[Federal Register Volume 62, Number 237 (Wednesday, December 10, 1997)]
[Notices]
[Pages 65063-65067]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32356]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-405-071]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Viscose Rayon Staple Fiber From Finland

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

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

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SUMMARY: In response to a request by the petitioners, the Department of 
Commerce is conducting an administrative review of the antidumping duty 
order on viscose rayon staple fiber from Finland. The review covers one 
manufacturer/exporter, Kemira Fibres Oy, during the review period, 
March 1, 1996, through February 28, 1997.
    We invite interested parties to comment on these preliminary 
results of review. Parties who submit comments in this proceeding are 
requested to submit with each argument (1) a statement of the issue and 
(2) a brief summary of the argument.

EFFECTIVE DATE: December 10, 1997.

FOR FURTHER INFORMATION CONTACT: For further information, please 
contact Laurel LaCivita or Alexander Amdur at Import Administration, 
International Trade Administration, U.S. Department of Commerce, 
Washington, D.C. 20230; telephone: (202) 482-4740 or (202) 482-5346, 
respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to 19 CFR Part 353 (April 1997).

Background

    On March 21, 1979, the Treasury Department published in the Federal 
Register (44 FR 17156) the antidumping duty finding on viscose rayon 
staple fiber from Finland. This finding was revoked on November 7, 1994 
(59 FR 55441), effective as of April 1, 1993. The revocation was 
rescinded on February 22, 1997 (61 FR 6814). On March 28, 1997, the 
petitioners, Courtalds Fibers Inc. (``Courtalds'') and Lenzing Fibers 
Corporation (``Lenzing''), requested that the Department of Commerce 
(``the Department'') conduct an antidumping administrative review of 
Kemira Fibres Oy (``Kemira''), the only known producer of viscose rayon 
fiber in Finland, and any related, affiliated, or successor company or 
companies. On April 24, 1997, we published a notice of initiation of 
this administrative review covering the period March 1, 1996, through 
February 28, 1997, (62 FR 19988) for Kemira. We issued a questionnaire 
on May 20, 1997. We received section A, B and C questionnaire responses 
from Kemira on July 3, 1997. We issued a supplemental questionnaire on 
August 15, 1997. We received a supplemental response from Kemira on 
September 10, 1997. We issued a second supplemental questionnaire on 
September 22, 1997. Kemira responded to this letter on October 6, 1997. 
On October 27, 1997, Kemira submitted information concerning sales of 
VISIL fiber, which it maintains are outside of the scope of the 
finding.
    On August 28, 1997, the Department solicited comments from all 
interested parties concerning the model match criteria and methodology 
to be used in this review. It received comments from the petitioners on 
September 11, 1997 and October 24, 1997, and from the respondent on 
September 16, 1997 and November 4, 1997.
    We conducted a verification of home market and United States sales 
at Kemira's headquarters in Valkeakoski, Finland from November 3, 1997 
to November 7, 1997.
    The Department is conducting this administrative review in 
accordance with section 751(a) of the Act.

Scope of Review

    The product covered by this review is viscose rayon staple fiber, 
except solution dyed, in noncontinuous form, not carded, not combed and 
not otherwise processed, wholly of filaments (except laminated 
filaments

[[Page 65064]]

and plexiform filaments). The term includes both commodity and 
speciality fiber. This product is currently classifiable under 
Harmonized Tariff Schedules (HTS) item numbers 5504.10.00 and 
5504.90.00. The HTS numbers are provided for convenience and customs 
purposes. The written description of the scope of the finding remains 
dispositive.

