Last Revised October 1, 2003

**APPENDIX I**

**GLOSSARY OF TERMS**

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  This glossary is intended to provide parties with a basic understanding
  of many technical terms that appear in the antidumping questionnaire.
  These explanations are not regulations or rules with the force of law.
  As difficult or detailed questions arise, parties should seek
  clarification from the statute, regulations, and the Department, rather
  than attempting to derive precise guidance from these general
  explanations.

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**Administrative Protective Order**

An administrative protective order is the legal mechanism that controls
the limited disclosure of business proprietary information to
representatives of interested parties. The Department authorizes the
release of proprietary information under administrative protective order
only when the representatives file a request in which they agree to the
following four conditions: (a) to use the information only in the
antidumping proceeding, (b) to secure the information and protect it
from disclosure to any person not subject to an administrative
protective order, (c) to report any violation of the terms of the
protective order, and (d) to acknowledge that they may be subject to
sanctions if they violate the terms of the order. (Section 777(c) of the
Act. See also **Proprietary Information** and **Proprietary
Treatment**.)

**Affiliated Persons**

The term affiliated persons (affiliates) includes: (1) members of a
family; (2) an officer or director of an organization and that
organization; (3) partners; (4) employers and employees;

\(5\) any person directly or indirectly owning, controlling, or holding
with power to vote, 5 percent or more of the outstanding voting stock or
shares of any organization and that organization; 6) two or more persons
directly or indirectly controlling, controlled by, or under common
control with, any person; and (7) any person who controls any other
person and that other person. Control exists when a person is legally or
operationally in a position to exercise restraint or direction over
another person. For purposes of this investigation, a control
relationship should also have the potential to affect decisions
concerning the production, pricing, or cost of the merchandise under
investigation. (Section 771(33) of the Act; sections 351.102(b) and
351.401(f) of the regulations.)

Examples of situations which may indicate control include (but are not
limited to):

\(a\) joint ventures and franchises; (b) lender/borrower situations; (c)
a close relationship with a supplier, (sub) contractor, lender,
distributor, exporter or reseller; and (d) a group of companies
controlled by, for example, a family, a corporation, or the same
investors.

An example of affiliation by common control may be the affiliation
between the owners of a joint venture when each owner is in a control
position with that joint venture.

Section 351.102(b) of the Department's regulations states that the term
person includes any interested party as well as any other individual,
enterprise, or entity, as appropriate. In the Department's practice, the
term person includes any company, individual, organization, partnership
or group.

**Antidumping Law and Regulations**

The United States antidumping laws are set forth in Title VII of the
Tariff Act of 1930, as amended (the Act) (19 U.S.C. 1673 *et seq.*). The
Department's regulations governing antidumping proceedings are set forth
at 19 CFR Part 351, published in the *Federal Register* on May 19, 1997
(62 FR 27379-27424). For procedures governing Administrative Protective
Orders and the treatment of proprietary information, please see 19 CFR
Parts 351 and 354, published in the *Federal Register* on May 4, 1998
(63 FR 24391).

**Arm's-Length Transactions (between affiliates)**

Generally, the Department may use transactions between affiliates as a
basis for normal value, only if the transactions are made at arm's
length. Arm's-length transactions are those in which the selling price
between the affiliated parties is comparable to the selling prices in
transactions involving persons who are not affiliated. The Department
takes into account terms of sale, conditions of delivery, and other
circumstances related to the sales in deciding if the selling prices are
comparable. To determine whether sales to an affiliate should be
included in the normal value calculation, the Department performs an
arm's-length test. In this test, the Department compares the
weighted-average price to each affiliate for each product to the
weighted-average price of the same or a similar product to all
unaffiliated customers. If the overall ratio calculated for an affiliate
is between 98 percent and 102 percent, inclusive, of sales prices to all
unaffiliated customers, sales to that affiliate may be considered in the
**ordinary course of trade** and used in the normal value calculation.
Sales not made at arm's length are not considered to be within the
ordinary course of trade. (See also **Ordinary Course of Trade**.)

**Certification of Accuracy**

Any person that submits factual information to the Department must
include with the submission a certification of the completeness and
accuracy of the factual information. Certifications must be made by a
knowledgeable official responsible for presentation of the factual
information and by the party\'s legal counsel or other representative,
if any. A sample certification form is included as Appendix IV to the
questionnaire. (Section 782 (b) of the Act; section 351.303(g) of the
regulations.)

