[Federal Register Volume 64, Number 59 (Monday, March 29, 1999)]
[Notices]
[Pages 14863-14865]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7525]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-827]
Notice of Final Determination of Sales at Less Than Fair Value:
Emulsion Styrene-Butadiene Rubber From Brazil
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 29, 1999.
FOR FURTHER INFORMATION CONTACT: Sunkyu Kim or John Maloney, Office of
AD/CVD Enforcement, Group II, Office 5, 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.
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 regulations codified at 19 CFR
part 351 (April 1998).
Final Determination
We determine that emulsion styrene-butadiene rubber (ESBR) from
Brazil is being sold in the United States at less than fair value
(LTFV), as provided in section 735 of the Act. The estimated margins of
sales at LTFV are shown in the ``Continuation of Suspension of
Liquidation'' section of this notice.
Case History
Since the preliminary determination in this investigation on
October 28, 1998 (see Notice of Preliminary Determination of Sales at
Less Than Fair Value and Postponement of Final Determination: Emulsion
Styrene-Butadiene Rubber from Brazil, 63 FR 59509 (November 4, 1998)
(Preliminary Determination)), the following events have occurred:
On December 9, 1998, the sole respondent in this case, Petroflex
Industria e Comercio S.A. (Petroflex), submitted a letter to the
Department stating that Petroflex is ``unable to receive Department
personnel for verification as scheduled.'' Furthermore, Petroflex
stated that the ``company does not anticipate a significant reduction
in the final margin to warrant further participation in the
Department's investigation'' and ``has therefore decided to focus its
efforts on the injury proceedings at the U.S. International Trade
Commission.'' As a result of Petroflex's decision not to participate in
verification, the information provided by the company, which was the
basis of our preliminary determination, could not be verified.
Therefore, we have applied facts otherwise available in our final
determination. For a further discussion, see ``Facts Available''
section below.
We received a case brief from the petitioners on February 5, 1999.
We received no case or rebuttal brief from Petroflex.
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.
Facts Available
Section 776(a)(2) of the Act provides that, if an interested party:
(A) withholds information that has been requested by the Department;
(B) fails to provide such information in a timely manner or in the form
or manner requested; (C) significantly impedes a proceeding under the
antidumping statute; or (D) provides such information but the
information cannot be verified, the Department shall, subject to
certain exceptions contained in section 782, use facts otherwise
available in reaching the applicable determination. In this case,
Petroflex refused to allow the Department to verify the sales and cost
of production data it provided in its questionnaire responses, thus
rendering subsections 782(c)(1) and (e) inapplicable. Accordingly, we
have determined that use of facts available is appropriate for
Petroflex.
Section 776(b) of the Act provides that adverse inferences may be
used
[[Page 14864]]
when an interested party has failed to cooperate by not acting to the
best of its ability to comply with the Department's requests for
information. See also Statement of Administrative Action accompanying
the URAA, H.R. Rep. No. 316, 103d Cong., 2d Sess. 870 (1994) (SAA).
Petroflex's decision to refuse verification of its submitted data
demonstrates that it has failed to act to the best of its ability to
comply with a request for information under section 776 of the Act.
Thus, the Department has determined that, in selecting among the facts
otherwise available, an adverse inference is warranted. Consistent with
Department practice in cases where the respondent refuses to
participate, as adverse facts otherwise available, we have applied a
margin based on the highest margin stated in the petition (there were
no calculated margins in this investigation for us to consider). See,
e.g., Notice of Final Determination of Sales At Less Than Fair Value:
Stainless Steel Wire Rod from Germany, 63 FR 40433 (July 29, 1998).
Section 776(c) provides that, when the Department relies on
secondary information, such as the petition, when resorting to the
facts otherwise available, it must, to the extent practicable,
corroborate that information using independent sources that are
reasonably at its disposal. To corroborate secondary information, to
the extent practicable, the Department will examine the reliability and
relevance of the information to be used. With respect to the
reliability aspect of corroboration, we reviewed the adequacy and
accuracy of the information in the petition during our pre-initiation
analysis of the petition, to the extent appropriate information was
available for this purpose (e.g., import statistics, call reports, and
data from business contacts) as outlined below.
The petitioners identified Petroflex as the sole exporter and
producer of ESBR from Brazil. The petitioners based export price on
U.S. prices in call reports generated by the petitioners' sales
personnel in the normal course of business and obtained from various
customers for ESBR grades 1502 and 1712, two grades most commonly
exported to the United States. The petitioners adjusted the delivered
U.S. prices to ex-factory prices by deducting international freight and
insurance expenses. The source of these expenses were official U.S.
import statistics. For sales that did not specify ``FOB Port'' or
``Delivered'', the petitioners assumed the terms of these sales to be
FOB Brazil and did not deduct international freight and insurance
expenses. No other adjustments were made.