Scope Issues

    Kemira claims that short-cut (LK) fibers and semi-viscose fire-
retardant (VISIL) fibers are excluded from the scope of the finding, 
while petitioners claim that they are included.1
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    \1\ Kemira also claims that hydrophobic fibers are excluded from 
the scope of the order, but since Kemira did not sell these fibers 
in the U.S. during the period of review, we have not addressed this 
issue.
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    Specifically, Kemira argues that LK fiber is excluded from the 
scope of the finding because it is cut in small sizes (specifically, 
\1/4\-inch to \1/2\-inch sizes), has a unique production line, and is 
used by the paper industry, rather than the textile industry. 
Petitioners claim that the scope of the finding does not limit the 
definition of rayon staple fiber based on fiber length or end use and 
that, consequently, LK fiber should be included in the scope of the 
review.
    Kemira claims that VISIL fiber is excluded from the scope of the 
finding because it is a hybrid fiber containing substantial non-viscose 
content; and is a patented product that is not produced by any other 
manufacturer. Kemira also notes that this fiber has been ``finished/
laminated with aluminum.'' However, Kemira notes that VISIL fiber is 
classified for Customs purposes under HTS 5504.10.00, the same tariff 
classification as viscose rayon staple fiber. The petitioners claim 
that VISIL fiber should be included within the scope of the finding. 
They argue that there is nothing in the scope of the finding that 
limits the applicability of the finding to ``standard'' fiber.
    For the purposes of the preliminary results of review, we have 
included both LK and VISIL fibers within the scope of the finding, and 
have included sales of both LK and VISIL fibers in our margin analysis. 
However, because of the complexity of the issues relating to LK and 
VISIL fibers, the Department is commencing a scope inquiry to determine 
whether LK and VISIL fibers are covered by the scope of the finding.

Verification

    We conducted verification of home market and U.S. sales information 
provided by Kemira using standard verification procedures, including 
on-site inspection of Kemira's sales and production facility, the 
examination of relevant sales and financial records, and original 
documentation containing relevant information.

Fair Value Comparisons

    To determine whether sales of viscose rayon staple fiber to the 
United States were made at less than fair value, we compared the export 
price (EP) or constructed export price (CEP) to the normal value (NV), 
as described in the ``Export Price'', ``Constructed Export Price'' and 
``Normal Value'' sections of this notice. In accordance with section 
777A(d)(2), we calculated monthly weighted-average prices for normal 
value and compared these to individual U.S. transactions. We made 
corrections to the reported U.S. and home market sales data for 
clerical errors found at verification, as appropriate.
    We excluded certain U.S. sales from our calculations. First, we 
excluded any zero-priced sample sales in accordance with NSK LTD., et 
al v. United States, 969 F. Supp. 34 (CIT 1997). Second, we excluded 
any sales that were shipped to the United States by a third country 
reseller if the respondent did not have any reason to know at the time 
of sale to the reseller that the merchandise was destined for the 
United States (for a detailed explanation, see Concurrence Memorandum, 
December 1, 1997). Third, we excluded any U.S. sales of entries that 
were liquidated prior to the period of review (POR), i.e., prior to 
suspension of liquidation. Such sales were only excluded if we were 
able to make a direct link to an entry prior to suspension of 
liquidation (see, e.g., Certain Stainless Steel Wire Rods From France: 
Final Results of Antidumping Duty Administrative Review, 61 FR 177 
(September 11, 1996)).
    We excluded a home market sale to an affiliated party because this 
sale failed to pass the Department's arm's-length test in accordance 
with 19 CFR 353.45(a) (see Concurrence Memorandum, December 1, 1997).

Facts Available

    During the current POR, the Department requested that Kemira report 
all of its home market and U.S. sales of subject merchandise in 
accordance with the instructions in the questionnaire. Kemira did not 
report its home market and U.S. sales of second quality and sub-
standard merchandise. Kemira stated in its narrative response that it 
sold second quality and sub-standard merchandise only to customers in 
Europe. On August 15, 1997, the Department issued a supplemental 
questionnaire to Kemira, requesting again that Kemira report all sales 
of viscose rayon fiber that are not specifically excluded from the 
scope of the finding. In its response to the supplemental 
questionnaire, Kemira again did not report its home market and U.S. 
sales of second quality and sub-standard merchandise. In both requests 
for information, the Department advised Kemira that failing to provide 
the requested information could result in the application of facts 
available (FA).
    Section 776(a)(2) of the Act provides that if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides information that cannot be verified, the 
Department will use FA in reaching the applicable determination. Kemira 
failed to report all the information requested by the Department, so 
the Department will use FA in reaching the margin determination for 
Kemira's sales of second quality and sub-standard merchandise.
    Section 776(b) of the Act provides that adverse inferences may be 
used with respect to a party that has failed to cooperate by not acting 
to the best of its ability to comply with requests for information. See 
also Statement of Administrative Action (SAA) at 870. Kemira's failure 
to report the sales data requested by the Department, despite two 
requests for data from the Department, demonstrates that Kemira has 
failed to cooperate to the best of its ability in this review. 
Additionally, the Department explicitly told Kemira the possible 
consequences of not reporting the data. We find that, in selecting 
among the FA for Kemira, an adverse inference is warranted. Section 
776(b) states that an adverse inference may include reliance on 
information derived from: (1) The petition; (2) the final determination 
in the LTFV investigation; (3) any previous review under section 751 of 
the Act or investigation under section 753 of the Act; or (4) any other 
information placed on the record. See also SAA at 829-831.
    Therefore, for sales of second quality and sub-standard 
merchandise, we are applying as adverse FA, the higher of the margin 
calculated for Kemira in this review or 8.7 percent, the highest 
calculated rate for Kemira from any previous segment of the proceeding 
(i.e., the margin calculated for Kemira in both the investigation and 
in the first period of review (44 FR 2219, January 10, 1979 and 46 FR 
19844, April 1, 1981)).

