[Federal Register Volume 62, Number 21 (Friday, January 31, 1997)]
[Notices]
[Pages 4723-4728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-2350]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-504]


Porcelain-on-Steel Cookware From Mexico: Preliminary Results of 
Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: In response to a request by respondents, Cinsa, S.A. de C.V. 
(``Cinsa'') and Esmaltaciones de Norte America, S.A. de C.V. 
(``ENASA''), the Department of Commerce (the Department) is conducting 
an administrative review of the antidumping duty order on porcelain-on-
steel cookware from Mexico. This review covers the above manufacturers/
exporters of the subject merchandise to the United States. The period 
of review (POR) is December 1, 1994, through November 30, 1995. This is 
the ninth period of review.
    We preliminarily determine that sales have been made below normal 
value (NV). If these preliminary results are adopted in our final 
results of administrative review, we will instruct U.S. Customs to 
assess antidumping duties on all appropriate entries.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit arguments in this proceeding should also 
submit with the argument: (1) a statement of the issue, and (2) a brief 
summary of the argument.

EFFECTIVE DATE: January 31, 1997.

FOR FURTHER INFORMATION CONTACT: Dolores Peck or Kate Johnson, AD/CVD 
Enforcement Group II, Import Administration--Room B099, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4929.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act), by the 
Uruguay Rounds Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

Background

    On October 10, 1986, the Department published in the Federal 
Register (51 FR 36435) the final affirmative antidumping duty 
determination on certain porcelain-on-steel cookware from Mexico. We 
published an antidumping duty order on December 2, 1986 (51 FR 43415). 
On December 4, 1995, the Department published the Opportunity to 
Request an Administrative Review of this order for the period December 
1, 1994, through November 30, 1995 (60 FR 62071). The Department 
received a request for an administrative review of exports from Cinsa 
and ENASA, affiliated producers/exporters of the subject merchandise, 
and from General Housewares Corporation, the petitioner. We published a 
notice of initiation of the review on February 1, 1996 (61 FR 3670).
    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for completion of an administrative review if it 
determines that it is not practicable to complete the review within the 
statutory time limit of 365 days. On August 6, 1996, the Department 
extended the time limit for the preliminary results in this case. See 
Extension of Time Limit for Antidumping Duty Administrative Review, 61 
FR 40819 (August 6, 1996).
    The Department is conducting this review in accordance with section 
751(a) of the Act.

Scope of the Review

    Imports covered by this review are shipments of porcelain-on-steel 
cookware, including tea kettles, which do not have self-contained 
electric heating elements. All of the foregoing are constructed of 
steel and are enameled or glazed with vitreous glasses. This 
merchandise is currently classifiable under Harmonized Tariff Schedule 
of the United States (HTSUS) subheading 7323.94.00. Kitchenware 
currently entering under HTSUS subheading 7323.94.00.30 is not subject 
to the order. Although the HTSUS subheadings are provided for 
convenience and Customs purposes, our written description of the scope 
of this proceeding is dispositive.

Transactions Reviewed

    In accordance with section 751(a)(2) of the Act, the Department is 
required to determine the EP (or CEP) and NV of each entry of subject 
merchandise.
    In determining NV, based on a review of respondents' submissions, 
the Department determined that ENASA should report all sales of heavy 
gauge (HG) cookware in conjunction with a promotion agreement signed 
during the POR because the Department determined that the sales in 
question occurred during the POR. See Memorandum For Louis Apple From 
The Team, dated December 16, 1996 (``Issues Memorandum'').

[[Page 4724]]

Affiliated Parties Issue

    Petitioner claimed that the facts on the record of this 
administrative review indicate that the relationship of respondents 
Cinsa and ENASA to their parent, Grupo Industrial Saltillo, S.A. de 
C.V. (``GIS'' or ``GISSA'), is such that there exists a strong 
possibility of manipulating prices or affecting production decisions. 
In addition, petitioner placed on the record of this review 
correspondence from Cinsa in the previous review wherein Cinsa stated 
that all GIS majority-owned related companies should be collapsed. 
Furthermore, petitioner argued that in the previous review, in making 
the preliminary decision not to collapse these two companies, the 
Department had failed to consider other criteria which the Department 
normally looks at in making such decisions.
    In the preliminary results for the 8th review, the Department 
decided not to collapse Cinsa and ENASA because during that review we 
verified that ENASA's manufacturing facilities are separate from 
Cinsa's. The verification report noted that the machinery that Cinsa 
used to make light-gauge (LG) cookware could not be used to make the 
heavy-gauge (HG) cookware produced by ENASA without fundamental and 
expensive retooling.
    The Department's proposed regulations would codify its current 
practice for determining when to ``collapse'' producers of subject 
merchandise:

    In an antidumping proceeding under this part, the Secretary will 
treat two or more affiliated producers as a single entity where 
those producers have production facilities for similar or identical 
products that would not require substantial retooling of either 
facility in order to restructure manufacturing priorities and the 
Secretary concludes that there is a significant potential for the 
manipulation of price or production.

    See Antidumping Duties; Countervailing Duties (Notice of Proposed 
Rulemaking and Request for Public Comments). 61 FR 7308, 7330 and 7381 
(February 27, 1996), at section 351.401.
    As is evident from the above regulation, the Department will 
collapse two producers if each of three requirements are met: (1) the 
producers must be ``affiliated''; (2) they must have manufacturing 
facilities sufficiently similar that no substantial retooling would be 
needed to restructure manufacturing priorities with respect to the 
subject merchandise, and (3) the Department concludes, based on the 
listed factors, that there is a significant potential for manipulation 
of pricing or production decisions.
    Under the new statute (which applies to this 9th review), the 
definition of ``affiliated parties'' includes ``[t]wo or more persons 
directly or indirectly controlling, controlled by, or under common 
control with, any person.'' 19 U.S.C. 1677(33)(F)(1996). The facts on 
the record of this review indicate that Cinsa and ENASA are controlled 
by the same parent, and are thus affiliated.
    Although we consider both HG and LG cookware to be subject 
merchandise, they are not similar products and therefore cannot be 
reasonably compared for the purposes of determining dumping margins. HG 
and LG cookware differ significantly in the area of material 
composition and fabrication. HG cookware is made with a heavier gauge 
of steel and has a heavier coating of enamel with a different chemical 
composition than the enamel types used for LG cookware. Also, HG and LG 
are usually not approximately equal in commercial value.
    Moreover, we verified in the 8th review that extensive and 
expensive retooling would be necessary for Cinsa to produce HG products 
or for ENASA to produce LG products. According to Cinsa, although both 
Cinsa and ENASA use stamping equipment to stamp metal forms out of 
sheet metal, the stamping machines are not interchangeable. Also, more 
powerful equipment is needed for the production of HG cookware, 
equipment which is not suitable for LG steel. In addition, LG and HG 
cookware require totally different die types for use in the stamping 
equipment. Moreover, HG cookware production requires three different 
furnaces: one for the enamel coatings, one for decorative coatings, and 
one for the application of the nonstick surface. However, in LG 
cookware production a single furnace is used for enamel and decorative 
coatings and there is no application of nonstick coatings. Finally, the 
different chemical composition of the enamel coatings used in HG and LG 
cookware requires different cleaning treatments prior to the 
application of the enamel. (See April 22, 1996, response at 28.) 
Verification did not contradict any of these statements.
    We have determined that the differences between the production 
facilities for LG and HG cookware dictate that the second criterion for 
collapsing affiliated parties is not met. Therefore, Cinsa and ENASA 
will receive separate dumping margins.
    Petitioner further argued that Cinsa and ENASA should be collapsed 
because they both have the capability to produce medium gauge cookware. 
This issue of medium gauge of cookware was not raised in prior reviews. 
Respondents asserted that this issue was irrelevant since neither 
respondent sold medium gauge cookware in the United States. We 
requested supplemental information from respondents regarding the 
possibility that both respondents manufacture an overlapping product. 
Respondents claimed that prior to 1994 Cinsa produced a few medium and 
heavy gauge products. However Cinsa ceased its production of older 
models of medium and heavy gauge after the establishment of ENASA in 
late 1993 and Cinsa's tooling was sold off as scrap. Evidence on the 
record does not suggest that Cinsa and ENASA both produced medium gauge 
cookware during the POR.
    Petitioner argues that any collapsing decision must be based on the 
totality of the circumstances, such that the absence of overlapping 
production facilities must be weighed against the concerns associated 
with a substantial degree of common control. However, under the 
Department's current practice, the existence of production facilities 
for similar or identical merchandise, while not necessarily 
determinative, is essential. Thus, while we would not collapse based 
solely upon that one criterion, we will not collapse if that criterion 
is not met. See Certain Corrosion-Resistant Carbon Steel Flat Products 
and Certain Cut-to-Length Carbon Steel Plate From Canada, 60 FR 42511, 
42512 (August 16, 1995) (Preliminary); 61 FR 13815 (March 28, 1996) 
(Final). In Certain Cold Rolled Carbon Steel Flat Products From Korea, 
60 FR 65284, 65285 (December 19, 1995) (Preliminary); 61 FR 18547 
(April 26, 1996) (Final).
    Because we have preliminarily determined that the production 
facilities of Cinsa and ENASA would require substantial retooling in 
order to produce similar or identical products, we are not treating 
these firms as a single entity for the purpose of assigning an 
antidumping margin.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondents, covered by the description in the 
``Scope of the Review'' section, above, and sold in the home market 
during the POR, to be foreign like products 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 next most similar foreign like 
product on the basis of the characteristics listed in the description 
of the merchandise and product description sections of

