[Federal Register Volume 64, Number 58 (Friday, March 26, 1999)]
[Notices]
[Pages 14690-14695]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7371]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-560-803]


Notice of Final Determination of Sales at Less Than Fair Value: 
Extruded Rubber Thread from Indonesia

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

EFFECTIVE DATE: March 26, 1999.

FOR FURTHER INFORMATION CONTACT: Russell Morris or Eric B. Greynolds, 
Office of AD/CVD Enforcement VI, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230; 
telephone: (202) 482-1775 or (202) 482-6071, 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 
(``Department'') regulations are to the regulations at 19 CFR Part 351 
(April 1998).

Final Determination

    We determine that extruded rubber thread (``ERT'') from Indonesia 
is being sold in the United States at less than fair value (``LTFV''), 
as provided in section 735 of the Act. The estimated margins are shown 
in the ``Suspension of Liquidation'' section of this notice.

Case History

    Since the publication of our preliminary determination in this 
investigation (see Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Extruded 
Rubber Thread from Indonesia; 63 FR 59279, (October 27, 1998), 
(``Preliminary Determination'')), the following events have occurred:
    In December 1998, we verified the sales questionnaire response from 
Globe Manufacturing Company (``Globe''), an affiliated selling agent of 
P.T. Bakrie Rubber Industries (``Bakrie''), a foreign respondent. 
Between January 7 through January 31, 1999, we verified the sales and 
cost questionnaire responses of the foreign respondents, Bakrie and 
P.T. Swasthi Parama Mulya (``Swasthi'').

[[Page 14691]]

    Petitioner, North American Rubber Thread Co., Ltd., and 
respondents, Bakrie and Globe, submitted case briefs on February 26, 
1999, and rebuttal briefs on March 2, 1999. Swasthi submitted a case 
brief on February 26, 1999, and a rebuttal brief on March 3, 1999. No 
party requested a public hearing for this investigation.

Scope of the Investigation

    For purposes of this investigation, the product covered is ERT from 
Indonesia. ERT is defined as vulcanized rubber thread obtained by 
extrusion of stable or concentrated natural rubber latex of any cross 
sectional shape, measuring from 0.18 mm, which is 0.007 inches or 140 
gauge, to 1.42 mm, which is 0.056 inch or 18 gauge, in diameter.
    ERT is currently classified under subheading 4007.00.00 of the 
Harmonized Tariff Schedule (``HTS''). Although the HTS 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 January 1, 1997, through 
December 31, 1997.

Fair Value Comparisons

    To determine whether sales of ERT from Indonesia to the United 
States were made at less than fair value, we compared the export price 
(``EP'') or the constructed export price (``CEP'') to the normal value 
(``NV''), as described below in the ``Export Price,'' ``Constructed 
Export Price,'' and ``Normal Value'' sections of this notice. 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.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products covered by the description in the ``Scope of Investigation'' 
section of this notice, produced in Indonesia by the respondents and 
sold in the home market during the POI, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
Where there were no sales of identical merchandise in the home market 
to compare to U.S. sales, we compared U.S. sales to the most similar 
foreign like product on the basis of the characteristics listed in the 
Department's antidumping questionnaire. In making the product 
comparisons, we relied on the following criteria (listed in order of 
preference): gauge and color. In our preliminary determination we also 
made product comparisons using ends in our model match. At verification 
we learned that ends are not relevant to the product price of ERT. We 
also verified that there are no costs associated with the ends. 
Therefore, for purposes of the final determination, we have eliminated 
ends as a model match characteristic.

Level of Trade

    In the preliminary determination, we determined that all 
comparisons are at the same level of trade for both respondents and an 
adjustment pursuant to section 773(a)(7)(A) of the Act is not 
warranted. We find no basis to change this determination for the final 
determination.

Export Price

    As in the preliminary determination, for Swasthi we used EP 
methodology, in accordance with section 772(a) of the Act, because the 
merchandise was sold directly to the first unaffiliated purchaser in 
the United States prior to importation and CEP methodology was not 
otherwise indicated.
    We based EP on the packed prices to unaffiliated purchasers in the 
United States. In accordance with section 772(c)(2)(A) of the Act, we 
made deductions, where appropriate, from the starting price for foreign 
inland freight, international freight, marine insurance, U.S. customs 
duty, and brokerage and handling. We also made a deduction, where 
appropriate, for rebates.
    In the course of preparing for verification, Swasthi discovered 
minor errors in its questionnaire responses. Swasthi reported these 
corrections to its questionnaire responses on the first day of 
verification. Upon examination of these minor corrections, we made the 
following revisions to Swasthi's U.S. sales database: (1) accepted a 
revised sales database which amended various fields (see Comment 4 in 
the ``Analysis of Comments Received'' section for further discussion); 
(2) revised the brokerage expenses (see Swasthi's Sales Verification 
Report); (3) revised the rebate calculation, where appropriate (see 
Swasthi's Sales Verification Report); and (4) recalculated imputed 
credit costs in the home and U.S. market in order to account for 
changes in the interest rates (see Swasthi's Sales Verification 
Report).

