[Federal Register Volume 63, Number 213 (Wednesday, November 4, 1998)]
[Notices]
[Pages 59509-59514]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29551]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-827]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Emulsion Styrene-
Butadiene Rubber from Brazil
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 4, 1998.
FOR FURTHER INFORMATION CONTACT: Sunkyu Kim or John Maloney, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230; telephone: (202) 482-2613 or (202) 482-1503, respectively.
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 of Commerce's (the
Department's) regulations are to the
[[Page 59510]]
regulations at 19 CFR Part 351, 62 FR 27296 (May 19, 1997).
Preliminary D etermination
We preliminarily determine that emulsion styrene-butadiene rubber
(ESBR) from Brazil is being, or is likely to be, sold in the United
States at less than fair value (LTFV), as provided in section 733 of
the Act. The estimated margins of sales at LTFV are shown in the
``Suspension of Liquidation'' section of this notice.
Case History
Since the initiation of this investigation (Notice of Initiation of
Antidumping Investigations: Emulsion Styrene-Butadiene Rubber from
Brazil, the Republic of Korea, and Mexico (63 FR 20575, April 27,
1998)), the following events have occurred:
On May 18, 1998, the United States International Trade Commission
(ITC) issued an affirmative preliminary injury determination in this
case (see ITC Investigation No. 731-TA-794-796).
In May 1998, the Department obtained information from the U.S.
Embassy in Brazil identifying Petroflex Industria e Comercio S.A.
(Petroflex) as the only producer and/or exporter of the subject
merchandise to the United States. Based on this information, the
Department issued the antidumping questionnaire to Petroflex in May
1998.
On May 22, 1998, Petroflex requested that it be permitted to use
calendar year 1997 (i.e., its fiscal year) as its cost calculation
period rather than the period of investigation (i.e., April 1, 1997,
through March 31, 1998). We granted Petroflex's request on May 26,
1998. We note, however, that Petroflex subsequently submitted cost
information for the period of investigation in its Section D
questionnaire response. Also, on May 26, 1998, Petroflex requested that
the Department not require Petroflex to report resales of ESBR made by
its affiliated customers in Brazil because such sales represent less
than five percent of Petroflex's total sales in the home market. On May
27, 1998, pursuant to 19 CFR 351.403(d), the Department granted
Petroflex's request.
In June 1998, the Department received a response to Section A of
the questionnaire from Petroflex. Petroflex submitted its response to
Sections B and C of the questionnaire in July 1998.
On July 21, 1998, pursuant to section 733(c)(1)(A) of the Act, the
petitioners made a timely request to postpone the preliminary
determination. The petitioners filed an explanatory amendment to that
request on July 23, 1998. We granted this request and, on July 28,
1998, postponed the preliminary determination until no later than
October 28, 1998 (see Notice of Postponement of Preliminary
Determinations of Sales at Less Than Fair Value: Emulsion Styrene-
Butadiene Rubber From Brazil, the Republic of Korea, and Mexico (63 FR
41544, August 4, 1998)).
On July 27, 1998, the petitioners submitted a timely allegation
pursuant to section 773(b) of the Act that Petroflex had made sales in
the home market at less than the cost of production (COP). Our analysis
of the allegation indicated that there were reasonable grounds to
believe or suspect that Petroflex sold ESBR in the home market at less
than the COP. Accordingly, we initiated a COP investigation with
respect to Petroflex pursuant to section 773(b) of the Act (see
Memorandum from Team to Louis Apple, Office Director, dated August 21,
1998).
We issued supplemental questionnaires for Sections A, B, and C to
Petroflex in August 1998 and received responses to these questionnaires
along with revised U.S. and home market sales listings in August and
September 1998. We received Petroflex's response to Section D of the
questionnaire in September 1998. We issued a supplemental questionnaire
for Section D in October 1998, but the response to the supplemental
questionnaire was not received in time to be considered for purposes of
the preliminary determination. We will consider it, however, for
purposes of the final determination.
