[Federal Register Volume 62, Number 216 (Friday, November 7, 1997)]
[Notices]
[Pages 60221-60225]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29400]



[[Page 60221]]

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DEPARTMENT OF COMMERCE

International Trade Administration
[A-557-805]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Extruded Rubber Thread From Malaysia

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

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SUMMARY: In response to a request by the petitioner and four producers/
exporters of the subject merchandise, the Department of Commerce is 
conducting an administrative review of the antidumping duty order on 
extruded rubber thread from Malaysia. The period of review is October 
1, 1995, through September 30, 1996.
    We have preliminarily determined that sales have been made below 
the normal value by each of the companies subject to this review. If 
these preliminary results are adopted in the final results of this 
administrative review, we will instruct the U.S. Customs Service to 
assess antidumping duties on all appropriate entries.
    We invite interested parties to comment on these preliminary 
results. Parties who wish to submit comments in this proceeding are 
requested to submit with each argument (1) a statement of the issue and 
(2) a brief summary of the argument.

EFFECTIVE DATE: November 7, 1997.

FOR FURTHER INFORMATION CONTACT: Shawn Thompson or Fabian Rivelis, 
Office of AD/CVD Enforcement, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-1776 or (202) 482-3853, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On January 1, 1996, the Department of Commerce (the Department) 
published in the Federal Register a notice of ``Opportunity to Request 
an Administrative Review'' of the Antidumping Duty Order on Extruded 
Rubber Thread from Malaysia (61 FR 51259).
    In accordance with 19 CFR 353.22(a)(1), on October 2, 1996, the 
petitioner, North American Rubber Thread, requested an administrative 
review of the antidumping order covering the period October 1, 1995, 
through September 30, 1996, for the following producers and exporters 
of extruded rubber thread: Filati Lastex Sdn. Bhd. (Filati), Heveafil 
Sdn. Bhd. (Heveafil), Rubberflex Sdn. Bhd. (Rubberflex), and Rubfil 
Sdn. Bhd (Rubfil). On October 31, 1996, each of these four companies 
also requested an administrative review.
    On November 15, 1996, the Department initiated an administrative 
review for Filati, Heveafil, Rubberflex, and Rubfil (61 FR 58513). In 
December 1996, the Department issued sales questionnaires to these four 
companies. The Department also issued cost questionnaires to Heveafil 
and Rubberflex.
    On February 13, 1997, Rubfil withdrew its request for 
administrative review in accordance with 19 CFR 353.22(a)(5). However, 
we have not terminated the review for Rubfil because the petitioner 
also requested a review for this company. Because Rubfil did not 
respond to the Department's questionnaire, we have assigned a margin to 
Rubfil based on the facts available. (See the ``Facts Available'' 
section below, for further discussion.)
    Filati, Heveafil, and Rubberflex submitted questionnaire responses 
in February 1997. In March 1997, petitioner alleged that Filati was 
selling at prices below the cost of production (COP) in its home 
market. Based on information submitted by petitioner, the Department 
found reasonable grounds to believe or suspect that sales in the home 
market were made at prices below the cost of producing the merchandise, 
in accordance with section 773(b)(1) of the Tariff Act of 1930, as 
amended (the Act). As a result, the Department initiated an 
investigation to determine whether Filati made home market sales during 
the period of review (POR) at prices below their respective COPs within 
the meaning of section 773(b) of the Act.
    Also in March 1997, we issued supplemental questionnaires to 
Filati, Heveafil, and Rubberflex. We received responses to these 
supplemental questionnaires, as well as Filati's initial cost response 
in April 1997.
    In June 1997, we issued additional supplemental questionnaires to 
these respondents. We received responses to the supplemental 
questionnaires in June and July 1997.
    In July and August 1997, the Department conducted sales and cost 
verifications of the data submitted by the three respondents 
participating in this review, in accordance with 19 CFR 353.36(a)(iv).

Scope of the Review

    The product covered by this review is extruded rubber thread. 
Extruded rubber thread is defined as vulcanized rubber thread obtained 
by extrusion of stable or concentrated natural rubber latex of any 
cross sectional shape, measuring from 0.18 mm, which is 0.007 inch or 
140 gauge, to 1.42 mm, which is 0.056 inch or 18 gauge, in diameter. 
Extruded rubber thread is currently classifiable under subheading 
4007.00.00 of the Harmonized Tariff Schedule of the United States 
(HTSUS). The HTSUS subheadings are provided for convenience and customs 
purposes. Our written description of the scope of this review is 
dispositive.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Act are references 
to the provisions effective January 1, 1995, the effective date of the 
amendments made to the Act by the Uruguay Round Agreements Act (URAA). 
In addition, unless otherwise indicated, all citations to the 
Department's regulations are to the regulations codified at 19 CFR Part 
353 (April 1, 1997).