Constructed Export Price

    For all sales by Bakrie, we used the CEP methodology, in accordance 
with section 772(b) of the Act, because the first sale of subject 
merchandise to an unaffiliated purchaser took place after importation 
into the United States. We based CEP on the packed, delivered prices to 
unaffiliated purchasers in the United States. We made deductions, where 
appropriate, for discounts. We also made deductions for the following 
movement expenses, where appropriate, in accordance with section 
772(c)(2)(A) of the Act: foreign inland freight, containerization 
expenses (expenses for loading the merchandise into the container), 
foreign brokerage and handling, international freight (including marine 
insurance, U.S. inland insurance, U.S. freight to the affiliated 
reseller), U.S. customs duties, and freight to U.S. customer. In 
accordance with section 772(d)(1) of the Act, we deducted selling 
expenses associated with economic activities occurring in the United 
States, including direct selling expenses (credit cost) (see Comment 
7), inventory carrying costs (see Comment 7), other indirect selling 
expenses.
    Finally, during our verification of Globe, we learned that Globe 
incorrectly based its inventory carrying costs and indirect selling 
expenses on a nine-month period rather than on the entire POI. Thus, 
based on our verification findings, we revised the inventory carrying 
costs and indirect selling expenses in Bakrie's U.S. sales database in 
order to account for the entire POI. In addition, we revised the 
international freight expenses incurred in the United States and the 
inland freight expenses from the warehouse and created a new field in 
order to account for marine insurance expenses that were omitted from 
Bakrie's original section C response. For further discussion on the 
above-mentioned revisions, see Globe's Verification Report. In 
addition, we recalculated Bakrie's imputed credit expenses in the home 
and U.S. market in order to account for changes in the interest rates 
that we discovered at verification (see Bakrie and Globe's Sales 
Verification Report).

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 (i.e., 
the aggregate volume of home market sales of the foreign like product 
is greater than five percent of the aggregate volume of U.S. sales), we 
compared the volume of each respondent's home market sales of the 
foreign like product to the volume of U.S. sales of subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act. Based 
on this comparison, we determined that each respondent had a viable 
home market during the POI.

[[Page 14692]]

