[Federal Register Volume 64, Number 173 (Wednesday, September 8, 1999)]
[Notices]
[Pages 48778-48783]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23326]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-802]
Gray Portland Cement and Clinker From Mexico; Preliminary Results
of Antidumping Duty Administrative Review and Extension of Final
Results of Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review and extension of final results of administrative
review.
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SUMMARY: In response to requests from interested parties, the
Department of Commerce is conducting an administrative review of the
antidumping duty order on gray portland cement and clinker from Mexico.
The review covers exports of subject merchandise to the United States
during the period August 1, 1997, through July 31, 1998, and one firm,
CEMEX, S.A. de C.V., and its affiliate, Cementos de Chihuahua, S.A. de
C.V. The results of this review indicate the existence of dumping
margins for the period.
We invite interested parties to comment on these preliminary
results. Parties who submit arguments in this proceeding are requested
to submit with the argument (1) a statement of the issues, and (2) a
brief summary of the argument.
In addition, we are extending the period for issuing the final
results of this review. Our final results will be issued no later than
180 days after the date of publication of these preliminary results of
review.
EFFECTIVE DATE: September 8, 1999.
FOR FURTHER INFORMATION CONTACT: Davina Hashmi, Anne Copper, or George
Callen, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, DC 20230; telephone (202) 482-5760, (202) 482-0090, (202)
482-0180, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department of Commerce's (the
Department's) regulations are to the regulations codified at 19 CFR
Part 351 (April 1998).
Background
On August 11, 1998, the Department published in the Federal
Register a Notice of Opportunity to Request Administrative Review
concerning the antidumping duty order on gray portland cement and
clinker from Mexico (63 FR 42821). In accordance with 19 CFR 351.213,
the petitioner, the Southern Tier Cement Committee (STCC), requested a
review of CEMEX, CEMEX's affiliate, Cementos de Chihuahua, S.A. de C.V.
(CDC), and Apasco, S.A. de C.V. (Apasco). In addition, CEMEX and CDC
requested review of their own entries. Apasco subsequently reported,
and the Department confirmed with U.S. Customs, that Apasco did not
have any U.S. sales or shipments during the period of review. On
September 29, 1998, the Department published a Notice of Initiation of
Antidumping and Countervailing Duty Administrative Reviews (63 FR
51894) initiating this review. The period of review is August 1, 1997,
through July 31, 1998. The Department is now conducting a review of
CEMEX and CDC pursuant to section 751 of the Act.
Scope of Review
The products covered by this review include gray portland cement
and clinker. Gray portland cement is a hydraulic cement and the primary
[[Page 48779]]
component of concrete. Clinker, an intermediate material product
produced when manufacturing cement, has no use other than of being
ground into finished cement. Gray portland cement is currently
classifiable under the Harmonized Tariff Schedule (HTS) item number
2523.29 and cement clinker is currently classifiable under HTS item
number 2523.10. Gray portland cement has also been entered under HTS
item number 2523.90 as ``other hydraulic cements.'' The HTS subheadings
are provided for convenience and customs purposes only. Our written
description of the scope of the proceeding is dispositive.
Verification
As provided in section 782(i) of the Act, we verified sales
information provided by CEMEX and CDC using standard verification
procedures, including an examination of relevant sales and financial
records, selection of original documentation containing relevant
information, and an on-site tour of one of CDC's manufacturing
facilities. Our verification results are outlined in public versions of
the verification reports.
Extension of Final Results
We have determined that it is not practical to complete our final
results within 120 days of the date of publication of this notice of
preliminary results. To allow time to obtain, analyze, and verify new
cost information which we requested late in this review, we are
extending the deadline for our final results of review, pursuant to 19
CFR 351.213(h)(2), from 120 to 180 days after publication of this
notice. Memorandum from Richard W. Moreland to Robert S. LaRussa, 1997-
1998 Administrative Review of the Anti-Dumping Order on Gray Portland
Cement and Clinker from Mexico-Extension of Final Results, August 31,
1999. (Public versions of all referenced memoranda are on file in Room
B-099 of the Department's main building.)
Collapsing
Section 771(33) of the Act defines when two or more parties will be
considered affiliated for purposes of an antidumping analysis.