Facts Available

    In accordance with section 776(a)(2) of the Act, we preliminarily 
determine that the use of the facts available is appropriate as the 
basis for Heveafil's and Rubfil's weighted-average dumping margins. 
Section 776(a)(2) of the Act provides that if an interested party (1) 
withholds information that has been requested by the Department, (2) 
fails to provide such information in a timely manner or in the form or 
manner requested, subject to subsections 782(c)(1) and (e), (3) 
significantly impedes a determination under the antidumping statute, or 
(4) provides such information but the information cannot be verified, 
the Department shall, subject to subsection 782(d) of the Act, use 
facts otherwise available in reaching the applicable determination.

A. Heveafil

    We have used the facts available with regard to Heveafil under 
section 776(a)(2)(D) of the Act because the Department could not verify 
the information provided by Heveafil as required under section 782(i) 
of the Act, despite the Department's attempts to do so.
    Specifically, we were unable to verify the COP and constructed 
value (CV) information provided by Heveafil because we discovered at 
verification that the company had destroyed the source documents upon 
which a large portion of its response was based. The destruction of 
these source documents raises particular concern, as Heveafil should 
have been well aware of the

[[Page 60222]]

necessity of these documents based upon its participation in prior 
segments of this proceeding. Moreover, there were significant delays in 
the verification process itself, caused by company difficulties in 
locating documents and the inability of company officials to link 
information submitted in the questionnaire response to the accounting 
system. Our findings at verification are outlined in detail in the 
public version of the cost verification report from Shawn Thompson and 
Irina Itkin to Louis Apple, dated October 17, 1997.
    Because we were unable to verify the information submitted by 
Heveafil in this POR and because the company failed to adequately 
prepare and provide information during the verification, we 
preliminarily determine that Heveafil did not cooperate to the best of 
its ability. Thus, pursuant to section 776(b) of the Act, we are using 
adverse facts available. See Notice of Final Determination of Sales at 
Less Than Fair Value; Certain Pasta from Italy, 61 FR 30326, 30327-29 
(June 14, 1996).
    As adverse facts available for Heveafil, we have used the highest 
rate calculated for any respondent in a prior segment of this 
proceeding. This rate is 54.31%. We have determined that this rate is 
sufficiently high to effectuate the purpose of the facts available rule 
by deterring such non-cooperative actions as the destruction of source 
documents needed for verification.

B. Rubfil

    In accordance with section 776(a)(2)(A) of the Act, we also 
preliminarily determine that the use of the facts available is 
appropriate as the basis for Rubfil's weighted-average dumping margin. 
Specifically, Rubfil did not respond to the Department's questionnaire, 
issued in December 1996. Because Rubfil did not respond to the 
Department's questionnaire and because the applicable subsections of 
section 782 do not apply with respect to this company, we must use 
facts otherwise available to calculate Rubfil's dumping margin.
    Section 776(b) of the Act provides that adverse inferences may be 
used with respect to a party that has failed to cooperate by not acting 
to the best of its ability to comply with requests for information. See 
Statement of Administrative Action accompanying the URAA, H.R. Rep. 
No., 316, 103rd Cong., 2d. Sess. 870 (SAA). The failure of Rubfil to 
reply to the Department's questionnaire demonstrates that it has failed 
to act to the best of its ability in this review, and, therefore, an 
adverse inference is warranted.
    As adverse facts available for Rubfil, we have used the highest 
rate calculated for Rubfil in a prior segment of this proceeding (see 
Extruded Rubber Thread from Malaysia, Final Results of Antidumping Duty 
Administrative Review, 62 FR 33588 (June 20, 1997)), which is 
considered secondary information within the meaning of section 776(c) 
of the Act. See SAA at 870. This rate of 54.31 percent is the cash 
deposit rate currently assigned to Rubfil. In certain other proceedings 
we have refrained from using a respondent's current cash deposit rate 
as FA for that respondent. See, e.g., Carbon Steel Pipe and Tube from 
Thailand; Final Results of Antidumping Duty Administrative Review 62 FR 
53821 (Oct. 16, 1997). However, based on the facts of this case, we 
find that this existing cash deposit rate is sufficiently high as to 
effectuate the purpose of the facts available rule.