**Circumstances of Sale**

In comparing normal value to export price or constructed export price,
the Department makes adjustments to normal value for certain differences
in expenses or prices that exist because the conditions under which the
sales are made in the two markets differ. Besides particular adjustments
named in the statute (*e.g.*, differences in quantities and levels of
trade), the statute also allows the Department to adjust for other
differences in circumstances of sale. This adjustment normally is based
only on differences in direct selling expenses that the Department does
not adjust for under more specific provisions. (Section
773(a)(6)(C)(iii) of the Act; section 351.410 of the regulations. See
also **Direct vs. Indirect Expenses**.)

**Constructed Export Price**

(See **Export Price and Constructed Export Price**.)

**Constructed Export Price Offset**

To the extent practicable, the Department attempts to base normal value
on sales made at the same level of trade as the export price or
constructed export price or adjust for the differences in levels of
trade. Where this is not possible, the law provides for an adjustment to
normal value to account for differences in level of trade when (1) U.S.
price is a constructed export price; (2) normal value is determined at a
more advanced level of trade than the level of trade of the constructed
export price;[^1] and (3) the data available do not provide an
appropriate basis for determining whether differences in levels of trade
affect price comparability and quantify­ing the amount of a level of
trade adjustment. This adjustment takes the form of a deduction from
normal value of the amount of indirect selling expenses incurred in the
foreign market. The amount of this deduction may not exceed (*i.e.*, it
is capped by) the amount of indirect selling expenses deducted in
calculating constructed export price. (Section 773(a)(­7)(B) of the Act;
351.412(f) of the regulations. See also **Level of Trade, Level of Trade
Adjustment**.)

**Constructed Value**

When there are no sales of the foreign like product in the foreign
market suitable for matching to the subject merchandise (including, for
example, when the Department disregards sales because they are below the
cost of production), the Department uses constructed value as the basis
for normal value. The constructed value is the sum of (1) the cost of
materials and fabrication of the subject merchandise, (2) selling,
general, and administrative expenses and profit in the foreign market,
and (3) the cost of packing for exportation to the United States.
(Section 773(e) of the Act; sections 351.405 and 351.407 of the
regulations.)

**Contemporaneous Sales**

In investigations, the Department normally compares average export
prices (or constructed export prices) to average normal values. The
averages normally are based on sales made over the course of the period
of investigation.

In administra­tive reviews of existing antidumping orders, on the other
hand, the Department normally compares the export price (or constructed
export price) of an individual U.S. sale to an average normal value for
a contempo­raneous month.

The preferred month is the month in which the particular U.S. sale was
made. If, during the preferred month, there are no sales in the foreign
market of a foreign like product that is identical to the subject
merchandise, the Department will then employ a six-month window for the
selection of contemporaneous sales. For each U.S. sale, the Department
will calculate an average price for sales of identical merchandise in
the most recent of the three months prior to the month of the U.S. sale.
If there are no such sales, the Department will use sales of identical
merchandise in the earlier of the two months following the month of the
U.S. sale. If there are no sales of identical merchandise in any of
these months, the Department will apply the same progression to sales of
similar merchandise. (Section 351.414 of the regulations.)

**Cost of Manufacture**

The cost of manufacture is the sum of material, fabrication and other
processing costs incurred to produce the products under investigation.
(See also **Cost of Production**.)

**Cost of Production**

Cost of production means the cost of producing the foreign like product.
The cost of production is the sum of (1) material, fabrication, and
other processing costs, (2) selling, general, and administrative
expenses, and (3) the cost of containers and other packing expenses. The
Department may disregard foreign market sales in calculating normal
value if they are made at prices which are less than the cost of
production. The Department will disregard all sales below cost if made:
(A) within an extended period of time (normally one year) in substantial
quantities ( at least 20 percent of the volume of the product examined
is sold below cost or the weighted-average unit price is below the
weighted-average cost for the period examined); and (B) at prices that
do not permit recovery of costs within a reasonable period of time
(*i.e.*, a price is less than the weighted-average cost of production
during the period examined). Although the Department initiates any cost
of production inquiries for all sales of the foreign like product, this
determination is made on a product-specific basis. (Section 773(b) of
the Act; sections 351.406 and 351.407 of the regulations.)

**Credit Expense**

Credit expense is a type of expense for which the Department frequently
makes circumstances-of-sale adjustments. It is the interest expense
incurred (or interest revenue foregone) between shipment of merchandise
to a customer and receipt of payment from the customer. The Department
normally imputes the expense by applying a firm\'s annual short-term
borrowing rate in the currency of the transaction, prorated by the
number of days between shipment and payment, to the unit price. If
actual payment dates are not kept in a way that makes them accessible,
the calculation may be based on the average of the number of days that
accounts receivable remain outstanding. (See also **Imputed Expenses**.)

