[Federal Register Volume 63, Number 133 (Monday, July 13, 1998)]
[Notices]
[Pages 37516-37520]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-18596]



[[Page 37516]]

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DEPARTMENT OF COMMERCE

International Trade Administration
[A-421-805]


Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide From 
the Netherlands; Final Results of Antidumping Administrative Review

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

ACTION: Notice of Final Results of the Antidumping Duty Administrative 
Review; Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide from 
the Netherlands.

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SUMMARY: On March 9, 1998, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping duty order on aramid fiber formed of poly para-phenylene 
terephthalamide (PPD-T aramid) from the Netherlands. The review covers 
one manufacturer/exporter and the period June 1, 1996 through May 31, 
1997.
    We gave interested parties an opportunity to comment on our 
preliminary results. Based on our analysis of the comments received, we 
have revised the results from those presented in the preliminary 
results of review.

EFFECTIVE DATE: July 13, 1998.

FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan at (202) 482-1324 or 
Eugenia Chu at (202) 482-3964, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230.

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 references to the Department's regulations are to 19 CFR 
Part 353 (1997).

SUPPLEMENTARY INFORMATION:

Background

    The Department published in the Federal Register the antidumping 
duty order on PPD-T aramid from the Netherlands on June 24, 1994 (59 FR 
32678). On June 11, 1997, we published in the Federal Register (62 FR 
31786) a notice of opportunity to request an administrative review of 
the order covering the period June 1, 1996, through May 31, 1997.
    In accordance with 19 CFR 353.22(a)(1), Aramid Products V.o.F. and 
Akzo Nobel Aramid Products, Inc. (collectively ``Akzo'' or respondent), 
and petitioner, E.I. DuPont de Nemours and Company (petitioner), 
requested that we conduct an administrative review for the 
aforementioned period of review (POR). We published a notice of 
initiation of this antidumping duty administrative review on August 1, 
1997 (62 FR 41339). The Department is conducting this administrative 
review in accordance with section 751 of the Act.
    On March 9, 1998, the Department published the preliminary results 
of the review. (See 63 FR 11408). The Department has now completed the 
review in accordance with section 751 of the Act.

Scope of the Review

    The products covered by this review are all forms of PPD-T aramid 
from the Netherlands. These consist of PPD-T aramid in the form of 
filament yarn (including single and corded), staple fiber, pulp (wet or 
dry), spun-laced and spun-bonded nonwovens, chopped fiber and floc. 
Tire cord is excluded from the class or kind of merchandise under 
review. This merchandise is currently classifiable under the Harmonized 
Tariff Schedule (HTS) item numbers 5402.10.3020, 5402.10.3040, 
5402.10.6000, 5503.10.1000, 5503.10.9000, 5601.30.0000, and 
5603.00.9000. The HTS item numbers are provided for convenience and 
Customs purposes. The Department's written description of the scope 
remains dispositive.

