used the following steps to calculate
the direct labor costs reported in its COP/CV submissions: (1)
calculate actual direct labor cost per minute of production by dividing
total direct labor costs during the review period by the total
production time during the review period; (2) allocate the cost per
minute to specific products based on the standard number of minutes
required to produce particular types of rubber thread; and (3) adjust
the product-specific costs calculated using the standard yield for the
variance between actual and predicted factory operation.
Rubberflex notes that at the beginning of verification, it
disclosed certain minor revisions, and provided a corrected worksheet,
to the Department. Rubberflex claims that a side-by-side comparison of
the original and corrected worksheets reveals only minor corrections.
In order to verify the corrected worksheet, Rubberflex states that it
traced all of the reported expenses to its trial balance, and traced
from the trial balance to the general ledger and relevant source
documentation.
DOC Position: We agree that Rubberflex followed the method it
outlined to determine direct labor expenses. However, we disagree with
Rubberflex's characterization that these expenses were fully verified.
See DOC Position to comment 14. Rubberflex failed to clearly
demonstrate the impact of these changes on the calculations in the
questionnaire response. For example, Rubberflex contends that the
revised data was merely a reclassification. Despite the fact that much
of Rubberflex's explanation is post hoc, their own exhibits belie their
assertions. An examination of the exhibits placed side-by-side in
exhibit 3 of Rubberflex's brief reveals numerous and significant
differences in the exhibits, differences not explained at verification
nor in the case brief.
A second problem arose during the verification of labor expenses.
As we explain on pages 13 of our February 14, 1997 verification report,
Rubberflex failed to provide the original source documentation for
managerial labor, despite the Department's request, thus ``placing
control . . . in the hands of uncooperative respondents who could force
Commerce to use possibly unrepresentative information most beneficial
to them.'' Krupp Stahl, 822 F. Supp. at 792.
Comment 18: Variable Overhead Costs.
Rubberflex contends that at the beginning of verification, it
disclosed to the Department two minor errors concerning its variable
overhead costs: (1) Rubberflex reported the salary of the factory
supervisor and manager as variable overhead costs, rather than fixed
overhead costs; and (2) certain components of variable overhead needed
to be corrected to reflect year-end adjustments. Rubberflex stated that
a corrected worksheet reflecting this reallocation was submitted to the
Department during the cost verification. Rubberflex claims that a side-
by-side comparison of the original and corrected worksheets reveal only
minor changes. Rubberflex states that the costs were verified by the
Department and that final expense figures used were appropriately
recorded in monthly accounts, according to the Department's
verification report. In addition, Rubberflex states that these minor
changes were necessitated by adjustments made by the auditors after
performing a physical inventory of materials.
DOC Position: We disagree. See DOC Position to comment 14.
Comment 19: Fixed Overhead Costs.
Rubberflex contends that at the beginning of verification, it
disclosed to the department several minor errors concerning its fixed
overhead costs: (1) Rubberflex reported the salary of the factory
supervisor and manager as variable overhead costs, rather than fixed
overhead costs; (2) the cost of all benefits for workers in the factor
was included in fixed overhead cost, rather than being allocated among
direct labor
[[Page 33595]]
costs, fixed overhead costs, and packing labor costs; and (3)
Rubberflex's auditor made a provision for writing-off finished goods
inventory, which did not exists at the time of the original
questionnaire response. Rubberflex stated that it provided a corrected
worksheet reflecting this reallocation during the cost verification.
Rubberflex contends that the magnitude of any corrections made with
regard to the original worksheet were minor. Rubberflex contends that
the Department verified the corrected worksheet by tracing expense
amounts to source documents, the trial balance and the general ledger.
DOC Position: We disagree. See DOC Position to comment 14.
Comment 20: Depreciation.
Rubberflex claims that the Department verified the reported
depreciation figures by tracing the figures to the trial balance,
general ledger, asset schedules, and selected purchase invoices for
assets. Rubberflex disputes the Department's finding in the
verification report that it could not rely on the accuracy of reported
depreciation expense due to the fact that the ``original cost basis''
for certain assets acquired prior to 1990 could not be traced to the
appropriate asset schedule in the year of purchase. Rubberflex
justifies its inability to produce ``original cost basis'' information
on certain assets by claiming that: (1) it is unreasonable for
accounting or tax purposes to maintain accounting documents for more
than five years, particularly where Malaysian tax authorities do not
require the retention of these documents for that period of time; (2)
Rubberflex was not notified that such documents may be needed for
verification purposes; and (3) the Department traced the annual
depreciation for assets purchased before 1990 to trial balances and
asset schedules for fiscal years 1993, 1994, and 1995, and could
plainly see that the assets were being depreciated in a systematic
manner, which was reviewed and approved by its auditors. Therefore,
Rubberflex claims that its inability to provide original asset
schedules for years prior to 1990 does not provide grounds for the
Department to question the accuracy of the reported costs.
DOC Position: We disagree with Rubberflex that its inability to
provide original asset ledgers for certain items requested is not a
verification problem. The verification report specifies that we became
aware that Rubberflex purchased certain major pieces of capital
equipment from an affiliated party. Examples of these purchases are
recorded on verification exhibit 36. Page 18 of the verification report
notes that we attempted to determine whether the transfer price of such
equipment, and the associated depreciation expenses, represented arm's-
length transactions. Rubberflex failed to provide information
responsive to our request. Thus, we were unable to satisfy ourselves in
this regard.