Moreover, section 351.401(f) of the regulations describes when we will
treat two or more affiliated producers as a single entity (i.e.,
``collapse'' the firms) for purposes of calculating a dumping margin.
In the three previous administrative reviews of this order, we analyzed
whether we should collapse CEMEX and CDC in accordance with our
regulations. Gray Portland Cement and Clinker from Mexico; Final
Results of Antidumping Duty Administrative Review, 64 FR 13148 (March
17, 1999).
The regulations state that the Department will treat two or more
affiliated producers as a single entity where those producers have
production facilities for similar or identical products that would not
require substantial retooling of either facility in order to
restructure manufacturing priorities and the Department concludes that
there is a significant potential for the manipulation of price or
production. In identifying a significant potential for the manipulation
of price or production, the factors the Department may consider include
the following: (i) the level of common ownership; (ii) the extent to
which managerial employees or board members of one firm sit on the
board of directors of an affiliated firm; and (iii) whether operations
are intertwined, such as through the sharing of sales information,
involvement in production and pricing decisions, the sharing of
facilities or employees, or significant transactions between the
affiliated producers.
A North American Free Trade Agreement Binational Panel upheld our
decision in the 1994/95 administrative review to collapse CEMEX and
CDC. Article 1904 Binational Panel Review Pursuant To The North
American Free Trade Agreement opinion of the Panel, Secretariat File
No. USA-97-1904-01 (June 18, 1999). We found that, in each of the
subsequent administrative reviews, the factual information underlying
our original decision to collapse these two entities did not change
and, accordingly, we continued to treat these two entities as a single
entity.
Having reviewed the current record, we find, once again, that the
factual information underlying our original decision to collapse these
two entities has not changed during the instant administrative review
period. CEMEX's indirect ownership of CDC exceeds five percent, such
that these two companies are affiliated pursuant to section 771(33)(E)
of the Act. In addition to their affiliation, we find that CEMEX and
CDC have similar production processes. Finally, interlocking boards of
directors and significant transactions between the companies give rise
to a significant potential for the manipulation of price or production.
Accordingly, we preliminarily conclude that these affiliated producers
should be treated as a singly entity and that we should calculate a
single, weighted-average margin for these companies. Therefore,
throughout this notice, references to ``respondent'' should be read to
mean the collapsed entity. Memorandum from Analyst to Joseph A.
Spetrini, 1996/1997 Administrative Review of Gray Portland Cement and
Clinker from Mexico (August 31, 1998), and Memorandum from Analyst to
File, Collapsing CEMEX, S.A. and Cementos de Chihuahua for the Current
Administrative Review (April 6, 1999).
Export Price and Constructed Export Price
We used export price (EP), in accordance with section 772(a) of the
Act, where the subject merchandise was sold to the first unaffiliated
purchaser in the United States prior to importation and constructed
export price (CEP) was not otherwise warranted based on the facts in
the record. We used CEP in accordance with section 772(b) of the Act
for those sales to the first unaffiliated purchaser that took place
after importation into the United States. CEMEX made CEP sales during
the period of review, while CDC made both CEP and EP sales during the
period of review.
We calculated EP based on delivered prices to unaffiliated
customers in the United States. Where appropriate, we made adjustments
from the starting price for early payment discounts, foreign inland
freight, U.S. inland freight, U.S. brokerage and handling, and U.S.
duties. We also adjusted the starting price for billing adjustments to
the invoice price.
We calculated CEP based on delivered prices to unaffiliated
customers. Where appropriate, we made adjustments to the starting price
for discounts and billing adjustments to the invoice price. In
accordance with section 772(d) of the Act, we deducted those selling
expenses, including inventory carrying costs, that were related to
economic activity in the United States. We also made deductions for
foreign brokerage and handling, foreign inland freight, U.S. inland
freight and insurance, U.S. brokerage and handling, U.S. duties, and
direct selling expenses. Finally, we made an adjustment for CEP profit
in accordance with section 772(d)(3) of the Act.
With respect to subject merchandise to which value was added in the
United States prior to sale to unaffiliated U.S. customers (e.g.,
cement that was imported and further-processed into finished concrete
by U.S. affiliates of foreign exporters), we preliminarily determine
that the special rule under section 772(e) of the Act for merchandise
with value added after importation is applicable.