**Date of Sale**

Because the Department attempts to compare sales made at the same time,
establishing the date of sale is an important part of the dumping
analysis. The Department will normally use the date of invoice, as
recorded in the exporter or producer's records kept in the ordinary
course of business. However, the Department may use a date other than
the date of invoice (*e.g.*, the date of contract in the case of a
long-term contract) if satisfied that a different date better reflects
the date on which the exporter or producer establishes the material
terms of sale (*e.g.*, price, quantity). (Section 351.401(i) of the
regulations.)

**Difference in Merchandise Adjustments**

When normal value is based on sales in the foreign market of a product
which is similar, but not identical, to the product sold in the United
States, the Department may adjust normal value to account for
differences in the variable costs of producing the two products.
Generally, the adjustment is limited to differences in the costs of
materials, labor and variable production costs that are attributable to
physical differences in the merchandise. The Department will not adjust
for differences in fixed overhead or administrative expenses or profit.
(Section 351.411 of the regulations.)

**Direct vs. Indirect Expenses**

In calculating export price, constructed export price, and normal value,
the Department treats selling expenses differently depending on whether
they are direct expenses or indirect expenses. For instance,
circumstances-of-sale adjustments normally involve only direct expenses,
while the constructed export price offset involves indirect expenses.

Direct expenses generally must be (1) variable and (2) traceable in a
company\'s financial records to sales of the merchandise under
investigation.

1\. [Variable vs. fixed expenses]{.underline}: Direct expenses are
typically variable expenses that are incurred as a direct and
unavoidable consequence of the sale (*i.e.*, in the absence of the sale
these expenses would not be incurred). Indirect expenses are fixed
expenses that are incurred whether or not a sale is made.

> The same expense may be classified as fixed or variable depending on
> how the expense is incurred. For example, if an exporter pays an
> unaffiliated contractor to perform a service, this fee would normally
> be considered variable and treated as a direct expense (provided that
> condition 2, below, is also satisfied). However, if the exporter
> provides the service through a salaried employee, the fixed salary
> expense will be treated as an indirect expense.

2\. [Tying of the expense to sales of the merchandise under
investigation]{.underline}: Selling expenses must be reasonably
dependent upon sales of the merchandise under investigation to qualify
as direct selling expenses. However, even if a [fixed]{.underline}
expense is allocable to the merchandise under investigation, the
Department normally will treat it as an indirect expense.

Common examples of direct selling expenses include credit expenses,
commissions, and the variable portions of guarantee, warranty, technical
assistance, and servicing expenses. Common examples of indirect selling
expenses include inventory carrying costs, salesmen\'s salaries, and
product liability insurance. The fixed portion of expenses, such as
salaries for employees who perform technical services or warranty
repairs, are indirect expenses.

The Department also treats assumptions of expenses as direct expenses,
provided they are attributable to a later sale of the merchandise. For
example, the Department treats expenses incurred for advertising aimed
at retailers as if they were direct selling expenses when the exporter
is selling to wholesalers.

**Discounts**

See **Price Adjustments**

**Dumping**

Dumping occurs when imported merchandise is sold in, or for export to,
the United States at less than the normal value of the merchandise,
*i.e.*, a price that is less than the price at which identical or
similar merchandise is sold in the foreign market, or less than the
constructed value of the merchandise. The dumping margin is the amount
by which the normal value exceeds the export price or constructed export
price of the subject merchandise. The weighted-average dumping margin is
the sum of the dumping margins divided by the sum of the export prices
and constructed export prices.

**Export Price and Constructed Export Price**

Export price and constructed export price refer to the two types of
calculated prices for merchandise imported into the United States. The
Department compares these prices to normal values to determine whether
goods are dumped. Both export price and constructed export price are
calculated from the price at which the subject merchandise is first sold
to a person not affiliated with the foreign producer or exporter.

Generally, a U.S. sale is classified as an export price sale when the
first sale to an unaffiliated person occurs *before* the goods are
imported into the United States. In cases where the foreign manufacturer
knows or has reason to believe that the merchandise is ultimately
destined for the United States, the manufacturer's sale is usually the
sale subject to investigation or review. If, on the other hand, the
manufacturer sold the merchandise to a trader without knowledge of the
trader's intention to export the merchandise to the United States, then
the trader's first sale to an unaffiliated person is the sale subject to
investigation or review.

Generally, a U.S. sale is classified as a constructed export price sale
when the first sale to an unaffiliated person occurs *after*
importation. Constructed export price also applies if the first sale to
the unaffiliated person is made by a person in the United States
affiliated with the foreign exporter before importation.