Consequently, we based NV on home market sales.
    As discussed in the preliminary determination, the Department found 
reasonable grounds to believe or suspect that both Bakrie's and 
Swasthi's sales in the home market were made at prices below the cost 
of producing the subject merchandise. As a result, the Department 
initiated an investigation to determine whether Bakrie and Swasthi had 
made home market sales during the POI at prices below their respective 
cost of production within the meaning of section 773(b) of the Act. 
Section 782(c)(2) of the Act provides that the Department must attempt 
to provide guidance to small responding companies. Because both 
respondents are small companies in Indonesia, acting on their own 
behalf, the Department has attempted to provide guidance in the course 
of responding to antidumping questionnaires. This, in turn, 
necessitated granting time to respond to the questionnaires. Due to 
these extensions, the Department was unable to include a cost of 
production (``COP'') analysis of either respondent's home market sales 
in the preliminary determination. However, we are including a COP 
analysis of Bakrie's and Swasthi's home market sales in this final 
determination.
    Before making any fair value comparisons, we conducted the COP 
analysis described below for each company:
1. Bakrie
    A. Calculation of COP.  We calculated the COP based on the sum of 
Bakrie's cost of materials and fabrication for the foreign like 
product, plus amounts for home market selling, general and 
administrative expenses (``SG&A'') and packing costs in accordance with 
section 773(b)(3) of the Act.
    B. Test of Home Market Prices.  We used the respondent's weighted-
average COP for the POI. We compared the 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 these sales 
had been made at below-cost prices within an extended period of time in 
substantial quantities, and whether the below-cost prices would permit 
recovery of all costs within a reasonable period of time. On a product-
specific basis, we compared the COP to the home market prices, less any 
applicable movement charges and direct selling expenses. We did not 
deduct indirect selling expenses from the home market price because 
these expenses were included in COP.
    C. Results of COP Test.  Pursuant to section 773(b)(2)(C) of the 
Act, where less than 20 percent of a respondent's sales of a given 
product were at prices less than 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 a respondent'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, because 
we compared prices to weighted-average COPs for the POI, 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.
    Based on our COP test, we found that Bakrie had no above-cost home 
market sales for matching purposes. (For further discussion, see the 
Calculation Memorandum to the File, dated March 18, 1999). Therefore, 
NV was based upon constructed value, pursuant to section 773(b)(1).
    D. Calculation of CV. In accordance with section 773(e) of the Act, 
we calculated CV based on the sum of Bakrie's cost of materials, 
fabrication costs, SG&A, profit, and U.S. packing costs. We used 
Bakrie's actual selling expenses incurred in Indonesia on home market 
sales. Because Bakrie had no above-cost home market sales and, hence, 
no actual company-specific profit data available for its home market 
sales, we calculated profit in accordance with section 773(e)(2)(B) of 
the Act. Specifically, section 773(e)(2)(B)(iii) of the Act permits the 
Department to use any other reasonable method to determine profit. 
Therefore, we used Swasthi's profit rate as facts available under 
section 773(e)(2)(B)(iii) of the Act (see Comment 2).
    E. Price to CV Comparisons. For price to CV comparisons, we made 
adjustments to CV in accordance with section 773(a)(8) of the Act. 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.
2. Swasthi
    A. Calculation of COP. We calculated the COP based on the sum of 
Swasthi's cost of materials and fabrication for the foreign like 
product, plus amounts for home market SG&A and packing costs in 
accordance with section 773(b)(3) of the Act.
    B. Test of Home Market Prices. On a product-specific basis, we 
compared the COP to the home market prices, less any applicable 
movement charges and direct selling expenses. We did not deduct 
indirect selling expenses from the home market price because these 
expenses were included in the G&A portion of COP.
    C. Results of COP Test. Based on our COP test and the methodology 
for disregarding below-cost sales described above for Bakrie, we found 
that Swasthi had sufficient above-cost home market sales for matching 
purposes. (For further discussion, see the Calculation Memorandum to 
the File, dated March 18, 1999). Therefore, for matching purposes, U.S. 
sales were compared to home market prices for all comparisons and CV 
was not required.
    D. Price to Price Comparisons. We calculated NV based on packed, 
delivered prices to unaffiliated customers and prices to affiliated 
customers where the sales were made at arm's length. Where appropriate, 
we made deductions from the starting price (gross unit price) for 
foreign inland freight in accordance with section 773(a)(6)(B). In 
addition, where appropriate, we adjusted for differences in 
circumstances of sale (``COS'') for credit expenses, in accordance with 
section 773(a)(6)(C). We made COS adjustments by deducting from the 
starting price credit expenses. In addition, in accordance with section 
773(a)(6)(A) and (B) of the Act, we deducted home market packing costs 
and added U.S. packing costs. We made adjustments, where appropriate, 
for physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act.

Currency Conversion

    As in the preliminary determination, 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, ignoring 
fluctuations, in accordance with section 773A of the Act.
    Section 773A 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 is 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

[[Page 14693]]

substitute the benchmark for the daily rate.