[[Page 65065]]

    In the event that we apply as adverse FA the 8.7 percent rate, 
section 776(c) of the Act provides that when the Department relies on 
such secondary information in using FA, it must, to the extent 
practicable, corroborate that information from independent sources 
reasonably at its disposal. The 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). To 
determine probative value, we examine, to the extent practicable, the 
reliability and relevance of the information to be used. However, 
unlike other types of information such as input costs or selling 
expenses, there are no independent sources for calculated dumping 
margins. The only source for margins is administrative determinations 
and reviews. However, if the Department relies on a calculated dumping 
margin from a prior segment of the proceeding as FA, it is not 
necessary to question the reliability of the margin. With respect to 
relevance, the Department will consider information reasonably at its 
disposal that would render a margin not relevant (see Anhydrous Sodium 
Metasilicate from France; Preliminary Results of Review, 61 FR 30853 
(June 18, 1996)). We have no information indicating that the 8.7 
percent rate is inappropriate as FA; therefore, we consider the 
corroboration requirements satisfied.

Export Price

    The Department used the EP, as defined in section 772(a) of the 
Act, where the subject merchandise was sold by the manufacturer or 
exporter to unaffiliated purchasers in the United States prior to 
importation and the CEP methodology was not otherwise warranted based 
on the facts of record. We calculated EP based on packed, delivered 
prices. We made deductions, where appropriate, for early payment 
discounts, foreign inland freight, ocean freight, Finnish and U.S. 
insurance expenses, and brokerage and handling fees in Finland and in 
the United States, in accordance with section 772(c)(2) of the Act.

Constructed Export Price

    We calculated CEP, as defined in section 772(b) of the Act, based 
on packed, delivered prices to unaffiliated purchasers in the United 
States (the starting price). We found that CEP was warranted for 
certain sales in the United States that were made (before or after the 
date of importation) by or for the account of the producer or exporter 
(see Concurrence Memorandum, December 1, 1997). We calculated CEP based 
on the price to the first unaffiliated customer in the United States. 
We made deductions from the gross unit price (starting price) for early 
payment discounts, foreign inland freight, ocean freight, insurance 
expenses, brokerage and handling, U.S. duty, U.S. brokerage and U.S. 
inland freight, as appropriate, in accordance with section 772(c)(2)(A) 
of the Act.
    In accordance with section 772(d)(1) of the Act and the Uruguay 
Round Agreements Act Statement of Administrative Action (SAA at 823-
824), we made additional adjustments to the starting price by deducting 
selling expenses associated with economic activities in the United 
States, including commissions, warranty, and credit. We allocated the 
total reported commission for the POR for VISIL fiber sales over the 
total U.S. sales of VISIL fiber during the POR. We recalculated 
warranty expenses based on such expenses incurred during the current 
period (see Calculation Memorandum, December 1, 1997). Finally, we made 
an adjustment for CEP profit in accordance with sections 772(d)(3) and 
772(f) of the Act.

Normal Value

A. Viability

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating 
normal value (NV), we compared the respondent's volume of home market 
sales of the foreign like product to the volume of U.S. sales of the 
subject merchandise, in accordance with section 773(a)(1)(C) of the 
Act. Because the aggregate volume of home market sales of the foreign 
like product was greater than five percent of the aggregate volume of 
U.S. sales of the subject merchandise, we found that the home market 
was viable. Therefore, we have based NV on home market sales.