Postponement of Final Determination and Extension of Provisional
Measures
Pursuant to section 735(a)(2) of the Act, on October 13, 1998,
Petroflex requested that, in the event of an affirmative preliminary
determination in this investigation, the Department postpone its final
determination until not later than 135 days after the publication of
this notice in the Federal Register. On October 16, 1998, Petroflex
amended its request to include a request to extend the provisional
measures to not more than six months. In accordance with 19 CFR
351.210(b), because: (1) Our preliminary determination is affirmative;
(2) Petroflex accounts for a significant proportion of exports of the
subject merchandise; (3) no compelling reasons for denial exist; and
(4) Petroflex has requested an extension of provisional measures, we
are granting the respondent's request and are postponing the final
determination until no later than 135 days after the publication of
this notice in the Federal Register. Suspension of liquidation will be
extended accordingly.
Scope of Investigation
For purposes of this investigation, the product covered is ESBR.
ESBR is a synthetic polymer made via free radical cold emulsion
copolymerization of styrene and butadiene monomers in reactors. The
reaction process involves combining styrene and butadiene monomers in
water, with an initiator system, an emulsifier system, and molecular
weight modifiers. ESBR consists of cold non-pigmented rubbers and cold
oil extended non-pigmented rubbers that contain at least one percent of
organic acids from the emulsion polymerization process.
ESBR is produced and sold, both inside the United States and
internationally, in accordance with a generally accepted set of product
specifications issued by the International Institute of Synthetic
Rubber Producers (IISRP). The universe of products subject to this
investigation are grades of ESBR included in the IISRP 1500 series and
IISRP 1700 series of synthetic rubbers. The 1500 grades are light in
color and are often described as ``Clear'' or ``White Rubber.'' The
1700 grades are oil-extended and thus darker in color, and are often
called ``Brown Rubber.'' ESBR is used primarily in the production of
tires. It is also used in a variety of other products, including
conveyor belts, shoe soles, some kinds of hoses, roller coverings, and
flooring.
Products manufactured by blending ESBR with other polymers, high
styrene resin master batch, carbon black master batch (i.e., IISRP 1600
series and 1800 series) and latex (an intermediate product) are not
included within the scope of this investigation.
The products under investigation are currently classifiable under
subheading 4002.19.0010 of the Harmonized Tariff Schedule of the United
States (HTSUS). Although the HTSUS subheading is provided for
convenience and customs purposes, the written description of the scope
of this investigation is dispositive.
Period of Investigation
The period of investigation (POI) is April 1, 1997, through March
31, 1998.
Fair Value Comparisons
To determine whether sales of ESBR from Brazil 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 and Constructed Export
[[Page 59511]]
Price'' and ``Normal Value'' sections of this notice, below. In
accordance with section 777A(d)(1)(A)(i) of the Act, we calculated
weighted-average EPs and CEPs for comparison to weighted-average NVs.
On January 8, 1998, the Court of Appeals for the Federal Circuit
issued a decision in CEMEX v. United States, 1998 WL 3626 (Fed Cir.).
In that case, based on the pre-URAA version of the Act, the Court
discussed the appropriateness of using constructed value (CV) as the
basis for foreign market value when the Department finds home market
sales to be outside the ``ordinary course of trade.'' This issue was
not raised by any party in this proceeding. However, the URAA amended
the definition of sales outside the ``ordinary course of trade'' to
include sales below cost. See Section 771(15) of the Act. Consequently,
the Department has reconsidered its practice in accordance with this
court decision and has determined that it would be inappropriate to
resort directly to CV, in lieu of foreign market sales, as the basis
for NV if the Department finds foreign market sales of merchandise
identical or most similar to that sold in the United States to be
outside the ``ordinary course of trade.'' Instead, the Department will
use sales of similar merchandise, if such sales exist. The Department
will use CV as the basis for NV only when there are no above-cost sales
that are otherwise suitable for comparison. Therefore, in this
proceeding, when making comparisons in accordance with section 771(16)
of the Act, we considered all products sold in the home market as
described in the ``Scope of Investigation'' section of this notice,
above, that were in the ordinary course of trade for purposes of
determining appropriate product comparisons to U.S. sales. Where there
were no sales of identical merchandise in the home market made in the
ordinary course of trade, we compared U.S. sales to sales of the most
similar foreign like product made in the ordinary course of trade,
based on the characteristics listed in Sections B and C of our
antidumping questionnaire.
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 EP or CEP transaction. The NV LOT
is that of the starting-price sales in the comparison market or, when
NV is based on CV, that of the sales from which we derive selling,
general and administrative (SG&A) expenses and profit. For EP, the 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 level of trade
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 sales 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 an 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 (November 19, 1997).