The Department makes adjustments to the price to the first unaffiliated
customer in calculating the export price or constructed export price.
For both export price and constructed export price the Department adds
packing charges, if not already included in the price, rebated import
duties, and, if applicable, certain countervailing duties. Also for
both, the Department deducts transportation costs and export taxes or
duties. No other adjustments are made in calculating export price.
However, in calculating the constructed export price, the Department
also deducts selling commissions and other expenses incurred for selling
activities in the United States performed in selling the subject
merchandise to unaffiliated U.S. customers, the cost of any further
manufacture or assembly performed in the United States, and profit.
These expenses and profits represent activities undertaken in the United
States to support the U.S. resale to an unaffiliated customer. Generally
these activities are undertaken by the affiliated U.S. reseller.
However, the Department will also deduct any selling expenses incurred
to support the U.S. resale that are paid by the producer or exporter on
behalf of its affiliated U.S. reseller. (Section 772 of the Act; section
351.402(b) of the regulations.)

**Facts Available**

The Department seeks to make its antidumping determinations on the basis
of responses to its antidumping questionnaires. However, for a variety
of reasons, the data needed to make such determinations may be
unavailable or unusable. In such instanc­es, the law requires the
Department to make its determinations on the basis of \"the facts
otherwise available\" (more commonly referred to as \"the facts
available\"). More specifically, the Department must use the facts
available if necessary information is not available on the record of an
antidumping proceeding. In addition, the Department must use the facts
available where an interested party or any other person: (1) withholds
information requested by the Department; (2) fails to provide requested
information by the requested date or in the form and manner requested;
(3) significantly impedes an antidumping proceeding; or (4) provides
information that cannot be verified.

In selecting the information to use as the facts available, the law
authorizes the Department to make an inference that is adverse to an
interested party if the Department finds that party failed to cooperate
by not acting to the best of its ability to comply with a request for
information.

Submitted information that does not meet all of the requirements may be
used if: (1) the information is submitted within applicable deadlines;
(2) the information can be verified; (3) the information is not so
incomplete that it cannot serve as a reliable basis for a deter­mination;
(4) the party establishes that it acted to the best of its ability; and
(5) the Department can use the information without undue difficulties.
Finally, if an interested party promptly informs the Department of
difficulties it is having in responding to a request for information,
the Department will consider modifying its request to the extent
necessary to avoid imposing an unreasonable burden on the party.
(Sections 776 and 782(c)-(e) of the Act; section 351.308 of the
regulations.)

**Foreign Like Product**

The term foreign like product refers to merchandise that is sold in the
foreign market and that is identical or similar to the subject
merchandise. When used in the questionnaire, foreign like product means
all merchandise that is sold in the foreign market and that fits within
the description of merchandise provided in Appendix III to the
questionnaire. (Section 771(16) of the Act. See also **Identical
Merchandise** and **Similar Merchandise.**)

**Foreign Market**

The foreign market is the home or third-country market from which the
Department selects the prices used to establish normal values. (See also
**Viability**.)

**Further Manufacturing Adjustment**

In calculating constructed export price, the Department normally deducts
from the price of the merchandise sold in the United States the cost of
any further manufacture or assembly performed in the United States by,
or for, the exporter or an affiliate. However, if the value of the
further processing is more than the value of the subject merchandise as
imported, the Department may instead use an alternative basis for the
constructed export price. The Department normally will determine that
the value added in the United States meets this requirement if the value
of the further processing in the United States by the affiliated person
is estimated to be at least 65 percent of the price charged to the first
unaffiliated purchaser for the merchandise as it is sold in the United
States. In such cases, if possible, the Department will use the price of
identical or similar subject merchandise sold to an unaffiliated
customer by the producer, exporter, or affiliated seller. If there is an
insufficient quantity of such sales or it is not appropriate to use such
sales, the Department may rely on any other reasonable basis. (Sections
772(d)(2) and 772(e) of the Act; sections 351.402 (b) and (c) of the
regulations.)

**Home Market**

The home market refers to the market for sales of the foreign like
product in the country in which the merchandise under investigation is
produced. Home market sales are the preferred basis for normal value.
(See also **Third-Country Market** and **Viability**.)

**Identical Merchandise**

The Department prefers to compare U.S. sales to foreign market sales of
identical merchandise. The identical merchandise is merchandise that is
produced by the same manufacturer in the same country as the subject
merchandise, and which the Department determines is identical or
virtually identical in all physical characteristics with the subject
merchandise, as imported into the United States. (See also **Similar
Merchandise** and **Foreign Like Product**.)