We agree that Rubberflex reported the depreciation expenses on its
books and records, which were audited and in accordance with Malaysian
GAAP. Normally we use the costs and expenses recorded on the company's
books and records, provided that we are satisfied that such costs are
non-distortive. In this case, we had reason to question whether the
depreciation expenses recorded on Rubberflex's books where under- or
overstated (i.e. distortive) by reason of an affiliated party
transaction.
Finally, it is reasonable to request Rubberflex to document the
figures that it used to record its depreciation expense on its books
and records. Rubberflex depreciates certain machines and buildings for
more than 5 years and reflects those figures on its books and records.
It is standard verification practice to ask companies to demonstrate
the figures, and to keep documentation supporting information submitted
in an antidumping proceeding, for the purpose of verification. The U.S.
Court of International Trade held in Krupp Stahl, 822 F. Supp. at 792,
that, despite the fact that the German authorities did not require the
company to maintain business records for more than five years, it did
not absolve a respondent in an antidumping proceeding of the
responsibility of providing source documents to support its
questionnaire response.
Comment 21: General and Administrative (G&A) Expenses.
Rubberflex states that at the beginning of verification, it
submitted a revised worksheet which properly captured certain G&A
expenses. Some of these expenses were misclassified as G&A expenses in
the original questionnaire response and, therefore, were not properly
included in the worksheet for indirect selling expenses. Rubberflex
further explains that it provided worksheets and source documentation
which substantiated its allocation methodology with regard to indirect
selling expenses and G&A expenses. Rubberflex contends that the
Department traced the amounts shown in the revised worksheet to
relevant trial balances, source documentation, and the general ledger.
DOC Position: We disagree, See DOC Position to comment 14. The G&A
expenses in the original questionnaire response were presented in a
different format from the G&A expenses in the revisions presented at
verification, so direct comparisons are not possible. Rubberflex never
presented a systematic explanation of how individual elements of G&A
were affected by the revisions, nor how or why the total changed.
Rather, as with variable overhead, the Department was left with
insufficient time and information to evaluate the magnitude of the
change. Again, this was a situation where a company's ``failure to
reconcile its submitted costs to its normal books and records prevents
us from quantifying the magnitude of the distortions which exist in its
submitted data.'' Certain Cut-to-Length Carbon Steel Plate From Sweden:
Preliminary Results of Antidumping Duty/Administrative Review, 61 FR
51898, 51899 (October 4, 1996) (the Department's position adopted in
the final results of review, 62 FR 18396 (April 15, 1997)).
Finally, contrary to Rubberflex's assertion, it was unable to tie
the specific line items from its revised worksheets to the audited
financial statements. The fact that total profit, sales, and cost of
goods sold (COGS) figures were traced is irrelevant. It is precisely
the items which could not be traced--the components of G&A--which were
under evaluation at verification.
Comment 22: Financing Expense.
Rubberflex states that while preparing for verification it
discovered slight errors related to the amounts reported for bank
charges and interest on bills refinanced. Rubberflex further states
that these corrections were presented to the Department at verification
and that it demonstrated the accuracy of the revised worksheet by tying
the total financing expenses and interest received to the total
expenses stated in the trial balance for financing expenses and
interest received, respectively.
DOC Position: We disagree. See DOC Position to comment 14.
Comment 23: Conduct of the review.
Rubberflex contends that it fully cooperated under difficult
circumstances during this proceeding and that the Department must bear
a significant portion of the responsibility for any problems that arose
at verification. In addition to the short preparation time given to
Rubberflex prior to the verification, Rubberflex enumerates a list of
Departmental procedural errors, which Rubberflex contends unfairly
prejudiced its interests and resulted in the use of facts available in
the preliminary results. According to Rubberflex, these procedural
errors were due to the
[[Page 33596]]
Department's untimely handling of the case. Rubberflex stated that it
did the best it could under these circumstances to cooperate fully and
that it submitted its responses and verification exhibits in a timely
manner, and prepared for the verification to the extent possible given
the time available.
DOC Position: We agree with Rubberflex that there was a great deal
of case activity within a relatively short period in 1996. However, we
disagree that we unfairly prejudiced Rubberflex by our conduct of the
case. The supplemental questionnaires for this and the prior review
were relatively short and not overly demanding and Rubberflex was given
adequate time to respond. The record reflects that Rubberflex was given
several extensions of time to submit its data; in fact, Rubberflex was
granted every extension request it made. Finally Rubberflex was given
sufficient notice of the timing of verification, and the Department
followed the same standard procedures, and issued a standard
verification outline which was substantially similar for the
verification of information in both the 1993-1994 and 1994-1995 review.
These procedures were similar to those followed in the original
investigation, when Rubberflex underwent verification. Thus, there is
little evidence that the Department's conduct of the case placed an
``unreasonable'' burden on Rubberflex. Rather, in this case, as in
virtually every case the Department conducts, the burden on respondents
is to provide accurate and timely data which can be verified. To the
greatest extent possible, the Department strives to be flexible with
deadlines for respondents; ultimately, however it is respondents'
responsibility to meet this burden. Nevertheless, we took into account
Rubberflex's level of cooperation in this case in our selection of the
appropriate facts available for Rubberflex's antidumping margin. (See
Facts Available for Rubberflex section above.)
Comment 24: Rubberflex's Cooperation.