C. Corroboration of Secondary Information

    Section 776(c) of the Act provides that the Department shall, to 
the extent practicable, corroborate secondary information from 
independent sources reasonably at its disposal. The SAA provides that 
``corroborate'' means that the Department will satisfy itself that the 
secondary information to be used has probative value (see SAA at 870).
    To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. However, unlike for other types of information, 
such as input costs or selling expenses, there are no independent 
sources for calculated dumping margins. Thus, in an administrative 
review, if the Department chooses as facts available a calculated 
dumping margin from a prior segment of this proceeding, it is not 
necessary to question the reliability of that calculated margin. With 
respect to relevance, however, the Department will consider information 
reasonably at its disposal as to whether there are circumstances that 
would render a margin not relevant. Where circumstances indicate that 
the selected margin may not be appropriate, the Department will attempt 
to find a more appropriate basis for facts available (see, e.g., Fresh 
Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812, 6814 (February 22, 1996) (Fresh Cut 
Flowers) (where the Department disregarded the highest margin as 
adverse best information available because the margin was based on 
another company's uncharacteristic business expense resulting in an 
unusually high margin)).
    For both Heveafil and Rubfil, we examined the rates applicable to 
extruded rubber thread from Malaysia throughout the course of the 
proceeding. With regard to their probative value, the rate specified 
above is reliable and relevant because it is a calculated rate from the 
1994-1995 administrative review. There is no information on the record 
that demonstrates that the rate selected is not an appropriate total 
adverse facts available rate for Heveafil and Rubfil. Thus, the 
Department considers these rates to be appropriate adverse facts 
available.

Normal Value Comparisons

    To determine whether sales of extruded rubber thread from Malaysia 
to the United States were made at less than normal value (NV), we 
compared the United States price (USP) to the NV for Filati and 
Rubberflex, as specified in the ``United States Price'' and ``Normal 
Value'' sections of this notice.

Level of Trade and Constructed Export Price (CEP) Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determined NV based on sales in the comparison market 
at the same level of trade as export price (EP) or CEP. The NV level of 
trade is that of the starting-price sales in the comparison market or, 
when NV is based on CV, that of the sales from which we derive selling, 
general and administrative expenses (SG&A) and profit. For EP, it is 
also the level of the starting-price sale, which is usually from the 
exporter to importer. For CEP, it is the level of the constructed sale 
from the exporter to the importer.
    To determine whether NV sales are at a different level of trade 
than EP or CEP sales, we examined stages in the marketing process and 
selling functions along the chain of distribution between the producer 
and the unaffiliated customer. If the comparison-market sales are at a 
different level of trade, and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a 
level of trade adjustment under section 773(a)(7)(A) of the Act. 
Finally, for CEP sales, if the NV level is more remote from the factory 
than the CEP level and there is no basis for determining whether the 
difference in the levels between NV and CEP affects price 
comparability, we adjust NV by making a CEP offset, in accordance with

[[Page 60223]]

section 773(a)(7)(B) of the Act. See Certain Welded Carbon Steel 
Standard Pipes and Tubes From India: Preliminary Results of New Shipper 
Antidumping Duty Administrative Review, 62 FR 23760, 23761 (May 1, 
1997).
    Both Filati and Rubberflex claimed that they made home market sales 
at only one level of trade (i.e., sales to original equipment 
manufacturers) and that this level was different, and more remote, than 
the level of trade at which they made CEP sales.
    Because only one level of trade existed in the home market for both 
respondents, we conducted an analysis to determine whether a CEP offset 
was warranted for either company. In order to determine whether NV was 
established at a level of trade which constituted a more advanced state 
of distribution than the level of trade of the CEP, we compared the 
selling functions performed for home market sales with those performed 
with respect to the CEP transaction which excludes economic activities 
occurring in the United States. We found that both respondents 
performed essentially the same selling functions in their sales offices 
in Malaysia for both home market and U.S. sales. Therefore, their sales 
in Malaysia were not at a more advanced stage of marketing and 
distribution than the constructed U.S. level of trade, which represents 
an FOB foreign port price after the deduction of expenses associated 
with U.S. selling activities. Because we find that no difference in 
level of trade exists between markets, we have not granted a CEP offset 
to either Filati or Rubberflex. For a detailed explanation of this 
analysis, see the concurrence memorandum issued for the preliminary 
results of this review, dated October 31, 1997.

