[Federal Register Volume 63, Number 90 (Monday, May 11, 1998)]
[Notices]
[Pages 25830-25833]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-12317]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-423-602]


Industrial Phosphoric Acid From Belgium; Preliminary Results of 
Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review of industrial phosphoric acid from Belgium.

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SUMMARY: In response to requests from one respondent, petitioner and 
one

[[Page 25831]]

domestic producer, the Department of Commerce is conducting an 
administrative review of the antidumping duty order on industrial 
phosphoric acid from Belgium. The period of review is August 1, 1996 
through July 31, 1997. This review covers imports of industrial 
phosphoric acid from one producer, Societe Chimique Prayon-Rupel S.A. 
(``Prayon'').
    We have preliminarily found that sales of subject merchandise have 
been made below normal value. If these preliminary results are adopted 
in our final results, we will instruct the Customs Service to assess 
antidumping duties based on the difference between the export price and 
normal value.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit arguments are requested to submit with the 
argument (1) a statement of the issue and (2) a brief summary of the 
argument. We will issue the final results not later than 120 days from 
the date of publication of this notice.

EFFECTIVE DATE: May 11, 1998.

FOR FURTHER INFORMATION CONTACT:
Robert Blankenbaker or Thomas Futtner, AD/CVD Enforcement Office 4, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone (202) 482-0989, and 482-3814, 
respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    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 of Commerce's (the 
Department's) regulations refer to the regulations codified at 19 CFR 
Part 351, 62 FR 27296 (May 19, 1997).

Background

    On August 20, 1987, the Department published in the Federal 
Register (52 FR 31439) the antidumping duty order on industrial 
phosphoric acid (``IPA'') from Belgium. On August 4, 1997, the 
Department published in the Federal Register (62 FR 41925) a notice of 
opportunity to request an administrative review of this antidumping 
duty order. On August 29, 1997, in accordance with 19 CFR 351.213(b), 
Prayon, the petitioner FMC Corporation (``FMC''), and Albright & Wilson 
Americas Inc. (``Wilson''), a domestic producer of the subject 
merchandise, requested that the Department conduct an administrative 
review of Prayon's exports of subject merchandise to the United States. 
We published the notice of initiation of this review on September 25, 
1997 (62 FR 50292).

Scope of the Review

    The products covered by this review include shipments of IPA from 
Belgium. This merchandise is currently classifiable under the 
Harmonized Tariff Schedule (HTS) item numbers 2809.2000 and 4163.0000. 
The HTS item number is provided for convenience and Customs purposes. 
The written description remains dispositive.

Product Comparisons

    We calculated monthly, weighted-average, normal values (NVs). The 
industrial phosphoric acid exported by Prayon to the United States is 
PRAYPHOS P5, a refined industrial phosphoric acid, and is the identical 
merchandise sold by Prayon in its home market in Belgium. Therefore, we 
have compared U.S. sales to contemporaneous sales of identical 
merchandise in Belgium.

Export Price

    Prayon sells to end-users in the United States through its 
affiliated sales agent. For these sales, we used export price (EP). In 
accordance with sections 772 (a) and (c) of the Act, we calculated and 
EP because Prayon sold the merchandise directly to the first 
unaffiliated purchaser in the United States prior to importation. 
Additional factors used to determine EP include: (1) Whether the 
merchandise was shipped directly from the manufacturer to the 
unaffiliated U.S. customer; (2) whether this was the customary 
commercial channel between the parties involved; and (3) whether the 
function of the U.S. affiliate was limited to that of a processor of 
sales-related documentation and a communications link with the 
unrelated buyer. Where the facts indicate that the activities of the 
U.S. affiliate were ancillary to the sale (e.g., arranging 
transportation or customs clearance, invoicing), we treat the 
transactions as EP sales. See e.g., Certain Corrosion Resistant Steel 
Flat Products From Canada: Final Results of Antidumping Duty 
Administrative Review, 63 FR 12725, 12738 (March 16, 1998). The record 
in this case indicates that Prayon has correctly classified its U.S. 
sales as EP sales. Prayon's affiliated sales agent in the United 
States, Quadra Corporation (USA) (``Quadra''), served as a processor of 
sales-related documentation.
    EP sales were based on the delivered price to unaffiliated 
purchasers in, or for exportation to, the United States. As 
appropriate, we made deductions for discounts and rebates, including 
early payment discounts. We made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Act; these included foreign 
inland freight, foreign brokerage and handling, ocean freight, marine 
insurance, U.S. customs brokerage fees, merchandise processing fees, 
and U.S. inland freight expenses.