Section 772(e) of the Act provides that, where the subject
merchandise is
[[Page 48780]]
imported by an affiliated person and the value added in the United
States by the affiliated person is likely to exceed substantially the
value of the subject merchandise, we shall determine the CEP for such
merchandise using the price of identical or other subject merchandise
if there is a sufficient quantity of sales to provide a reasonable
basis for comparison and we determine that the use of such sales is
appropriate. Section 351.402(c)(2) of the regulations provides that the
Department normally will determine that the value added in the United
States by the affiliated person is likely to exceed substantially the
value of the subject merchandise if the Department estimates the value
added to be at least 65 percent of the price charged to the first
unaffiliated purchaser for the merchandise as sold in the United
States. We normally will estimate the value added based on the
difference between the price charged to the first unaffiliated
purchaser for the merchandise as sold in the United States and the
price paid for the subject merchandise by the affiliated person. The
Department normally will base this determination on averages of the
prices and the value added to the subject merchandise. If there is not
a sufficient quantity of such sales or if we determine that using the
price of identical or other subject merchandise is not appropriate, we
may use any other reasonable basis to determine the CEP.
During the course of this administrative review, the respondent
submitted, and we verified, information which allowed us to determine
whether, in accordance with section 772(e) of the Act, the value added
in the United States by its U.S. affiliates is likely to exceed
substantially the value of the subject merchandise. To determine
whether the value added is likely to exceed substantially the value of
the subject merchandise, we estimated the value added based on the
difference between the averages of the prices charged to the first
unaffiliated purchaser for the merchandise as sold in the United States
and the averages of the prices paid for subject merchandise by the
affiliated person. Based on this analysis, we estimate that the value
added was at least 65 percent of the price the respondent charged to
the first unaffiliated purchaser for the merchandise as sold in the
United States. Therefore, we preliminarily determine that the value
added is likely to exceed substantially the value of the subject
merchandise. Also, the record indicates that there is a sufficient
quantity of subject merchandise to prove a reasonable and appropriate
basis for comparison. Accordingly, for purposes of determining dumping
margins for these sales, we have used the weighted-average margin of
45.39 percent calculated on sales of identical or other subject
merchandise sold to unaffiliated purchasers.
No other adjustments to EP or CEP were claimed or allowed.
Normal Value
A. Comparisons
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating
normal value (NV), we compared the respondent's volume of home-market
sales of the foreign like product to the volume of U.S. sales of the
subject merchandise in accordance with section 773(a)(1)(C) of the Act.
Since the respondent'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 for the subject merchandise, we determined that
the home market was viable. Therefore, we have based NV on home-market
sales.
During the period of review, CEMEX and CDC sold two types of cement
in the United States--Type V LA and Type II, respectively. The statute
expresses a preference for matching U.S. sales to identical merchandise
in the home market. However, in situations where identical product
types cannot be matched, the statute expresses a preference for basing
NV on sales of similar merchandise (sections 773(a)(1)(B) and 771(16)
of the Act). Because we have preliminarily determined that Type V and
Type V LA sold in the home market by CEMEX are outside the ordinary
course of trade (see the ``Ordinary Course of Trade'' section of this
notice) and CDC had no sales to unaffiliated customers of either Type
II LA or Type V LA in the home market, we did not find identical
matches in the home market to which we could match sales of the subject
merchandise. Accordingly, we based NV on sales of similar merchandise.
During the period of review, CEMEX sold four basic types of gray
portland cement in Mexico--Type I, Type V, Type V LA, and pozzolanic.
During the same period, CDC sold two types of gray portland cement in
Mexico--Type I and Type II. The history of this order demonstrates
that, of the various types of cement which may reasonably be compared
to imports of cement from Mexico, Type I cement is most similar to the
Type V LA cement sold in the United States. On June 2, 1999, we
determined that, while pozzolanic cement is covered by the scope of
this order, it is not comparable to Types II and V under sections
771(16)(B) or (C) of the Act and, thus, we did not require CEMEX to
report its home-market sales of pozzolanic cement for this review. See
Memorandum from Laurie Parkhill to Richard W. Moreland, Gray Portland
Cement and Clinker from Mexico-Sales of Pozzolanic Cement (June 2,
1999).