Rubberflex argues that the evidence on the record disputes the
Department's assertion in the preliminary determination that Rubberflex
failed to cooperate. Rubberflex contends that it timely filed its April
15, 1996 questionnaire response as well as its September 17, 1996
supplemental response. Further, Rubberflex argues that it prepared for
verification to the best of its ability and prepared worksheets
requested by the Department to the extent possible given the time
constraints. Rubberflex states that in the second administrative
review, the Department stated the Rubberflex ``cooperated throughout
the administrative review by submitting questionnaire responses and
with verification.'' Rubberflex argues that the level and quality of
its participation in this review was precisely the same as the second
review. Therefore, Rubberflex maintains that the Department cannot
logically conclude that it did not cooperate in this review.
DOC Position: Rubberflex points to the Department's application in
the preliminary results of the 1993-1994 review in this case of the
second-tier `'cooperative'' BIA rate set forth in Antifriction Bearings
(Other Than Tapered Roller Bearings) and Parts Thereof From France, et
al.; Final Results of Antidumping Duty Administrative Reviews, Partial
Termination of Administrative Reviews, and Revocation in Part of
Antidumping duty Orders, 60 FR 10900 (February 28, 1995) to argue that
the Department's treatment in this review is inconsistent with that of
the prior review. Contrary to Rubberflex's characterization, there is
nothing inconsistent about the Department's treatment of Rubberflex in
theses two administrative reviews. We explained in our Notice of
Preliminary Results of Antidumping Duty Administrative Review: Extruded
Rubber Thread from Malaysia, 62 FR 6758 (February 13, 1997), concerning
the 1993-1994 administrative review, that Rubberflex cooperated
throughout the review by submitting questionnaire responses and by
participating in verification. However, we found that information could
not be verified and thus resorted to BIA pursuant to section 776(b) of
the Act. Although the degree of cooperation by Rubberflex in the two
reviews is substantially the same, this final results is governed by
the new statutory provisions concerning the use of facts otherwise
available. As stated in our Preliminary Results, Rubberflex has not
cooperated to the best of its ability.
Comment 25: Partial Facts Available.
Because of the arguments presented, Rubberflex claims that the
application of a total adverse facts available is not warranted.
Rubberflex contends that during verification, it tied all information
submitted in its original response to its trial balance, and
ultimately, to its audited financial statements. Further, Rubberflex
emphasizes that because the Department verified virtually all of the
submitted sales and cost data, the fact that a few minor errors
disclosed at the commencement of verification should not provide the
legal basis for the Department to disregard its entire response and
resort to adverse facts available. Rubberflex cites to prior
Departmental determinations in which the Department states that it will
resort to facts available ``only for those specific items of the
response that it was not able to verify.'' See Notice of Final
Determination of Sales at Less Than Fair Value: Brake Drums and Brake
Rotors from the People's Republic of China, 62 FR 9160, 9167 (February
28, 1997); and Certain Internal Combustion Industrial Forklift Trucks
from Japan; Final Results of Antidumping Duty Administrative Review, 62
FR 5592, 5594 (February 6, 1997). Rubberflex concedes that it did not
submit an error-free response. However, Rubberflex states that minor
errors and corrections were presented to the Department during
verification. Rubberflex argues that the fact that some corrections
were not presented on the first day of verification does not provide
the Department reasonable grounds for disregarding them because
Rubberflex was provided only two days for verification preparation.
Therefore, in light of the above-mentioned circumstances, Rubberflex's
cooperation in this review, and that Rubberflex's claims that the
Department was able to verify its responses, Rubberflex argues that the
Department does not have legal grounds to use adverse facts available.
Petitioner contends that because the Department determined during
verification that Rubberflex's questionnaire responses were wholly
deficient and unverifiable, Rubberflex should therefore be assigned a
total facts available rate. Petitioner cites to the Department's
Analysis Memorandum of December 12, 1996 and verification report, which
document Rubberflex's uncooperativeness due to misreportings,
inaccuracies and omissions of certain information. Petitioner therefore
argues that the Department should assess a margin which corresponds to
criteria outlined in the Department's Antidumping Manual; ``* * * when
a substantial amount of a response does not verify, the Department will
normally assign the highest margin for the relevant class or kind of
merchandise among (1) the margins in the petition, (2) the highest
calculated margin of any respondent within that country * * *'' See
U.S. Department of Commerce, Antidumping Manual, July 1993, Ch. 6, at
3. Further, Petitioner disputes that Rubberflex's claimed errors are
minor. Petitioner contends that Rubberflex's purported justification
for such errors, which Rubberflex claims were the result of year-end
accounting adjustments, are unsubstantiated, and unpersuasive.
Petitioner contends that any year-end
[[Page 33597]]
adjustments should have been reported long before verification.
Petitioner emphasizes that even minor errors would nevertheless
generate an inaccurate margin calculation, which would place the U.S.
industry at a disadvantage, given that extruded rubber thread is a
commodity, price-sensitive product.
Petitioner emphasizes that Rubberflex did not submit to the
Department a listing of errors at the commencement of verification, nor
was petitioner served such a list, as required by the Department's
regulations. Petitioner contends that Rubberflex's claim that the
Department was advised at the commencement of verification regarding
certain errors in its submission is therefore of no consequence.
DOC Position: We disagree with Rubberflex that the Department was
able to verify Rubberflex's questionnaire response and tie all of the
information provided in the original response to the trial balance, and
ultimately to the audited financial statements. We have addressed this
issue in the Facts Available for Rubberflex section of this notice.