Petroflex reported two customer categories (i.e., end users and
distributors) and two channels of distribution corresponding to each
customer category for its home market sales. In its response, Petroflex
claims that its sales to the end users are at a different LOT than its
sales to the distributors, arguing that it provides significantly
different selling services to its end-user customers than its
distributors. In the U.S. market, Petroflex reported both EP and CEP
sales. For EP sales, Petroflex reported one channel of distribution and
one customer category (i.e., direct sales to unaffiliated end users)
and claims that sales to this customer category are at the same level
of trade as its sales to end users in the home market. For CEP sales,
Petroflex reported one channel of distribution and one customer
category (i.e., sales to small end-users through its U.S. affiliate).
Petroflex claims that these sales constitute a separate level of trade
from its EP sales and the same level of trade as its home market sales
to distributors.
In determining whether separate levels of trade actually existed in
the home market, we examined whether Petroflex's sales involved
different marketing stages (or their equivalent) based on the channel
of distribution, customer categories and selling functions. As noted
above, Petroflex made sales to two different customer categories (i.e.,
end users and distributors). With respect to selling activities,
Petroflex identified the following selling services it provides to its
end users: (1) freight and delivery; (2) pre-and post-sale technical
services; (3) warranty services; and (4) market research. For sales to
distributors, Petroflex stated that it does not perform any of the
services it performs for its sales to end users except for post-sale
technical services. With respect to technical services, however,
Petroflex further stated that such services are provided infrequently
to distributors, whereas they are provided frequently to end users.
Based upon this information, we have determined that Petroflex's sales
to end users differ significantly from its sales to distributors with
respect to selling activities and, therefore, constitute a different
level of trade than its sales to distributors.
In analyzing Petroflex's selling activities for its EP sales (i.e.,
sales to end users), we noted that the sales involved basically the
same selling functions associated with the home market sales to end
users described above. Therefore, we determine that Petroflex's EP
sales and its home market sales to end users are made at the same level
of trade.
The CEP sales were based on sales made by Petroflex to its U.S.
affiliate, which then sold the merchandise to unaffiliated purchasers
in the United States. Based on our analysis, we find that the selling
functions performed at the CEP level do not significantly differ from
those performed in the home market for sales to distributors.
Specifically, after making deductions pursuant to section 772(d) of the
Act, we determined that there were two selling activities performed by
Petroflex associated with its sales to its U.S. affiliate: (1) Freight;
and (2) post-sale technical services, which, according to Petroflex,
are offered infrequently. Based on this information, we determined that
Petroflex's CEP sales and its home market sales to distributors are
made at the same level of trade.
To the extent possible, we determined NV based on sales in the home
market at the same LOT as the EP or CEP transactions. When we were
unable to find sales of the foreign like product in the home market at
the same LOT as the U.S. sale, we determined whether a LOT adjustment
was warranted. To make that determination, we examined whether there
was a pattern of consistent price differences between the two levels of
trade in the home market by comparing, for each model sold at both
levels, the average net price of sales made in the ordinary course of
trade at the two
[[Page 59512]]
levels of trade. We examined whether average prices were higher at one
of the levels of trade for a preponderance of the models, so as to
demonstrate a pattern of consistent price differences. We also
considered whether the average prices were higher at one of the levels
of trade for a preponderance of sales, based on the quantities of each
model sold, in making this determination. Based on our analysis, we did
not find that there existed a pattern of consistent price differences
between the two levels of trade in the home market. Therefore, we did
not make level of trade adjustments in our calculation. Since there was
no pattern of consistent price differences between sales at the
different levels of trade, we also did not make a CEP offset adjustment
to NV. See Calculation Memorandum from Case Analyst dated October 28,
1998, for further discussion.
Export Price and Constructed Export Price
Petroflex reported as EP transactions its sales of subject
merchandise sold to unaffiliated U.S. customers prior to importation
through its affiliated company, Nemotrade Corporation (Nemotrade).
Petroflex reported as CEP transactions its sales of subject merchandise
sold to Nemotrade for its own account. Nemotrade then resold the
subject merchandise after importation to unaffiliated customers in the
United States.