United States Price

    For sales by Filati, we based USP on EP, in accordance with section 
772(b) of the Act, when the subject merchandise was sold to unrelated 
purchasers in the United States prior to importation and when the CEP 
methodology of section 772(c) of the Act was not otherwise applicable. 
In addition, for both Filati and Rubberflex, where sales to the first 
unaffiliated purchaser took place after importation into the United 
States, we based USP on CEP, in accordance with section 772(c) of the 
Act. For both companies, we revised the reported data based on our 
findings at verification.

A. Filati

    We based EP on the gross unit price to the first unaffiliated 
purchaser in the United States. We made deductions from gross unit 
price, where appropriate, for discounts and rebates. In accordance with 
section 772(c)(1)(B) of the Act, we added an amount for uncollected 
import duties in Malaysia (where we made price-to-price comparisons). 
In addition, where appropriate, we made deductions for foreign inland 
freight, foreign brokerage and handling expenses, ocean freight, marine 
insurance, U.S. customs duty, U.S. brokerage and handling expenses, and 
U.S. inland freight, in accordance with section 772(c)(2)(A) of the 
Act.
    For sales made from the inventory of the U.S. subsidiary, we based 
USP on CEP, in accordance with section 772(b) of the Act. We calculated 
CEP based on the gross unit price to the first unaffiliated customer in 
the United States. We made deductions from gross unit price, where 
appropriate, for discounts and rebates. In accordance with section 
772(c)(1)(B) of the Act, we added an amount for uncollected import 
duties in Malaysia (where we made price-to-price comparisons). We also 
made deductions for foreign inland freight, foreign brokerage and 
handling expenses, ocean freight, marine insurance, U.S. brokerage and 
handling expenses, U.S. customs duty, and U.S. inland freight, in 
accordance with section 772(c)(2)(A) of the Act. We made additional 
deductions, where appropriate, for commissions, credit, U.S. indirect 
selling expenses, and U.S. inventory carrying costs, in accordance with 
section 772(d)(1) of the Act. We recalculated U.S. indirect selling 
expenses to exclude an offset claimed by Filati relating to imputed 
costs associated with financing antidumping and countervailing duty 
(CVD) deposits, in accordance the Department's practice (see 
Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts 
Thereof from France, Germany, Italy, Japan, Romania, Singapore, Sweden 
and the United Kingdom; Final Results of Antidumping Duty 
Administrative Reviews, 62 FR 54043, (Oct. 17, 1997) (AFBs)).
    Pursuant to section 772(d)(3) of the Act, we further reduced gross 
unit price by an amount for profit, to arrive at CEP. In accordance 
with section 772(f) of the Act, we calculated CEP profit rate using the 
expenses incurred by Filati and its affiliate on their sales of the 
subject merchandise in the United States and the foreign like product 
in the home market and the profit associated with those sales.

B. Rubberflex

    We based USP on CEP, in accordance with section 772(b) of the Act. 
We calculated CEP based on the gross unit price to the first 
unaffiliated customer in the United States. We made deductions from 
gross unit price, where appropriate, for discounts and rebates. We also 
made deductions for foreign inland freight, foreign brokerage and 
handling expenses, ocean freight, marine insurance, U.S. customs duty, 
and U.S. inland freight, in accordance with section 772(c)(2)(A) of the 
Act. We made additional deductions, where appropriate, for credit, U.S. 
indirect selling expenses, and U.S. inventory carrying costs, in 
accordance with section 772(d)(1) of the Act. We recalculated U.S. 
indirect selling expenses to exclude an offset claimed by Rubberflex 
relating to imputed costs associated with financing antidumping and CVD 
duty deposits, in accordance the Department's practice (see AFBs).
    Pursuant to section 772(d)(3) of the Act, we further reduced gross 
unit price by an amount for profit, to arrive at CEP. In accordance 
with section 772(f) of the Act, we calculated the CEP profit rate using 
the expenses incurred by Rubberflex and its affiliate on their sales of 
the subject merchandise in the United States and the foreign like 
product in the home market and the profit associated with those sales.