Comments Concerning Other Respondents
Comment 26: CEP versus EP Sales.
The petitioner alleges that Heveafil's ``back-to-back'' sales are
CEP, and not EP sales, as reported in the questionnaire response. The
petitioner argues that the name ``back-to-back'' sales indicates that
the U.S. subsidiary makes the sale and determines the price of the
merchandise in the United States. Petitioner also notes that both
Heveafil's and Filati's April 22, 1996 questionnaire responses indicate
that the company's per-unit price is not fixed until the U.S.
subsidiary issues the invoice to the U.S. customer. (Heveafil's
response at page A-10 and Filati's response at page A-13.)
Petitioner further contends that the Department has found that
sales made under circumstances like those made by Heveafil and Filati
are CEP sales. Petitioner notes that in Brake Drums and Brake Rotors
from the PRC; Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination, 61 FR 53190, 53194
(October 3, 1996), the Department stated that the ``responsibilities of
the U.S. affiliates go well beyond those of a processor of sales
related documentation'' or a ``communication link'' and therefore
designated the sales in question as CEP sales. Petitioners note that in
Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products
from Korea; Preliminary Results of Antidumping Duty Administrative
Review, 61 FR 51882, 51885 (October 4, 1996), the Department found it
more appropriate to determine that sales were CEP sales where: the U.S.
subsidiary was the importer of record and took title to the
merchandise; the U.S. subsidiary financed the relevant sales
transactions; and the U.S. subsidiary assumed the seller's risk.
Petitioner argues that Heveafil's and Filati's sales meet these
criteria.
Heveafil and Filati contend that the Department has repeatedly
treated ``back-to-back sales'' as EP sales in the original
investigation and in all prior administrative reviews. They note that
Commerce verified that the characterization of the sales is correct in
both the original investigation and the first review.
Specifically, respondents argue that back-to-back sales must
continue to be treated as export price sales, in accordance with the
Department's practice for determining ``indirect'' purchase price/EP
sales as set forth in Certain Corrosion-Resistant Carbon Steel Flat
Products from Korea; Final Results of Antidumping Duty Administrative
Review, 61 FR 18547 (April 26, 1996). Heveafil and Filati argue that
because petitioner has not submitted any new factual information on the
record to alter prior treatment of these sales, respondents contend the
Department must not depart from previous determinations. Accordingly,
Heveafil and Filati argue that back-to-back sales conform to the
Department's practice in the following ways: (1) sales were made prior
to importation; (2) subject merchandise was not introduced into the
inventory of U.S. affiliates; (3) the subsidiaries selling activities
are consistent with the EP classification; and (4) neither subsidiary
is engaged in advanced marketing or product development. For the sales
made prior to important, Filati and Heveafil further note that date of
sale was reported as the bill of lading date, which occurred before
importation, a methodology argued to be consistent with the
Department's past determinations.
DOC Position: We agree that Heveafil's and Filati's ``back-to-
back'' sales are properly treated as EP sales. With respect to EP
sales, section 772(a) of the Act states that: ``the term `export price'
means the price at which the subject merchandise is first sold (or
agreed to be sold) before the date of importation by the producer or
exporter of the subject merchandise outside of the United States to an
unaffiliated purchaser in the United States or to an unaffiliated
purchaser for exportation to the United States.'' Based on the
Department's practice, we examine several criteria for determining
whether sales made prior to importation through an affiliated sales
agent to an unaffiliated customer in the United States are EP sales,
including: (1) Whether the merchandise was shipped directly from the
manufacturer to the unaffiliated U.S. customer; (2) whether the sales
follow customary commercial channels between the parties involved; and
(3) whether the function of the U.S. selling agent is limited to that
of a ``processor of sales-related documentation'' and a ``communication
link'' with the unrelated U.S. buyer. Where all criteria are met, the
Department has regarded the routine selling functions of the exporter
as ``merely having been relocated geographically from the country of
exportation to the United States,'' and has determined the sales to be
EP sales. Where all conditions are not met, the Department has
classified the sales in question as CEP sales. See, e.g., Final
Determination of Sales at Less Than Fair Value: Brake Drums and Brake
Rotors From the People's Republic of China, 62 FR 9171 (February 28,
1997). Based on our analysis of the selling activities of Filati's and
Heveafil's U.S. affiliates, we determine that EP is appropriate. The
customary commercial channels between Heveafil and Filati their
respective unaffiliated customers are that Heveafil and Filati ship the
EP merchandise directly to the unaffiliated U.S. customer without
having the merchandise enter into the inventory of the U.S. subsidiary,
and that the U.S. selling agent is limited to that of a ``processor of
sales-related documentation'' and a ``communications link'' with the
unrelated U.S. buyer. Moreover we disagree with petitioner's
characterization that the U.S. affiliate sets the price after
importation. There has been no record evidence submitted in this
segment of the proceeding that would cause us to alter our treatment of
these sales as EP sales.
Comment 27: Indirect Selling Expenses and Inventory Carrying Costs
Incurred in the Home market for U.S. Sales.
