Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices 43701

Site 4—Cedar Park site (122 acres), some

eight miles northwest of the Austin city

limits, in Williamson County;

Site 5—Round Rock ‘‘SSC’’ site (246 acres),

consisting of two parcels located along I–35

between Chandler Road and Westinghouse

Road on the northern edge of the City of

Round Rock;

Site 6—Georgetown site (246 acres),

located along I–35 and U.S. 81, south of

downtown Georgetown;

Site 7—San Marcos site (40 acres), located

within the San Marcos Municipal Airport

facility in eastern San Marcos, adjacent to

State Highway 21, on the Hays County/

Caldwell County line.

(An expansion request (Doc. 30–97) is

currently pending with the FTZ Board to

expand Site 3 to include 368 acres (5

contiguous tracts) located within the City of

Round Rock, adjacent to Site 3’s eastern

boundary)

The applicant is now requesting

authority to expand FTZ 183 to include

the MET Center industrial park (200

acres) located between U.S. Highway

183 South and State Highway 71 East in

southeast Austin, some 5 miles

northwest of the new Austin Bergstrom

International Airport. No specific

manufacturing requests are being made

at this time. Such requests would be

made to the Board on a case-by case

basis.

In accordance with the Board’s

regulations, a member of the FTZ Staff

has been designated examiner to

investigate the application and report to

the Board.

Public comment on the application is

invited from interested parties.

Submissions (original and 3 copies)

shall be addressed to the Board’s

Executive Secretary at the address

below. The closing period for their

receipt is October 14, 1997. Rebuttal

comments in response to material

submitted during the foregoing period

may be submitted during the subsequent

15-day period (to October 29, 1997).

A copy of the application and

accompanying exhibits will be available

for public inspection at each of the

following locations:

U.S. Department of Commerce, Export

Assistance Center, 1700 Congress, 2nd

Floor, Austin, Texas 78701

Office of the Executive Secretary,

Foreign-Trade Zones Board, U.S.

Department of Commerce, Room

3716, 14th and Pennsylvania Avenue,

NW., Washington, DC 20230

Dated: August 8, 1997.

John J. DaPonte, Jr.,

Executive Secretary.

[FR Doc. 97–21714 Filed 8–14–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–427–098]

Anhydrous Sodium Metasilicate From

France; Notice of Termination of

Antidumping Duty Administrative

Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of termination of

antidumping duty administrative

review.

SUMMARY: On March 3, 1997, the

Department of Commerce (‘‘the

Department’’) published in the Federal

Register (62 FR 1874) a notice

announcing the initiation of an

administrative review of the

antidumping duty order on anhydrous

sodium metasilicate (ASM) from France.

The initiation was in response to a

request for review by the petitioner, the

PQ Corporation. This review covers

Rhone-Poulenc, a manufacturer/

exporter of ASM, and the period of

review (POR) from January 1, 1996

through December 31, 1996. However,

we are terminating this review as a

result of the absence of entries into the

United States of subject merchandise

manufactured/exported by RhonePoulenc.

EFFECTIVE DATE: August 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Mark Ross or Richard Rimlinger, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington, D.C. 20230;

telephone (202) 482–4733.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (the Tariff Act), are references

to the provisions effective January 1,

1995, the effective date of the

amendments made to the Tariff Act by

the Uruguay Round Agreements Act.

Background

The Department published in the

Federal Register on January 14, 1997

(62 FR 1874) a ‘‘Notice of Opportunity

to Request Administrative Review’’ of

the antidumping duty order on ASM

from France (46 FR 1667, January 7,

1981). On January 28, 1997, the

petitioner requested an administrative

review of Rhone-Poulenc, a

manufacturer/exporter of ASM. The

Department initiated the review on

March 3, 1997 (62 FR 9413). On April

2, 1997, Rhone-Poulenc filed a letter

explaining that it did not export any

subject merchandise to the United

States during the POR. On April 10,

1997, the Department sent a noshipment inquiry regarding RhonePoulenc to the U.S. Customs Service.

The purpose of this inquiry was to

determine whether the U.S. Customs

Service suspended liquidation of entry

summaries of this merchandise during

the period. Because the U.S. Customs

Service did not identify any suspended

entry summaries of ASM manufactured/

exported by Rhone-Poulenc during the

POR, we have determined that no

entries into the customs territory of the

United States occurred during the POR.

Therefore, we are terminating this

review. The cash deposit rate for RhonePoulenc will remain at 60 percent, the

rate established in the most recently

completed segment of this proceeding

(61 FR 44038, August 27, 1996).

This administrative review and notice

are in accordance with section 751(a)(1)

of the Tariff Act (19 U.S.C. 1675(a)(1))

and 19 CFR 353.22 (1997).

Dated: August 7, 1997.

Richard W. Moreland,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–21713 Filed 8–14–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–433–807]

Notice of Final Determination of Sales

at Less Than Fair Value: Open-End

Spun Rayon Singles Yarn From Austria

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: August 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Russell Morris or Robert Copyak, Office

of CVD/AD Enforcement VI, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, Room 4012, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone

(202) 482–2786.

The Applicable Statute

Unless otherwise indicated, all

citations to the statute are references to

the provisions of the Tariff Act of 1930,

as amended by the Uruguay Round

Agreements Act effective January 1,

1995 (the ‘‘Act’’). In addition, unless

otherwise indicated, all citations to the
43702 Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices

Department’s regulations are to 19 CFR

Part 353 (1997).

Final Determination

We determine that open-end spun

rayon singles yarn from Austria is being,

or is likely to be, sold in the United

States at less than fair value (‘‘LTFV’’),

as provided in section 735 of the Act.

Case History

Since the preliminary determination

in this investigation (Notice of

Preliminary Determination of Sales at

Less Than Fair Value and Postponement

of Final Determination: Open-End Spun

Rayon Singles Yarn from Austria, (62 FR

14399 (March 26, 1997)), the following

events have occurred:

In May, we verified the questionnaire

responses of respondents, Linz Textil

GmbH (Linz) and G. Borckenstein und

Sohn A.G. (Borckenstein). Petitioner,

The Ad-Hoc Committee of Open-End

Rayon Yarn Producers, and respondents

submitted case briefs on June 30, 1997,

and rebuttal briefs on July 7, 1997.

Scope of Investigation

The investigation covers all items of

open-end spun singles yarn containing

85% or more rayon staple fiber. The

merchandise is classifiable under

subheading 5510.11.0000 of the

Harmonized Tariff Schedule of the

United States (HTSUS). Although the

HTSUS subheading is provided for

convenience and for Customs purposes,

our written description of the scope of

this investigation is dispositive.

