[Federal Register Volume 64, Number 177 (Tuesday, September 14, 1999)]
[Notices]
[Pages 49771-49773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23954]



[[Page 49771]]

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DEPARTMENT OF COMMERCE

International Trade Administration
[A-423-602]


Industrial Phosphoric Acid From Belgium; Final Results of 
Antidumping Duty Administrative Review

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

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review of Industrial Phosphoric Acid from Belgium.

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SUMMARY: On May 7, 1999, the Department of Commerce (``the 
Department'') published the preliminary results of its administrative 
review of the antidumping order on industrial phosphoric acid (``IPA'') 
from Belgium. This review covers imports of IPA from one producer, 
Societe Chimique Prayon-Rupel S.A. (``Prayon'') and the period of 
review (POR) is August 1, 1997, through July 31, 1998.
    We gave interested parties an opportunity to comment on our 
preliminary results. Based on our analysis of the comments received, we 
have revised the results from those presented in the preliminary 
results of review.

EFFECTIVE DATE: September 14, 1999.

FOR FURTHER INFORMATION CONTACT: Frank Thomson or Jim Terpstra, AD/CVD 
Enforcement, Office IV, 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-
4793, and 482-3965, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 20, 1987, the Department published in the Federal 
Register (52 FR 31439) the antidumping duty order on IPA from Belgium. 
On August 11, 1998, the Department published in the Federal Register 
(63 FR 42821) a notice of opportunity to request an administrative 
review of this antidumping duty order. On August 27, 1998, in 
accordance with section 751(a)(1) of the Tariff Act of 1930, as amended 
(``the Act'') and 19 CFR 351.213(b), FMC Corporation (``FMC''), and 
Albright & Wilson Americas, Inc. (``Wilson''), both domestic producers 
of the subject merchandise, requested that the Department conduct an 
administrative review of Prayon's exports of subject merchandise to the 
United States. We published the notice of initiation of this review on 
September 29, 1998 (63 FR 51893). On May 7, 1999, the Department 
published the Notice of Preliminary Results of Antidumping Duty 
Administrative Review of Industrial Phosphoric Acid from Belgium, 64 FR 
24574 (Preliminary Results). On May 12, 1999, Prayon submitted a 
response to our supplemental questionnaire of April 21, 1999, in which 
we asked for certain additional information regarding Prayon's reported 
home market and U.S. market commissions. We gave interested parties an 
opportunity to comment on the preliminary results. We received case and 
rebuttal briefs from Prayon and the domestic producers on June 9, 1999, 
and June 16, 1999, respectively. We did not receive any request from 
interested parties for a hearing. The Department has now completed this 
review in accordance with section 751 of the Act.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Act are references 
to the provisions as of 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's regulations refer to the regulations codified at 19 CFR 
Part 351 (1998).

Scope of the Review

    The products covered by this review include shipments of IPA from 
Belgium. This merchandise is currently classifiable under the 
Harmonized Tariff Schedule (HTS) item numbers 2809.2000 and 4163.0000. 
The HTS item number is provided for convenience and U.S. Customs 
Service (Customs Service) purposes. The written description remains 
dispositive.

Analysis of Comments Received

    Comment 1: Sales commissions Prayon argues that the Department 
erroneously treated its home and U.S. market commission payments to 
affiliated parties as arm's-length transactions. Prayon claims that the 
commission it paid to its affiliated sales agent in the United States, 
Quadra Corporation (USA) (``Quadra''), is not comparable to the 
commissions it paid to its non-affiliated sales agents in third 
countries.
    Specifically, Prayon asserts that the commission paid to Quadra was 
significantly higher than those paid to non-affiliated sales agents in 
all other countries except one. According to Prayon, the only 
commission rate comparable to the one it pays Quadra is the rate it 
pays to Quadra Chimie Limite (``QCL''), with which Prayon claims to be 
affiliated. Prayon asserts that this is not an appropriate comparison, 
and thus, the Department does not have an appropriate basis for 
concluding that the commission to Quadra was made at arm's-length. 
Prayon concludes that the Department should find that its commission 
payment to Quadra was not at arm's-length.
    Regarding commission payments in the home market, Prayon points out 
that its home-market sales agent (Zinchem Benelux) is virtually wholly 
owned by Prayon, and that the Department has, in past segments of this 
proceeding, treated this commission as not being at arm's-length (see 
Industrial Phosphoric Acid from Belgium; Final Results of Antidumping 
Duty Administrative Review, 63 FR 55087 (October 14, 1998) (Final 
Results 1996-1997); Industrial Phosphoric Acid from Belgium; Final 
Results of Antidumping Duty Administrative Review, 62 FR 41359 (August 
1, 1997) (Final Results 1995-1996); Industrial Phosphoric Acid from 
Belgium; Final Results of Antidumping Duty Administrative Review, 61 FR 
51424 (October 2, 1996) (Final Results 1994-1995); Industrial 
Phosphoric Acid from Belgium; Final Results of Antidumping Duty 
Administrative Review, 61 FR 20227 (May 6, 1996) (Final Results 1993-
1994)). Prayon also points to the original investigation, where the 
Department determined that these payments were not made at arm's-length 
(see Notice of Final Determination of Sales at Less Than Fair Value: 
Industrial Phosphoric Acid from Belgium, 52 FR 25436 (July 7, 1987) 
(LTFV)). Prayon asserts that since the completion of those segments, 
there has been no change in the circumstances of this commission 
arrangement, and thus no reason for the Department's reversal of its 
treatment in the current review.
    The domestic producers agree with the Department's treatment of 
these commissions in the preliminary results of review, and assert that 
the commission Prayon paid to QCL represents a valid basis for 
comparison and, furthermore, is consistent with the commission paid to 
Quadra. The domestic producers disagree with Prayon's contention that 
these commission payments were not at arm's-length. First, the domestic 
producers assert that the Department's comparison of commission 
payments using QCL is valid because QCL received them for sales made 
directly to specific customers on its own, not for sales jointly made 
with Quadra. Second, QCL ran its business operation