Analysis of the Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results of review. We received comments from respondent and 
petitioner.
    Comment 1: Petitioner contends that the Department should revise 
Akzo's reported U.S. indirect selling expenses (ISE), arguing that the 
calculation was improperly based on the consolidated financial 
statements of Akzo Nobel Inc., and should have instead been based upon 
the financial statements of Akzo Nobel Aramid Product Inc.'s (ANAPI--
the exclusive sales agent of Aramid Products V.o.F. in the United 
States (Aramid)). Petitioner also asserts that the Department should 
reject Akzo's use of consolidated financial data in calculating the net 
interest expenses included in Aramid's cost of production so as to 
reflect Aramid's actual financing expenses. Petitioner acknowledges 
that the Department generally uses consolidated financial expense data 
to calculate financing expenses. However, petitioner asserts that this 
is not an automatic requirement. Further, petitioner contends that the 
Department must not use consolidated data where using the consolidated 
data would distort actual financing expenses. Petitioner asserts that 
such would be the case in the instant circumstance because Akzo's 
reported financial interest expense factor is unrelated to the 
financing requirements of Akzo's PPD-T aramid fiber business in the 
United States. Moreover, petitioner argues that Akzo justifies its use 
of consolidated figures on the grounds that the U.S. parent borrows on 
behalf of its related companies, and then charges the units a share of 
this cost, without explaining how it allocates the financing expenses. 
Petitioner argues that Akzo calculated the reported financing expenses 
based on outstanding loans between the U.S. parent and ANAPI and 
speculates as to the reasons why ANAPI borrowed money from its parent 
company to finance its U.S. operations.
    Petitioner further argues that the Department and the Court of 
International Trade (CIT) misapplied binding precedent when affirming 
the Department's use of Akzo's consolidated data in E.I. DuPont de 
Nemours & Co. v. United States, No. 96-11-02509, Slip Op. 98-7, 1998 WL 
42598 (CIT Jan. 29, 1998) (E.I. DuPont). Moreover, petitioner contends 
that the Department and the CIT failed to follow the express mandate of 
the 1994 amendments to the antidumping statute, which directs the 
Department to capture all actual costs incurred in producing the 
subject merchandise and to ensure that reported costs constitute a 
representative measure of the respondent's true costs. Petitioner 
argues that the CIT incorrectly interpreted the Statement of 
Administrative Action (SAA), accompanying H.R. 5110, 103rd Cong., at 
834-835 (1994), which according to petitioner, requires a change in the 
Department's practice with respect to the calculation of financing 
costs.
    Akzo argues that the CIT decision in E.I. DuPont properly affirmed 
the Department's use of Akzo's consolidated financial expense in the 
first administrative review. Akzo urges the Department to follow the 
same methodology in the final results of the third administrative 
review. Further, Akzo emphasizes that petitioner did not point to any 
evidence justifying a deviation from the Department's standard practice 
of using the parent's consolidated interest expense in cases where the 
parent's majority ownership

[[Page 37517]]