On June 18, 1999, the North American Free Trade Agreement
Binational Panel reviewing the final results of the 1994/1995
administrative review found that CEMEX's and CDC's Type I bagged cement
should not have been combined with sales of Type I cement sold in bulk
to the United States in the calculation of normal value. In other
words, the Panel found that sales of Type I cement in bags should not
be included in the universe of home-market sales available for
comparison to bulk sales to the United States. Rather, the Panel
concluded, only sales of Type I cement in bulk should serve as the
basis for determining NV for Type II and Type V cement sold in the
United States, and it remanded the results of the 1994/1995 review to
the Department for a recalculation of the margin. Those proceedings
have not yet been completed. In this review, the record supports the
continued practice of finding CEMEX's and CDC's sales of Type I cement
in bags in the home market as sales comparable, within the meaning of
section 771(16)(B) of the Act, to U.S. sales. Specifically, in
accordance with section 771(16)(B) of the Act, we find that both bulk
and bagged Type I cement are produced in the same country and by the
same producer as Type V LA or Type II, both bulk and bagged Type I
cement are like Type V LA in component materials and in the purposes
for which used, and both bulk and bagged Type I cement are
approximately equal in commercial value to Type II or Type V LA cement.
Questionnaire responses from both CEMEX and CDC indicate that, with the
exception of packaging, Type I cement sold in bulk and Type I cement
sold in bags are physically identical and both are used in the
production of concrete. Also, since there is no difference in cost
between cement sold in bulk or in bag (again with the exception of
packaging), both are approximately equal in commercial value. See CEMEX
response to Section A of the Department's Questionnaire, Volume 1,
November 12, 1998, pgs. A-28-30, Section B, December 4, 1998, pg. B-51,
and CDC response to Section A, A-44-47, November. 12, 1998, and Section
B, December 2, 1998, pg. B-31.
[[Page 48781]]
B. Ordinary Course of Trade
Section 773(a)(1)(B) of the Act requires the Department to base NV
on ``the price at which the foreign like product is first sold (or in
the absence of sales, offered for sale) for consumption in the
exporting country, in the usual commercial quantities and in the
ordinary course of trade.'' Ordinary course of trade is defined as
``the conditions and practices which, for a reasonable time prior to
the exportation of the subject merchandise, have been normal in the
trade under consideration with respect to merchandise of the same class
or kind.''
Apart from identifying certain sales that are below cost (section
773(b)(1) of the Act) or between affiliated persons (section 773(f)(2)
of the Act), Congress has not specified any criteria that the
Department should use in determining the appropriate ``conditions and
practices'' which are ``normal in the trade under consideration.''
Therefore, ``Commerce, in its discretion, chooses how best to analyze
the many factors involved in a determination of whether sales are made
within the ordinary course of trade.'' Thai Pineapple Public Co. v.
United States, 946 F. Supp. 11, 14-17 (CIT 1996).
The Department's ordinary-course-of-trade inquiry is far-reaching.
It evaluates not just ``one factor taken in isolation but rather all
the circumstances particular to the sales in question.'' Murata Mfg.
Co. v. United States, 820 F. Supp. 603, 607 (CIT 1993). In short, we
examine the totality of the facts in each case to determine if sales
are being made for ``unusual reasons'' or under ``unusual
circumstances.'' Electrolytic Manganese Dioxide from Japan; Final
Results of Antidumping Duty Administrative Review, 58 FR 28551, 28552
(May 14, 1993).
In the 1991/1992 administrative review of this order, the
Department determined that CEMEX's home-market sales of Type II and
Type V cement were outside the ordinary course of trade and, therefore,
could not be used in the calculation of NV (then referred to as
``foreign market value''). Gray Portland Cement and Clinker from
Mexico: Final Results of Antidumping Duty Administrative Review, 58 FR
47253, 27254 (Sept. 8, 1993). In making this determination, the
Department considered, inter alia, shipping distances and costs, sales
volume, profit levels, sales history, home-market demand and the
promotional aspect of sales. See Decision Memorandum to Joseph A.