With respect to normal value, the petitioners obtained from a local
business contact in Brazil prices for contemporaneous sales of ESBR
grades 1502 and 1712 from Petroflex to a Brazilian customer. The
petitioners adjusted these home market prices for estimated inland
freight and credit expenses. The interest rates used in the calculation
of credit expenses were obtained from publicly available information.
The Brazilian inland freight expenses and credit terms were based on
information obtained by local business contacts, as noted in an
affidavit. After making adjustments for movement expenses and credit
expenses, the petitioners calculated ex-factory normal values which
were converted to U.S. dollars using publicly available exchange rates.
See Notice of Initiation of Antidumping Investigations: Emulsion
Styrene-Butadiene Rubber from Brazil, the Republic of Korea, and
Mexico, 63 FR 20575 (April 27, 1998), and ``Office of Antidumping
Investigations Initiation Checklist'' dated April 21, 1998 (Initiation
Checklist).
For purposes of the final determination, we reexamined the export
price and normal value data provided in the petition in light of
information obtained during the investigation and, to the extent that
it could be corroborated, found that it continues to be reliable. For
export prices, we attempted to corroborate the petition information by
comparing the range of prices in the petition to U.S. Customs C.I.F.
prices for the HTSUS number which includes subject merchandise (i.e.,
subheading 4002.19.0010). The price quotes submitted by the petitioners
are consistent with the U.S. import statistics. Additionally, the
actual information submitted by Petroflex regarding U.S. price in this
case, although not dispositive because it is unverified, tends to
corroborate information submitted in the petition. With regard to
normal value, information obtained from Petroflex during the
investigation shows the prices calculated by the petitioners represent
a reasonable range of prices for the sale of the foreign like product
in the home market.
With respect to the relevance aspect of corroboration, the
Department considers information reasonably at its disposal as to
whether there are circumstances that would render a margin not
relevant. In this proceeding, there was no information that indicated
that the margins in the petition are not relevant. Thus, as the highest
margin in the petition is reliable and relevant, the Department
concludes that this margin has probative value and is sufficiently
corroborated so that it may be used as facts available. See, the
Memorandum to Louis Apple, Office Director from the Team on ``The
Application of Facts Available Rate and Corroboration of Secondary
Information for Petroflex Industria e Comercio S.A.'' dated March 19,
1999.
The All-Others Rate
The foreign manufacturer/exporter in this investigation is being
assigned a dumping margin on the basis of facts otherwise available.
Section 735(c)(5) of the Act provides that, where the dumping margins
established for all exporters and producers individually investigated
are determined entirely under section 776, the Department may use any
reasonable method to establish the estimated all-others rate for
exporters and producers not individually investigated, including
averaging the estimated weighted average dumping margins determined for
the exporters and producers individually investigated. Where the data
is not available to weight average the facts available rates, the SAA,
at 873, provides that we may use other reasonable methods. In this
case, the margin assigned to the only company investigated is based on
adverse facts available. Therefore, consistent with the SAA, we are
using an alternative method. As our alternative, we are basing the all
others rate on a simple average of the margins in the petition, 43.85
percent.
Interested Party Comments
Comment Use of Facts Available for Petroflex
The petitioners argue that Petroflex refused to allow verification
of its questionnaire responses and, therefore, the Department should
base its final determination on total facts available. Further, the
petitioners assert that Petroflex has not cooperated with the
Department in this investigation and that adverse inferences are
warranted in assigning a facts available margin to Petroflex. As
adverse facts available, the petitioners urge the Department to assign
the highest margin calculated in the petition.
DOC Position
We agree with the petitioners. As discussed above in the ``Facts
Available'' section of the notice, as adverse facts available, we
assigned the highest margin calculated in the petition, 71.08 percent,
to Petroflex.
[[Page 14865]]
Continuation of Suspension of Liquidation
In accordance with section 735(c)(4)(A) of the Act, we are
directing the Customs Service to continue to suspend liquidation of all
entries of emulsion styrene-butadiene from Brazil, as defined in the
``Scope of Investigation'' section of this notice, that are entered, or
withdrawn from warehouse, for consumption on or after November 4, 1998,
the date of publication of our preliminary determination in the Federal
Register. For these entries, the Customs Service will require a cash
deposit equal to the estimated amount by which the normal value exceeds
the export price as shown below. This suspension of liquidation will
remain in effect until further notice.
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer margin
percentage
------------------------------------------------------------------------
Petroflex Industria e Comercio S.A........................ 71.08
All Others................................................ 43.85
------------------------------------------------------------------------
The all-others rate applies to all entries of subject merchandise
except for the entries of merchandise produced by the exporter/
manufacturer listed above.
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, or withdrawn from warehouse, for consumption on or
after the effective date of the suspension of liquidation.
This determination is published pursuant to section 777(i) of the
Act.
Dated: March 19, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration
[FR Doc. 99-7525 Filed 3-26-99; 8:45 am]
BILLING CODE 3510-DS-P