[Federal Register Volume 64, Number 215 (Monday, November 8, 1999)]
[Notices]
[Pages 60771-60776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29207]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-583-833]


Notice of Preliminary Determination of Sales at Not Less Than 
Fair Value and Preliminary Negative Critical Circumstances 
Determination: Certain Polyester Staple Fiber From Taiwan

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

EFFECTIVE DATE: November 8, 1999.

FOR FURTHER INFORMATION CONTACT: Cynthia Thirumalai or Alysia Wilson, 
Office 1 AD/CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4087 or (202) 482-0108, respectively.

The 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 Department of Commerce (Department) 
regulations refer to the regulations codified at 19 CFR Part 351 (April 
1998).

Preliminary Determination

    We preliminarily determine that certain polyester staple fiber 
(PSF) from Taiwan is not being sold, nor is likely to be sold, in the 
United States at less than fair value (LTFV), as provided in section 
733(b) of the Act.

Case History

    This investigation was initiated on April 22, 1999. See Initiation 
of Antidumping Duty Investigations: Certain Polyester Staple Fiber From 
the Republic of Korea and Taiwan, 64 FR 23053 (April 29, 1999) 
(Initiation Notice). Since the initiation of this investigation, the 
following events have occurred:
    On May 17, 1999, the United States International Trade Commission 
(the ITC) preliminarily determined that there is a reasonable 
indication that imports of the product under investigation are 
materially injuring the United States industry.
    In the Initiation Notice and in a letter dated May 24, 1999, the 
Department solicited comments on the scope of the investigation and 
matching criteria. We received comments on the scope of the 
investigation and matching criteria from various interested parties May 
12, 1999 through June 7, 1999. On June 2, 1999, the Department issued 
antidumping questionnaires to the two largest producers/exporters of 
subject merchandise (i.e., Far Eastern Textile Ltd. (Far Eastern) and 
Nan Ya Plastics Corporation (Nan Ya), collectively referred to as ``the 
respondents''), as indicated by information on the record of the 
proceeding at that time.
    The respondents submitted their initial responses to the 
questionnaire July 2 through 29, 1999. The petitioners submitted 
comments on these responses. After analyzing the responses and the 
petitioners' comments, we issued supplemental questionnaires to the 
respondents on August 6, 1999. We received the narrative responses to 
these supplemental questionnaires August 12 through 27, 1999, and the 
associated databases on September 3, 1999. On September 14, 1999, we 
asked respondents to provide explanations for all of the updates and 
changes to their databases submitted September 3. 1999. The respondents 
submitted their explanations on September 17 and 20, 1999. On October 
13, 1999, the petitioners submitted additional comments on respondents' 
questionnaire responses. The Department issued another supplemental 
questionnaire to Nan Ya on October 19, 1999. On October 25, 1999, Nan 
Ya responded to the last supplemental questionnaire. In addition, the 
Department requested certain documentation from Nan Ya on September 16, 
1999; Nan Ya supplied these documents on October 26, 1999.
    The petitioners submitted an allegation that critical circumstances 
exist with respect to imports of PSF from Taiwan on July 30, 1999. On 
August 6, 1999, the Department issued critical circumstances 
questionnaires as part of the supplemental questionnaires.
    On August 25, 1999, at the request of the petitioners, the 
Department extended the preliminary determination until no later than 
September 29, 1999. See Notice of Postponement of Preliminary 
Antidumping Duty Determinations: Certain Polyester Staple Fiber from 
the Republic of Korea and Taiwan, 64 FR 47766 (September 1, 1999). On 
September 29, 1999, the petitioners requested another extension. In 
response, the Department extended

[[Page 60772]]

the preliminary determination until no later than October 4, 1999. See 
Notice of Postponement of Preliminary Antidumping Duty Determinations: 
Certain Polyester Staple Fiber from the Republic of Korea and Taiwan, 
64 FR 55248 (October 12, 1999). We further extended the preliminary 
determination until no later than October 29, 1999 based on 
petitioners' September 29, 1999 request. See Notice of Postponement of 
Preliminary Antidumping Duty Determinations: Certain Polyester Staple 
Fiber from the Republic of Korea and Taiwan, 64 FR 557001 (October 14, 
1999).