Period of Investigation

The period of investigation (POI) is

July 1, 1995 through June 30, 1996.

Fair Value Comparisons

To determine whether sales to the

United States of the subject

merchandise by respondents were made

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. As set forth in section

773(a)(1)(B)(i) of the Act, we calculated

NV based on sales at the same level of

trade as the U.S. sale. In accordance

with section 777A(d)(1)(A)(i), we

compared the weighted average EPs to

weighted-average NVs during the POI.

In determining averaging groups for

comparison purposes, we considered

the appropriateness of such factors as

physical characteristics.

1. Physical Characteristics

In accordance with section 771(16) of

the Act, we considered all products

covered by the description in the

‘‘Scope of Investigation’’ section, above,

produced in Austria by the respondents

and sold in the home market during the

POI, to be foreign like product for

purposes of determining appropriate

product comparisons to U.S. sales.

Where there were no sales of identical

merchandise in the home market to

compare to U.S. sales, we compared

U.S. sales to the most similar foreign

like product on the basis of the

characteristics listed in the

Department’s antidumping

questionnaire. In making the product

comparisons, we relied on the following

criteria (listed in order of preference):

weight, percentage of rayon fiber, color,

denier, finish, and luster. All

comparisons were based on the same

grade of yarn.

2. Level of Trade

In the preliminary determination, the

Department determined that no

difference in level of trade existed

between home market and U.S. sales for

either Borckenstein or Linz (Notice of

Preliminary Determination of Sales at

Less Than Fair Value and Postponement

of Final Determination: Open-End Spun

Rayon Singles Yarn from Austria, (62 FR

14399 (March 26, 1997)). Our findings at

verification confirmed that Borckenstein

and Linz performed essentially the same

selling activities for all reported home

market and U.S. sales. Accordingly, we

determine that all price comparisons are

at the same level of trade and an

adjustment pursuant to section

773(a)(7)(A) is unwarranted.

Export Price

We calculated EP, in accordance with

subsections 772 (a) and (c) of the Act,

for each of the respondents, where the

subject merchandise was sold directly to

the first unaffiliated purchaser in the

United States prior to importation and

use of constructed export price (CEP)

was not otherwise warranted based on

the facts of record.

We made company-specific

adjustments as follows:

1. Linz

We calculated EP based on packed,

delivered/duty paid and f.o.b. prices to

unaffiliated customers in the United

States. Where appropriate, we made

deductions from the starting price (gross

unit price) for the following charges:

Austrian inland freight (which included

brokerage), insurance (which included

inland and marine insurance), ocean

freight, U.S. duty, clearing charges,

bond expenses, U.S. freight and postsale warehousing, in accordance with

section 772(c)(2).

Linz reported that it did not borrow

in U.S. dollars during the POI. In

accordance with the Department’s

policy (see, e.g., Notice of Final Results

of Antidumping Duty Administrative

Review: Certain Cut-to-Length Carbon

Steel Plate from Sweden, (61 FR 15780,

April 9, 1996)), we recalculated the U.S.

imputed credit expense using the

average short-term lending rates

published by the Federal Reserve as

surrogate U.S. interest rates, for

purposes of making the circumstance of

sale adjustment for this expense. In

addition, in the preliminary

determination, we treated post-sale

warehousing as a circumstance of sale

adjustment. For the final determination,

we have deducted post-sale

warehousing from the export price

because it is a movement expense (see,

e.g., Certain Stainless Steel Wire Rods

from France: Final Results of

Antidumping Duty Administrative

Review, (62 FR 7206, February 18,

1997)).

Based on our verification findings, we

deducted an additional small movement

expense, called the ‘‘vorlage,’’ which

Linz had omitted in reporting

movement charges to the United States

(see Comment 2).

2. Borckenstein

For Borckenstein, we calculated EP

based on packed, CIF, U.S. port prices

to an unaffiliated customer in the

United States. Where appropriate, we

made deductions from the starting price

(gross unit price) for international

freight (which included freight from the

plant to port of export and ocean freight)

and marine insurance, in accordance

with section 772(c)(2)(A).

We have considered petitioner’s

request to use CEP. Based on our

analysis and verification findings,

however, we do not find that sufficient

evidence exists to indicate that the sole

U.S. importer and Borckenstein are

affiliated parties. Pursuant to section

771(33) of the Act, we reviewed

Borckenstein’s relationship with the

U.S. importer during verification and

determined that petitioner’s claim is

unwarranted (see Comment 10).

We made the following correction,

based on our verification findings. In

our preliminary determination, we

treated the U.S. commissions paid by

Borckenstein to its U.S. selling agent as

rebates. Upon a thorough review of

documentation during verification, and

our analysis of arguments from

interested parties, we have determined

that the fee paid by Borckenstein to its

selling agent on U.S. sales is a

commission (see Comment 14).
Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices 43703

Normal Value

Cost of Production Analysis

As discussed in the preliminary

determination, the Department found

reasonable grounds to believe or suspect

that Linz’s and Borckenstein’s sales in

the home market were made at prices

below the cost of producing the

merchandise. As a result, the

Department initiated an investigation to

determine whether Linz and

Borckenstein had made home market

sales during the POI at prices below

their respective cost of production

(‘‘COP’’) within the meaning of section

773(b) of the Act. Although the

Department was unable to include a

COP analysis of Borckenstein’s home

market sales in the preliminary

determination, the final determination

does include a COP analysis of

Borckenstein’s home market sales.

Before making any fair value

comparisons, we conducted the COP

analysis described below for each

company:

1. Linz

A. Calculation of COP

We calculated the COP based on the

sum of Linz’s cost of materials and

fabrication for the foreign like product,

plus amounts for home market selling,

general and administrative expenses

(‘‘SG&A’’) and packing costs in

accordance with section 773(b)(3) of the

Act.

In calculating Linz’s SG&A, we

adjusted the submitted net interest

expense amount to include only shortterm interest income as an offset (see

Comment 8).

B. Test of Home Market Prices

We compared the respondent’s

submitted POI weighted-average COP

figures, as adjusted, to home market

sales of the foreign like product as

required under section 773(b) of the Act,

in order to determine whether these

sales had been made at below-cost

prices within an extended period of

time in substantial quantities, and

whether the below-cost prices would

permit recovery of all costs within a

reasonable period of time. On a productspecific basis, we compared the COP to

the home market prices, less any

applicable movement charges and direct

selling expenses. As in our preliminary

determination, we did not deduct

indirect selling expenses from the home

market price because these expenses

were included in the SG&A rate for

COP.