is prima facie evidence of corporate control.
    Additionally, Akzo argues that petitioner's claims that the 
amendments to the antidumping statute set a new standard for 
calculating interest expense is in error. Contrary to petitioner's 
argument, Akzo contends that neither the SAA nor the amended section 
773(f) of the antidumping statute directs the Department to change its 
existing practice. Akzo further contends that the cited portion of the 
SAA suggests only two distinct changes in the law that do not affect 
Commerce's past practice at issue here, as the CIT explained in E.I. 
DuPont at 7-9.
    Akzo further buttresses its argument by pointing to evidence in the 
administrative record demonstrating that the interest expense of the 
consolidated company reflects the actual interest expense incurred. 
Akzo claims that the only loans and corresponding interest expense on 
the books of ANAPI and Aramid are intercompany loans from the parent 
companies, Akzo Nobel Inc. and Akzo Nobel N.V. In addition, Akzo argues 
that the Department verified that the financial statements of the 
subsidiary companies are consolidated with those of the parent 
companies. Akzo explains that the only actual interest expense is 
recorded on the books of the parent companies because it is only these 
entities that actually borrow money and incur the related interest 
expense. Akzo asserts that it is only the parent that determines the 
sources of money, borrows the money, and incurs the actual interest 
expense and that therefore, petitioner's speculations on how and why 
companies borrow money and how a parent determines the amount of loans 
and interest are irrelevant because these are internal decisions that 
take into account a variety of factors.
    Department's Position: We agree with Akzo. In the prior first and 
second administrative reviews, petitioner similarly urged the 
Department to rely on Aramid's own financial records to determine its 
net interest expense, instead of following the Department's normal 
practice of using the parent company's financing expenses incurred on 
behalf of the consolidated group of companies. The Department disagreed 
with petitioner's position, explaining in detail that any departure 
from the Department's normal practice in this case was not warranted in 
light of Akzo Nobel N.V.'s majority ownership interest in Aramid, which 
constituted prima facie evidence of the parent's corporate control. For 
a detailed explanation of this issue, see Aramid Fiber Formed of Poly-
Phenylene Terephthalamide from the Netherlands: Final Results of 
Antidumping Administrative Review, 61 FR 51406 (1996); Aramid Fiber 
Formed of Poly-Phenylene Terephthalamide from the Netherlands: Final 
Results of Antidumping Administrative Review, 62 FR 38058 (1997).
    On January 29, 1998, the CIT affirmed the Department's 
determination, ruling that neither the SAA nor the amended statute 
mandate a change of practice with respect to using a parent company's 
consolidated statements when calculating the respondent's interest 
expense ratio, and that this practice is consistent with the principle 
of allocating costs in a manner that reasonably reflects the actual 
costs. E.I. DuPont at 8-9. (Emphasis added.) Citing Gulf States Tube 
Div. of Quanex Corp. v. United States, Slip Op. 97-124, Consol. Court 
No. 95-09-01125, at 38-39 (CIT Aug. 29, 1997), the Court noted that the 
focus of the analysis is on whether the consolidated group's 
controlling entity has the power to determine the capital structure of 
each member of the group. The Court concluded that the administrative 
record in this case supported the Department's finding that Akzo Nobel 
N.V. was a controlling entity, and that DuPont did not cite evidence 
which would overcome the presumption of corporate control.
    In the instant administrative review, petitioner merely reiterates 
its position argued in the previous two reviews and does not point to 
any new evidence in the administrative record, which would demonstrate 
that the parent, Akzo Nobel N.V., does not exercise corporate control 
over the respondent company. Thus, consistent with the Department's 
prior determinations and the CIT's decision in E.I. DuPont, we will 
continue using Akzo Nobel N.V.'s consolidated financial interest 
expense in computing the respondent's net interest ratio.
    Similarly, petitioner's contention that we should revise Akzo's 
reported U.S. indirect selling expense (ISE) lacks merit. As the 
Department stated in the prior administrative reviews, the Department 
bases its calculations on the consolidated financial statements of the 
parent, not the subsidiary. This method is grounded in a well-
established practice. See Aramid Fiber Formed of Poly-Phenylene 
Terephthalamide from the Netherlands: Final Results of Antidumping 
Administrative Review, 61 FR at 51407; Aramid Fiber Formed of Poly-
Phenylene Terephthalamide from the Netherlands: Final Results of 
Antidumping Administrative Review, 62 FR at 38060. As stated above, the 
focal point of the analysis is upon the parent company's control over 
the subsidiary. The record contains sufficient evidence of Akzo Nobel 
Inc.'s corporate control over ANAPI. More importantly, the petitioner 
has failed to produce any evidence to rebut the prima facie evidence of 
Akzo's control over ANAPI. For the reasons stated above, we will 
continue to adhere to the Department's current practice in this final 
determination.
    Comment 2: Petitioner alleges that ANAPI is being reimbursed for 
antidumping duty deposits by one of its parent companies and argues 
that the Department should deduct the deposits from Akzo's U.S. price, 
or at least include the associated imputed financing expenses in Akzo's 
U.S. ISE. Petitioner claims that although there are no reimbursement 
agreements, the summary trial balances of ANAPI and the Annual Reports 
of Akzo Nobel Inc. support this allegation. Moreover, petitioner cites 
Hoogovens Staal BV v. AK Steel Corp., 1998 WL 118090 (CIT March 13, 
1998) (Hoogovens), as a case affirming the Department's authority to 
subtract reimbursed antidumping duty deposits, reasoning that the 
antidumping duties were intended to cause importers to raise prices to 
take into account such duties. Petitioner argues that the fact that 
Akzo has not raised its prices by anywhere close to 66 percent since 
the antidumping duty order was published further supports its claim 
that ANAPI is relieved of the responsibility for the antidumping duties 
and speculates that certain amounts may be reimbursed by either Akzo 
Nobel Inc. or Akzo Nobel N.V.
    Akzo contends that ANAPI is not being reimbursed for antidumping 
duties and the petitioner's speculation to the contrary should be 
disregarded. Akzo cites the Department's regulations, 19 CFR 353.26(a), 
requiring the Department to deduct from U.S. price the amount of any 
antidumping duty which the producer or reseller paid directly on behalf 
of the importer or reimbursed to the importer. Akzo notes that this 
regulation also requires the importer to file a certificate, prior to 
liquidation, with the U.S. Customs Service, attesting to the absence of 
any agreement for the payment or reimbursement of any part of the 
antidumping duties by the manufacturer, producer, seller or exporter. 
The regulation provides that the Department may presume from an 
importer's failure to file this certificate that the producer or 
reseller paid or reimbursed the antidumping duties. Akzo argues that it 
is in full compliance with the Department's regulations. It