Period of Investigation

    The period of investigation (POI) is April 1, 1998, through March 
31, 1999.
    This period corresponds to each respondent's four most recent 
fiscal quarters prior to the filing of the petition.

Scope of Investigation

    For purposes of this investigation, the product covered is certain 
polyester staple fiber. Certain polyester staple fiber is defined as 
synthetic staple fibers, not carded, combed or otherwise processed for 
spinning, of polyesters measuring 3.3 decitex (3 denier, inclusive) or 
more in diameter. This merchandise is cut to lengths varying from one 
inch (25 mm) to five inches (127 mm). The merchandise subject to this 
investigation may be coated, usually with a silicon or other finish, or 
not coated. Certain polyester staple fiber is generally used as 
stuffing in sleeping bags, mattresses, ski jackets, comforters, 
cushions, pillows, and furniture. Merchandise of less than 3.3 decitex 
(less than 3 denier) classified under the Harmonized Tariff Schedule of 
the United States (HTSUS) at subheading 5503.20.00.20 is specifically 
excluded from this investigation. Also specifically excluded from this 
investigation are polyester staple fibers of 10 to 18 denier that are 
cut to lengths of 6 to 8 inches (fibers used in the manufacture of 
carpeting).
    The merchandise subject to these investigations is classified in 
the HTSUS at subheadings 5503.20.00.40 and 5503.20.00.60. Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the merchandise under investigation is 
dispositive.
    Scope Comments: As stated in our notice of initiation, we set aside 
a period for parties to raise issues regarding product coverage. Stein 
Fibers, Ltd. (Stein Fibers), an importer of PSF, requested that the 
Department modify the scope of investigation to exclude regenerated 
PSF. Far Eastern and Nan Ya requested that the Department exclude low-
melt PSF from the scope of investigation.
    Stein Fibers states that under the criteria set forth in the 
Department's regulations at 19 CFR 351.225(k)(2) (the ``Diversified 
Products criteria''), regenerated fiber does not fall within the scope 
of this investigation. First, Stein Fibers asserts that regenerated 
fiber is a low quality product that is not comparable to U.S.-produced 
high-quality virgin and recycled PSF. Second, Stein Fibers contends 
that the quality differences result in different expectations by the 
ultimate user and in the product's ultimate use. Third, Stein Fibers 
states that regenerated PSF and U.S.-made virgin or recycled PSF do not 
compete with each other, and therefore, their channels of trade are 
dissimilar. Finally, Stein Fibers claims that regenerated fiber is 
never advertised or displayed while particular brands of U.S.-made 
virgin or recycled PSF are prominently displayed and advertised in the 
bedding departments of many department stores.
    Gates Formed-Fibre Products, Inc. (Gates), an importer of PSF and 
interested party in the companion antidumping duty investigation of PSF 
from the Republic of Korea, stated that the black and colored fiber 
extruded from textile fiber waste that it imports for the manufacture 
of substrate for automobile trunk liners is a different class or kind 
of merchandise than the products covered by the petition. Therefore, 
Gates argued, black automotive substrate (BAS) should be excluded from 
the scope of the investigation because (1) it cannot be used for the 
fill applications described in the petition; (2) it is distinct from 
other fiber products; (3) it should be excluded based on consideration 
of the ``Diversified Products'' criteria as set forth in the 
Department's regulations; (4) the petitioners are considering its 
exclusion; and (5) if excluded, there would be no risk of 
circumvention.
    With respect to the ``Diversified Products'' criteria, Gates 
submitted specific comments on each of the criteria. First, Gates 
claimed that BAS differs from fiber fill product in all possible model 
matching criteria. Second, Gates stated that the ultimate purchaser 
would not accept BAS for use in the manufacture of merchandise such as 
pillows and ski jackets which require fiber fill. Third, Gates asserted 
that fiber fill is distributed by importers to manufacturers of 
pillows, comforters, jackets, etc., which then resell their products to 
distributors and large retailers. BAS is used in the manufacture of 
trunk liners which are then sold to original equipment manufacturers or 
their suppliers. Fourth, BAS cannot be used for fill applications. 
Fifth, products using fiber fill are advertised directly to consumers 
while BAS for trunk liners is not advertised to consumers.
    Far Eastern and Nan Ya note that low-melt PSF acts as an adhesive 
to hold other fibers together for non-woven batting in high-loft 
products. Since low-melt PSF itself is not used as filling and is not 
similar in appearance to cotton or wool, Far Eastern and Nan Ya state 
that low-melt PSF is clearly outside the scope of investigation. 
Moreover, Far Eastern and Nan Ya assert that low-melt PSF is outside 
the scope of investigation when considered in light of the 
``Diversified Products'' criteria. First, with respect to product 
characteristics, low-melt PSF consists of an outer sheath and an inner 
core as opposed to single-component PSF, according to Far Eastern and 
Nan Ya. Second, with respect to the expectations of the ultimate user 
and the ultimate use, Far Eastern and Nan Ya point out that low-melt 
PSF is used as a bonding agent, not as a filler or loft material. 
Third, Far Eastern and Nan Ya state that while the channels of trade 
may be similar, this single criterion is not dispositive. Finally, Far 
Eastern and Nan Ya note that they supply the U.S. market with a 
particular specification of low-melt PSF suitable for furniture and 
bedding manufacturing that is not available domestically in the United 
States.
    Saehan Industries Inc. and Samyang Corporation (Saehan/Samyang), 
respondents in the companion antidumping duty investigation of PSF from 
the Republic of Korea, stated that conjugate polyester staple fiber 
(conjugate PSF) and low-melt polyester staple fiber (low-melt PSF) do 
not fall under the scope of this investigation. Saehan/Samyang argued 
that conjugate PSF should be excluded from the scope because there is 
no U.S. industry producing this product. Saehan/Samyang stated that 
low-melt PSF is not ``fiber for fill'' and is, thus, not the product 
targeted by the petitioners. Moreover, Saehan/Samyang claimed that 
under the ``Diversified Products'' criteria, conjugate PSF and low-melt 
PSF are outside the scope of this investigation. First, Saehan/Samyang 
noted that the manufacturing process for conjugate fiber creates a 
natural curl or spiral, resulting in greater ``fluff.'' ``Regular'' 
fibers, produced by the petitioners, are straight or mechanically 
crimped and lack the loft of conjugate fiber.