C. Results of 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 are

at prices less than COP, we do 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 are at

prices less than the COP, we determine

such sales to have been made in

‘‘substantial quantities’’ within an

extended period of time in accordance

with section 773(b)(2)(B) of the Act, and

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. In such

cases, we disregard the below-cost sales.

Under the Department’s practice, when

all sales of a specific product are at

prices below the COP, we disregard all

sales of that product, and calculate NV

based on constructed value (‘‘CV’’).

Based on our COP test, we found that

less than 20 percent (by quantity) of

Linz’s sales of a given product were at

less than COP. Thus, we did not

disregard any below-cost sales. For

matching purposes, export prices were

compared to home market prices for all

comparisons, and CV was not required.

D. Price to Price Comparison

We calculated NV based on packed,

delivered prices to unaffiliated

customers and prices to affiliated

customers where the sales were made at

arm’s length. Where appropriate, we

made deductions from the starting price

(gross unit price) for foreign inland

freight and inland insurance, in

accordance with section 773(a)(6)(B). In

addition, where appropriate, we

adjusted for differences in

circumstances of sale for credit

expenses and commissions (including

appropriate offsets), in accordance with

section 773(a)(6)(C)(iii). We also

deducted home market packing costs

and added U.S. packing costs, in

accordance with section 773(a)(6) (A)

and (B) of the Act. We made

adjustments, where appropriate, for

physical differences in the merchandise

in accordance with section

773(a)(6)(C)(ii) of the Act. In no case did

the difference in merchandise

adjustment for the comparison product

exceed 20 percent of the U.S. product’s

cost of manufacturing.

For purposes of the difference in

merchandise adjustment, Linz reported

a different cost of manufacturing for

identical yarns due to the fact that

different machines produce the yarn.

Since the difference in merchandise

adjustment is intended to account for

physical differences in similar

merchandise being compared and not

differences in the production process,

we have calculated a single weightedaverage cost of manufacturing for

identical yarns.

Linz also reported an amount upon

which to base an adjustment for

differences in quantities sold in the

United States and Austrian markets.

However, Linz was unable to

demonstrate, based on information on

the record, that pricing differences were

related to quantity. Accordingly, we

have not made the requested adjustment

(see Comment 6).

Linz was instructed to provide sales

made to affiliated weaving mills in

Austria (see Comment 5). We tested

these sales to ensure that the affiliated

party sales were at arm’s-length. To

conduct this test, we compared the

starting prices of sales to affiliated and

unaffiliated customers net of all

movement charges, direct selling

expenses, and packing. We utilized the

99.5 percent benchmark ratio used in

the 1993 carbon steel investigations.

See, e.g., Final Determination of Sales at

Less Than Fair Value: Certain ColdRolled Carbon Steel Flat Products from

Argentina (58 FR 37062, 37077 (July 9,

1993)). Where no affiliated customer

price ratio could be constructed because

identical merchandise was not sold to

unaffiliated customers, we were unable

to determine that these sales were made

at arm’s-length and, therefore, we

excluded them from our LTFV analysis.

We made the following corrections,

based on our verification findings. For

the preliminary determination, Linz did

not report home market indirect selling

expenses; therefore, we were unable to

offset commissions paid in the United

States with home market indirect selling

expenses. Subsequent to the preliminary

determination, Linz submitted its

indirect selling expenses. However, we

were unable to verify the full amount of

Linz’s claimed home market indirect

selling expenses, and have recalculated

the allowable portion of indirect selling

expenses to be used as an offset to the

U.S. commission (see Comment 3).

During verification, we discovered the

interest rate used to calculate home

market credit expenses was based on

long-term lending. However, we did

find that the company maintained two

lines of credit for export sales during the

POI. Although these lines of credit are

based on a percentage of the company’s

annual export turnover, the company

can borrow against these lines of credit

to finance more than just exports. The

credit lines are available for financing
43704 Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices

current assets and liabilities and the

interest rates charged are set on a

quarterly basis. Therefore, we have

recalculated Linz’s home market credit

expenses based upon the average

interest rate charged on these lines of

credit in order to reflect the company’s

actual short-term borrowing experience.

2. Borckenstein

A. Calculation of COP

We calculated the COP based on the

sum of Borckenstein’s cost of materials

and fabrication for the foreign like

product, plus amounts for home market

selling, general and administrative

expenses (SG&A) and packing costs in

accordance with section 773(b)(3) of the

Act.

We adjusted Borckenstein’s

depreciation expense to include

depreciation expense for all categories

of fixed assets used in the production of

the subject merchandise and for assets

used to perform the administrative

functions of the company (see Comment

15).

B. Test of Home Market Prices

We compared the respondent’s

submitted POI weighted-average COP

figures, as adjusted, to home market

sales of the foreign like product as

required under section 773(b) of the Act

in order to determine whether these

sales had been made at below-cost

prices within an extended period of

time in substantial quantities, and were

not at prices which permit recovery of

all costs within a reasonable period of

time. On a model-specific basis, we

compared the COP to the home market

prices, less any applicable movement

charges and direct selling expenses. We

deducted indirect selling expenses from

the home market price because these

expenses were not included in the G&A

rate for COP.

C. Results of 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 are

at prices less than COP, we do 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 are at

prices less than the COP, we determine

such sales to have been made in

‘‘substantial quantities’’ within an

extended period of time in accordance

with section 773(b)(2)(B) of the Act, and

that such sales are 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. In such cases, we disregard

the below-cost sales. Under the

Department’s practice, when all sales of

a specific product are at prices below

the COP, we disregard all sales of that

product, and calculate NV based on CV.

Based on our COP test, we found that

less than 20 percent (by quantity) of

Borckenstein’s sales of a given product

were at less than COP. Thus, we did not

disregard any below-cost sales. For

matching purposes, export prices were

compared to home market prices for all

comparisons, and CV was not required.

D. Price to Price Comparisons

We calculated NV based on packed,

delivered prices to unaffiliated

customers. Where appropriate, we made

deductions from the starting price (gross

unit price) for foreign inland freight and

inland insurance, in accordance with

section 773(a)(6)(B). In addition, where

appropriate, we adjusted for differences

in circumstances of sale for credit

expenses, export credit insurance, and

commissions (including appropriate

offsets), in accordance with section

773(a)(6)(C)(iii). We also deducted home

market packing costs and added U.S.

packing costs, in accordance with

section 773(a)(6) (A) and (B) of the Act.