[[Page 37518]]

states ANAPI has filed, prior to liquidation, certifications with 
Customs attesting to the absence of any agreement with the 
manufacturer, producer, seller or exporter for the payment or 
reimbursement of antidumping duties that, as required by section 
353.26(c). Further, the respondent claims that ANAPI has not entered 
into such an agreement with Akzo Nobel Inc. or Akzo Nobel N.V. In 
support of its arguments, Akzo cites the CIT ruling in The Torrington 
Corp. v. United States, 881 F. Supp. 622, 632 (1995) (Torrington) that 
``once an importer * * * has indicated on this certificate that it has 
not been reimbursed for antidumping duties, it is unnecessary for the 
Department to conduct an additional inquiry absent a sufficient 
allegation of customs fraud.'' Akzo claims that, because it has filed 
the requisite certification, and because petitioner has failed to show 
any customs fraud, the record establishes that neither Akzo Nobel Inc. 
nor Akzo Nobel N.V. has reimbursed ANAPI for antidumping duty payments.
    Akzo further contends that the CIT has affirmed the Department's 
longstanding precedent that, absent evidence of reimbursement, the 
Department has no authority to make the adjustment to U.S. price 
requested by the petitioner. See Torrington at 632. Akzo states that, 
according to the CIT, in Torrington, the party who requests the 
reimbursement investigation must produce some link between the transfer 
of funds and reimbursement of antidumping duties. Akzo argues that the 
petitioner has failed to meet this burden by failing to establish any 
agreement for reimbursement of antidumping duties between either Akzo 
Nobel Inc. or Akzo Nobel N.V. and ANAPI .
    Furthermore, Akzo argues that petitioner's reliance on Hoogovens is 
misplaced. Akzo states that the Court remanded this decision to the 
Department to provide a clearer basis for its determination that 
reimbursement occurred. However, Akzo argues, even if the CIT 
ultimately agrees that Hoogovens reimbursed its importer of record, the 
facts of that case are distinguishable from the facts in Akzo's case. 
In Hoogovens, the Department found that the importer and exporter had 
entered into a written agreement to reimburse antidumping duties, which 
triggered the application of section 353.26 of the Department's 
regulations. See Certain Cold-Rolled Carbon Steel Plat Products from 
the Netherlands, 61 FR 48465 (1996) (First Cold-Rolled Review) (the 
review that led to the Hoogovens' CIT appeal). Akzo insists that there 
is no such agreement between Akzo Nobel N.V. and its U.S. subsidiaries, 
or between Aramid and ANAPI and, therefore, the decision in First Cold-
Rolled Review has no bearing on this case. Thus, the requirements of 
section 353.26(a) do not apply and the Department should deny the 
requested adjustment to Akzo's U.S. price.
    Akzo further argues that no adjustments to the reported U.S. ISE is 
warranted as there were no improper exclusions. Akzo claims that 
petitioner argues without any citations that the Department should 
artificially inflate Akzo's U.S. ISE to account for the financing 
expenses incurred in connection with the antidumping duty deposits it 
has made. Akzo argues that the Department's practice and precedent 
actually support a downward adjustment of ISE to account for these 
expenses. See Antifriction Bearings and Parts Thereof from France (AFBs 
III), 58 FR 39729 (1993) opinion after remand, Federal-Mogul Corp. v. 
United States, Slip Op. 96-193 at 2, 8 (CIT Dec. 12, 1996) (Federal 
Mogul II). Akzo states that the Department has justified the adjustment 
as analogous to the payment of legal fees in antidumping proceedings, 
which are incurred solely because of the antidumping duty order and 
thus are not selling expenses. Akzo further argues that, in Tapered 