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by the respondents for use in our final 
determination. We used standard verification procedures, including 
examination of relevant accounting and production records and original 
source documents provided by respondents. Our verification results are 
outlined in detail in the public versions and are on file in Room B-
099, the Central Records Unit, of the Department of Commerce.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received comments from the petitioner, and the 
two respondents, Bakrie and Swasthi. We also received rebuttal comments 
from the petitioner, Bakrie, Swasthi, and Globe.
    Comment 1: Averaging Periods to Account for the Effect of Time on 
Price Comparability. Petitioner requests that the Department depart 
from its standard use of a single weighted-average price and use two 
six-month averaging periods to calculate the dumping margin in this 
investigation to ensure that the currency conversion methodology does 
not distort the Department's calculations of the dumping margins. 
Petitioner, in this case, cites the identical arguments for applying 
two six-month averaging periods discussed in the Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from Indonesia, 63 FR 72268, 72272 (December 31, 1998) 
(``Preserved Mushrooms''). See Preserved Mushrooms at Comment 1.
    According to Globe, the petitioner has misinterpreted the 
Department's decision regarding the application of two six-month 
averaging periods to calculate the dumping margin in this 
investigation. Globe argues that in the Preserved Mushrooms case, the 
Department chose not to use shorter averaging periods because they were 
of no consequence in that case. Accordingly, because the POI in this 
investigation is identical to the POI in Preserved Mushrooms, Globe 
contends that the Department should also not alter the averaging period 
and continue to average prices over the entire POI.
    Swasthi also disagrees with the Petitioner's assertion that the 
Department should use two-averaging periods. Swasthi argues that 
dividing the POI into two parts would require the use of two sets of 
costs and sales data for each of the periods. Swasthi notes that the 
Department has only the costs and sales information regarding calendar 
year 1997, and does not have the information available to consider the 
Petitioner's proposed two-six month averaging period. On this basis, 
Swasthi contends that the Department should follow the practice as 
applied in Preserved Mushrooms by basing the price comparison on a 
single averaging period for all of calendar year 1997.
    DOC Position. We agree with petitioners that separate averaging 
periods should be used. Under section 777A(d)(1)(A) of the Act , the 
Department has wide latitude in calculating the average prices used to 
determine whether sales at less than fair value exist. More 
specifically, under 19 C.F.R. 351.414(d)(3), the Department may use 
shorter averaging periods where normal value varies significantly over 
the POI. In this case, such a change is evidenced by the steady, 
significant decline in the rupiah's value that began about August 1997 
and continued through the end of the POI. From August through December, 
the end of the POI, the rupiah's value decreased by more than 50 
percent in relation to the dollar. Consequently, it is appropriate to 
use two averaging periods to avoid the possibility of a distortion in 
the dumping calculation. We disagree with Globe's claim that the use of 
averaging periods is not warranted because the POI is the same as the 
POI in Preserved Mushrooms. Whereas we declined to use two averaging 
periods in that case because doing so would have had no effect, thus 
rendering the issue moot, in this case the use of two averaging periods 
would affect our determination. As noted above, in our view, using a 
single averaging period would result in a distortion of the dumping 
calculation. We also disagree with Swasthi's assertion that we would 
need additional information in order to use two averaging periods. In 
accordance with our normal requirements, respondents reported 
individual sales transactions, and we simply segregated sales by 
period. Further, no additional or different cost information is 
required. The use of two averaging periods for margin calculation 
purposes does not affect whether the reported cost data are 
appropriate.
    Comment 2: Calculated Profit. Petitioner argues that, should the 
Department find in its COP analysis that respondents made no sales 
above the cost of production, the Department should resort to the use 
of constructed value as NV, and apply, as the profit rate, a rate of 
22.69 percent as used in the Notice of Final Determination of Sales at 
Less Than Fair Value: Melamine Institutional Dinnerware Products From 
Indonesia, 62 FR 1719, (January 13, 1997) (``Melamine Dinnerware'').
    Swasthi argues that its home market sales are profitable, and 
therefore the Department should use, if necessary, Swasthi's actual 
profit rate and not the rate of a plastic tableware manufacturer. 
Swasthi continues to state that a profit rate of another industry is 
irrelevant for an analysis involving the extruded rubber thread 
industry.
    Bakrie did not comment on this issue.
    DOC Position. We disagree with Petitioner. According to section 
773(e)(2)(B) of the Act, the Department has various methodologies for 
calculating profit where profit does not exist. The Statement of 
Administrative Action accompanying the URAA, H.R. Doc. No. 316, 103d 
Cong., 2nd Sess. (1994) (SAA) at 841, states that if a company has no 
home market profit on sales of the foreign like product or has incurred 
losses in the home market, the Department is directed to find an 
alternative home market profit. The statute also infers that a positive 
profit amount must be included in the calculation of constructed value 
by mandating the use of profit from any sales above the costs of 
production (even one sale) and provides alternative methods for 
determining profit when no sales are found to be above the cost of 
production.
    Because Bakrie had no above-cost home market sales and, hence, no 
actual company-specific profit data available for its home market sales 
of the foreign like product, we calculated profit in accordance with 
section 773(e)(2)(B) of the Act. Specifically, section 
773(e)(2)(B)(iii) of the Act permits the Department to use any other 
reasonable method to determine profit. We note that Bakrie's audited 
1997 financial statement indicated no profit during the POI. However, 
because Swasthi is another producer/exporter of the subject merchandise 
in Indonesia and did report a profit for the POI, we are applying, as 
facts available, its profit rate under section 773(e)(2)(B)(iii) of the 
Act. Therefore, we do not need to resort to other alternatives for a 
surrogate profit ratio.
    Comment 3: Treatment of Bakrie's Audited Financial Statement as 
Public. Petitioner contends that the Department should treat Bakrie's 
1997 audited financial statement as public information, as opposed to 
business proprietary information, based on the fact that Bakrie had to 
report such information to the Indonesian government.