We made adjustments, where

appropriate, for physical differences in

the merchandise in accordance with

section 773(a)(6)(C)(ii) of the Act. In no

case did the difference in merchandise

adjustment for the comparison product

exceed 20 percent of the U.S. product’s

cost of manufacturing.

Borckenstein also reported an amount

upon which to base an adjustment for

differences in quantities sold in the U.S.

and Austrian markets, pursuant to 19

CFR 353.55(b). Although Borckenstein

claimed that it incurred differing

manufacturing costs based on quantities

produced, it was unable to demonstrate,

based on information on the record, that

pricing differences were related to

quantity. Our review of the submitted

prices indicated that prices did not vary

based upon the quantity sold.

Accordingly, we have not made the

requested adjustment (see Comment 11).

We made the following modification

to the calculations for the final

determination. In our preliminary

determination, we treated the U.S.

commissions paid by Borckenstein to its

U.S. selling agent as rebates. As a result,

there was no offset for indirect selling

expenses in the home market. Upon a

thorough review of documentation

during verification, we have determined

that the fee paid by Borckenstein to its

selling agent on U.S. sales is a

commission. Therefore, we have offset

the U.S. commission with

Borckenstein’s home market indirect

selling expenses (see Comment 14).

Currency Conversion

We made currency conversions into

U.S. dollars based on the official

exchange rates in effect on the dates of

the U.S. sales as certified by the Federal

Reserve Bank.

Section 773A(a) of the Act directs the

Department to convert foreign

currencies based on the dollar exchange

rate in effect on the date of sale of the

subject merchandise, except if it is

established that a currency transaction

on forward markets is directly linked to

an export sale. When a company

demonstrates that a sale on forward

markets is directly linked to a particular

export sale in order to minimize its

exposure to exchange rate losses, the

Department will use the rate of

exchange in the forward currency sale

agreement.

Section 773A(a) also 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. 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.

Further, section 773A(b) directs the

Department to allow a 60-day

adjustment period when a currency has

undergone a sustained movement. A

sustained movement has occurred when

the weekly average of actual daily rates

exceeds the weekly average of

benchmark rates by more than five

percent for eight consecutive weeks, see

Change in Policy Regarding Currency

Conversions 61 FR 9434 (March 8,

1996). Such an adjustment period is

required only when a foreign currency

is appreciating against the U.S. dollar.

The use of an adjustment period was not

warranted in this case because the

Austrian Schilling did not undergo a

sustained movement.

Verification

As provided in section 782(i) of the

Act, we verified the information

submitted by the respondents for use in

our final determination. We used

standard verification procedures,

including examination of relevant

accounting and production records and

original source documents provided by

respondents.
Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices 43705

Interested Party Comments

Linz

Comment 1: Comparison of Sales of

Second-Quality Merchandise

Petitioner asserts that the comparison

of sales of second-quality merchandise

in the home market to first quality

export sales to the U.S. is inconsistent

with the Department’s standard

practice. Accordingly, petitioner claims

that the Department should revise its

preliminary results to ensure that first

quality and second quality merchandise

are treated as distinct products in the

Department’s margin program for

purposes of the final determination.

Linz argues that the Department should

include Linz’s sales to the home market

of second-quality merchandise in the

margin calculation.

DOC Position: The petitioner is

correct that it is the Department’s policy

to compare U.S. and home market

merchandise of comparable quality. See,

e.g., Notice of Final Results of

Antidumping Administrative Review:

Porcelain on Steel Cookware from

Mexico, 62 FR 25908 (May 12, 1997).

Only first quality merchandise was sold

in the U.S. market. Therefore, for

purposes of this final determination,

first quality products sold in the United

States were compared only to first

quality merchandise sold in the home

market.

Comment 2: Movement Expenses

The petitioner contends that Linz

failed to fully report all of its movement

expenses to the United States. Petitioner

states that the Department discovered

that Linz failed to report the ‘‘vorlage’’

freight expenses incurred in

transporting merchandise to the United

States during verification. As a result,

the Department should account for this

unreported expense by applying, as

facts available, an adjustment for this

expense to be deducted from the price

of each U.S. sale. Linz asserts that the

Department should not adjust all U.S.

sales for a movement expense that may

not have actually been incurred. Linz

states that this expense is not found on

the invoices of all freight forwarders.

DOC Position: During verification, the

Department discovered that Linz had

inadvertently failed to report a minor

freight expense incurred in transporting

merchandise to the United States. This

expense, called ‘‘vorlage,’’ was part of

the company’s freight bill. This expense

was reported on all of the freight bills

reviewed by the Department for U.S.

sales. Therefore, during verification, we

collected several U.S. freight bills and

calculated the average ‘‘vorlage’’

charged on U.S. sales. We have

deducted the average ‘‘vorlage’’ expense

from the sales price of all U.S. sales as

‘‘facts available’’ in accordance with

section 776(a) of the Act.

Comment 3: Commission Offset

Petitioner argues that Linz’s estimated

indirect selling expenses were not

verified, and, thus, cannot be used as a

commission offset. Petitioner contends

that there are two problems with Linz’s

estimated indirect selling expense, and,

therefore, only the general indirect

selling expense was properly calculated

and should be included in the

Department’s margin calculation. First,

petitioner states that all of Linz’s

estimated indirect selling expenses were

fully captured in the general expense

amount and that creation of an

additional expense estimate is not

warranted. Second, the Department was

unable to verify the allocation method

of the estimated selling expenses to

domestic sales at verification.

Linz argues that it arrived at a general

per unit indirect selling amount

applicable to all sales and then adjusted

this amount to reflect the proportion

allocated to home market sales for

which no separate selling agents are

involved. Linz states that this allocation

is reasonable and properly accepted

based upon the stated experience of the

sales manager.

DOC Position: We agree with the

petitioner. Commissions are paid on

U.S. sales but none are paid on home

market sales. In our preliminary

determination, the Department did not

perform a commission offset, pursuant

to 19 CFR section 353.56(b), as Linz had

not provided information on its indirect

selling expenses in the home market.

After the preliminary determination,

Linz provided an amount for home

market indirect selling expenses. Linz

reported two indirect selling expense

amounts: a general indirect selling

expense amount and an additional

estimated home market indirect selling

expense amount.

At verification, Linz explained how it

calculated its estimated indirect selling

expenses incurred on home market

sales. Linz stated that beginning with a

total indirect selling amount that

captures the expenses for all production

(open-end and ring-spun yarn), Linz

arrived at a general per unit amount

applicable to all sales on a global scale.