Normal Value

    We compared the aggregate quantity of home market and U.S. sales 
and determined that the quantity of the company's sales in its home 
market was more than five percent of the quantity of its sales to the 
U.S. market. Consequently, in accordance with section 773(a)(1)(B) of 
the Act, we based NV on home market sales.
    We also excluded from our NV analysis sales to affiliated home 
market customers where the weighted-average sales prices to the 
affiliated parties were less than 99.5 percent of the weighted-average 
sales prices to unaffiliated parties. See Usinor Sacilor v. United 
States, 872 F. Supp. 1000, 1004 (CIT 1994).
    We also made adjustments, consistent with section 773(a)(6)(B) of 
the Act, for inland freight. In addition, we made adjustments for 
differences in circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410.
    In calculating credit expense, Prayon reported the discount on 
accounts receivable sold to its affiliated coordination center. Since 
the reported credit expense is greater than the credit expense 
calculated using the standard credit calculation (i.e., (date of 
payment less date of shipment/ 365)* monthly home market short-term 
interest rates* gross price), we have determined that the discount 
transaction between Prayon and its affiliated coordination center is 
not conducted at arm's-length. Accordingly, we have used the standard 
credit calculation when calculating the amount of credit to deduct from 
normal value. We used the monthly home market short-term borrowing 
rates provided by Prayon in calculating inventory carrying costs as the 
basis for the monthly home market short-term interest rates used in the 
credit calculation.
    No other adjustments were claimed or allowed.

[[Page 25832]]

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the export price (EP) or the 
(constructed export price (CEP) transaction. The NV LOT is that of the 
starting-price sales in the comparison market or, when NV is based on 
constructed value, that of the sales from which we derive selling, 
general and administrative expenses and profit. For EP, the U.S. LOT is 
also the level of the starting-price sale, which is usually from 
exporter to importer. For CEP, it is the level of the constructed sale 
from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sale are at a different 
LOT, and the difference affects price comparability, as manifested in a 
pattern of consistent price differences between the sales on which NV 
is based and comparison-market sales at the LOT of the export 
transaction, we make a LOT adjustment under section 773(a)(7)(A) of the 
Act. Finally, for CEP sales, if the NV level is more remote from the 
factory than the CEP level and there is no basis for determining 
whether the difference in the levels between NV and CEP affects price 
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the 
CEP offset provision). See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from 
South Africa, 62 FR 61731, 61732 (November 19, 1997).
    Prayon did not claim a LOT adjustment; however, we requested 
information concerning Prayon's distribution system, including selling 
functions, to determine whether such an adjustment was necessary. 
Prayon reported that all sales during the period of review (POR), in 
both the comparison market (the home market in this case) and the 
United States, were to end-users and distributors. In the U.S. market, 
Prayon sells to end-users through its affiliated sales agent. The 
subject merchandise is shipped from tankage in a storage facility in 
Canada directly to the customer. In the home market, Prayon sells 
through several channels of distribution. The first channel includes 
direct sales made to end-users. For the other channels, Prayon sells to 
either end-users or distributors through its affiliated sales agent. 
For all home market customers, Prayon ships the subject merchandise via 
independent carriers directly to the customer from its storage 
facilities at the plant. We have examined information provided by 
Prayon concerning these sales and determined that the selling functions 
are the same in the home market and U.S. market. Prayon negotiates all 
final prices and quantities, and bears the cost of storage and 
handling, surveys and delivery to customer. Prayon does not maintain 
inventories for its customers, provide after-sales service, or offer 
advertising or other sales support activities to its customers in 
either market. Therefore, we preliminarily determine that sales in the 
home market and sales in the United States are at the same LOT and that 
no adjustment is warranted.