[[Page 49772]]

independently from Prayon, also an indication of the arm's-length 
nature of the commission payments, according to the domestic producers.
    In further support for finding that the commission paid to Quadra 
was at arm's-length, the domestic producers point out that Prayon, as a 
minority shareholder in Quadra, is not in a position to freely set 
commission rates to Quadra, benefit from paying out unduly high 
commissions to it, or have negotiating power over Quadra. The domestic 
producers conclude that the commission payment in question reflects an 
open market rate negotiation.
    Finally, the domestic producers assert that, even were the 
Department to disregard the commission paid to QCL, the commissions 
paid by Prayon to non-affiliated sales agents in other countries are 
sufficiently similar to that paid to Quadra to support the Department's 
finding of the arm's-length nature of this commission.
    Department's position: During the POR, Prayon used an affiliated 
sales agent in the home market and a different affiliated sales agent 
in the United States. For the preliminary results, we compared the 
commission rates Prayon submitted for its affiliated sales agents in 
both the home and U.S. market, with the rates paid to unaffiliated 
parties in other markets. Since the preliminary results were published, 
Prayon submitted additional documentation regarding these commission 
rates. As discussed in the preliminary results of review, we have 
applied the Department's guidelines for determining whether affiliated 
party commissions are paid on an arm's-length basis. See Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, From Japan and 
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and 
Components Thereof, From Japan: Final Results of Antidumping Duty 
Administrative Reviews and Revocation in Part of an Antidumping 
Finding, 61 FR 57629 (November 7, 1996). Accordingly, because Prayon 
did not use an unaffiliated sales agent in either the U.S. or home 
market, we compared the affiliated commission rates with rates Prayon 
paid to unaffiliated parties in other markets. Based on our comparison 
of commission rates for affiliated and unaffiliated parties, we find 
that Prayon's affiliated commission rates in all markets are reasonably 
similar to the range of commission rates Prayon paid to unaffiliated 
sales agents, such that we conclude that the affiliated commissions 
were arm's-length transactions.
    As to Prayon's assertion that the Department, in the four previous 
reviews, treated Prayon's commissions to its affiliated sales agent in 
the home market as not being at arm's-length, we agree. However, in 
those reviews the Department found that Prayon did not use unaffiliated 
sales agents. Thus, no information existed that would allow the 
Department to establish a benchmark against which to compare the arm's-
length nature of the commission payments from Prayon to its affiliated 
home market sales agent. The Department was therefore unable to carry 
out an analysis as to the arm's-length nature of Prayon's commission 
payments. Accordingly, the Department's treatment of home market 
commissions in those reviews is not dispositive of the arm's-length 
nature of the transactions. See Final Results 1996-1997; Industrial 
Phosphoric Acid From Belgium; Preliminary Results of Antidumping Duty 
Administrative Review, 63 FR 25830, 25832 (May 11, 1998); Final Results 
1995-1996; Industrial Phosphoric Acid From Belgium; Preliminary Results 
of Antidumping Duty Administrative Review, 62 FR 31073, 31074 (June 6, 
1997); Final Results 1994-1995; Industrial Phosphoric Acid From 
Belgium; Preliminary Results of Antidumping Duty Administrative Review, 
61 FR 26160, 26161 (May 24, 1996); Final Results 1993-1994; Industrial 
Phosphoric Acid From Belgium; Preliminary Results of Antidumping Duty 
Administrative Review, 60 FR 57398 (November 15, 1995). Prayon's 
reliance on the previous reviews, therefore, is misplaced.
    As to Prayon's assertion that the Department, in the original 
investigation, determined that Prayon's commissions to its affiliated 
sales agent in the home market were not at arm's-length, our analysis 
indicates otherwise. At the time of the investigation, the Department 
considered Prayon's commission payments to be ``part of the general 
expenses of the company, and [thus] not costs directly related to 
particular sales.'' See LTFV at 25439. In addition, at the time of the 
LTFV investigation, the Department did not have a practice or policy 
with respect to considering commissions paid to unaffiliated sales 
agents in other (i.e., third country) markets in determining whether a 
respondent's affiliated commission rates were at arm's-length, since we 
considered such transactions to be intracompany transfers of funds. Id. 
Consequently, Prayon's argument is not supported by the LTFV.
    Since the time of the investigation, the Department has changed its 
practice regarding the arm's-length nature of commissions paid to 
affiliated selling agents. Under guidelines the Department subsequently 
developed, the Department compares the commission paid to affiliated 
selling agents with the commission paid by the respondent to any 
unaffiliated selling agents in the same market, (i.e., home or U.S.) or 
in any third country market to determine the arm's-length nature of the 
affiliated commissions. See Final Determination of Sales at Less Than 
Fair Value: Coated Groundwood Paper from the United Kingdom, 56 FR 
56403, 56405-06 (November 4, 1991) (Paper from United Kingdom); see 
also Final Determination of Sales at Less Than Fair Value: Coated 
Groundwood Paper from Finland, 56 FR 56363, 56371-72 (November 4, 1991) 
(Paper from Finland); Final Determination of Sales at Less Than Fair 
Value: Coated Groundwood Paper from Germany, 56 FR 56385, 56389 
(November 4, 1991) (Paper from Germany). Pursuant to the current 
practice, the Department will make an adjustment for commissions 
between affiliated parties where we find the commissions paid to such 
parties to be at arm's-length. See Paper from United Kingdom, 56 FR at 
56406; Paper from Finland, 56 FR at 56372; Paper from Germany, 56 FR at 
56389.
    In the present review, Prayon used the services of unaffiliated 
agents and provided detailed information on the record regarding the 
commission rates it paid to these unaffiliated sales agents, (see 
``Background'' section, above). Consequently, in this review, the 
Department does have information appropriate for use as a benchmark in 
establishing the arm's-length nature of Prayon's affiliated commission 
rates.
    Since the Department has determined that the commissions paid to 
affiliated selling agents are comparable to the commissions paid by the 
respondent to unaffiliated selling agents in third country markets, for 
purposes of these final results we continue to find that the affiliated 
commissions in both the home and U.S. market are made at arm's-length 
and, for these final results, we are accepting Prayon's reported home 
and U.S. market commissions. Accordingly, we have continued to make a 
circumstance of sale adjustment for commissions in both markets.
    Comment 2: Prayon argues that, even were the Department to continue 
to treat its U.S. market commission payments as having been made at 
arm's-length, the Department committed a clerical error