[[Page 4725]]

respondents' March 11, 1996, and April 22, 1996, questionnaire 
responses. In making the product comparisons, we matched foreign like 
products based on the physical characteristics reported by the 
respondents.
    We have rejected respondent Cinsa's argument that HG and LG 
cookware constitute distinct ``classes or kinds'' of merchandise and, 
therefore, we should calculate separate margins for HG and LG cookware. 
The scope of an order constitutes a single class or kind of 
merchandise, i.e. the ``subject merchandise.''
    The order under review covers both HG and LG cookware. Cinsa has 
conceded that point by requesting rates for both HG and LG cookware. 
Thus, in effect, Cinsa argues not that there are separate classes or 
kinds of merchandise, but rather that HG and LG are sufficiently 
different to warrant separate rates. While the Department has 
calculated separate margins for different classes of products in 
exceptional circumstances, the record of this proceeding does not 
establish circumstances sufficient to warrant product-specific rates.

Date of Sale

    For Cinsa sales to the United States, we used the invoice date as 
the date of sale since this represents the first occasion where the 
price and quantity are fixed.
    ENASA stated that its date of sale for sales to the United States 
should be the date of the ultimate reconciliation between ENASA's 
affiliated distributor, Yamaka China, Inc. (``Yamaka'') and the 
unaffiliated customer, while petitioner favored the date of the 
contract between Yamaka and its unaffiliated customer.
    We reviewed the terms of the contract between Yamaka and an 
unaffiliated customer. Because the contract constitutes a binding 
agreement in the nature of a requirements contract, whereby Yamaka and 
the unaffiliated customer agreed upon the price and quantity (whatever 
was sold in connection with the promotion, with a guarantee of 
repurchase for items not sold at retail), the date of this contract is 
the appropriate date of sale for all cookware sold to the United States 
in connection with the promotion. See Issues Memorandum.
    For Cinsa and ENASA sales in the home market, we used invoice date 
as the date of sale.

Fair Value Comparisons

    To determine whether sales of porcelain-on-steel cookware by Cinsa 
and ENASA to the United States were made at less than fair value, we 
compared EP (or CEP) to the NV, as described in the ``Export Price (or 
Constructed Export Price)'' and ``Normal Value'' sections of this 
notice.
    Mexico experienced significant inflation during the POR, as 
measured by the consumer price index published in International 
Financial Statistics and the consumer price index from the Bank of 
Mexico. Accordingly, to avoid the distortions caused by the effects of 
this level of inflation on prices, we limited our comparisons to sales 
in the same month and did not apply the Department's 90/60 rule, 
whereby the Department uses NV from three months prior to and two 
months after the month in which the U.S. sale was made. See Certain 
Welded Carbon Steel Pipes and Tubes from Thailand: Final Results of 
Antidumping Duty Administrative Review, 56 FR 58356, 58359 (November 
19, 1991).