Roller Bearings from Japan, 62 FR 11825, 11829 (1997), the Department 
cautioned that failure to allow a downward adjustment would risk 
calculating overstated margins due to failure to take into account the 
fact that no such expense would have been incurred absent the order. 
Therefore, Akzo argues that the Department should not make an upward 
adjustment to Akzo's U.S. ISE because it is not an expense incurred in 
selling the subject merchandise.
    Department's Position: We agree with Akzo. The Department's 
regulations require the Department to deduct from U.S. price the amount 
of any antidumping duty which the producer or reseller (i) paid 
directly on behalf of the importer or (ii) reimbursed to the importer. 
See 19 CFR 353.26 (a)(1996). Absent evidence of reimbursement, the 
Department has no authority to make the adjustment to U.S. price. 
Torrington at 632, citing Brass Sheet and Strip From Sweden, 57 FR 
2706, 2708 (1992) and Brass Sheet and Strip From the Republic of Korea, 
54 FR 33257, 33258 (1989). See also, Color Television Receivers from 
the Republic of Korea; Final Results of Antidumping Duty Administrative 
Reviews, 61 FR 4408, 4411 (1996). In the absence of actual 
reimbursement payments, the Department requires evidence of a concrete 
link between the financial transaction and the antidumping duty before 
it may find reimbursement and impose additional duties. Torrington at 
632, aff'd 127 F.3d 1077, 1080-81 (Fed. Cir. 1997) (further, the Court 
of Appeals for the Federal Circuit upheld the Department's 
interpretation and application of section 353.26. Id.) Finally, section 
353.26 (b) of the Department's regulations also requires that the 
importer file a certificate with the U.S. Customs Service, attesting to 
the absence of any ``agreement or understanding for the payment or for 
the refunding'' of the antidumping duties. See 19 CFR 353.26(b).
    In the previous second administrative review, the Department 
concluded that there was no evidence of reimbursement of ANAPI by Akzo 
for antidumping duties and, therefore, there was no justification for 
adjusting U.S. ISE for the potentially reimbursed antidumping duty 
deposits. See Final Results of Antidumping Duty Administrative Review: 
Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide From the 
Netherlands, 62 FR at 38061. During the course of conducting the 
instant review, the Department provided petitioner with the opportunity 
to comment upon all the information and data presented by the 
respondent. However, petitioner did not allege any specific instance or 
evidence of reimbursement of antidumping duties in either its October 
17, 1997, or December 12, 1997, comments. Petitioner's first allegation 
of reimbursement was presented in its administrative case brief, dated 
April 8, 1998, after the Department completed verification and issued 
its preliminary results of the administrative review. In its case 
brief, the petitioner failed to provide any new, specific evidence 
supporting its reimbursement allegations. Petitioner's comments on this 
issue are speculative and do not point to concrete evidence of 
reimbursement. Mere allegations of reimbursement are insufficient to 
warrant further action by the Department. Neither section 353.26 nor 
past precedent provide authority for the Department to undertake 
further action or make additional adjustments based upon petitioner's 
thinly supported assertions of reimbursement. Moreover, we carefully 
reviewed the record and found no evidence on the record suggesting 
reimbursement of antidumping duties, nor did we find specific evidence 
of inappropriate financial intermingling between ANAPI and Akzo Nobel 
Inc. or Akzo Nobel N.V. In reviewing the financial statements and 
payment records of the U.S.