**Imputed Expenses**

Imputed expenses generally are opportunity costs (rather than actual
costs) that are not reflected in the financial records of the company
being investigated, but which must be estimated and reported for
purposes of an antidumping inquiry. Common examples of imputed expenses
include credit expenses and inventory carrying costs.

**Indirect Expenses**

See **Direct vs. Indirect Expenses**.

**Inventory Carrying Costs**

Inventory carrying costs are the interest expenses incurred (or interest
revenue foregone) between the time the merchandise leaves the production
line at the factory to the time the goods are shipped to the first
unaffiliated customer. The Department normally calculates these costs by
applying the firm\'s annual short-term borrowing rate in the currency of
the country where the inventory is being held, prorated by the number of
days between leaving the production line and shipment to the customer,
to the unit cost or price. (See also **Imputed Expenses**.)

**Level of Trade**

To the extent practicable, the Department calculates normal values based
on sales made in the foreign market at the same level of trade as the
constructed export price (CEP) or export price, or adjusts for the
differences in levels of trade. In a CEP situation, economic activities
occurring in the United States are not considered in determining the
level of trade. The level of trade of the U.S. sale is that associated
with the constructed export price.

In order to establish whether differences in levels of trade exist, the
Department reviews distribution systems, including categories of
customers, selling activities, and levels of selling expenses for each
type of sale. Different levels of trade are typically characterized by
purchasers at different stages in the chain of distribution and sellers
performing qualitatively and/or quantitatively different selling
activities. Different levels of trade necessarily involve differences in
selling activities, although differences in selling activities alone are
not sufficient to establish differences in levels of trade. Similarly,
customer categories such as distributor, wholesaler, retailer, and
end-user are often useful in identifying levels of trade, although they,
too, are insufficient in themselves to establish differences in levels
of trade. Rather, the Department evaluates differences in levels of
trade based on a seller's entire marketing process. (Section 773(a)(1)
and 773(a)(7)(A) of the Act; sections 351.412(a)-(c) of the Department's
regulations.)

**Level of Trade Adjustment**

When the Department bases normal value on sales in the foreign market at
a level of trade that is different from that of the EP or CEP, the
Department may adjust the normal value to account for differences in
levels of trade between the two markets.

The Department makes these adjustments only when there is a difference
in the levels of trade and that difference affects price comparability.
The Department determines whether there is an effect on price
comparability by determining whether there is a pattern of consistent
price differences between sales at the different levels of trade in the
foreign market. The Department normally calculates any adjustment for
level of trade based on the percentage difference between an average of
the prices at the different levels of trade in the foreign market, less
any expenses adjusted for elsewhere in the normal value calculation.
(Sections 773(a)(1) and (7) of the Act; sections 351.412(c), (d), and
(e) of the regulations.)

**Movement Expenses**

Movement expenses are expenses directly attributable to bringing the
merchandise from the original place of shipment to the place of delivery
to the United States or in the foreign market. These expenses may
include freight and freight insurance charges, brokerage and handling
fees, export taxes, and warehousing expenses incurred after the
merchandise leaves the original place of shipment.

Normally, the production facility is considered to be the original place
of shipment. However, where export price, constructed export price, or
normal value is based on a sale made by a reseller unaffiliated with the
producer, the Department may treat the place from which the reseller
shipped the merchandise as the original place of shipment. (Sections
772(c)(2)(A) and 773(a)(6)(B)(ii) of the Act; section 351.401(e) of the
regulations.)

**Normal Value**

Normal value is the adjusted price of the foreign like product in the
home or third-country (foreign) market, or the constructed value of the
subject merchandise. The Department compares the normal value to the
export price or constructed export price to determine the margin of
dumping, if any.

The Department initially seeks to calculate normal values based on
price. If there are adequate sales in the home market (see
**Viability**), the Department calculates normal value based on the
price at which the foreign like product is first sold (generally, to
unaffiliated parties) in that market; otherwise, if there are adequate
sales in a third-country market, the Department calculates normal value
based on the price at which the foreign like product is first sold
(generally, to unaffiliated parties) in the third-country market. If
there are no appropriate home or third-country market sales, the
Department determines normal value by calculating the constructed value.

To ensure a fair comparison between normal value and export price or
constructed export price, the Department makes adjustments to the price
used to calculate the normal value. The Department adds U.S. packing
charges and deducts any of the following expenses included in the
foreign market price: packing charges, transportation costs, and any
internal tax[^2] that was rebated or not collected on the subject
merchandise. The Department may make additional adjustments to account
for differences in the conditions under which sales are made in the
United States and the foreign market. Thus, the Department may increase
or decrease the normal value to account for differences in quantities,
physical characteristics of the merchandise, levels of trade, and other
circumstances of sale. (Section 773(a) and 773(c) of the Act.)