With respect to sales made through Nemotrade prior to importation,
Petroflex claims that these sales are properly classified as EP sales
because Nemotrade acted only as a sales-document processor and
communication link to facilitate Petroflex's U.S. sales to unaffiliated
customers. Specifically, Petroflex states the following: (1) Nemotrade
does not take physical possession of the merchandise; (2) the
merchandise is shipped directly from Petroflex to the customer; (3)
Nemotrade does not have independent authority to establish prices; and
(4) the essential terms of sales are set and approved by Petroflex in
Brazil.
We examine several factors to determine whether sales made prior to
importation through an affiliated sales agent to an unaffiliated
customer in the United States are EP sales, such as: (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 the factors indicate that the activities of
the U.S. affiliate are ancillary to the sale (e.g., arranging
transportation or customs clearance), we treat the transactions as EP
sales. Where the U.S. affiliate is substantially involved in the sales
process (e.g., negotiating prices), we treat the transactions as CEP
sales.
Based on our review of the selling activities of Petroflex's U.S.
affiliate, we preliminarily determine that EP is appropriate for
Petroflex's sales made to the first unaffiliated customers in the
United States through Nemotrade prior to importation. The customary
commercial channel between Petroflex and its unaffiliated customers is
that Petroflex ships the EP merchandise directly to the unaffiliated
U.S. customers without having the merchandise enter into the inventory
of the U.S. affiliate and that the U.S. affiliate's activities are
limited to that of a ``processor of sales-related documentation'' and a
``communication link'' with the unaffiliated U.S. buyers. Information
on the record reflects that Nemotrade does no more than relay to
Petroflex purchase orders received from U.S. customers and does not
solicit such orders or negotiate terms with the customers. Accordingly,
for purposes of the preliminary determination, we are treating the
sales in question as EP transactions. We will examine this issue
further at verification.
We calculated EP, in accordance with section 772(a) of the Act, for
those sales where the merchandise was sold to the first unaffiliated
purchaser in the United States prior to importation and CEP methodology
was not otherwise warranted, based on the facts of record. We based EP
on the packed CIF or C&F price to unaffiliated purchasers in the United
States. We made deductions for movement expenses in accordance with
section 772(c)(2)(A) of the Act; these included, where appropriate,
foreign inland freight, ocean freight and marine insurance.
We calculated CEP, in accordance with subsections 772(b) of the
Act, for those sales to the first unaffiliated purchaser that took
place after importation into the United States. We based CEP on the
packed FOB or delivered prices to unaffiliated purchasers in the United
States. We made adjustments for price-billing errors, where applicable.
We also made deductions for movement expenses in accordance with
section 772(c)(2)(A) of the Act; these included, where appropriate,
foreign inland freight, ocean freight, marine insurance, U.S. customs
duties (including harbor maintenance fees and merchandise processing
fees), U.S. inland freight, and U.S. warehousing expenses. In
accordance with section 772(d)(1) of the Act, we deducted those selling
expenses associated with economic activities occurring in the United
States, including direct selling expenses (credit costs and warranty
expenses), inventory carrying costs, and indirect selling expenses. We
also made an adjustment for profit in accordance with section 772(d)(3)
of the Act.
Affiliated-Party Transactions and Arm's-Length Test
Sales to affiliated customers in the home market not made at arm's-
length prices (if any) were excluded from our analysis because we
considered them to be outside the ordinary course of trade. See 19 CFR
351.102. To test whether these sales were made at arm's-length prices,
we compared on a model-specific basis the starting prices of sales to
affiliated and unaffiliated customers net of all movement charges,
direct selling expenses, and packing. Where, for the tested models of
subject merchandise, prices to the affiliated party were on average
99.5 percent or more of the price to the unaffiliated parties, we
determined that sales made to the affiliated party were at arm's
length. See 19 CFR 351.403(c). In instances where no price ratio could
be constructed for an affiliated customer because identical merchandise
was not sold to unaffiliated customers, we were unable to determine
that these sales were made at arm's-length prices and, therefore,
excluded them from our LTFV analysis. See Final Determination of Sales
at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products
from Argentina (58 FR 37062, 37077 (July 9, 1993)). Where the exclusion
of such sales eliminated all sales of the most appropriate comparison
product, we made a comparison to the next most similar model.