[[Page 14694]]

    Bakrie did not comment on this issue.
    DOC Position. We disagree with Petitioner. Pursuant to section 
351.105 of the Department's regulations, the Secretary normally will 
consider as business proprietary, at the request of the submitter, 
specific business information the release of which to the public would 
cause substantial harm to the competitive position of the submitter. At 
the time of Bakrie's questionnaire submission, Bakrie requested that 
its financial statement be treated as proprietary. Bakrie's financial 
statement is not a public document. Petitioner's argument that the 
financial statement should be a public document because Bakrie has 
acknowledged that it must provide a copy of its financial statement to 
the government of Indonesia is not pertinent to Bakrie's request for 
proprietary treatment of the document. The fact that Bakrie's financial 
statement might be disclosed to a government entity does not in and of 
itself demonstrate that such information is public. For example, 
companies must file a tax return with the government, but this fact 
does not mean that company tax returns are public documents. Therefore, 
we continue to treat Bakrie's financial statement as a business 
proprietary document.
    Comment 4: Use of Facts Available in Swasthi's Sales Responses. 
Petitioner argues that, at the beginning of the verification process, 
Swasthi provided updated information regarding returns, discounts, 
commissions, payment dates, packing expenses, product codes, sales 
dates and inland freight costs for both U.S. and Indonesian sales, 
which essentially constituted a new questionnaire response. Petitioner 
asserts that, because such data constitutes untimely new information 
which should have been provided in the questionnaire responses, the 
Department should disregard this new data and adjust Swasthi's sales 
data using facts available.
    Swasthi states that the revisions should be included in the 
Department's final determination because the Department was able to 
reconcile the revisions during verification.
    DOC Position. The revisions Swasthi provided to the Department at 
verification amount to corrections of certain errors Swasthi made in 
its questionnaire responses. The errors in question were neither 
significant nor pervasive. On the first day of verification, Swasthi 
presented a revised Section B and C database. The revisions were the 
direct result of errors discovered in the course of preparing for the 
Department's verification. Furthermore, the revised sales databases 
were reconciled and formed the basis of the Department's verification 
report. Because it is the Department's practice to accept minor 
corrections at verification, we have accepted these corrections for 
purposes of this final determination.
    Comment 5: Conversion of Correct Units of Measure of Imputed Credit 
Cost in the United States. Swasthi alleges that its imputed credit cost 
for sales incurred in the United States at the preliminary 
determination was reported in U.S. dollars per kilogram instead of U.S. 
dollars per pound. Swasthi contends that this resulted in an 
overstatement of imputed credit cost to be deducted from the gross 
sales prices. Swasthi requests that the Department recalculate its 
imputed credit cost in the United States based on the fact that the 
Department verified that the imputed credit was reported in U.S. 
dollars per pound.
    Petitioner did not comment on this issue.
    DOC Position. In both the preliminary determination and in this 
final determination, we calculated imputed credit costs for Swasthi's 
U.S. sales based on a cost per-pound basis. This was done because the 
U.S. sales price is made on a per-pound basis. Therefore, the proper 
credit costs were used in both the preliminary and final 
determinations.
    Comment 6: Loan from Shareholders. Petitioner argues that the 
Department should impute an interest expense on loans received from 
related parties and that this is consistent both with related party 
transaction provisions in the statute and with the Department's normal 
practice. Specifically, petitioner states that Swasthi received loans 
from shareholders bearing a non-arm's length interest rate. Petitioner 
notes that it is the Department's practice to calculate the interest 
cost for loans from affiliated parties, e.g., shareholders, based on 
the interest rate the loan recipient is paying unaffiliated parties. 
See Final Results of Antidumping Duty Administrative Review: Industrial 
Phosphoric Acid from Belgium, 63 FR 55087, 55089, (October 18, 1998). 
According to petitioner, the COP the Department uses in its margin 
calculations should reflect the fair market cost of this type of loan.
    Swasthi refutes petitioner's allegations by stating that its 
shareholders do indeed charge market interest rates on the loans; and 
that the cost of such loans were included as reported costs in its COP 
and CV databases. Swasthi notes that the Department stated in its 
verification report that there were no discrepancies in Swasthi's COP 
and/or CV databases. Thus, Swasthi contends, petitioner's comment on 
this issue should be disregarded.
    DOC Position. We agree with Petitioner. It is the Department's 
practice to include imputed interest expenses in the computation of CV 
and COP on loans received from affiliated parties, if not included in 
the interest expense calculation. See Final Results of Antidumping Duty 
Administrative Review: Shop Towels from Bangladesh, 60 FR 48966, 
(September 21, 1995). The Department will normally impute an interest 
expense on transactions when the rate charged by a related party lender 
does not reflect a fair market rate. In this case, we do not consider 
the respondent's shareholder loans to be reflective of the fair market 
borrowing rate since such loans typically involve some cost to the 
borrower. The Department determined that Swasthi received loans from 
its shareholders, but the interest on those loans was not included in 
the calculation of Swasthi's COP and CV. Therefore, we calculated an 
annual imputed interest expense for the loan by multiplying the 
outstanding loan balance by the annual borrowing rate in rupiah as 
shown in the 1997 audited financial statement. The resulting per annum, 
annual imputed interest expense of the loan was added to Swasthi's 
reported interest expense, and the revised interest expense was then 
divided by the cost of goods sold to obtain a revised interest expense 
ratio which was used in the calculation of the COP (see, the 
Calculation Memorandum to the File dated March 18, 1999).
    Comment 7: Imputed Credit and Inventory Carrying Costs. Bakrie 
argues that its U.S. and home market prices should not be adjusted for 
imputed credit costs and inventory carrying costs incurred in the home 
and United States because imputed credit costs are included in its 
interest expense for purposes of its COP calculation. Thus, Bakrie 
contends that the Department double-counted its interest expense 
because these expenses are included in COP and are also deducted from 
the home market sales price.
    DOC Position. We did not double-count Bakrie's expenses. When 
conducting the COP test for Bakrie's home market sales, the COP 
includes the company's actual financial expenses. In conducting the COP 
test, we do not deduct imputed inventory carrying costs and home market 
credit costs from HM prices because the COP already includes the 
company's actual financial expenses. Thus, there is no double-counting 
of Bakrie's interest expenses. We do not perform the cost