[[Page 60773]]

    Second, Saehan/Samyang cited testimony given before the ITC 
asserting that end-users expect greater loft and a down-like quality 
from conjugate fibers which is not characteristic of the mechanically-
crimped fibers produced by DuPont, one of the petitioners. Third, 
Saehan/Samyang stated that ``regular'' PSF and conjugate PSF are both 
used in the production of furniture and home furnishings and, 
therefore, they are not sold in different channels of trade. However, 
Saehan/Samyang argued that channels of trade is less significant as a 
criterion in this case because there are no different channels of trade 
for any products used in this industry. Fourth, the ultimate use of 
conjugate PSF is to create a certain level of loft. In the United 
States, it is either used to provide high-loft characteristics, or it 
is mixed with ``regular'' fiber to achieve different levels of loft, 
and these two fibers are not interchangeable. Fifth, Saehan/Samyang 
stated that although these products are not advertised or displayed in 
the same way as products sold directly in the retail market, 
manufacturers and customers treat the two products very differently.
    The petitioners objected to the interested parties' requests that 
regenerated, low-melt, BAS, and conjugate PSF be excluded from the 
scope of the investigation. According to the petitioners, these 
products are all PSF, meet the definition of the scope, and are 
captured within the scope intended by the petitioners. Furthermore, the 
petitioners claimed that all of these imported products are 
domestically available. The petitioners added that there is no basis 
for creating a separate class or kind of merchandise relating to the 
PSF under consideration.
    For purposes of this preliminary determination and in consideration 
of comments by interested parties, the Department has not modified the 
scope of this investigation because the current language reflects the 
product coverage requested by the petitioners, and we have determined 
that regenerated, low-melt, BAS, and conjugate PSF fall within that 
scope. On the issue of whether BAS is a separate class or kind of 
merchandise under the ``Diversified Products'' criteria, we will make a 
determination in the final determination of this investigation.