B. Model Match

    In accordance with section 771(16) of the Act, we considered all 
products sold in the home market, fitting the description specified in 
the ``Scope of Review'' section above, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
The petitioners recommended that we determine home market matches based 
on the criteria of linear density (denier/decitex), fiber length, 
luster and end-use. We found that the product model names used by 
Kemira incorporated all such information. Therefore, where possible, we 
matched each model sold in the United States with an identical home 
market model, based on Kemira's product codes, that was sold within the 
contemporaneous window which extends from three months prior to the 
U.S. sale until two months after the sale. We found contemporaneous 
home market sales of identical merchandise for all U.S. sales of non-
VISIL. Therefore, we did not establish a model match hierarchy to 
determine the next most similar model in accordance with section 
771(16) of the Act. With respect to U.S. sales of VISIL products for 
which there were no home market sales of identical merchandise during 
the contemporaneous window, we matched models based on most similar 
size and made an adjustment to NV for differences in physical 
characteristics (difmer). Because Kemira did not provide sufficient 
supporting documentation for its reported model-specific cost data, we 
could not determine the actual amount of any difmer. Therefore, as 
facts available, we made a difmer adjustment equal to twenty percent of 
the reported variable cost of manufacture (TCOM) of VISIL products sold 
in the United States. Interested parties are invited to comment on the 
appropriate difmer adjustment relevant to the sales at issue.
    Furthermore, in conducting our margin calculations for Kemira, we 
discovered a number of VISIL sales for which there were no 
contemporaneous sales of identical or similar merchandise in the home 
market.
    Since Kemira did not provide constructed value (CV) information, we 
are unable to calculate a margin for these sales. Therefore, we are 
compelled to use FA with regard to these sales for the purposes of the 
preliminary results. As FA we have selected the weighted-average margin 
calculated for those U.S. VISIL sales with contemporaneous home market 
matches.

C. Price-to-Price Comparisons

    We based NV on the prices at which the foreign like products were 
first sold for consumption in the home market to an unaffiliated party 
in the usual commercial quantities and in the ordinary course of trade 
and, to the extent practicable, at the same level of trade as the CEP 
or EP, in accordance with section 773(a)(1)(B)(i) of the Act. For 
purposes of this review, we determined that the same level of trade 
exists for Kemira in both markets (see Concurrence Memorandum, December 
1, 1997). Accordingly, pursuant to section 777A(d)(2) of the Act, we 
compared the EP or CEP of the individual transactions to the monthly 
weighted-average price of sales of the foreign like product. In 
accordance with sections 773(a)(1)(B) of the Act, we

[[Page 65066]]

reduced home market price by deducting early payment discounts. We 
increased home market price by U.S. packing costs in accordance with 
section 773(a)(6)(A) of the Act and reduced it by home market packing 
costs in accordance with section 773(a)(6)(B) of the Act. In accordance 
with section 773(a)(6)(C) of the Act and 19 CFR 353.56(a), we made 
circumstance of sale (COS) adjustments for direct selling expenses, 
including credit and (recalculated) warranty expenses. In accordance 
with 19 CFR 353.56(b), we made an offset to NV for U.S. commissions. 
Since Kemira was not able to quantify the indirect selling expenses 
incurred for home market sales, the amount of this offset, pursuant to 
19 CFR 353.56(b), was the lesser of (the recalculated) home market 
inventory carrying costs or U.S. commissions (see Concurrence 
Memorandum and Calculation Memorandum, December 1, 1997). No other 
adjustments were claimed or allowed.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margin for the period March 1, 1996, through February 
28, 1997 to be as follows:

------------------------------------------------------------------------
                                                                Margin  
                        Manufacturer                          (percent) 
------------------------------------------------------------------------
Kemira Fibres Oy...........................................        13.63
------------------------------------------------------------------------