Heveafil, Filati and Rubfil argue that indirect selling expenses
and inventory carrying costs incurred in the home market should not be
deducted from CEP under section 772(d) of the Act. They note that the
Department articulated a standard whereby it deducts selling expenses
incurred in the home market from CEP only if they are specifically
related to commercial activities in the United States. (See
Antifriction Bearings (Other Than
[[Page 33598]]
Tapered Roller Bearings) from France, Germany, Italy, Japan, Singapore,
and the United Kingdom; Final Results of Antidumping Duty
Administrative Reviews 62 FR 2081, 2124 (January 15, 1997) and
Preliminary Results of Antidumping Duty Administrative Review: Calcium
Aluminate Flux from France, 61 FR 40396, 40397 (August 2, 1996).
DOC Position: We agree with Heveafil, Filati and Rubfil. In
Antifriction Bearings (Other Than Tapered Roller Bearings) from France,
Germany, Italy, Japan, Singapore, and the United Kingdom; Final Results
of Antidumping Duty Administrative Reviews 62 FR 2081, 2124 (January
15, 1997) states that the ``statutory definition of `constructed export
price' contained in section 772(d) of the Act indicates clearly that
were are to base CEP on the U.S. resale price as adjusted for U.S.
selling expenses and profit. As such, the CEP reflects a price
exclusive of all selling expenses and profit associated with economic
activities occurring in the United States.'' Our analysis of
Heveafil's, Filati's and Rubfil's responses indicates that the indirect
selling expenses and inventory carrying costs incurred in the home
market were not specifically related to the economic operations of the
U.S. affiliate. As a result, indirect selling expenses and inventory
carrying costs incurred in the home market were no longer included in
the CEP deduction. Consequently, we have revised our calculations to
include in the CEP deduction only those expenses specifically related
to the economic operations of the U.S. affiliate.
Comment 28: U.S. Packing Expenses.
Heveafil, Rubfil and Filati claim that we erroneously deducted U.S.
packing expenses from the U.S. price. As stated by these respondents,
the Act does not provide for the deduction of U.S. packing expenses
from either EP or CEP.
DOC Position: We agree. These calculations were made in error and
have been corrected.
Comment 29: Adjustments for Countervailing Duties (CVDs) Paid.
Heveafil, Filati and Rubfil contend that the Department must
increase the U.S. price for certain countervailing duties paid on
imports of the subject merchandise pursuant to the CVD order. In
accordance with section 772(c)(1)(C) of the Act, the Department should
increase U.S. price by the ``amount of any countervailing duty imposed
on the subject merchandise to offset an export subsidy.'' The
Department, however, has not made adjustments nor increased U.S. price
for export subsidies if normal value (NV) has been based on constructed
value. Respondents note that the Department has declined to make and
adjustments when normal value is based on constructed value, on the
grounds that any benefit conferred through the export subsidy is
reflected in the production costs as well as in U.S. price. (See Notice
of Final Results of Antidumping Duty Administrative Review: Extruded
Rubber Thread from Malaysia, 61 FR 54767 (October 22, 1996).
Respondents also assert that export subsidies, specifically income
tax holidays and income tax abatements, are not reflected in a
company's production costs and must be included in an adjustment to
U.S. price. They note that income taxes are not an element of the cost
of production. Respondents note that the following Malaysian export
subsidy programs found in the second and third countervailing duty
reviews, qualify as income tax holidays or income tax abatements and
thus, should be used in an adjustment to U.S. price: (1) Pioneer
Status; (2) Abatement of Income Tax based on Ratio of Export Sales to
Total Sales; (3) Abatement of Five Percent of the Value of Indigenous
Malaysian Materials Used in Exports; (4) Industrial Building Allowance;
and, (5) Double Deduction for Export Promotion Expenses.
DOC Position: We agree with respondents that the programs: (1)
Pioneer Status, (2) Abatement of Income Tax Based on the Ratio of
Export Sales to Total Sales, (3) Abatement of Five Percent of the Value
of Indigenous Malaysian Materials Used in Exports, (4) Industrial
Building Allowance, and (5) Double Deduction for Export Promotion
Expenses have been found countervailable and classified as export
subsidies in the most recently completed countervailing duty review,
Extruded Rubber Thread from Malaysia; Final Results of Countervailing
Duty Administrative Review, 61 FR 55272 (October 25, 1996).
Therefore, in accordance with section 772(c)(1)(C) of the Act, we
increase U.S. price by ``the amount of any countervailing duty imposed
on the subject merchandise to offset an export subsidy.'' The most
recently completed CVD review, Extruded Rubber Thread from Malaysia;
Final Results of Countervailing Duty Administrative Review, 61 FR 55272
(October 25, 1996), found ad valorem net subsidies of 0.23% for
Heveafil; 0.19% for Rubberflex; 1.39% for Filati; and, 0.38% Rubfil for
1994. In the context of an administrative review (as opposed to a less-
than-fair value investigation), these rates, with the exception of
Filati's, are de minimis pursuant to the language of the SAA, at page
939, and thus will not be collected, i.e., ``imposed,'' within the
meaning of section 772(c)(1)(C) of the Act. As a result, because we are
comparing Filati's sales to the United States to home market sales or
constructed value in the home market for this review, we will adjust
the 1994 U.S. prices of Filati to account for the net export subsidies
of 0.15%. We will also make adjustments to assessment and deposit rates
for any export subsidies in the final results of the 1995 CVD review,
which has not been completed.
Comment 30: Import Duties.
Filati claims that the Department erred in not making an adjustment
for TAXH, which represents the impact of a duty imposed on imported
inputs used to produce rubber thread which will later be exported, and
is collected only on home market sales. Filati notes that TAXH is not
collected on export sales. It claims that TAXH is included in the price
of its home market sales and is passed on to its Malaysian customers,
and, therefore, constitutes an indirect tax imposed directly upon the
foreign like product which has not been collected on the subject
merchandise. Therefore, Filati argues that TAXH must be deducted from
normal value in accordance with section 773(a)(6)(B)(iii) of the Act.