Critical Circumstances

    On July 30, 1999, as amended on August 19, 1999, the petitioners 
alleged that critical circumstances exist with respect to imports of 
PSF from Taiwan. In accordance with 19 CFR 351.351(c)(2)(i), since this 
allegation was filed at least 20 days prior to our preliminary 
determination, we must issue our preliminary critical circumstances 
determination not later than the preliminary determination.
    Section 733(e)(1) of the Act provides that, if a petitioner alleges 
critical circumstances, the Department will determine whether there is 
a reasonable basis to believe or suspect that: (A)(i) There is a 
history of dumping and material injury by reason of dumped imports in 
the United States or elsewhere of the subject merchandise, or (ii) the 
person by whom, or for whose account, the merchandise was imported knew 
or should have known that the exporter was selling the subject 
merchandise at less than its fair value and that there was likely to be 
material injury by reason of such sales, and (B) there have been 
massive imports of the subject merchandise over a relatively short 
period.

History of Dumping

    The petitioners submitted information indicating that the European 
Union (EU) imposed antidumping duties on synthetic fibers of polyester 
(PSF) from Taiwan in 1992; the EU continues to impose antidumping 
duties on PSF from Taiwan. Based on the foregoing, we preliminarily 
determine that there is a history of dumping and material injury with 
respect to PSF from Taiwan. Therefore, we find that the first criterion 
has been satisfied. We must now examine whether or not respondents had 
massive imports.

Massive Imports

    Far Eastern and Nan Ya submitted data on shipments of subject 
merchandise to the United States for the eight-month period beginning 
with December 1998 and ending with July 1999. 19 CFR 351(h) states 
that, unless the imports during a ``relatively short period'' have 
increased by at least 15 percent over the imports during a period 
immediately preceding the filing of the petition, the Secretary will 
not consider the imports massive. Furthermore, pursuant to 19 CFR 
351(i), the Secretary will normally consider a ``relatively short 
period'' the period beginning on the date the proceeding begins and 
ending at least three months later. We compared Far Eastern's and Nan 
Ya's exports in the four-month pre-petition period, December 1998 
through March 1999, to their exports in the four months after the 
filing of the petition, April through July 1999. These comparisons 
indicate that exports by Far Eastern and Nan Ya did not increase by 15 
percent respectively from one period to the next.
    Based on these facts, we determine that the second criterion for 
finding that critical circumstances exist is not satisfied. Therefore, 
we preliminarily determine that critical circumstances do not exist 
with respect to exports of PSF from Taiwan by Far Eastern and Nan Ya. 
We will make a final determination concerning critical circumstances 
when we make our final determination in this investigation.

Product Comparisons

    All products produced and sold by the respondents in the home 
market that fit the definition contained in the Scope of the 
Investigation section of this notice comprise the foreign like product. 
(See section 771(16) of the Act.) For purposes of this preliminary 
determination, we have relied on the following criteria, in order, to 
match U.S. sales of PSF to home market sales of the foreign like 
product: (1) Fiber composition (conjugate; single component, crimped; 
low melt; etc.); (2) fiber type (virgin; recycled; blended; 
regenerated); (3) cross section; (4) finish; and (5) denier. Also, 
because Nan Ya reported that its sales of PSF in both the home market 
and in the United States were differentiated by grade of product and 
Far Eastern reported that its sales were differentiated by color, we 
compared Nan Ya's sales by grade and Far Eastern's by color.
    We first attempted to compare sales of products sold in the U.S. 
and the home market that were identical with respect to the product 
matching criteria above. Where we did not find any home market sales of 
merchandise that were identical in these respects to the merchandise 
sold in the United States, we compared U.S. products with the most 
similar merchandise sold in the home market. Where there were no 
appropriate comparison market sales of comparable merchandise, we 
compared the merchandise sold in the United States to constructed value 
(CV), in accordance with section 773 (a)(4) of the Act.