Normal Value
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV, we
compared Petroflex's volume of home market sales of the foreign like
product to the volume of its U.S. sales of the subject merchandise, in
accordance with section 773(a)(1)(C) of the Act. Because Petroflex's
aggregate volume of home market sales of the foreign like product was
greater than five percent of its aggregate volume of U.S. sales of the
subject merchandise, we determined that the home market was viable for
Petroflex.
[[Page 59513]]
Based on the information contained in the cost allegation submitted
by the petitioners, the Department found reasonable grounds to believe
or suspect that Petroflex made sales in the home market at prices below
their COPs, in accordance with section 773(b)(1) of the Act. As a
result, the Department initiated an investigation to determine whether
Petroflex made home market sales at prices below their COPs during the
POI, within the meaning of section 773(b) of the Act. See Memorandum
from the Team to Louis Apple, Director, Office 5, dated August 21,
1998. Before making any fair value comparisons, we conducted the COP
analysis described below.
We calculated the COP based on the sum of Petroflex's cost of
materials and fabrication for the foreign like product, plus amounts
for home market SG&A, financial expenses and packing costs, in
accordance with section 773(b)(3) of the Act. Petroflex purchased a
major input, butadiene, for ESBR from both unaffiliated and affiliated
parties. At the time of this determination, no information was
available on the affiliated party's cost to produce the input.
Therefore, in accordance with section 773(f)(2) of the Act, we valued
butadiene that Petroflex purchased from its affiliated producer by
applying the higher of the transfer price or the market price of the
input. We intend to consider the affiliate's cost of production in our
analysis for the final determination. In addition, we adjusted
Petroflex's G&A and financial expense ratio calculation using fiscal
year, rather that POI data, as set out in the Cost Calculation
Adjustment Memorandum from William Jones to Neal Halper, Acting
Director, Office of Accounting, dated October 28, 1998.
We compared Petroflex's weighted-average COP figures to home market
sales of the foreign like product, as required under section 773(b) of
the Act, in order to determine whether sales had been made at prices
below their COPs. On a product-specific basis, we compared the COP to
home market price, less any applicable movement charges, discounts,
direct selling expenses and packing expenses.
In determining whether to disregard home market sales made at
prices below the COP, we examined whether such sales were made: (1) in
substantial quantities within an extended period of time; and (2) at
prices which permitted the recovery of all costs within a reasonable
period of time in the normal course of trade, pursuant to section
773(b)(1) of the Act.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of Petroflex's sales of a given product were at prices less
than the COP, we did not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
``substantial quantities.'' Where 20 percent or more of Petroflex's
sales of a given product during the POI were at prices less than the
COP, we determined such sales to have been made in ``substantial
quantities'' within an extended period of time in accordance with
section 773(b)(2)(B) of the Act. In such cases, we also determined that
such sales were not made at prices which would permit recovery of all
costs within a reasonable period of time, in accordance with section
773(b)(2)(D) of the Act. Therefore, we disregarded the below-cost
sales. Where all sales of a specific product were at prices below the
COP, we disregarded all sales of that product. For those U.S. sales of
ESBR for which there were no comparable home market sales in the
ordinary course of trade, we compared the CEP to CV in accordance with
section 773(a)(4) of the Act.
We found that, for certain models of ESBR, more than 20 percent of
Petroflex's home market sales within an extended period of time were at
prices less than COP. Further, the prices did not provide for the
recovery of costs within a reasonable period of time. We, therefore,
disregarded the below-cost sales and used the remaining above-cost
sales as the basis for determining NV, in accordance with section
773(b)(1) of the Act.
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of Petroflex's cost of materials, fabrication, SG&A
expenses, profit, and U.S. packing costs. For Petroflex, in accordance
with section 773(e)(2)(A) of the Act, we based SG&A expenses and profit
on the amounts incurred and realized by Petroflex in connection with
the production and sale of the foreign like product in the ordinary
course of trade, for consumption in the foreign country.
We calculated NV for Petroflex as noted in the ``Price to Price
Comparisons'' and ``Price to CV Comparisons'' sections of this notice,
below.