It then adjusted this amount to reflect

the proportion attributable solely to

home market sales. Linz estimated that

only 20 percent of indirect selling must

be allocated to home market sales

because there are no selling agents in

their domestic market. We requested to

review worksheets to determine how

they calculated this percentage. Linz

stated that no worksheets were used in

this calculation. Because no worksheets

were used to calculate this portion of

indirect selling expenses that Linz

claimed to be attributed to home market

sales, and because they were unable to

tie the estimate to any source

documentation, the Department cannot

consider this additional estimated home

market selling expense as verified.

Therefore, we are not allowing this

portion of the indirect selling expense

adjustment. However, because we were

able to verify the general indirect selling

expense claim, we have used that

amount as the basis of the commission

offset.

Comment 4: Granting of Early Payment

Discount

Petitioner contends that Linz’s early

payment discounts on home market

sales should not be granted to customers

that did not meet the terms of the

discount program. Petitioner states that

Linz applied an early payment discount

to a number of sales where payment was

not made within the requisite time

period, as agreed upon in the terms of

payment. Linz states that the

Department should subtract all early

payment discounts from the normal

value, regardless of whether payment

was made within the time period

specified in the payment terms.

DOC Position: At verification, the

Department carefully reviewed the

customer accounts involving early

payment discounts, both those taken

within and outside the requisite time

period, and found that the discounts

were in fact granted. Because we

verified that the discounts were given

on the sales, we have taken them into

account in this final determination.

Comment 5: Deficiencies With Affiliated

Sales

Petitioner argues that there are

significant errors in Linz’s revised data

file for sales to affiliates in the home

market. Petitioner states that in

submitting its revised data, Linz did not

report gross price, sales date, pay date,

rebates, discounts, rebates or credit

expenses. Petitioner states that the

Department was forced to verify Linz’s

revised affiliated sales during

verification and that none of the

reported sales to affiliates were traced

for accuracy during verification. Thus,

petitioner argues that the Department

should employ the use of facts available

in analyzing Linz’s sales to affiliated

parties in the home market. At a

minimum, the Department should deny
43706 Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices

the unverified adjustments claimed by

Linz.

Linz states that nowhere in the

Department’s verification report does

the Department state that it could not

verify any adjustment. Linz states that

the verification team reviewed the

affiliated party sales extensively because

of a ‘‘data sort’’ problem encountered

and corrected at verification. Linz

asserts that the verification team

checked the records of these sales

through numerous sales traces.

DOC Position: During verification, we

discovered that there was a problem

with the data base for Linz’s home

market affiliated sales. This problem

was caused during a ‘‘data sort’’ for the

affiliated data base used in our

preliminary determination. The

company only resorted the first few

fields in the data base, while the other

data fields remained in the original

order. This caused the observation

numbers to be out of sequential order

and, thus, the information on pricing

and expenses were unrelated to the

specified sale in the data base. After

discovering this error at verification,

Linz correctly sorted the data fields and

provided a corrected affiliated party

sales listing.

We collected this revised affiliated

party sales listing as a verification

exhibit. The price reported in this sales

listing was less the early payment

discount. The sales listing also reported

the freight expenses. The Department

then verified this corrected data base

and traced the information reported on

these affiliated party sales to source

documents. Thus, we verified the

accuracy of the revised home market

affiliated party sales data base and have

used it where appropriate in this final

determination. However, because the

company did not report any other

adjustment for these sales, the only

deductions made from the starting price

were for early payment discounts and

freight expense.

Comment 6: Quantity Adjustment

Under Section 353.55(b)

Linz has requested recognition of

quantity price adjustments under

§ 353.55(b)(1) of the Department’s

regulations. Linz states that it has

supplied the Department with

information to show that its small

quantity price adjustment policy was

motivated by a commercial need to

equalize the per-unit administrative

expenses of processing large and small

quantity orders. Linz further states that

it has demonstrated that the amount of

any price differential is wholly or

partially due to the differences in

quantities sold in the two markets, and

that it has demonstrated that the small

quantity price adjustment was

consistently applied on a majority of its

home market sales in the POI.

Petitioner argues that there is no basis

to grant Linz’s claim of a small quantity

surcharge. Petitioner states that Linz

was unable to verify the accuracy or

relevance of their internal memorandum

on low volume sales, which serves as

the basis for Linz’s claim. They state

that prices and quantities in the home

market were inconsistent with the

guidelines established by Linz for the

low quantity price add-ons. Thus, there

has been no demonstration that price

increases for small quantity sales were

applied in a consistent manner as

required by Department policy.

DOC Position: Pursuant to 19 CFR

353.55(b), ‘‘The Secretary will calculate

foreign market value based on sales with

quantity discounts if:

(1) During the period examined or during

a more representative period, the producer or

reseller granted quantity discounts of at least

the same magnitude on 20 percent or more

of sales of such or similar merchandise for

the relevant country [Six-Month Rule]; or

(2) the producer demonstrates to the

Secretary’s satisfaction that the discounts

reflect savings specifically attributable to the

production of different quantities [Cost

Justification Method].’’

The Department expounded upon its

requirements for including quantity

discounts in its analysis in Final

Determination of Sales at Less Than Fair

Value: Brass Sheet and Strip from the

Netherlands, (Brass Sheet and Strip) 53

FR 23431 (June 22, 1988). The

Department asserted that:

to be eligible for a quantity-based adjustment

[six-month rule], a respondent must

demonstrate a clear and direct correlation

between price differences and quantities sold

or costs incurred. This requirement applies

equally to an allowance for quantity

differences under the six-month rule or the

cost justification requirement. Under the sixmonth rule, it is not sufficient that, during

the POI, the respondent merely granted

discounts of at least the same magnitude with

respect to 20 percent or more of such or

similar merchandise sold in the ordinary

course of trade in the market used to

establish foreign market value[;] the exporter

must also demonstrate, using evidence such

as a price list or quantity discount schedule,

that it gave discounts on a uniform basis and

that such discounts were available to

substantially all home market customers.

With regard to a cost-based adjustment, the

exporter must demonstrate that the discounts

are warranted on the basis of savings which

are specifically attributable to the production

of the different quantities involved.

(Emphasis added)

Linz has specified that it is seeking to

include a small quantity surcharge

under the Department’s so-called ‘‘sixmonth’’ rule, contained in Section

353.55(b)(1) of the Department’s

regulations. The Department requires

consistency under this rule in two

respects: The first is whether or not

price increases were applied when

appropriate. The second is whether or

not price increases, when applied, were

applied consistently in accordance with

the pricing policy.