[[Page 14695]]

test for U.S. sales. Therefore Bakrie's comment with respected to U.S. 
costs is moot.
    Comment 8: Exclusion of Globe's Assistance in Bakrie's Reported 
COP. Petitioner contends that the Department should adjust Bakrie's 
reported COP to account for Globe's contribution to the joint venture 
which Petitioner asserts was not reflected in Bakrie's reported COP.
    DOC Position. We disagree with Petitioner. Globe's contribution to 
the joint venture was already included in Bakrie's reported COP and CV 
databases. For further discussion, see the Calculation Memorandum to 
the File dated, March 18, 1999.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing the Customs Service to begin suspension of liquidation for 
Swasthi of all entries of subject merchandise that are entered, or 
withdrawn from warehouse, for consumption on or after the date of 
publication of the final determination in the Federal Register. We are 
also directing the Customs Service to continue to suspend liquidation 
for Bakrie of all entries of subject merchandise from Indonesia, that 
are entered, or withdrawn from warehouse, for consumption on or after 
November 3, 1998 (the date of publication of the preliminary 
determination in the Federal Register). The ``All Others'' rate applies 
to all exporters of extruded rubber thread not specifically listed 
below. The Customs Service shall continue to require a cash deposit or 
posting of a bond equal to the estimated amount by which the normal 
value exceeds the U.S. price as shown 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
------------------------------------------------------------------------
P.T. Bakrie Rubber Industry................................        28.29
P.T. Swasthi Parama Mulya..................................        44.86
All Others.................................................        31.54
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ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (ITC) of our determination. As our final 
determination is affirmative, the ITC will, within 45 days, determine 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry. If the ITC determines that material 
injury, or threat of material injury does not exist, the proceeding 
will be terminated and all securities posted will be refunded or 
canceled. If the ITC determines that such injury does exist, the 
Department will issue an antidumping duty order directing Customs 
officials to assess antidumping duties on all imports of the subject 
merchandise entered for consumption on or after the effective date of 
the suspension of liquidation.

Return or Destruction of Proprietary Information

    This notice serves as the only reminder to parties subject to 
Administrative Protective Order (``APO'') of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 355.34(d). Failure to 
comply is a violation of the APO.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: March 18, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-7371 Filed 3-25-99; 8:45 am]
BILLING CODE 3510-DS-P