Export Price and Constructed Export Price

    For certain sales made by Cinsa, and all sales made by ENASA, we 
calculated EP in accordance with section 772(a) of the Act, because the 
subject merchandise was sold directly to the first unaffiliated 
purchaser in the United States prior to importation and because CEP was 
not otherwise indicated. We based EP on packed prices to unaffiliated 
purchasers in the United States. We made deductions from the gross unit 
price, where appropriate, for U.S. and foreign inland freight, U.S. and 
Mexican brokerage and handling expenses, U.S. duty and rebates.
    For certain sales made by Cinsa during the POR, we used CEP in 
accordance with section 772(b) of the Act, because the subject 
merchandise was sold for the account of the Cinsa by its affiliated 
sales companies after having been imported into the United States. We 
based CEP on packed prices to unaffiliated purchasers in the United 
States. We made deductions from the gross unit price, where 
appropriate, for U.S. and foreign inland freight, U.S. and Mexican 
brokerage and handling expenses, U.S. duty and rebates.
    We made further deductions, where appropriate, for credit, 
commissions, and indirect selling expenses that were associated with 
economic activities occurring in the United States. Finally, we made an 
adjustment for CEP profit in accordance with section 772(d)(3) of the 
Act.

Normal Value

    Based on a comparison of the aggregate quantity of home market and 
U.S. sales, we determined that the quantity of the foreign like product 
sold in the exporting country was sufficient to permit a proper 
comparison with the sales of the subject merchandise to the United 
States, pursuant to section 773(a) of the Act. Therefore, in accordance 
with section 773(a)(1)(B)(i) of the Act, we based NV on (1) either the 
VAT-exclusive price at which the foreign like product was first sold 
for consumption in the home market or (2) CV, as noted in the ``Price 
to Price Comparisons'' and ``Price to CV Comparisons'' sections of this 
notice.

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the 
Statement of Administrative Action (SAA) accompanying the URAA, H.R. 
Doc. No. 316, 103d Cong., 2d Sess at 870. (1994) (SAA), at 829-831, to 
the extent practicable, the Department will calculate NV based on sales 
at the same level of trade as the U.S. sale. When the Department is 
unable to find sale(s) in the comparison market at the same level of 
trade as the U.S. sale(s), the Department may compare sales in the U.S. 
to foreign market sales at a different level of trade. See Final 
Determination of Sales at Less than Fair Value; Certain Pasta from 
Italy, 61 FR 30326 (June 14, 1996) (Pasta from Italy).
    In accordance with section 773(a)(7)(A) of the Act, in comparing 
U.S. sales to NV sales, the Department will adjust the NV to account 
for any difference in level of trade if two conditions are met. First, 
the sales must in fact be made at different levels of trade, which can 
exist only if there are differences between the actual selling 
functions performed by the seller at the level of trade of the U.S. 
sale and the level of trade of the NV sale. Second, the difference must 
affect price comparability as evidenced by a pattern of consistent 
price differences between sales at the different levels of trade in the 
market in which NV is determined.
    Section 773(a)(7)(B) of the Act establishes that a CEP ``offset'' 
may be made when two conditions exist: (1) NV is established at a level 
of trade which constitutes a more advanced stage of distribution than 
the level of trade of the CEP and; (2) the data available do not 
provide an appropriate basis for a level-of-trade adjustment.
    In order to determine that there is a difference in level of trade, 
the Department must find that two sales have been made at different 
stages of marketing, or the equivalent. Different stages of marketing 
necessarily involve differences in selling functions, but differences 
in selling functions (even substantial ones) are not alone sufficient 
to establish a difference in the level of