Fair Value Comparisons

    To determine whether sales of certain polyester staple fiber from 
Taiwan were made in the United States at less than fair value, we 
compared the export price (EP) to the normal value (NV), as described 
in the Export Price and Normal Value sections of this notice. In 
accordance with section 777A(d)(1)(A)(i) of the Act, we calculated POI 
weighted-average EPs for comparison to POI weighted-average normal 
values.

Date of Sale

    We have preliminarily determined that the date of sale for home 
market and U.S. sales of both Nan Ya and Far

[[Page 60774]]

Eastern is the purchase order date/order acceptance memo date. 
According to the respondents, the material terms of sale rarely changed 
after this date and any quantity changes made to the sale before 
shipment were within the industry accepted tolerances.
    For some sales by Far Eastern, reported purchase order dates 
occurred after the date of shipment. For these sales, we have relied on 
the date of shipment as the date of sale since it is the Department's 
practice not to rely on a date later than the date of shipment as the 
date of sale (see Notice of Final Determination of Sales at Less Than 
Fair Value: Stainless Steel Sheet and Strip in Coils From the Republic 
of Korea, 64 FR 30664, 30666 (July 8, 1999)).

Export Price

    In accordance with section 772 of the Act, we based U.S. price on 
EP. Section 772(a) of the Act defines EP as the price at which the 
subject merchandise is first sold before the date of importation by the 
exporter or producer outside the United States to an unaffiliated 
purchaser in the United States, or to an unaffiliated purchaser for 
exportation to the United States. Consistent with this definition, we 
found that the respondents made EP sales during the POI. For both 
respondents, we calculated EP based on prices charged to the first 
unaffiliated customer in the United States.
    As the starting U.S. price, we used reported gross unit prices on 
CIF and FOB bases. In accordance with section 772(c)(2) of the Act, we 
reduced the EP by export taxes, duties and movement expenses, where 
appropriate. Movement expenses included foreign inland freight, 
international freight, brokerage and handling, and marine insurance.

Normal Value

A. Selection of Comparison Markets
    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared each respondent's volume of home market sales of the 
foreign like product to the volume of their U.S. sales of the subject 
merchandise. Pursuant to sections 773(a)(1)(B) and (C) of the Act, 
because each 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 of the subject merchandise, we determined that the 
home market was viable for both producers.
B. Sales to Affiliated Customers
    Nan Ya made sales in the home market to affiliated customers. To 
test whether these sales were made at arm's length, we compared the 
starting prices of sales to affiliated and unaffiliated customers, net 
of all movement charges, direct and indirect selling expenses, 
discounts and packing. Where the price to Nan Ya's affiliated customer 
was on average 99.5 percent or more of the price to its unaffiliated 
customers, we determined that the sales made to the affiliated customer 
were at arm's length and included those sales in our calculation of NV 
pursuant to 19 CFR 351.403(c). The prices to some of Nan Ya's 
affiliated customers were, on average, less than 99.5 percent of the 
price to unaffiliated customers and were excluded from the calculation 
of NV because they were determined not to be at arm's length.
C. Cost of Production Analysis
    Based on allegations contained in the petition, and in accordance 
with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to 
believe or suspect that sales of PSF in Taiwan were made at prices 
below the cost of production (COP). See Initiation Notice, 64 FR at 
23055. As a result, the Department has conducted investigations to 
determine whether the respondents made sales in their home market at 
prices below their respective COPs during the POI within the meaning of 
section 773(b)(1) of the Act. We conducted the COP analysis described 
below.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP for PSF based on the sum of the cost of materials 
and fabrication for the foreign like product, plus amounts for general 
and administrative (G&A) expenses and packing. We relied on the COP 
data submitted by each respondent in its cost questionnaire responses 
with the following exceptions for Nan Ya: (1) We have disallowed the 
scrap credit for regenerated products because information on the record 
indicates that Nan Ya has inappropriately allocated the scrap credit to 
regenerated products and (2) we adjusted Nan Ya's G&A expense rate for 
other operating costs (see the memorandum to the file on the COP and CV 
adjustments for Nan Ya dated October 29, 1999).
2. Test of Home Market Sales Prices
    We compared the adjusted, weighted-average COP to the home market 
sales of the foreign like product by each respondent. The home market 
prices were computed net of any applicable discounts, movement charges, 
taxes, and other direct and indirect selling expenses. We made this 
comparison in accordance with section 773(b)(1) of the Act, in order to 
determine whether these sales had been made at prices below the COP 
within an extended period of time (i.e., a period of one year) in 
substantial quantities 1 and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time.
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    \1\ In accordance with section 773(b)(2)(C)(i) of the Act, we 
determined that sales made below the COP were made in substantial 
quantities if the volume of such sales represented 20 percent or 
more of the volume of sales under consideration for the 
determination of normal value.
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3. Results of the 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 the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of 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) or the Act. Because we compared prices to the 
average COP calculated over 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.
    We found that, for certain models of PSF, more than 20 percent of 
the home market sales of both respondents were made within an extended 
period of time at prices less than the COP. Further, the prices did not 
provide for the recovery of costs within a reasonable period of time. 
Therefore, we disregarded the below-cost sales and used the remaining 
sales as the basis for determining normal value, in accordance with 
section 773(b)(1) of the Act.
    For those U.S. sales of PSF for which there were no comparable home 
market sales in the ordinary course of trade, we compared EP to the 
constructed value in accordance with section 773(a)(4) of the Act. See 
Calculation of Normal Value Based on Constructed Value section, below.
D. Calculation of Normal Value Based on Home Market Prices
    We performed price-to-price comparisons where there were sales of 
comparable merchandise in the home