Commissions

    The Department operates under the assumption that commission 
payments to affiliated parties (in either the United States or home 
market) are not at arm's length. The Court of International Trade has 
held that this is a reasonable assumption. See Outokumpu Copper Rolled 
Products AB v. United States, 850 F. Supp. 16,22 (1994).
    Accordingly, the Department has established guidelines to determine 
whether affiliated party commissions are paid on an arm's-length basis 
such that an adjustment for such commissions can be made. See Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan 
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, 
and Components Thereof, From Japan, 61 FR 57,629 (November 7, 1996). 
First, we compare the commissions paid to affiliated and unaffiliated 
sales agents in the same market. If there are no commissions paid to 
unaffiliated parties, we then compare the commissions earned by the 
affiliated selling agent on sales of merchandise produced by the 
respondent to commissions earned on sales of merchandise produced by 
unaffiliated sellers or manufacturers. If there is no benchmark which 
can be used to determine whether the affiliated party commission is an 
arm's-length value (i.e., the producer does not use an unaffiliated 
selling agent and the affiliated selling agent does not sell subject 
merchandise for an unaffiliated producer), the Department assumes that 
the affiliated party commissions are not paid on an arm's-length basis.
    In this case, Prayon used an affiliated sales agent in the home 
market and a different affiliated sales agent in the United States. 
Prayon did not use unaffiliated agents during the POR and did not place 
on the record information that its affiliated home market and U.S. 
selling agents acted as agents for unaffiliated producers of the 
subject merchandise. As a result, we were unable to establish a 
benchmark for use in determining whether commission payments Prayon 
made to affiliated selling agents were at arm's length. Accordingly, we 
preliminarily determine not to make a circumstance of sale adjustment 
for commissions in either market.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act based on rates certified by the Federal Reserve Bank in effect on 
the dates of U.S. sales. See Change in Policy Regarding Currency 
Conversions, 61 FR 9434 (March 8, 1996).

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following margin exists for the period August 1, 1996 through July 31, 
1997:

------------------------------------------------------------------------
                                                                Margin  
                   Manufacturer/exporter                      (percent) 
------------------------------------------------------------------------
Prayon.....................................................         3.96
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Interested parties may also 
request a hearing within ten days of publication. If requested, a 
hearing will be held as early as convenient for the parties but not 
later than 44 days after the date of publication or the first work day 
thereafter. Interested parties may submit case briefs not later than 30 
days after the date of publication of this notice. Rebuttal briefs, 
which must be limited to issues raised in the case briefs, may be filed 
not later than 37 days after the date of publication of this notice. 
The Department will issue a notice of the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such briefs, within 120 days from the 
publication of these preliminary results.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. In accordance 
with the methodology in Final Results of Antidumping Duty 
Administrative Review and Partial Termination of Administrative Review: 
Circular Welded Non-Alloy Steel Pipe from the Republic of Korea (62 FR 
55574, October 27, 1997), we calculated exporter/importer-specific 
assessment

[[Page 25833]]

values by dividing the total dumping duties due for each importer by 
the number of tons used to determine the duties due. We will direct 
Customs to assess the resulting per-ton dollar amount against each ton 
of the merchandise entered by these importers during the review period.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of industrial phosphoric acid from Belgium 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 the rate established in the final results of 
this administrative review (except no cash deposit will be required 
where the weighted-average margin is de minimis, i.e., less than 0.5 
percent); (2) for merchandise exported by manufacturers or exporters 
not covered in this review but covered in the original less-than-fair-
value (LTFV) investigation or a previous review, the cash deposit will 
continue to be the most recent rate published in the final 
determination or final results for which the manufacturer or exporter 
received an individual rate; (3) if the exporter is not a firm covered 
in this review, a previous 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) if neither the exporter nor the manufacturer is a firm covered in 
this or any previous reviews or the original investigation, the cash 
deposit rate will be 14.67 percent, the ``all others'' rate established 
in the LTFV investigation.
    This notice serves as a preliminary reminder to importers of their 
responsibility to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
this review period. Failure to comply with this requirement could 
result in the Secretary's presumption that reimbursement of antidumping 
duties occurred and the subsequent assessment of double antidumping 
duties.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 4, 1998.
Robert S. LaRussa,
Assistant Secretary, Import Administration.
[FR Doc. 98-12317 Filed 5-8-98; 8:45 am]
BILLING CODE 3510-DS-M