**Ordinary Course of Trade**

In calculating normal value, the Department considers only those sales
in the foreign market that are in the ordinary course of trade.
Generally, sales are in the ordinary course of trade if made under
conditions and practices that, for a reasonable period of time prior to
the date of sale of the subject merchandise, have been normal for sales
of the foreign like product. (Section 771(15) of the Act; section
351.102(b) of the regulations. See also **Arms-length Transactions**.)

**Price Adjustments**

A price adjustment is any change in the price charged for subject
merchandise or the foreign like product that is reflected in the
purchaser's net outlay. Discounts and rebates are examples of price
adjustments.

A discount is a reduction to the gross price that a buyer is charged for
goods. Although the discount need not be stated on the invoice, the
buyer remits to the seller only the face amount of the invoice, less
discounts. Common types of discounts include early payment discounts,
quantity discounts, and loyalty discounts.

Similar to discounts, rebates are reductions in the gross price that a
buyer is charged for goods. Unlike discounts, rebates do not result in a
reduction in the remittance from the buyer to the seller for the
particular merchandise with which the rebate is associated. Rather, a
rebate is a refund of monies paid, a credit against monies due on future
purchases, or the conveyance of some other item of value by the seller
to the buyer after the buyer has paid for the merchandise. When the
seller establishes the terms and conditions under which the rebate will
be granted at or before the time of sale, the Department reduces the
gross selling price by the amount of the rebate. (Section 351.102(b) of
the regulations. See also **Direct vs. Indirect Expenses**.)

**Proprietary Information**

Proprietary information is sensitive business data that would cause
substantial harm to the submitting party if disclosed publicly. Examples
of information that the Department normally treats as proprietary, if
requested and not already in the public domain, include trade secrets
concerning the production process, production and distribution costs,
terms of sale, individual prices, and the names of customers and
suppliers.

**Proprietary Treatment**

If a party requests proprietary treatment of information, and if the
Department agrees that the information is proprietary, the Department
will protect the information from public disclosure. If the Department
does not agree that the information is proprietary, it will return the
information and not rely on it in the proceeding, unless the submitting
party agrees that it may be made public. When requested, the Department
will disclose proprietary information only to United States
International Trade Commission and United States Customs Service
officials and, under limited administrative protective orders,
representatives of interested parties. (Section 777(b) of the Act. See
also **Administrative Protective Order**.)

**Rebates**

See **Price Adjustments**

**Regulations**

See **Antidumping Law and Regulations**

**Similar Merchandise**

In deciding which sales of the foreign like product to compare to sales
of the subject merchandise, the Department first seeks to compare sales
of identical merchandise. If there are no sales of the identical foreign
like product, the Department will compare sales of the foreign like
product similar to the subject merchandise. The similar foreign like
product is merchandise that is produced by the same manufacturer in the
same country as the subject merchandise, and which, in order of
preference, is either (1) similar to the subject merchandise in
component materials, use, and value, or (2) similar in use to, and
reasonably comparable to, the subject merchandise. (Section 771 (16) of
the Act. See also **Identical Merchandise**, **Foreign Like Product**,
and Appendix V.)

**Subject Merchandise**

Subject merchandise is the merchandise under investigation or review,
*i.e.*, the merchandise described in Appendix III to the questionnaire,
and sold in, or to, the United States. (Section 771(25) of the Act.)

**Technical Service Expenses**

Technical service expenses are typically incurred when a producer
provides technical advice to customers which are industrial users of the
product. Generally, the Department considers travel expenses and
contract services performed by unaffiliated technicians to be direct
expenses. The Department treats salaries paid to the seller\'s employees
who provide technical services as indirect expenses.

**Third-Country Market**

When the Department cannot use home market sales as the basis for normal
value, the preferred alternative method is the use of sales to a
third-country market, *i.e.*, export sales of the foreign like product
to a country other than the United States. Generally, in selecting a
third-country market to be used as the foreign market, the Department
will choose one of the three third-country markets with the largest
aggregate quantity of sales of the foreign like product. In selecting
which country, the Department will consider product similarity, the
similarity of the third-country and U.S. markets, and whether the sales
to the third country are representative. (Section 773(a)(1) of the Act;
section 351.404 of the regulations. See also **Home Market** and
**Viability**.)