[[Page 37519]]

subsidiary, we verified that ANAPI is responsible for all cash deposits 
and duties assessed. See Verification Report, dated February 24, 1998.
    Further, petitioner's reliance on Hoogovens is inapposite. In that 
case, the CIT held that, although the record evidence in Hoogovens 
``suggested'' reimbursement of antidumping duties, the Department did 
not identify which evidence supported its findings of reimbursement. 
Thus, the CIT remanded this case to the Department for a reasoned 
articulation of its decision. In the present case, however, we lack any 
evidence of reimbursement.
    Finally, there is evidence on the record that ANAPI filed the 
required certifications with U.S. Customs Service attesting to the 
absence of any agreement with the manufacturer, producer, seller, or 
exporter for the payment or reimbursement of antidumping duties. Based 
on these facts, the Department presumes the continued existence of the 
circumstances that gave rise to our findings in the second 
administrative review and that 19 CFR 353.26 is inapplicable in this 
case. Therefore, consistent with our findings in the second 
administrative review, we have not deducted any amount for reimbursed 
duties from Akzo's U.S. price or included them in Akzo's U.S. ISE.
    Comment 3: Petitioner argues that the Department inconsistently 
filled in missing values for imputed credit expense for home market and 
U.S. sales. Specifically, for home market sales, the Department filled 
in the missing payment dates with the date of the preliminary 
determination, March 2, 1998, and then calculated the missing credit 
expense value, while for the U.S. sales, the Department calculated the 
average credit expense for U.S. sales and then applied that average 
expense to missing credit values. Petitioner claims that this 
inconsistent application maximized the credit expense deduction for 
home market sales, thereby reducing normal value, and artificially 
reduced the credit expense deduction for U.S. sales, thereby increasing 
the U.S. price. Because Akzo failed to submit a complete questionnaire 
response, petitioner further argues that the Department should apply 
adverse inferences and fill in the missing data with the largest value 
on the record for the U.S. price deduction and with zero for the 
corresponding home market price deduction, or at least fill in the 
missing data with values that do not allow Akzo to benefit from its 
omissions.
    Akzo argues that the Department should reject petitioner's request 
as contrary to current Department practice, which is to use the last 
day of verification as the payment date for unpaid sales (February 2, 
1998). Respondent cites Static Random Access Memory Semiconductors from 
Taiwan, 63 FR 8909, 8928 (1998), as precedent.
    Department's Position: In accordance with the Department's current 
practice, the last day of verification will be used as the date of 
payment for unpaid sales. See Extruded Rubber Thread From Malaysia; 
Final Results of Antidumping Duty Administrative Review, 63 FR 12752, 
12757 (1998) (citing Static Random Access Memory Semiconductors from 
Taiwan; Final Results of Less than Fair Value Investigation, 63 FR 
8909, 8928 (1998) and Brass Sheet and Strip from Sweden; Final Results 
of Antidumping Administrative Review, 60 FR 3617, 3621 (1995)). We 
disagree with petitioner's assertion that the Department should use an 
adverse inference in calculating the imputed credit expense. In the 
instant review, respondent has not impeded the review by providing 
inaccurate or unverifiable data, instead it has provided data which was 
successfully verified. Therefore, we have used the last day of 
verification, February 2, 1998, as the date of payment for the 
transactions in question.
    The Department agrees with petitioner that we inconsistently 
calculated missing credit expenses in the home sales market and U.S. 
market during the preliminary determination. In the final results of 
the review, the Department has substituted the missing payment dates 
with the last day of verification and calculated the missing credit 
expense value for both home market sales and U.S. sales. See 
Calculation Memorandum, dated July 7, 1998, for a complete discussion 
of the mathematical calculation.
    Comment 4: Petitioner contends that the Department's treatment of 
Akzo's goodwill expenses in the first and second administrative reviews 
is not supported by substantial evidence on the record and is contrary 
to law. Petitioner argues that the Department should amortize these 
costs over a period that covers the POR to avoid improperly 
understating the actual cost of producing PPD-T aramid fiber during the 
POR.
    Akzo argues that petitioner's position is unsubstantiated and 
contrary to law. Akzo notes that the proper treatment of the goodwill 
was the focus of the first administrative review, and of the recently 
issued CIT decision. Respondent further notes that the Department spent 
a significant amount of time gathering and analyzing all aspects of the 
purchase. See Aramid Fiber Formed of Poly Para-Phenylene 
Terephthalamide from the Netherlands, 61 FR 51406. Akso cites the CIT's 
ruling to affirm the Department's treatment of goodwill as further 
support for its contentions. Respondent cites specifically to the CIT's 
approval of the Department's analysis, affirming that it was more 
appropriate to isolate those components of goodwill that pertained to 
assets used in the production of subject merchandise. Akzo states that 
in preparing the questionnaire response for this review, it complied 
with the Department's determination in the first two administrative 
reviews. Finally, Respondent contends that no circumstances exist 
warranting any deviation from the Department's prior approach, as 
affirmed by the CIT.
    Department's Position: The Department agrees with Akzo. As 
explained at length in the final results of the first and second 
administrative reviews, and affirmed by the CIT in E.I. DuPont, the 
Department determined to accept Akzo's accounting method for the 
amortization of goodwill expense as reasonable. See Aramid Fiber Formed 
of Poly-Phenylene Terephthalamide from the Netherlands: Final Results 
of Antidumping Administrative Review, 61 FR at 51406; Aramid Fiber 
Formed of Poly-Phenylene Terephthalamide from the Netherlands: Final 
Results of Antidumping Administrative Review, 62 FR at 38063.
    The Department spent a significant amount of time gathering and 
analyzing all aspects of the facts surrounding the goodwill issue 
during the first administrative review. Upon completion of its 
analysis, the Department determined that, for cost calculation 
purposes, it was appropriate to isolate those components of goodwill 
that pertained to assets used in the production of subject merchandise. 
See Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide from the 
Netherlands, 61 FR at 51406. The Department verified that Akzo complied 
with the Department's decision in the first administrative review, and 
calculated the reported depreciation expenses exclusive of goodwill 
expenses in preparing its response for the instant review. The 
methodology used in the instant case is consistent with the final 
results of the first and second administrative reviews.
    Moreover, in E.I. DuPont, the CIT rejected petitioner's arguments 
with respect to goodwill, affirming the Department's treatment of 
inventory write-downs and residual goodwill