Price-to-Price Comparisons
We calculated NV based on FOB or delivered prices to unaffiliated
customers or prices to affiliated customers that we determined to be at
arm's-length prices. We made adjustments for price billing errors,
where appropriate. We made deductions, where appropriate, for foreign
inland freight, pursuant to section 773 (a)(6)(B) of the Act. In
addition, we made adjustments for differences in cost attributable to
differences in physical characteristics of the merchandise pursuant to
section 773(a)(6)(C)(ii) of the Act, as well as for differences in
circumstances of sale (COS) in accordance with section
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We made COS
adjustments for imputed credit expenses. Finally, we deducted home
market packing costs and added U.S. packing costs in accordance with
section 773(a)(6)(A) and (B) of the Act.
To the extent practicable, we based NV on sales at the same level
of trade as the EP or CEP transactions. In cases where NV was
calculated at a different LOT, we did not make any LOT adjustment, as
discussed further in the Level of Trade section, above.
Price-to-CV Comparisons
For price-to-CV comparisons, we made adjustments to CV in
accordance with section 773(a)(8) of the Act. Where we compared CV to
EP, we deducted from CV the weighted-average home market direct selling
expenses and added the weighted-average U.S. product-specific direct
selling expenses in accordance with section 773(a)(6)(C)(iii) of the
Act. Where we compared CV to CEP, we deducted from CV the weighted-
average home market direct selling expenses.
Currency Conversion
We made currency conversions into U.S. dollars based on the
exchange rates in effect on the dates of the U.S. sales as certified by
the Federal Reserve Bank.
Section 773A(a) of the Act directs the Department to use a daily
exchange rate in order to convert foreign currencies into U.S. dollars
unless the daily rate involves a fluctuation. It is the Department's
practice to find that a fluctuation exists when the daily exchange rate
differs from the benchmark rate by 2.25 percent. The benchmark is
defined as the moving average of rates for the past 40 business days.
When we determine a fluctuation to have existed, we substitute the
benchmark rate for the daily rate, in accordance with established
practice. Further, section 773A(b) of the Act directs the Department to
allow a 60-day adjustment period when a currency has undergone a
sustained movement. A sustained movement has occurred when the weekly
average of actual daily rates exceeds the weekly average of benchmark
rates by more than five percent for eight consecutive weeks. (For an
explanation of this method, see Policy Bulletin 96-1: Currency
[[Page 59514]]
Conversions (61 FR 9434, March 8, 1996).) Such an adjustment period is
required only when a foreign currency is appreciating against the U.S.
dollar. The use of an adjustment period was not warranted in this case
because the Brazilian Real did not undergo a sustained movement.
Verification
As provided in section 782(i) of the Act, we will verify all
information determined to be acceptable for use in making our final
determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all imports of subject
merchandise that are entered, or withdrawn from warehouse, for
consumption on or after the date of publication of this notice in the
Federal Register. We will instruct the Customs Service to require a
cash deposit or the posting of a bond equal to the weighted-average
amount by which the NV exceeds the export price, as indicated in the
chart below. These suspension-of-liquidation instructions will remain
in effect until further notice. The weighted-average dumping margins
are as follows:
------------------------------------------------------------------------
Weighted-
Average
Exporter/Manufacturer Margin
Percentage
------------------------------------------------------------------------
Petroflex Industria e Comercio S.A......................... 61.71
All Others................................................. 61.71
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
Case briefs or other written comments in at least ten copies must
be submitted to the Assistant Secretary for Import Administration no
later than February 5, 1998, and rebuttal briefs no later than February
12, 1998. A list of authorities used and an executive summary of issues
should accompany any briefs submitted to the Department. Such summary
should be limited to five pages total, including footnotes. In
accordance with section 774 of the Act, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs. Tentatively, the hearing
will be held on February 16, 1998, time and room to be determined, at
the U.S. Department of Commerce, 14th Street and Constitution Avenue,
NW., Washington, DC 20230. Parties should confirm by telephone the
time, date, and place of the hearing 48 hours before the scheduled
time.
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, U.S. Department of Commerce, Room
1870, within 30 days of the publication of this notice. Requests should
contain: (1) The party's name, address, and telephone number; (2) the
number of participants; and (3) a list of the issues to be discussed.
Oral presentations will be limited to issues raised in the briefs. If
this investigation proceeds normally, we will make our final
determination by no later than 135 days after the publication of this
notice in the Federal Register.
This determination is issued and published pursuant to sections
733(d) and 777(i) of the Act.
Dated: October 28, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-29551 Filed 11-3-98; 8:45 am]
BILLING CODE 3510-DS-P