**Verification**

To establish the adequacy and accuracy of information submitted in
response to questionnaires and other requests for information, the
Department examines the records of the party that provided the
information and interviews company personnel who prepared the
questionnaire response and are familiar with the sources of the data in
the response. This process is called verification. The Department must
verify information relied upon in making a final determination in an
investigation, or in an administrative review when revocation of an
antidumping order is properly requested. The Department also must verify
information submitted in an administrative review if an interested party
so requests and no verification of the producer or exporter had been
conducted during the two immediately proceeding reviews of that producer
or exporter, or if good cause for verification is shown. (Section 782(i)
of the Act; section 351.307 of the regulations.)

**Viability**

To calculate normal value based on sales in the home market, the
Department must determine that the volume of sales is adequate in that
market and that a particular market situation does not make their use
inappropriate. To calculate normal value based on sales in a
third-country market, the Department must make the same determinations
with respect to sales to the third country, and in addition the sales
must be representative. These determinations establish whether a market
is viable.

The Department normally finds sales to be adequate if the quantity of
the foreign like product sold is 5 percent or more of the quantity sold
to the United States. In unusual situations, the Department may find
that sales below the 5-percent threshold are adequate, or that sales
above the threshold are not. Also in unusual situations, the Department
may apply the 5-percent test on the basis of value, rather than
quantity. The terms particular market situation and representative are
undefined in the statute or the regulations. A particular market
situation might exist, for example, where there was a single sale in the
foreign market that constituted 5 percent or more of the quantity sold
to the United States, or where government control of pricing is such
that prices cannot be competitively set. (Section 773(a)(1) of the Act;
section 351.404(b)(2) of the Department's regulations.)

**Warehousing Expenses**

See **Movement Expenses**

Last Revised March 20, 2003

**APPENDIX II**

**INSTRUCTIONS FOR SUBMITTING**

**COMPUTER DATA**

+-----------------------------------------------------------------------+
| All electronic business proprietary information that is submitted     |
| during a proceeding must be releasable in its entirety under the      |
| terms of an **administrative protective order**. (During an           |
| investigation, the Department may not release customer names or any   |
| information that would lead to their identity. If your standard       |
| customer code plainly identifies the customer, immediately contact    |
| the official in charge to obtain authorization for the use of a       |
| substitute code.)                                                     |
|                                                                       |
| If you are not able to prepare computer files or if you have any      |
| questions concerning the submission of electronic media, contact the  |
| official in charge.                                                   |
+-----------------------------------------------------------------------+

This appendix covers the following topics: computer file contents, file
formats, computer media specifications, and filing instructions.

A. [DESCRIPTION OF COMPUTER FILE CONTENTS]{.underline}

Each file submitted should be assigned a unique eight character name. We
suggest that the first four positions be used to identify the
respondent\'s name, the next two positions the type of file (*e.g.*, HM
= home market sales; US = United States sales; CP = cost), and the last
two positions a sequential file number.

For example, the first file of export sales to the United States would
be named \"FIRMUS01\". If that data file is amended and resubmitted
during the course of the proceeding, the second submission would be
named \"FIRMUS02\", and the third submission \"FIRMUS03\".

Within each file, all information pertaining to a specific sales
transaction or to the cost of production for a unique product should be
included in one record (row). Each record should contain the fields
(variables) defined in the suggested file formats included in section B
(Foreign Market Sales), section C (United States Sales), section D (Cost
of Production and Constructed Value) and section E (U.S. Further
Manufacturing) of the questionnaire.

In preparing the files, left justify character fields (columns) and
right justify numeric fields. If some of the fields in the suggested
file formats are not needed, exclude them from the file. Explain in the
narrative portion of your response why the information in those fields
is not applicable. If a particular field is not relevant for certain
records in the file, enter for those records a zero in the field. Do not
leave any fields blank. Fields left blank register as errors. Make sure
that all reported fields contain values.

Because the suggested file formats can be modified to add or delete
fields, we have not specified record length or field position in the
file formats. The Department, however, does require that each file have
a fixed record length and a uniform structure. Every record within a
file must be of the same length and must be formatted exactly like every
other record in the file. This requires that each field within a record
have a fixed width and that the fields be consistent from record to
record.

All values within each field must have the same format, either all
values as numeric or all values as character. In other words, do not mix
character and numeric formats within the same field. Fields with mixed
formats will cause errors. This is important for all data files,
especially for data submitted in spreadsheet format.

When preparing the completed files for submission, sort each file first
by product control number (\"CONNUM\"), and then, for sales files only,
by date of sale (\"SALEDT\"). Packed decimals should be avoided. If you
anticipate the need of packed decimals, approval should be obtained from
the official in charge.

The Department uses PC SAS software for calculation purposes. Other
suitable formats are Access, dBase, and Excel. If you have questions
about the software used for submission, contact the official in charge
of the case.