[[Page 60775]]

market that did not fail the cost test. We calculated NV based on ex-
works or delivered prices to home market customers. We made deductions 
from the starting price, where appropriate, for movement expenses and 
discounts, pursuant to section 773(a)(6)(B). 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. In addition, we made circumstance of sale 
(COS) adjustments for direct expenses (i.e., credit expenses, 
commissions and bank charges), where appropriate, in accordance with 
section 773(a)(6)(C)(iii) of the Act.
    When comparing U.S. sales with home market sales of similar, but 
not identical, merchandise, we also made adjustments to normal value 
for physical differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act. We based this adjustment on the difference 
in the variable costs of manufacturing for the foreign like product and 
subject merchandise, using POI-average costs.
    We also made adjustments, in accordance with 19 CFR 351.410(e), for 
indirect selling expenses incurred on home market or U.S. sales where 
commissions were granted on sales in one market but not in the other 
(the ``commission offset''). Specifically, where commissions were 
granted in the U.S. market but not in the home market, we made a 
downward adjustment to normal value for the lesser of (1) the amount of 
the commission paid in the U.S. market, or (2) the amount of indirect 
selling expenses incurred in the home market.
E. Calculation of Normal Value Based on Constructed Value
    Section 773(a)(4) of the Act provides that where normal value 
cannot be based on home market sales, normal value may be based on the 
constructed value (CV). Accordingly, for those models of PSF for which 
we could not determine the normal value based on home market sales, 
either because (1) there were no sales of a comparable product or (2) 
all sales of comparison products failed the COP test, we based normal 
value on the CV.
    Sections 773(e)(1) and (2)(A) of the Act provides that the CV shall 
be based on the sum of the cost of materials and fabrication for the 
foreign like product, plus amounts for selling, general, and 
administrative expenses (SG&A), profit, and U.S. packing costs. For 
each respondent, we calculated the cost of materials and fabrication 
based on the methodology described in the Calculation of COP section, 
above. We relied on the CV data submitted by each respondent in its 
questionnaire responses with the exception for Nan Ya of disallowing 
the scrap credit for regenerated products because information on the 
record indicates that Nan Ya has inappropriately allocated the scrap 
credit to regenerated products. As a result, we added the scrap credit 
back to the regenerated PSF material costs for Nan Ya. (See the 
memorandum to the file on the COP and CV adjustments for Nan Ya dated 
October 29, 1999.) We based SG&A and profit for each respondent on the 
actual amounts reported as incurred and realized by the respondent in 
connection with the production and sale of the foreign like product in 
the ordinary course of trade for consumption in the home market, in 
accordance with section 773(e)(2)(A) of the Act. For Nan Ya, this 
entailed reclassifying certain operating expenses pertaining to 
calculation of the G&A percentage.
    We made adjustments to CV for differences in COS in accordance with 
section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons to EP, 
we made COS adjustments by deducting direct selling expenses incurred 
on home market sales from, and adding U.S. direct selling expenses to, 
CV.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine normal value based on sales in the home 
market at the same level of trade as the EP. The normal value level of 
trade is that of the starting-price sales in the home market or, when 
normal value is based on CV, that of the sales from which we derive 
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 exporter to 
importer.
    To determine whether normal value sales are at a different level of 
trade than EP, we examine stages in the marketing process and selling 
functions along the chain of distribution between the producer and the 
unaffiliated (or arm's length) customer. If the home 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 normal value is based and home 
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.
    In implementing these principles in this investigation, we obtained 
information from each respondent about the marketing stages involved in 
the reported U.S. and home market sales, including a description of the 
selling activities performed by the respondents for each channel of 
distribution. In identifying levels of trade for EP and home market 
sales we considered the selling functions reflected in the starting 
price before any adjustments.
    In this investigation, we found that the respondents perform 
minimal selling functions in the United States and home markets. With 
respect to each respondent's EP sales, we found a single level of trade 
in the United States, and a single, identical level of trade in the 
home market. It was, thus, unnecessary to make any level-of-trade 
adjustment for comparison of EP and home market prices.