Spetrini, August 31, 1994, and Memorandum from Holly A. Kuga to Joseph
A. Spetrini, August 31, 1993. Based upon similar facts and using a
similar analysis, the Department reached the same conclusion in the
final results of the 1994/1995, 1995/1996, and 1996/1997 administrative
reviews for certain sales of Type II and Type V cement by CEMEX in
Mexico. Gray Portland Cement and Clinker from Mexico: Final Results of
Antidumping Duty Administrative Review, 62 FR 17148, 17151 (April 9,
1997), Gray Portland Cement and Clinker from Mexico: Final Results of
Antidumping Duty Administrative Review, 63 FR 12764, 12768 (March 16,
1998); Gray Portland Cement and Clinker from Mexico: Final Results of
Antidumping Duty Administrative Review, 64 FR 13148 (March 17, 1999).
In the instant review, CEMEX claims that its sales of Type V LA
cement in the home market are within the ordinary course of trade.
Pursuant to section 773(a)(1)(B) of the Act, the Department has
examined the totality of the circumstances surrounding CEMEX's sales of
cement in Mexico that are produced as Type V and Type V LA cement and
marketed as Type I, Type II LA, Type V, and Type V LA (Type V LA is
identical in physical characteristics to the cement that CEMEX sells in
the United States). Based on the current record, which reflects similar
findings in prior reviews (see, for example, Decision Memorandum to
Joseph A. Spetrini, August 31, 1998), the Department has preliminarily
determined that CEMEX's home-market sales of Type V and Type V LA
cement during the review period were outside the ordinary course of
trade.
CEMEX sells, in Mexico, Type V and Type V LA cement produced at its
Campana and Yaqui plants. The facts established in the record of this
review with respect to sales from these plants are very similar to the
facts which led the Department to determine in the 1991/1992, 1994/
1995, 1995/1996, and 1996/1997 reviews that home-market sales of Type
V, including Type V LA, cement were outside the ordinary course of
trade. The determination involving the 1991/1992 review, as noted
above, was affirmed by the Court of International Trade (CIT) in CEMEX
v. United States, Slip Op. 95-72 at 14. Specifically, as in previous
reviews, we examined shipping distances and costs, sales volume, profit
levels, sales history, home-market demand and the promotional aspect of
sales. We found that, while there has been some change from findings in
previous reviews, changes have been relatively minor and do not affect
the overall conclusion that sales of Type V and Type V LA cement from
the Campana and Yaqui plants are outside of the ordinary course of
trade.
With respect to sales of Type V LA cement from CEMEX's Hidalgo
plant, we have determined that these sales are also outside the
ordinary course of trade. CEMEX notes that only the Campana and Yaqui
plants produce Type V LA on a consistent basis, but it has produced
Type V LA on ``occasion'' at its Hidalgo plant. In addition, CEMEX has
stated that production of cement meeting the ASTM specifications of
Type V LA at the Hidalgo plant was unintentional. In fact, CEMEX
itself, in prior submissions, has indicated that production and sales
of cement meeting ASTM standards for Type V LA at the Hidalgo plant
were unusual in that they attempted to produce another type of cement.
Moreover, none of the Type V LA production from the Hidalgo plant was
sold as Type V LA and the profit-level pattern was similar to the
pattern at Campana and Yaqui for sales of cement produced as Type V LA
and sold as Type I. A complete discussion of our preliminary
conclusions on sales of cement from the Campana, Yaqui, and Hidalgo
plants, requiring reference to proprietary information, is contained in
a memorandum in the official file for this case. Memorandum from
Analyst to Laurie Parkhill, Gray Portland Cement and Clinker from
Mexico--Ordinary Course of Trade (August 31, 1999).
In conclusion, the decision to exclude sales of Type V and Type V
LA cement from the calculation of NV centers around the unusual nature
and characteristics of these sales compared to the vast majority of
CEMEX's other home-market sales. Based upon these differences, the
Department has preliminarily determined that they are not
representative of CEMEX's home-market sales, i.e., these sales were not
within the ordinary course of trade.