Alternatively, Filati proposes that the Department treat TAXH as a
difference in circumstances of sale, and make a downward adjustment to
normal value, in accordance with section 773(a)(6)(C)(iii) of the Act.
Rubfil maintains that the Department must deduct DUTYH from the
home market price in the calculation of normal value since it claims,
for the first time in its rebuttal brief, that DUTYH is the same 3
percent indirect tax adjustment reported by Filati, although Rubfil
mistakenly referred to it as TAXH in the narrative portion of the
response.
Petitioner disputes Filati's and Rubfil's arguments. It claims that
Filati did not claim that the home market prices it reported to the
Department include these indirect taxes. Petitioner notes that, as a
general matter, respondents, including Rubfil, usually report home
market prices to the Department already exclusive of indirect taxes. As
a result, petitioner argues that TAXH should not be netted from
reported home market sales.
DOC Position: We disagree that these expenses represent a tax. Both
Filati's and Rubfil's April 22, 1996 questionnaire response identifies
the expense reported in the TAXH or DUTYH column as a duty on imported
merchandise. It is imposed when the goods are sold in the home market,
and remains uncollected when the subject
[[Page 33599]]
merchandise is exported. Consequently, contrary to the respondents'
characterization of the expense, the expenses recorded in the TAXH or
DUTYH columns represent a duty, and not a tax. Filati and Rubfil
explain that they include the amount of this duty in their home market
price and pass it on to their customers. The duty is neither added to
nor included in the price of the export goods. Because this duty is
only collected on home market sales, and not on export sales, we have
determined it to be an uncollected duty within the meaning of section
772(c)(1)(B) of the Act, rather than an uncollected tax within the
meaning of 773(a)(6)(B)(iii) of the Act. Consequently, pursuant to
section 772(c)(2)(B) of the Act, we have revised our calculations by
adding the amount of the uncollected duty to the U.S. price.
Comment 31: Re-exports of Covered Merchandise.
Filati contends that it is the Department's long-standing policy,
which has been upheld by the U.S. Court of Appeals for the Federal
Circuit (The Torrington Company v. United States, 82 F.3d 1039 (Fed.
Cir. 1996)), not to calculate or collect antidumping duties on subject
merchandise that is re-exported without any sale to unaffiliated
parties in the United States. Filati contends that the Department
cannot calculate or collect antidumping duties regarding such imports,
because in the absence of sales in the United States, there is no basis
for calculating United States price. Thus, Filati explains, where a
respondent provides evidence that merchandise has been re-exported, the
Department has modified its assessment methodology formula to account
for the re-exports. Filati argues that it provided evidence of such
entries in its September 23, 1996 supplemental response and that there
were no computer programming instructions in the preliminary results of
review to accommodate such re-exports. Filati further argues that the
Department should structure its assessment instructions along the lines
outlined in the Department's proposed regulations (by dividing the
total duties calculated for the period of review (PUDD) by the entered
value of the sales during the POR, and directing Customs to apply the
resulting ad valorem rule to entries in the POR) as modified by the
``per-unit'' methodology used in the Department's August 31, 1992
memorandum for Richard W. Moreland, First Administrative Review of 3.5
Inch Microdisks and Coated Media Thereof from Japan (Microdisks)
Decisions Made with Respect to Issuing Assessment Instructions for all
Five Japanese Companies which had a either PP and ESP Sales
Transactions of 3.5-Inch Microdisks and Coated Media. Filati argues
that this new ad valorem, assessment rate should be calculated as
follows: PUDD/entered value of sales* (value of entries-value of re-
exports)/value of entries.
DOC Position: The Department agrees with Filati that it is
inappropriate to calculate or assess antidumping duties on covered
merchandise that is re-exported from the United States before the goods
are sold to an unaffiliated party in the United States. An examination
of the facts of this record indicates that all of the merchandise was
entered into the United States commerce for consumption. However, at
the time of entry, Filati did not know whether the merchandise would be
sold in the United States or Canada. At the end of the review period,
Filati was aware of which entries were sold in the United States and
which were re-exported without a sale to an unaffiliated party in the
United States. It reported U.S. sales to the Department in its
questionnaire response, and the re-exports to Canada in its
supplemental response.
Section 731 of the Act provides that once merchandise is subject to
an antidumping order ``then there shall be imposed upon such
merchandise an antidumping duty * * * in an amount equal to the amount
by which the normal value exceeds the export price (or the constructed
export price) for the merchandise.'' Section 751(a)(2) of the Act
provides that, in computing the amount of the antidumping duty, the
Department ``shall determine'' (1) the normal value and export price
(or constructed export price) of each entry of the subject merchandise,
and (2) the dumping margin for each entry. Thus, sections 731 and
751(a)(2) of the Act call for the Department to determine the United
States price (either the export price or the constructed export price).
In the instant case, because there is no sale to an unaffiliated party
in the United States, despite the fact that the goods have entered into
the U.S. customs territory, there is no means by which the Department
can calculate a United States price with respect to these particular
imports. See The Torrington Company v. United States, 82 F.3d 1039,
1044-1047 (Fed. Cir. 1996) (``Torrington'') (held that the re-exported
goods do not enter into the calculation of the total antidumping duties
owed by the respondent).