[[Page 4726]]

trade. Similarly, seller and customer descriptions (such as 
``distributor'' and ``wholesaler'') are useful in identifying different 
levels of trade, but are insufficient to establish that there is a 
difference in the level of trade. See Certain Corrosion-Resistant 
Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate 
from Canada: Preliminary Results of Antidumping Duty Administrative 
Review, 61 FR 51891, 51895-96 (October 4, 1996) (Steel from Canada).
    Pursuant to section 773(a)(7)(B)(i) of the Act and the SAA at 827, 
in identifying levels of trade for EP and home market sales, we 
considered the selling functions reflected in the starting price of 
these transactions before any adjustments. For CEP sales, we considered 
only the selling activities reflected in the constructed price, i.e., 
after expenses and profit were deducted under section 772(d) of the 
Act. Whenever sales were made by or through an affiliated company or 
agent, we considered all selling activities by affiliated parties, 
except for those selling activities associated with the expenses 
deducted under section 772(d) of the Act in CEP situations.
    In implementing this principle in this review, we examined 
information regarding the selling activities of the producers/exporters 
associated with each stage of marketing, or the equivalent. In 
addition, we examined any claimed levels of trade (LOTs) reported by 
each respondent in response to our initial and supplemental 
questionnaires (see February 8, 1996, and September 10, 1996, letters 
from the Department to respondents).
    In reviewing the selling functions reported by the respondents, we 
considered all types of selling activities, both claimed and unclaimed, 
that had been performed. In analyzing whether separate LOTs existed in 
this review, we found that no single selling activity was sufficient to 
warrant a separate LOT (see Notice of Proposed Rulemaking and Request 
for Public Comments, 61 FR 7307, 7348 (February 27, 1996)). For this 
review, we determined that the following selling functions and 
activities are relevant to the cookware industry: (1) Inventory 
maintenance; (2) technical services; (3) warranty services; (4) 
customer advice and product information; (5) delivery arrangements; (6) 
sales from warehouse vs. direct sales; and (7) direct advertising. We 
did not consider trade discounts as a selling function (see Pasta from 
Italy).
    When examining claimed LOTs, we analyzed the selling activities 
associated with the classes of customers and marketing stages the 
respondents reported. In applying this analysis, we expect that, if 
claimed LOTs are the same, the functions and activities of the seller 
should be similar. Conversely, if a party claims that LOTs are 
different for different groups of sales, the functions and activities 
of the seller should be dissimilar. The Department not only examines 
the types of selling activities, but weighs the overall function 
performed for each claimed level of trade. In determining whether 
separate LOTs existed in the home market, pursuant to section 
773(a)(1)(B)(i) of the Act, we considered the selling functions 
reflected in the starting price of the home market sales before any 
adjustment.
    In their questionnaire responses, Cinsa and ENASA stated that there 
were no differences in selling activities by customer categories within 
each market. Respondents requested a level of trade adjustment based on 
the fact that U.S. sales are made at a level of trade more remote from 
the customer and in significantly larger quantities than sales in the 
home market. However, as discussed below, we did not find any 
differences in levels of trade and therefore no level of trade 
adjustment or CEP offset is warranted.
    We reviewed respondents' questionnaire responses in order to 
confirm that the selling functions of Cinsa and ENASA did not differ 
among customer categories in the U.S. and home market.
    Cinsa and ENASA sold to multiple customers both in the United 
States and home markets. In their April 22, 1996, questionnaire 
responses both Cinsa and ENASA indicated that they do not differentiate 
pricing, sales terms or delivery terms by type of customer. They also 
stated in their request for a level of trade adjustment that sales 
support activities for both markets were generally the same. Thus, our 
analysis of the questionnaire responses leads us to conclude that sales 
within each market and between markets are not made at different levels 
of trade. Accordingly, we preliminarily find that all sales in the home 
market and the U.S. market are made at the same level of trade. 
Therefore, all sales comparisons are at the same level of trade and an 
adjustment pursuant to section 773(a)(7)(A) is unwarranted.

Cost of Production Analysis

    The Department disregarded certain sales made by Cinsa for the 
period December 1, 1991, through November 30, 1992, (the most recently 
completed review of Cinsa) pursuant to a finding in that review that 
sales were made below cost. Thus, in accordance with section 
773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or 
suspect that respondent Cinsa made sales in the home market at prices 
below the cost of producing the merchandise in the current review 
period. As a result, the Department initiated an investigation to 
determine whether the respondent made home market sales during the POR 
at prices below their COP within the meaning of section 773(b) of the 
Act.