Linz stated that, for small quantity

purchasers in the home market, it adds

a small quantity price add-on to account

for the additional administrative

expenses incurred in servicing small

quantity purchasers. Linz based its

claimed small quantity surcharge on a

September 1992 internal memorandum

on low volume sales. This

memorandum specifies four small

quantity categories with a specified

price increase for each of the quantity

brackets.

In the preliminary determination, the

Department denied Linz’s claim for a

small quantity surcharge. Linz stated in

its January 6, 1997 supplemental

response that the application of its small

quantity price adjustment is ‘‘flexible,

made on a case-by-case basis, and is

meant only as a guideline.’’ Therefore,

Linz was unable to demonstrate, based

on the information on the record, the

required consistency.

Prior to verification, Linz provided

additional information on its small

quantity surcharge. The company stated

that while its small quantity adjustment

policy was meant to be a guideline and

to be flexible, it was to be followed in

all possible cases and was to be applied

to virtually all small quantity sales. Linz

stated that, during the POI, it followed

the small quantity price increases in all

cases but eleven. The company stated

that there were specific reasons why

there were eleven exceptions to this

policy during the POI.

For purposes of this final

determination, we again examined

Linz’s home market sales to determine

whether or not price increases were

applied when appropriate, and to

determine whether or not price

increases were applied consistently in

accordance with Linz’s 1992 internal

memorandum on low volume sales. An

examination of Linz’s home market

prices during the POI demonstrated that

Linz did not consistently adhere to its

small quantity add-on pricing policy

with respect to the four quantity

brackets listed in its 1992 sales

memorandum, even disregarding the

eleven sales which Linz stated were

exceptions to this pricing policy.

Therefore, we do not find that there was

a clear and direct correlation between

price and quantity. Thus, the company
Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices 43707

did not meet the requirements of section

353.55(b) of the regulations and we have

not granted their claimed differences

due to small quantity surcharges.

Comment 7: Sales of Comparable

Quantities

Linz argues that absent an adjustment

to normal value for quantity discounts

under section 353.55(b) of the

regulations, the Department should

resort to comparisons of only sales in

comparable quantities in the two

markets. Linz states that under 19 C.F.R.

353.55(a), ‘‘in comparing the United

States price with foreign market value,

the Secretary normally will use sales of

comparable quantities of merchandise.’’

Linz states that all sales in both the U.S.

and home market over a certain amount

are treated equally in terms of quantity

pricing adjustments. Thus, the

Department should only use home

market sales over that amount in

calculating normal value.

Petitioner states that the Department

should reject Linz’s arguments for

comparable quantities. Petitioner states

that in defining its notion of comparable

quantities, Linz has classified all sales

into one of two quantity ranges, and that

these comparable quantity ranges are

flawed for two reasons. First, they

contradict the five quantity ranges that

Linz has claimed in the context of the

quantity discount. Thus, Linz is arguing

for one set of quantity ranges with

respect to quantity discounts, and a

different set of quantity ranges with

respect to comparable quantities.

Second, Linz has created an overlybroad upper range.

DOC Position: The issue of

comparison of comparable quantities

arose in Notice of Final Determination

of Sales at Less Than Fair Value:

Extruded PVC and Polystyrene Framing

Stock from the United Kingdom

(Framing Stock), 61 FR 51412 (October

2, 1996). In Framing Stock, we stated

that information on the record

demonstrated that the prices between

different quantity bands were

sufficiently distinct to warrant

comparisons at comparable quantity

bands. In the instant investigation, we

reviewed the pricing information on

home market sales between sales over a

certain quantity and those below that

quantity to determine whether the

prices between these two quantity bands

were sufficiently distinct to also warrant

comparisons at comparable quantities.

Based upon our pricing analysis, we

found that the pricing between the two

quantity bands was not sufficiently

distinct to warrant comparisons at

comparable quantity bands. Therefore,

we based normal value on the weightedaverage of all comparable sales,

regardless of quantity.

Comment 8: Calculation of Financial

Expenses

Petitioner states that the Department

should continue to include only shortterm interest income as an offset to

interest expense. Petitioner notes that,

in the preliminary determination, the

Department adjusted Linz’s reported

interest income to approximate the

portion of interest income attributable to

short-term assets. However, as a result

of verification, petitioner concludes that

the Department now has the data to

accurately determine which items of

interest income are short-term and

which are long-term. Linz states that

petitioner, in its brief, did not

specifically state which amount of

Linz’s interest income is short-term and

long-term. As a result, Linz argues that

the Department should disregard

petitioner’s request for an adjustment to

the calculation of Linz’s interest

expense.

DOC Position: We agree with

petitioner. During verification, the

Department verified the portion of

interest income related to short-term

investments of its working capital. For

the final determination, the Department

adjusted Linz’s reported net interest

expense rate to include only short-term

interest income as an offset to interest

expense.

Comment 9: Parent Company G&A

The petitioner claims that Linz

understated its general and

administrative expenses by failing to

account for expenses incurred by its

non-operating corporate parent.

Petitioner argues that because the

section D questionnaire instructed Linz

to include in its reported G&A an

amount for administrative services

performed by its parent, the Department

should increase Linz’s reported G&A

expenses to include a G&A expense

amount incurred by its parent company.

Linz asserts that the Department has

already included the expenses of Linz’s

parent company in its calculation of the

G&A expense.

DOC Position: The Department’s

practice is to include a portion of parent

company G&A expenses where

appropriate. In this case, Linz’s reported

G&A expense already reflects expenses

incurred on its behalf by its parent.

Therefore, to include additional G&A

amounts as argued by petitioner would

overstate G&A.

Borckenstein

Comment 10: Affiliation Due To Close

Supplier Relationship

Petitioner claims that information on

the record indicates a close supplier

relationship between Borckenstein and

its sole U.S. customer of the subject

merchandise, Beavertown, and thus

Borckenstein and the U.S. customer

would fall within the definition of

affiliated parties set forth in section

771(33) of the Act. Petitioner contends

that a determination of affiliation may

be based on a close supplier

relationship for the following reasons.

By purchasing a large percentage of a

supplier’s subject sales, the buyer could

extract price and other concessions from

the supplier by threatening to purchase

the products from another vendor.

Because such an action would severely

impact the business of the supplier, the

purchasing company is in a position to

control the related supplier by exerting

restraint or direction over the supplier.

Therefore, petitioner argues that

Borckenstein and Beavertown are

affiliated and that Borckenstein’s U.S.

sales should be classified as CEP sales.