C. Arm's-Length Sales
Consistent with 19 CFR 351.403, we excluded sales to affiliated
customers in the home market which were not made at arm's-length prices
from our analysis. Because we could not test whether sales of Type II
cement by CDC were made at arm's-length prices, we excluded such sales
from our analysis. To test whether other sales to affiliated customers
were made at arm's length for which we could test the prices, we
compared the prices of sales to affiliated and unaffiliated customers,
net of all movement charges, direct selling expenses, discounts, and
packing. Where the price to the affiliated party was on average 99.5
percent or more of the price to the unaffiliated parties, we
[[Page 48782]]
determined that the sales made to the affiliated party were at arm's
length.
D. Cost of Production
The petitioner alleged, on May 11, 1999, that CEMEX and its
affiliate, CDC, sold gray portland cement and clinker in the home
market at prices below their cost of production (COP). Based on these
allegations, the Department determined, on July 15, 1999, that it had
reasonable grounds to believe or suspect that CEMEX and CDC had sold
the subject merchandise in the home market at prices below the COP.
Therefore, pursuant to section 773(b)(1) of the Act, we initiated a COP
investigation in order to determine whether CEMEX and CDC made home-
market sales during the period of review at below-cost prices. See
Memorandum from Laurie Parkhill to Richard W. Moreland, Gray Portland
Cement and Clinker from Mexico: Amended Request to Initiate Cost
Investigation (July 15, 1999). Because of time constraints, we could
not incorporate the collapsed respondent's cost and constructed value
data into the margin calculation for the preliminary results of review.
However, we will incorporate such data into the margin calculation for
the final results of review. Accordingly, to calculate NV for these
preliminary results, we used all comparison-market sales to
unaffiliated and affiliated customers that passed the arm's-length test
and that were made within the ordinary course of trade.
E. Adjustments to Normal Value
Where appropriate, we adjusted home-market sales of Type I cement
for discounts, rebates, packing, handling and interest revenue, and
billing adjustments to the invoice price. In addition, we adjusted the
starting price for inland freight, inland insurance, and pre-sale
warehousing expenses. For comparisons to EP transactions, we made
adjustments to the home-market starting price for differences in direct
selling expenses in the two markets. For comparisons to CEP sales, we
deducted home-market direct selling expenses from the home-market
price. We also deducted home-market indirect selling expenses as a CEP-
offset adjustment (see F. Level of Trade/CEP Offset section below). In
addition, in accordance with section 773(a)(6) of the Act, we deducted
home-market packing costs and added U.S. packing costs.
Section 773(a)(6)(C)(ii) of the Act directs us to make an
adjustment to NV to account for differences in the physical
characteristics of merchandise where similar products are compared.
Section 351.411(b) of the regulations directs us to consider
differences in variable costs associated with the physical differences
in the merchandise. For CDC's sales, we calculated a difference-in-
merchandise adjustment using appropriate plant-specific variable cost
data CDC reported.
For CEMEX, although the company provided information pertaining to
the cost of production for Type I and Type V LA cement, it was unable
to segregate specific costs attributable to differences in physical
characteristics other than costs attributable to the addition of
kaolin. However, the Department has determined that the existing data
and product information from previous reviews, on the record of the
instant review, indicate that there are differences in the physical
characteristics of Type I cement and Type V LA cement. Thus, we
conclude that a difference-in-merchandise adjustment is appropriate.
Section 776(a) of the Act authorizes the Department to use facts
otherwise available when necessary information is not on the record.
Therefore, for sales made by CEMEX, we preliminarily determine, in
accordance with section 776 of the Act, that the use of partial facts
available for calculating the difference-in-merchandise adjustment is
appropriate. We have preliminarily determined that the most appropriate
basis for calculating the difference-in-merchandise adjustment is the
actual variable cost differences in producing Type I cement and Type V
LA cement at CEMEX's Hidalgo plant, which is CEMEX's only plant that
produced both types of cement during the period of review. Although we
have not yet verified CEMEX's variable cost information, we intend to
verify the cost information for the Hidalgo plant and will make any
necessary changes based on verification prior to the issuance of the
final results of review. A discussion of our preliminary conclusions on
differences in merchandise is contained in a memorandum in the official
file for this case. Memorandum from Analyst to Laurie Parkhill, Gray
Portland Cement and Clinker from Mexico--Difference in Merchandise
(August 31, 1999).