A. Calculation of COP

    We calculated the COP based on the sum of Cinsa's cost of materials 
and fabrication costs for the foreign like product, plus amounts for 
home market selling, general, and administrative expenses (``SG&A'') 
and packing costs in accordance with 19 C.F.R. 353.51(c).
    As noted above in the Fair Value section, we determined that the 
Mexican economy experienced high inflation during the POR. Therefore, 
in order to avoid the distortive effect of inflation on our comparisons 
of costs and prices, we requested that Cinsa submit current monthly 
model-specific production costs incurred during each month of the POR. 
For certain models sold during the POR, Cinsa approximated current 
production costs because the company did not manufacture these models 
during the POR. We calculated a model-specific total and variable cost 
of manufacturing during the POR. Using the consumer price index for 
Mexico maintained by the Bank of Mexico and provided by respondents in 
their response, we indexed the total and variable POR model-specific 
costs to an common point (November, 1995), the last month of the POR). 
We then divided the sum of the total POR model-specific costs by the 
total model-specific production quantity to obtain a model-specific POR 
weighted-average cost corresponding to the November, 1995, common 
point. The weighted average cost of manufacturing was then restated in 
the currency value of each respective month and used to calculate a 
monthly COP for each product.
    We relied on COP information submitted by Cinsa, except in the 
following instances where it was not appropriately quantified or valued 
: (1) frit prices from an affiliated supplier did not approximate fair 
market value prices; therefore, we increased direct materials by the 
percentage required to adjust the reported cost of frit to reflect fair 
market prices; (2) we included revalued depreciation in our calculation 
of fixed overhead since this cost related to depreciation of the 
production plant and equipment; (3) we added profit

[[Page 4727]]

sharing expenses to the variable cost of manufacture because they 
relate to the compensation of direct labor; and (4) we revised Cinsa's 
submitted interest costs to exclude the calculation of negative 
interest expense.

B. Test of Home Market Prices

    We compared the monthly weight-averaged per unit COP figures, 
indexed to account for the effects of inflation as noted above, 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 were made 
at prices below the COP. In determining whether to disregard home 
market sales made at prices below the COP, we examined whether (1) 
within an extended period of time, such sales were made in substantial 
quantities, and (2) such sales were made at prices which permitted the 
recovery of all costs within a reasonable period of time. On a product-
specific basis, we compared the COP to the home market prices, less any 
applicable movement charges, rebates, discounts, and direct and 
indirect selling expenses.

C. Results of COP Test

    Pursuant to section 773(b)(2)(C), where less than 20 percent of 
respondent's sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product during the POR were at prices less than the COP, we 
disregarded the below-cost sales where such sales were found to be made 
at prices which would not permit the recovery of all costs within a 
reasonable period of time (in accordance with section 773(b)(2)(D) of 
the Act). Where all sales of a specific product were at prices below 
the COP, we disregarded all sales of that product, and calculated NV 
based on CV, in accordance with section 773(b)(1)of the Act .

D. Calculation of CV

    In accordance with section 773(e)(1) of the Act, we calculated a CV 
based on the sum of respondents' cost of materials, fabrication, SG&A, 
and U.S. packing costs as reported in the U.S. sales listing. We 
calculated CV based on the methodology described in the calculation of 
COP above.
    In accordance with section 773(e)(2)(A), we based SG&A and profit 
on the actual amounts incurred and realized by Cinsa and ENASA in 
connection with the production and sale of the foreign like product in 
the ordinary course of trade, for consumption in the foreign country. 
For selling expenses, we used the weighted average home market selling 
expense. Where we compared EP to CV, we deducted from CV the weighted-
average home market direct selling expenses and added the weighted-
average U.S. product-specific direct selling expenses, in accordance 
with section 353.56(a)(2) of the Department's regulations.