Borckenstein states that it is not

affiliated with Beavertown and that

there is no close supplier relationship

based upon the percentage of

Beavertown’s purchases compared to

Borckenstein’s total sales revenue.

Borckenstein argues that petitioner’s

assertion that this percentage should

only be based on subject sales and not

on subject and non-subject sales is flatly

contrary to current Department practice.

Borckenstein states that the

Department’s standard practice of

determining close supplier relationship

is based on the percentage of ‘‘total

annual sales,’’ not solely the percentage

of subject sales. See Notice of Final

Determination of Sales at Less Than Fair

Value: Large Newspaper Printing

Presses and Components Thereof,

Whether Assembled or Unassembled

from Japan, (hereinafter Printing

Presses) 61 FR 38139, (July 23, 1996).

DOC Position: We disagree with the

petitioner’s claim that information on

the record indicates that a close supplier

relationship exists between

Borckenstein and its sole U.S. customer

of subject merchandise. We examined

this issue at verification and did not

find evidence of a close supplier

relationship. In addition, the

Department has dealt with a similar

issue in other recent cases and likewise

did not find affiliation. See, e.g.,

Printing Presses.

In Printing Presses, the Department

indicated, among other factors, that

close supplier relationships may occur
43708 Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices

when a majority of a supplier’s sales are

made to one customer. However, in the

instant case, Borckenstein’s financial

records indicate that Beavertown’s

purchases account for only a small

portion of Borckenstein’s total sales

revenue, which is based on sales of the

subject merchandise and closely related

products. Therefore, Borckenstein is not

reliant on Beavertown, and we find no

close supplier relationship in this case.

Thus, the two parties are not affiliated

under 771(33) of the Act.

Comment 11: Quantity Discount Under

Section 353.55(b)

Borckenstein states that the

information on the record supports an

adjustment for differences in quantities

sold in the U.S. and Austrian markets

pursuant to section 773(a)(6) of the Act

and section 353.55(b) of the

Department’s regulations. The claim for

the quantity adjustment is based on raw

material rebates received from

Borckenstein’s raw material supplier,

and the additional cost of machine

recalibrations in the home market.

Petitioner states that Borckenstein has

failed to demonstrate a clear and direct

correlation between price differences

and quantities sold, or price differences

and costs incurred. Therefore,

Borckenstein’s claimed quantity

adjustment pursuant to section

353.55(b) must be denied.

DOC Position: We agree with the

petitioner. The criteria for recognizing

quantity discounts pursuant to 19 CFR

353.55(b) have been fully explained in

the Department’s Position to Comment

6. Borckenstein has not demonstrated a

clear and direct correlation between

price differences and quantities sold or

costs incurred. See the discussion of

Brass Sheet and Strip referenced in

Comment 6. Furthermore, although

Borckenstein contends that the

additional cost of machine

recalibrations are appropriate costs on

which to base a difference in quantities

adjustment, however, it is the

Department’s practice not to allow a

quantity based adjustment under 19

CFR 353.55(b) based upon the

additional setup time that is required for

shorter runs. The Department will grant

cost adjustment claims based on direct

manufacturing costs; recalibration of

machinery does not constitute a direct

cost. In addition, the claim for the rebate

of raw material does not meet the

standard set forth in Brass Sheet and

Strip for an adjustment under 353.55(b).

It is our practice to use one average cost

for a raw material; different costs cannot

be attributed to the same raw material.

Therefore, Borckenstein is unable to

demonstrate that price differences are

attributable to the production of

different quantities. Accordingly, the

Department has not granted

Borckenstein’s claim for a quantity

discount.

Comment 12: Raw Material Rebate

Petitioner argues that the Department

should not grant an adjustment for a raw

material rebate that Borckenstein

receives from its supplier and that

Borckenstein claims it used to produce

subject merchandise destined for the

U.S. market. Petitioner states that the

granting of an export-based rebate on

raw material purchases is commonly

referred to as ‘‘input dumping,’’ and the

Department has condemned input

dumping in past cases, and must

continue to do so in the present case.

Borckenstein contends that the

Department should adjust for its

claimed raw material rebate.

Borckenstein argues that the rebate is

not directed at the U.S. market but to

the customer who purchases large

quantities of product which allows

Borckenstein to achieve economies of

scale in production. Borckenstein also

asserts that petitioner is incorrect when

it stated that there is input dumping in

this case.

DOC Position: Section 773(a)(4)(B) of

the Act authorizes the Department to

adjust for ‘‘differences in circumstances

of sales,’’ which include such things as

differences in commissions, credit

terms, guarantees, warranties, technical

assistance, and servicing. We note that

while the regulations do provide for

adjustments to production cost

differences in two instances (where

quantity discounts reflect savings in

production of different quantities (19

CFR 353.55(b)(2)), and where

differences in production cost are due to

differences in physical characteristics

(19 CFR 353.57(b)), neither of these

provisions is applicable here. Since the

type of adjustment at issue here does

not relate to physical differences in

merchandise, it is not an allowable

adjustment under the difference-inmerchandise provision. In addition, in

view of the fact that the proposed

adjustment cannot be deemed a salesrelated expense, it is not appropriate to

adjust for the rebate as a circumstance

of sale.

Comment 13: Raw Material Costs

The petitioner asserts that

Borckenstein’s costs of production for

home market sales is underreported.

Petitioner states that Borckenstein

received a rebate on raw material only

for finished yarn exported to the United

States. Since this rebate did not apply

to home market sales, this rebate should

not be attributable to raw material costs

for COP applied to home market sales.

Thus, the actual fiber costs incurred by

Borckenstein for home market sales are

higher than have been reported.

Borckenstein states that the raw material

costs reported by Borckenstein are

weighted-average costs between the

home market and the U.S. market,

consistent with standard Department

methodology. In addition, Borckenstein

states that the Department verified the

accuracy of Borckenstein’s reported

material cost at verification and found

no discrepancies.

DOC Position: We agree with

Borckenstein that the Department’s

normal practice is to compute a single

weighted-average COP for each unique

model subject to the investigation.

Accordingly, we did not adjust

Borckenstein’s reported raw material

cost for the final determination.

Comment 14: Treatment of Commission

as a Rebate

The petitioner asserts that Beavertown

Mills, Borckenstein’s sole U.S. customer

of subject merchandise, is whollyowned by Titan Textile Co., and that

Borckenstein’s commission agent is also

wholly-owned by Titan Textile Co.

Thus, petitioner asserts that the reported

commission payments are in effect

payments to the customer itself.