F. Level of Trade/CEP Offset
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the home market at the
same level of trade as the EP or CEP. The NV level of trade is that of
the starting-price sales in the home market or, when NV is based on
constructed value (CV), that of sales from which we derive selling,
general and administrative (SG&A) expenses and profit. For EP, the U.S.
level of trade is also the level of the starting-price sale, which is
usually from the exporter to the 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 level of trade, 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 level of trade of the export transaction, we make a
level-of-trade 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). Notice of Final Determination of Sales at Less
Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South
Africa, 62 FR 61971 (November 19, 1997).
Based on our analysis, we conclude that the respondent's home-
market sales to various classes of customers which purchase both bulk
and bagged cement constituted one level of trade. We based our
conclusion on our analysis of its selling functions and their sales
channels. We found that, with some minor exceptions, CEMEX and CDC
performed the same selling functions to varying degrees in similar
channels of distribution. We also concluded that the variations in
selling functions were not substantial when all selling expenses were
considered as a whole. Memorandum to Laurie Parkhill, Level of Trade
(Level of Trade Memorandum), August 30, 1999.
With respect to U.S. sales, we found that CEMEX's and CDC's home-
market sales occur at a different and more advanced stage of
distribution than their sales to their respective U.S. affiliates. We
also determined that the data available does not permit us to calculate
a level-of-trade adjustment. See the Level of Trade Memorandum.
Therefore, in accordance with section 773(a)(7)(B) of the Act, we
granted a CEP offset for the CEP sales made by CEMEX and CDC. CDC also
reported that it sold cement to EP customers (end-users) and listed the
selling functions performed for EP customers. We determined that CDC's
EP sales are at a different level of trade as compared to CEMEX's and
[[Page 48783]]
CDC's home-market sales. However, because there is only one level of
trade in the home market, available data did not permit a level-of-
trade adjustment.
Inflation
In the previous administrative review of this proceeding, we found
that Mexico experienced significant inflation and we adjusted our
dumping margin analysis to account for the effects of high inflation on
prices in order to avoid the distortions caused by such inflation. In
this review period, we found that Mexico experienced less than 5
percent inflation during each month of the period of review with an
annual inflation rate of less than 16 percent. Because we did not find
these inflation rates to be so significant that they cause distortions
in our analysis, we have not adjusted our antidumping margin analysis
to account for inflation during the instant period.
Currency Conversion
We made currency conversions in accordance with section 773A of the
Act based on rates certified by the Federal Reserve Bank in effect on
the dates of U.S. sales.
Preliminary Results of Review
As a result of our review, we preliminarily determine the dumping
margin for CEMEX and CDC for the period August 1, 1997, through July
31, 1998, to be 45.39 percent.
The Department will disclose calculations performed in connection
with these preliminary results to parties within five days of the date
of publication of this notice. Interested parties may request a hearing
by November 1, 1999. The Department will notify interested parties of
the date of any requested hearing and the briefing schedule.
Upon completion of this review, the Department shall determine, and
the Customs Service shall assess, antidumping duties on all appropriate
entries. The Department will issue appropriate appraisement
instructions directly to the Customs Service upon completion of this
review. The final results of this review shall be the basis for the
assessment of antidumping duties on entries of merchandise covered by
the determination and for future deposits of estimated duties. We will
base the assessment of antidumping duties on the per-unit assessment
amount for subject merchandise.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of review, as provided by section 751(a)(1) of the Act:
(1) The cash deposit rate for the reviewed company will be the rate
determined in the final results of review; (2) for previously reviewed
or investigated companies not mentioned above, the cash deposit rate
will continue to be the company-specific rate published for the most
recent period; (3) if the exporter is not a firm covered in this
review, a prior review, or in the original less-than-fair-value (LTFV)
investigation, but the manufacturer is, the cash deposit rate will be
the rate established for the most recent period for the manufacture of
the merchandise; and (4) the cash deposit rate for all other
manufacturers or exporters will be 61.85 percent, the all-others rate
from the LTFV investigation. These deposit requirements, when imposed,
shall remain in effect until publication of the final results of the
next administrative review.
This notice also serves as a preliminary 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 the subsequent
assessment of double dumping duties.
We are issuing and publishing this notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: August 31, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-23326 Filed 9-7-99; 8:45 am]
BILLING CODE 3510-DS-P