Further the U.S. Court of Appeals for the Federal Circuit held in
Torrington that under these circumstances the Department acts lawfully
when it does not assess antidumping duties on the covered merchandise.
See Torrington, 82 F.3d at 1040. The holding in Torrington sanctions
the Department's longstanding practice in the regard. See, e.g., Final
Results of Antidumping Duty Administrative Review and Revocation in
Part of Antidumping Duty Order: Antifriction Bearings (Other Than
Tapered Roller Bearings) and Parts Thereof from France, et al., 58 FR
39729, 39784 (July 26, 1993) (Department's position was that where the
bearings that entered the customs territory of the United States were
re-exported prior to sale to an unrelated customer in the United
States, there is no assessment of antidumping duties on those entries).
Finally, the Torrington Court held that, in upholding the Department's
practice not to calculate a United States price or assess with respect
to entries that are later re-exported from the United States without a
sale here to an unaffiliated party, this practice does not conflict
with the U.S. duty drawback laws. Torrington, 82 F.3d at 1045.
Comment 32: Currency Conversion Error.
Filati argues that the Department erroneously failed to convert its
inventory carrying costs into U.S. dollars.
DOC Position: We agree and have corrected the error.
Comment 33: The Difference in Physical Characteristics of
Merchandise (DIFMER) Calculation.
Heveafil contends that the Department incorrectly subtracted the
DIFMER adjustment from home market prices since it calculated the
DIFMER adjustment as the U.S. cost of manufacture (VCOMU) minus the
home-market variable cost of manufacture (VCOMH). In this situation,
the Department should add the DIFMER to the normal value (NV).
DOC Position: We agree that, pursuant to section 773(6)(c)(ii) of
the Act, it is appropriate to add the DIFMER to NV when the DIFMER is
calculated as VCOMU minus VCOMH. However, our standard program was
written to subtract it from normal value. Therefore, to keep Heveafil's
program in conformity with the Department's standard computer program,
we recalculated DIFMER as VCOMH minus VCOMU, then subtracted it from
NV. This equation is identical to the remedy proposed by Heveafil.
Comment 34: The Calculation of the Average Actual Profit for
Constructed Value.
Petitioner contends the Department erroneously used Heveafil's,
Filati's and Rubfil's average actual profit on both
[[Page 33600]]
profitable and unprofitable sales for the profit figure in the
constructed value calculation. Petitioner argues that only profit on
profitable sales is used in the calculation.
Respondents dispute petitioner's contention, arguing that the
Department calculates constructed value profit without excluding below-
cost sales. In support of its argument, respondents rely on Federal-
Mogul Corp. v. United States, 918 F. Supp. 386, 403 (CIT 1996) and
Torrington Co. v. United States, 881 F. Supp. 622, 633 (CIT 1995), as
well as a number of results of reviews of Antifriction Bearings (Other
Than Tapered Roller Bearings) and Parts thereof.
DOC Position: We agree with petitioner. Section 773(e)(2)(A) of the
Act states that the constructed value of the imported merchandise shall
be the ``actual amounts incurred and realized by the specific exporter
or producer being examined in the investigation or review for selling,
general, and administrative expenses, and for profits, in connection
with the production and sale of a foreign like product, in the ordinary
course of trade, for consumption in the foreign country.'' Section
771(15)(A) of the Act specifies that the Department shall consider the
sales disregarded under section 773(b)(1) of the Act to be outside the
ordinary course of trade. See also SAA, at 839. Therefore, we have
changed our calculations to include only the profit from sales not
disregarded under section 773(b) of the Act.
Respondents cite a number of instances where the Department and the
courts have included sales below cost in the calculation of profit for
constructed value. We not that all of the cases cited by respondents
pertain to the calculation methodology spelled out in the old law, and
have been superseded by the new law, which establishes new methods of
calculating profit for CV. See SAA, at 839
Comment 35: The Use of Color as a Model Match Criterion.
Petitioner argues that color should be excluded as a matching
criterion. Petitioner cites Melamine Institutional Dinnerware from
Taiwan: Final Determination of Sales at Less Than Fair Value
(Melamine), 62 FR 1726, at 1773 (January 13, 1997), in which the
Department stated that ``[c]olor is not a matching criteria in this
investigation; thus, it is inappropriate to treat these products, if
otherwise identical, as identical for purposes of model matching.''
According to respondents, color should not be excluded as a
matching criteria. Since color was used in the original investigation
and subsequent reviews, the Department must apply the same matching
criteria in this period of review.
DOC Position: We agree with respondents that color is an
appropriate model matching-criterion in this case. The Department has
consistently used color as a product matching criteria in the
investigation and reviews of the AD order. As we stated in our response
to Comment 3 in the Final Determination of Sales at Less Than Fair
Value: Extruded Rubber Thread from Malaysia, 57 FR 38465, 38468 (August
25, 1992) ``because color can materially affect cost and be important
to the customer and the use of the product, the Department determined
at an early stage of this investigation that color should be included
among the several product matching criteria.'' See, Final Determination
of Sales at Less Than Fair Value: Extruded Rubber Thread from Malaysia,
57 FR 38465 (August 25, 1992). At this time, petitioner supported this
decision and has since not offered any substantive reasons for changing
the matching criteria. Moreover, color is a characteristic fully in
accordance with the matching criteria as outlined in the January 26,
1994 memorandum to the file, entitled Changing the Department's
Questionnaire Order of the Product Concordance. Petitioner did not
comment on this memo which ranked color as third in the level of
importance for the product matching criteria. With respect to Melamine,
this determination covers a product with different physical
characteristics, different uses and different expectations by the
ultimate purchasers and, therefore, is irrelevant to this instant case.