Currency Conversions

    We made currency conversions in accordance with section 773A of the 
Act. The Department's preferred source for daily exchange rates is the 
Federal Reserve Bank. Section 773A(a) of the Act directs the Department 
to use a daily exchange rate in order to convert foreign currencies 
into U.S. dollars unless the daily rate involves a fluctuation. It is 
the Department's practice to find that a fluctuation exists when the 
daily exchange rate differs from the benchmark rate by 2.25 percent 
(see Extruded Rubber Thread From Malaysia; Final results of Antidumping 
duty Administrative Review, 64 FR 12967, 12970 (March 16, 1999)). The 
benchmark is defined as the moving average of rates for the past 40 
business days. When we determine a fluctuation to have existed, we 
substitute the benchmark rate for the daily rate, in accordance with 
established practice.

Verification

    In accordance with section 782(i) of the Act, we intend to verify 
information to be used in making our final determination. At 
verification, we will closely examine changes between the most recently 
submitted data sets and prior data sets including, but not limited to: 
cost allocations, materials usage, unit prices, and expenses. We will 
also thoroughly check the completeness of respondents' sales reporting.

Suspension of Liquidation

    Since the estimated weighted-average dumping margins for all 
examined companies (i.e., both Far Eastern and Nan Ya) are de minimis, 
we are directing the Customs Service not to suspend liquidation of 
entries of certain polyester staple fiber from Taiwan. These 
instructions not suspending liquidation will remain in effect until 
further notice.

[[Page 60776]]

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our negative preliminary determination. If our final antidumping 
determination is affirmative, the ITC will determine whether these 
imports are materially injuring, or threaten material injury to, the 
U.S. industry. The deadline for that ITC determination would be the 
later of 120 days after the date of this preliminary determination or 
45 days after the date of our final determination.

Disclosure

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See 19 CFR 351.224(b).

Public Comment

    For this investigation, case briefs must be submitted no later than 
November 22, 1999. Rebuttal briefs must be filed no later than November 
29, 1999. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes.
    Section 774 of the Act provides that the Department will hold a 
hearing to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by any interested party. If a hearing is 
requested, it will be held on December 3, 1999, at the U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW., Washington, D.C. 
20230. Parties should confirm by telephone the time, date, and place of 
the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request within 30 days of 
the publication of this notice. Requests should specify the number of 
participants and provide a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs.
    If this investigation proceeds normally, we will make our final 
determination no later than 135 days after the date of publication of 
this notice.
    This determination is published pursuant to sections 733(d) and 
777(i)(1) of the Act.

    Dated: October 29, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-29207 Filed 11-5-99; 8:45 am]
BILLING CODE 3510-DS-P