For spreadsheet files, use the first row to enter the field names as
defined in the questionnaire. Field names should be a maximum length of
eight characters. Each subsequent row should contain data values. Each
row of data values should represent only one transaction (sale, cost
record, etc.). There should be no hidden rows or columns in the file. Do
not protect columns or rows.

For spreadsheet files, report date variables as date values if possible
(*ex.* January 1, 2002 in Excel). Format the date value with a date
format (*ex.* 12/31/2000).

B. [DOCUMENTATION OF FILE FORMATS]{.underline}

Provide a record layout for each submitted file which identifies the
file name and structure and shows the name, position, and
characteristics of all fields in the file.

In addition to the record layout, prepare a chart for each file with the
following information:

> 1\. variable name of each field
>
> 2\. short description of the variable
>
> 3\. unit of measurement (where applicable)
>
> 4\. unit of currency (for monetary variables)

We suggest that you integrate this information with the record layout.
The record layout and chart should be included as attachments to your
narrative response to the questionnaire.

C. [COMPUTER MEDIA SPECIFICATIONS AND DOCUMENTATION]{.underline}

You may submit your files on any of the computer media listed below.
Please use the electronic media specifications and format instructions
described.

Please note that Diskettes, Zip disks, and CDs, are acceptable media.
Select a media that will hold all files pertaining to a company. If an
individual file is too large to fit on one media, split the file into
enough pieces that each piece will fit on a separate media. If a file is
split across multiple media, please explain how the data is split.

Compressed datasets are acceptable but must conform to these
instructions. Decompression instructions and software must accompany any
compressed data submission.

Since the media must be readable by an IBM-compatible PC, the data must
be encoded in ASCII format or, at your option, PC SAS, Access, dBase, or
Excel formats. Specify on the media label the format used.

1\. [Diskette]{.underline}: Standard double-sided, high density

2\. [Zip Disk]{.underline}: U250MB Zip disks

3.  [CD ROM]{.underline}: Unformatted CD-R or CD-RW

Clearly label the media with the following information:

> a\. Case name, case number, and submission date
>
> b\. Name of respondent
>
> c\. Proceeding and Time Period (for example,

REV-POR \[1/2001-12/2001\] or AR#2-POR \[3/2001-2/2002\])

> d\. Name of official in charge
>
> e\. File formats and software used to create files
>
> f\. File names, number of observations, and record lengths

D. [FILING INSTRUCTIONS]{.underline}

Separately pack the labeled electronic media, record layouts, file
information charts, and printouts (see General Instructions, part II,
instruction 11). Place a label on the package containing your name,
address, and telephone number plus the case name, case number, and name
of the official in charge. Deliver the package with your narrative
response to the address listed on the cover page of this questionnaire.

Last Revised March 20, 2003

**APPENDIX III**

**DESCRIPTION OF PRODUCTS UNDER INVESTIGATION**

The merchandise under investigation is \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.
The merchandise under investigation is currently classifiable under item
\_\_\_\_\_\_\_\_\_\_\_\_\_ of the [Harmonized Tariff Schedule of the
United States]{.underline} (HTSUS). Although the HTSUS subheading is
provided for convenience and customs purposes, the written description
of the merchandise under investigation is dispositive.

Last Revised March 20, 2003

**APPENDIX IV**

**CERTIFICATE OF SERVICE**

I, \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, hereby certify that a
copy of the

(name of certifying official)

foregoing submission on behalf of
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,

(company name)

dated \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, was served by first class mail
or by hand delivery (circle the method

used) on the following parties:

(Business Proprietary Version)

[On Behalf of]{.underline}

Name and address

(Public Version)

[On Behalf of]{.underline}

Name and address

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(signature of certifying official)

**APPENDIX IV (cont.)**

**COMPANY OFFICIAL CERTIFICATION**

I,
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
currently employed

(name and title)

by
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
certify that (1) I have

(Interested Party)

read the attached submission, and (2) the information contained in

this submission is, to the best of my knowledge, complete and

accurate.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(signature of certifying official)

Last Revised March 20, 2003

**APPENDIX V**

**CASE-SPECIFIC QUESTIONS AND MODIFICATIONS,**

**INCLUDING MATCHING CRITERIA**

[^1]: More advanced refers to a more advanced stage of marketing, which
    generally means that the home market level of trade is more remote
    from the factory door than the constructed export price level of
    trade. A more advanced, or remote, level of trade is typically
    characterized by more selling activities and greater selling
    expenses.

[^2]: Any internal tax other than an export tax or duty, or other charge
    described in section 771(6)(C) of the Act.