Cash Deposit Requirements

    The following deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed 
company will be that rate established in the final results of this 
review; (2) for previously reviewed or investigated companies not 
listed above, the cash deposit rate will continue to be the company-
specific rate published for the most recent period; (3) if the exporter 
is not a firm covered in this review, a prior review, or the original 
LTFV investigation, but the manufacturer is, the cash deposit rate will 
be the rate established for the most recent period for the manufacturer 
of the merchandise; and (4) the cash deposit rate for all other 
manufacturers or exporters will be 3.9 percent, the ``new shipper'' 
rate established in the first review conducted by the Department, as 
explained below.
    On March 25, 1993, the Court of International Trade (CIT) in Floral 
Trade Council v. United States, 822 F.Supp. 766 (CIT 1993) and Federal-
Mogul Corporation v. United States, 822 F.Supp. 782 (CIT 1993) decided 
that once an ``all others'' rate is established for a company, it can 
only be changed through an administrative review. The Department has 
determined that in order to implement the above-mentioned decisions, it 
is appropriate to reinstate the ``all others'' rate from the LTFV 
investigation (or that rate as amended for correction of clerical 
errors or as a result of litigation) in proceedings governed by 
antidumping duty orders.
    However, in proceedings governed by antidumping findings, unless we 
are able to ascertain the ``all others'' rate from the Treasury LTFV 
investigation, the Department has determined that it is appropriate to 
adopt the ``new shipper'' rate established in the first final results 
of administrative review published by the Department (or that rate as 
amended for correction of clerical errors as a result of litigation) as 
the ``all others'' rate for the purposes of establishing cash deposits 
in all current and future administrative reviews (see, e.g., Final 
Results of Antidumping Duty Administrative Review of Tapered Roller 
Bearings, Four Inches or Less in Outside Diameter, and Components 
Thereof, From Japan, 58 FR 64720, (December 9, 1993)).
    Therefore, the ``all others'' rate applied is the rate of 3.9 
percent from Viscose Rayon Staple Fiber From Finland, Final Results of 
Administrative Review of Antidumping Finding (46 FR 19844, April 1, 
1981), the first review conducted by the Department in which a ``new 
shipper'' rate (or in this case, a rate for all shipments of the 
subject merchandise, including new shippers) was established.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of this administrative review.

Assessment Rates

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between export price and NV may vary from the percentages 
stated above. The Department will issue appraisement instructions 
directly to the U.S. Customs Service upon completion of this review. 
The final results of this review shall be the basis for the assessment 
of antidumping duties on entries of merchandise covered by the final 
results of this review and for future deposits of estimated duties. For 
assessment purposes, we intend to calculate importer-specific 
assessment rates for viscose rayon staple fiber. For both EP and CEP 
sales, we will divide the total dumping margins (calculated as the 
difference between NV and EP (or CEP)) for each importer) by the 
entered value of the merchandise. Upon the completion of this review, 
we will direct Customs to assess the resulting ad valorem rates against 
the entered value of each entry of the subject merchandise by the 
importer during the POR.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 353.26 to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    Parties to the proceeding may request disclosure within 5 days of 
the date of publication of this notice. Any interested party may 
request a hearing within 10 days of the date of publication of this 
notice. A hearing, if requested, will be held 44 days from the date of 
publication of this notice at the main Commerce Department building.
    Interested parties are invited to comment on these preliminary 
results. In accordance with 19 CFR 353.38, case briefs from interested 
parties are due within 30 days of publication of this notice. Rebuttal 
briefs, limited to the issues raised in the respective case briefs, may 
be submitted no later than 37 days of publication of this notice. 
Parties who submit case briefs or rebuttal briefs in this proceeding 
are requested to submit with each argument (1) a statement of the issue 
and (2) a brief summary of the argument. The Department will 
subsequently publish the final results of this administrative review, 
including the results of its analysis of issues raised in any such 
written briefs or hearing. The Department will issue final results of 
this review within 120 days of publication of these preliminary 
results.
    Interested parties who wish to request a hearing or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, Room B-099, within ten days of the 
date of publication of this notice. Requests should contain: (1) The 
party's name, address and telephone number; (2) the number of 
participants; (3) a list of issues to be discussed. In accordance

[[Page 65067]]

with 19 CFR 353.38(b), issues raised in hearings will be limited to 
those raised in the respective case briefs and rebuttal briefs.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act and 19 CFR 353.22(c)(5).

    Dated: December 1, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-32356 Filed 12-9-97; 8:45 am]
BILLING CODE 3510-DS-P