Comment 36: The Erroneous Deduction of CEP Profit from U.S. Sales.
Heveafil argues that the Department incorrectly deducted CEP profit
from certain CEP sales, despite the fact that CEP profit calculated by
Commerce was negative. Heveafil suggests that we refer to observations
one and two in the hard-copy of the results of the Department's
preliminary margin program. Heveafil suggests that the Department
revised the calculation of net CEP sales prices in the final results of
review to ensure that CEP profit is not subtracted where none exists.
DOC Position: We have examined the hard copy of the results of
review for the 1994-1995 margin calculation program. None of the sales
include CEP profit of less than zero. Therefore, we have made no change
to our calculations.
Comment 37: Heveafil's Reported Cost Figures.
Petitioner notes that Heveafil reported more than one cost figure
for a number of products without providing any explanation for the
provision of more than one weighted-average cost. In addition,
petitioner also notes that in its preliminary results of review, the
Department erred in using the average of these cost figures to
calculate the cost of production for Heveafil. Petitioner argues that
by using this average cost, rather than the highest available cost,
Heveafil benefits from the unexplained ambiguity in the response.
DOC Position: We agree. Heveafil reported more than one per-unit
cost of production for certain products. However, in this case, there
is no evidence on the record to suggest that the highest reported cost
is appropriate. Consequently, we determined the simple average value of
each of the underlying components of the COP: material, labor, variable
overhead, fixed overhead, indirect selling expenses, general and
administrative expenses, net interest expense and home market packing.
We then added the revised values for these expenses to obtain the
average COP of each of the reported models as we did in the preliminary
results of review.
Comment 38: Rebates in Calculation of a Home Market Price for
comparison to COP.
Petitioner asserts that the Department failed to deduct Heveafil's
rebates for home market prices prior to conducting the sales below cost
test.
DOC Position: As indicated on line 2821 of the home market sales
program issued in the preliminary results of review, we have taken
rebates and discounts into account in our determination of the
appropriate home market price to be compared with the cost of
production in our cost test. Therefore, we have made no change to our
calculation.
Comment 39: Marine Insurance.
Petitioner asserts that Rubfil did not explain how it calculated
its reported cost of marine insurance. Accordingly, it cannot be
determined if marine insurance was correctly calculated. Petitioner
therefore contends that the Department should use, as the facts
available, the highest unit U.S. marine insurance cost to all U.S.
sales by Rubfil.
Rubfil responds that in its April 22, 1996 response, it explained
that marine insurance was paid according to the terms of a global
insurance policy that covers all risks associated with the shipment of
merchandise from Rubfil's factory to its customers throughout the
world. Rubfil provided a copy of the insurance agreement in exhibit C-
1, which did not explicitly spell out the per-shipment terms of the
policy. Rubfil
[[Page 33601]]
notes that the Department did not request further information in its
supplemental questionnaire. It argues that this policy has been in
effect since 1990 and was spelled out in the narrative of the
questionnaire response and was in effect during the 1994-1995 review.
Therefore, Rubfil argues that the Department should not change its
calculations.
DOC Position: In the December 19, 1996, Preliminary Results
Analysis Memorandum for Rubfil, the Department noted that Rubfil did
not fully explain its calculations for marine insurance. However, we
used the information provided in the questionnaire response to
calculate our margins. We did not request Rubfil to submit further
information, and there is no basis for making adverse inferences as
suggested by petitioner. Therefore, we have not changed our
calculations in this regard.
Final Results of Review
As a result of comments received we have revised our preliminary
results and determine that the following margins exist for the period
October 1, 1994, through September 30, 1995:
------------------------------------------------------------------------
Percent
Manufacturer/exporter margin
------------------------------------------------------------------------
Heveafil Sdn. Bhd............................................ 7.88
Rubberflex Sdn. Bhd.......................................... 20.38
Rubfil Sdn. Bhd.............................................. 54.31
Filati Lastex Elastofibre (Malaysia)......................... 8.11
------------------------------------------------------------------------
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between United States price and foreign market value may
vary from the percentages stated above. The Department will issue
appraisement instructions directly to the U.S. Customs Service.
Further, the following deposit requirements will be effective, upon
publication of this notice of final results of review for all shipments
of extruded rubber thread from Malaysia entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided for by section 751(a)(1) of the Act: (1) The cash deposit
rates for the reviewed companies will be the rates for those firms as
stated above (except that for Filati the cash deposit rate will be
reduced by 0.15 percent, the current cash deposit rate attributable to
export subsidies); (2) for previously 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, or the original 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
continue to be 15.16 percent, the all others rate established in the
LTFV investigations.
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice serves as a final 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 notice also serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with section 353.34(d) of the Department's
regulations. Timely notification of return/destruction of APO materials
or conversion to judicial protective order is hereby requested. Failure
to comply with the regulations and the terms of an APO is a
sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)), section 771(i) of
the Act (19 U.S.C. 1677f(i)) and 19 CFR 353.22.
Dated: June 9, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-16046 Filed 6-19-97; 8:45 am]
BILLING CODE 3510-DS-M