According to petitioner, the amount

paid to the customer cannot be

considered a commission, but is instead

a rebate. Therefore, the Department

should continue to treat the claimed

commission as a rebate. Borckenstein

contends that the payment is made to its

selling agent, therefore, the payment

should be considered a commission, not

a rebate. Borckenstein contends that the

selling agent never takes possession of

the merchandise, nor does it pay the

selling agent directly for the

merchandise. In addition, Borckenstein

states that these payments of

commissions are accounted for in its

books as commissions, and are invoiced

to its selling agent as commissions.

DOC Position: In the preliminary

determination, the Department treated

Borckenstein’s U.S. commissions as

rebates based on its understanding that

the commission agent was whollyowned by Beavertown’s parent

company. Because the commission was

treated as a rebate there was no offset for

indirect selling expenses in the

preliminary determination. At

verification, we learned that

Borckenstein uses selling agents for all

of its U.S. sales. The Department

established that the selling agent used

for sales of the subject merchandise

performed the functions of a
Federal Register / Vol. 62, No. 158 / Friday, August 15, 1997 / Notices 43709

commission agent. We verified that the

U.S. customer, not the selling agent,

pays Borckenstein for the merchandise.

In addition, Borckenstein makes

payments directly to the selling agent

for services rendered in the sales

transaction.

During verification, we also reviewed

documentation regarding the

shareholder listings for Borckenstein’s

selling agent, Beavertown, and

Beavertown’s parent company which

demonstrated that the selling agent is

not affiliated with Beavertown. The

controlling shareholder of the selling

agent owns no shares in either

Beavertown or Beavertown’s parent

company. Therefore, we do not find

Borckenstein’s selling agent to be

affiliated with Beavertown under

section 771(33) of the Act for the

purposes of the treatment of this

commission. Therefore, in this final

determination, we have treated this

expense as a commission and offset it

with home market indirect selling

expenses.

Comment 15: Depreciation Expense in

Reported Cost of Production

The petitioner contends that

Borckenstein underreported its

depreciation expense. Among the

excluded costs were depreciation

expenses for the plant in which the

product is produced, all depreciation

related to the general and administrative

functions of the company, and

depreciation related to assets that

directly or indirectly support the

manufacturing operation. Borckenstein

states that it does not object to an

appropriate and reasonable increase of

submitted depreciation expenses in

calculating the cost of production.

DOC Position: We agree with

petitioner. For the final determination,

we recalculated depreciation expense to

include depreciation from the other

categories of fixed assets used in the

production of the subject merchandise.

Additionally, we included a portion of

the depreciation expense related to

Borckenstein’s assets used to perform

the administrative functions of the

company.

Comment 16: Failure to Include Indirect

Material Expenses

The petitioner contends that

Borckenstein failed to include indirect

material expenses in its reported cost of

production. The indirect materials

excluded were: (1) Materials purchased

for the refurbishment of the open-end

equipment specifically used to produce

the merchandise under investigation;

and (2) repair materials. Further, the

petitioner asserts that these costs were

incurred during the fiscal period on

which Borckenstein’s cost response was

based, and related directly to the

equipment used to produce the

merchandise under investigation.

Borckenstein states that it properly

reported indirect material expenses in

its reported cost of production, and that,

at verification, the Department

determined that the expenses in

question were not incurred for the

production of the subject merchandise

during the POI.

DOC Position: The Department agrees,

in part, with petitioner. The Department

verified that the majority of the parts

purchased by respondent in the last

month of the cost calculation period

were used to refurbish and extend the

useful life of the machinery sold

subsequent to the POI. Given the fact

that Borckenstein intended to sell the

machinery, the company expensed the

cost of these parts rather than capitalize

them. In the normal course of business,

Borckenstein depreciates its machinery

over four years. Since the refurbishment

was so extensive, we agree that the costs

incurred should have been capitalized.

Accordingly, we consider it appropriate

for Borckenstein to depreciate the

refurbishment costs over four years

beginning with the month of purchases

(the last month of the POI). Thus,

Borckenstein should recognize one

month of depreciation related to the

purchased parts in its submitted POI

costs of manufacturing. We verified that

the remaining parts Borckenstein

purchased at the end of the year related

to repairs and maintenance for the

subsequent year. In the ordinary course

of business, Borckenstein expenses

small parts and maintenance supplies

when purchased rather than when

consumed. As such, the Department

maintains that the cost of these parts are

representative of Borckenstein’s yearly

repairs and maintenance expense and

should be included in its COP and CV.

However, consistent with 19 C.F.R.

§ 353.59(a), which permits the

Department to disregard insignificant

adjustments, we have elected not to

adjust Borckenstein’s COM for either the

depreciation expense or cost of the

parts, since the addition of these costs

would not affect our overall margin

calculation.

Continuation of Suspension of

Liquidation

In accordance with section 735(c) of

the Act, we are directing the Customs

Service to continue to suspend

liquidation of all entries of open-end

spun rayon singles yarn that are entered,

or withdrawn from warehouse, for

consumption on or after March 26,

1997, the date of publication of our

preliminary determination in the

Federal Register. We will instruct the

Customs Service to require a cash

deposit or the posting of a bond equal

to the weighted-average amount by

which the normal value exceeds the

export price, as indicated in the chart

below. This suspension of liquidation

will remain in effect until further notice.

Exporter/manufacturer

Weighted

average

margin

percentage

Linz ............................................... 12.36

Borckenstein ................................. 2.36

All Others ...................................... 7.42

Pursuant to section 733(d)(1)(A) and

section 735(c)(5) of the Act, the

Department has not included zero or de

minimis weighted-average dumping

margins, or margins determined entirely

under section 776 of the Act, in the

calculation of the ‘‘all others’’ rate.

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the ITC of our

determination. As our final

determination is affirmative, the ITC

will determine, within 45 days, whether

these imports are causing material

injury, or threat of material injury, to an

industry in the United States. If the ITC

determines that material injury, or

threat of material injury, does not exist,

the proceeding will be terminated and

all securities posted will be refunded or

canceled. If the ITC determines that

such injury does exist, the Department

will issue an antidumping duty order

directing Customs officials to assess

antidumping duties on all imports of the

subject merchandise entered, or

withdrawn from warehouse, for

consumption on or after the effective

date of the suspension of liquidation.

This determination is published

pursuant to section 735(d) of the Act.

Dated: August 8, 1997.

Richard W. Moreland,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–21710 Filed 8–14–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

Applications for Duty-Free Entry of

Scientific Instruments

Pursuant to Section 6(c) of the

Educational, Scientific and Cultural

Materials Importation Act of 1966 (Pub.