[[Page 37520]]

expenses. See E.I. DuPont at 15-24. Therefore, for purposes of the 
instant review, the Department will continue to use Akzo's reported 
cost of production and constructed value data in calculating the 
antidumping duty margin.
    Comment 5: Akzo claims that the computer program used in 
calculating the preliminary results contained three errors that must be 
corrected. First, Akzo argues that the difference in merchandise 
(DIFMER) adjustment was miscalculated by failing to convert the 
submitted variable cost of manufacturing of the U.S. product (VCOMU) 
from kilograms to pounds. Akzo explains that because the U.S. sales are 
reported on a per pound basis and the analysis is conducted on the same 
basis, it is necessary to convert the DIFMER adjustment to a per pound 
amount. Second, Akzo claims that in calculating the net constructed 
export price (CEP), the Department correctly added U.S. packing costs 
to normal value but incorrectly included U.S. packing costs as an 
adjustment to the gross price, thereby understating the net CEP and 
overstating the margin. Third, Akzo argues that the Department 
incorrectly deducted the ISE incurred in the home market on U.S. sales 
from CEP after correctly determining in the preliminary results and LOT 
analysis memo that these expenses were not related to the economic 
activity in the U.S. Akzo provided suggested changes to correct the 
alleged errors.
    Petitioner did not rebut any of Akzo's aforementioned suggested 
corrections.
    Department's Position: The Department agrees with Akzo and has 
revised the final margin program to reflect these changes. First, the 
Department has converted VCOMU from kilograms to pounds to ensure that 
the final margin analysis is performed on a comparable basis. Second, 
the Department has corrected the margin program to ensure that both the 
CEP and NV are calculated inclusive of packing costs. Finally, the 
Department's preliminary margin calculation program inadvertently 
included ISE that were not incurred in connection with economic 
activity as deductions to the U.S. selling price. The Department's 
analysis in the Level of Trade Memo, dated March 2, 1998, is correct in 
stating that only those expenses incurred connection with economic 
activity in the U.S. will be deducted from CEP in conducting the margin 
analysis. For purposes of these final results of review, the Department 
has revised the margin calculation to reflect the conclusion of the 
Level of Trade Analysis memo. For further explanation, see Calculation 
Memorandum, dated July 7, 1998.

Final Results of Review

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

------------------------------------------------------------------------
                                                                Margin  
          Manufacturer/exporter            Period of review   (percent) 
------------------------------------------------------------------------
Akzo....................................     6/1/96-5/31/97         6.31
All Other...............................     6/1/96-5/31/97        66.92
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions on each exporter directly to the 
Customs Service. For assessment purposes, we have calculated importer 
specific duty assessment rates for the merchandise based on the ratio 
of the total amount of antidumping duties calculated for the examined 
sales during the POR to the total entered value of sales examined 
during the POR.
    Furthermore, the following deposit requirements will be effective 
upon publication of this notice of final results of review for all 
shipments of PPD-T aramid fiber from the Netherlands entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided by section 751(a)(1) of the Act: (1) The cash deposit 
rate for the reviewed company will be the rate listed above; (2) 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 (3) for all other producers and/or 
exporters of this merchandise, the cash deposit rate shall be 66.92 
percent, the ``all others'' rate established in the LTFV investigation 
(59 FR 32678, June 24, 1994). These deposit requirements 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 351.402(f) 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 subsequent assessment 
of double antidumping duties.

Notification to Interested Parties

    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.305 and 19 CFR 353.306. Timely 
written 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)) and 19 CFR 351.221.

    Dated: July 7, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-18596 Filed 7-10-98; 8:45 am]
BILLING CODE 3510-DS-P