[[Page 49773]]

in deducting U.S. commission expense from U.S. price, instead of adding 
it to normal value (NV).
    The domestic producers disagree with Prayon and assert that in 
conducting an administrative review, the Department considers 
individual U.S. sales, and thus it is proper that the commission 
expense associated with each U.S. sale be deducted from U.S. price.
    Department's position: We agree with Prayon that this was a 
clerical error. For the final results we have added U.S. commissions to 
NV as is our normal practice in the treatment of circumstances of sale 
adjustments for export price (EP) transactions.

Final Results of Review

    As a result of our review, we have determined that the following 
weighted-average dumping margin exists for the period August 1, 1997 
through July 31, 1998:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Prayon.....................................................         3.92
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. We have 
calculated an importer-specific duty assessment rate based on the ratio 
of the total amount of antidumping duties calculated for the importer-
specific sales to the total entered value of the same sales. The rate 
will be assessed uniformly on all entries by that particular importer 
made during the POR. The Department will issue appraisement 
instructions directly to the Customs Service.
    Further, the following deposit requirements will be effective upon 
publication of this notice of final results of review for all shipments 
of IPA from Belgium entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided for by 
section 751(a) of the Act: (1) for the company named above, the cash 
deposit rate will be the rate listed above; (2) for merchandise 
exported by manufacturers or exporters not covered in this review but 
covered in a previous segment of this proceeding, the cash deposit rate 
will continue to be the company-specific rate published in the most 
recent final results which covered that manufacturer or exporter; (3) 
if the exporter is not a firm covered in this review or in any previous 
segment of this proceeding, but the manufacturer is, the cash deposit 
rate will be that established for the manufacturer of the merchandise 
in these final results of review or in the most recent final results 
which covered that manufacturer; and (4) if neither the exporter nor 
the manufacturer is a firm covered in this review or in any previous 
segment of this proceeding, the cash deposit rate will be 14.67 
percent, the ``all others'' rate established in the LTFV.
    These deposit requirements shall remain in effect until publication 
of the final results of the next administrative review. This notice 
serves as a final reminder to importers of their responsibility under 
19 CFR 351.402(f) to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
this review period. Failure to comply with this requirement could 
result in the Secretary's presumption that reimbursement of antidumping 
duties occurred and the subsequent assessment of doubled antidumping 
duties.
    This notice also serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with section 351.306 of the Department's regulations. 
Timely notification of return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: September 1, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-23954 Filed 9-13-99; 8:45 am]
BILLING CODE 3510-DS-P