E. Price to Price Comparisons

    For those comparison products for which there were sales at prices 
above the COP, we based Cinsa's NV on home market prices. We based 
ENASA's NV on home market prices. For both respondents, we calculated 
NV based on the VAT-exclusive gross unit price and deducted, where 
appropriate, inland freight, rebates, and early payment discounts.
    For comparisons to Cinsa and ENASA's EP sales, we made a 
circumstance-of-sale adjustment, where appropriate, for differences in 
credit expenses. For comparisons to Cinsa's CEP sales, we also deducted 
credit expenses and commissions from NV. We did not make an adjustment 
for packing expenses because both respondents reported that such costs 
were identical on a per-unit basis in the two markets. We also made 
adjustments to NV, where appropriate, for differences in costs 
attributable to differences in physical characteristics of the 
merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act.
    In order to make appropriate comparisons of differences in costs 
between models sold over the POR, and to account for the effects of 
inflation, all costs were expressed in currency values corresponding to 
November, 1995, the last month of the POR. Using these November based 
costs, we then calculated a per-unit model-specific weighted-average 
variable and total cost of manufacturing. These weighted-average costs 
were then indexed to the currency value of the month of the comparison 
U.S. sale. The adjusted monthly variable costs of manufacturing for 
U.S. and home market products were then compared to arrive at the 
difference in merchandise adjustment. Where the difference in 
merchandise adjustment for any product exceeded 20 percent of the 
indexed COM of the U.S. product, we based NV on CV.

F. Price to CV

    Where we compared EP or CEP to CV, we deducted from CV the 
weighted-average home market direct selling expenses and added the 
United States direct selling expenses.

Currency Conversion

    For purposes of the preliminary results, we made currency 
conversions based on the official exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank of New York. 
Section 773 A(a) of the Act directs the Department to use a daily 
exchange rate in order to convert foreign currencies into U.S. dollars, 
unless the daily rate involves a ``fluctuation.'' In accordance with 
the Department's practice, we have determined as a general matter that 
a fluctuation exists when the daily exchange rate differs from a 
benchmark by 2.25 percent. The benchmark is defined as the rolling 
average of rates for the past 40 business days. When we determine a 
fluctuation existed, we substitute the benchmark for the daily rate. 
However, for the preliminary results in this review, we have not 
determined that a fluctuation exists, and we have not substituted the 
benchmark for the daily rate.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margins exist:

------------------------------------------------------------------------
       Manufacturer/exporter                Period            Margin    
------------------------------------------------------------------------
Cinsa..............................     12/1/94-11/30/95           12.39
ENASA..............................     12/1/94-11/30/95           12.64
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    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held 44 days after the date of publication or the 
first business day thereafter.
    Issues raised in hearings will be limited to those raised in the 
respective case briefs and rebuttal briefs. Case briefs from interested 
parties and rebuttal briefs, limited to the issues raised in the 
respective case briefs, may be submitted not later than 30 days and

[[Page 4728]]

37 days, respectively, from the date of publication of these 
preliminary results. Parties who submit case briefs or rebuttal briefs 
in this proceeding are requested to submit with each argument (1) a 
statement of the issue and (2) a brief summary of the argument.
    The Department will subsequently publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written briefs or at the hearing, if held, not later 
than 120 days after the date of publication of this notice.
    The Department shall determine and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appropriate appraisement instructions directly to the 
Customs Service upon completion of this review.
    Furthermore, the following deposit requirements will be effective 
upon publication of the final results of this antidumping duty review 
for all shipments of porcelain-on-steel cookware from Mexico, entered, 
or withdrawn from warehouse, for consumption on or after the 
publication date, as provided by section 751(a) of the Tariff Act: (1) 
The cash deposit rates for the reviewed companies will be those 
established in the final results of review; (2) for exporters not 
covered in this review, but covered in the LTFV investigation or prior 
reviews, the cash deposit rate will continue to be the company-specific 
rate from the LTFV investigation or the prior review; (3) if the 
exporter is not a firm covered in this review, a prior review, or the 
original LTFV investigation, but the manufacturer is, the cash deposit 
rate will be the rate established for the most recent period for the 
manufacturer of the merchandise; (4) the cash deposit rate for all 
other manufacturers or exporters will continue to be 29.52 percent, the 
``All Others'' rate made effective by the LTFV investigation. These 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 C.F.R. 353.26 to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are published in accordance 
with section 751(a)(1) of the Act and 19 CFR 353.22.

    Dated: January 21, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-2350 Filed 1-30-97; 8:45 am]
BILLING CODE 3510-DS-P