Normal Value

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV, we 
compared the volume of each of the respondent's home market sales of 
the foreign like product to the volume of U.S. sales of subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act. Based 
on this comparison, we determined that the aggregate volume of home 
market sales of the foreign like product for both Filati and Rubberflex 
is greater than five percent of the aggregate volume of U.S. sales for 
these companies. Thus, we determined that both Filati and Rubberflex 
had viable home markets during the POR. Consequently, we based NV on 
home market sales.
    Pursuant to section 773(b) of the Act, there were reasonable 
grounds to believe or suspect that Rubberflex had made home market 
sales at prices below its COP in this review because the Department had 
disregarded sales below the COP for Rubberflex in a previous 
administrative review (see Notice of Final Results of Antidumping Duty 
Administrative Review: Extruded Rubber Thread from Malaysia, 61 FR 
54767 (October 22, 1996)) and the petitioner submitted an adequate 
allegation that there were reasonable grounds to believe or suspect 
that Filati

[[Page 60224]]

had made home market sales at prices below its COP in this review. As a 
result, the Department initiated an investigation to determine whether 
the respondents made home market sales during the POR at prices below 
their respective COPs.
    We calculated the COP based on the sum of each respondent's cost of 
materials and fabrication for the foreign like product, plus amounts 
for SG&A and packing costs, in accordance with section 773(b)(3) of the 
Act.
    Where possible, we used the respondents' reported COP amounts, 
adjusted as discussed below, to compute weighted-average COPs during 
the POR. We compared the COP figures 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 prices below 
the COP. On a product-specific basis, we compared the COP to home 
market prices, less any applicable movement charges and discounts.
    In determining whether to disregard home market sales made at 
prices below the COP, we examined (1) whether, within an extended 
period of time, such sales were made in substantial quantities, and (2) 
whether such sales were made at prices which permitted the recovery of 
all costs within a reasonable period of time in the normal course of 
trade.
    Pursuant to section 773(b)(2)(C), where less than 20 percent of the 
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 the respondent's sales of a 
given product during the POI were at prices less than the COP, we 
determined such sales to have been made in substantial quantities 
within an extended period of time in accordance with section 
773(b)(1)(A) of the Act. In such cases, we also determined that such 
sales were not made at prices which would permit recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(1)(B) of the Act. Therefore, we disregarded the below-cost 
sales. 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(a)(4) of the Act.
    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of each respondent's cost of materials, fabrication, 
SG&A, profit, and U.S. packing costs. In accordance with section 
773(e)(2)(A) of the Act, we based SG&A expenses and profit on the 
amounts incurred and realized by each respondent in connection with the 
production and sale of the foreign like product in the ordinary course 
of trade, for consumption in the foreign country.
    We deducted from CV weighted-average home market direct selling 
expenses incurred on sales made in the ordinary course of trade.
    Company-specific calculations are discussed below.

A. Filati

    We made the following adjustments to Filati's reported COP and CV 
data based on our findings at verification. For the cost of 
manufacturing (COM), in order to properly value the second quality 
merchandise and apply the appropriate manufacturing variance, we first 
valued the second quality merchandise at the standard cost of the first 
quality product that was intended to be produced. We then calculated 
the variance between the revised total standard cost and the total 
actual cost, and applied the variance proportionately to each per-unit 
standard cost. We also recalculated Filati's reported G&A expense ratio 
by excluding the direct selling, indirect selling, G&A expense, and 
financial expenses from the denominator of the ratio. The resulting 
ratio was applied to the per-unit COM. Finally, we recalculated 
Filati's reported interest expense to include only short-term interest 
income as an offset to total financial expense. For further discussion 
of these adjustments, see the cost calculation memorandum from Michael 
Martin to Christian Marsh, dated October 31, 1997.
    Where NV was based on home market sales, we based NV on the gross 
unit price to unaffiliated customers. We made adjustments to Filati's 
reported sales data based on our findings at verification, and where 
appropriate, we made deductions for rebates.
    For home market price-to-EP comparisons, we made deductions, where 
appropriate, for foreign inland freight, pursuant to section 
773(a)(6)(B) of the Act. Pursuant to section 773(a)(6)(C)(iii) of the 
Act, we made circumstance of sale adjustments, where appropriate, for 
differences in credit expenses and bank charges. Where applicable, in 
accordance with 19 CFR 353.56(b)(1), we offset any commission paid on a 
U.S. sale by reducing the NV by the amount of home market indirect 
selling expenses and inventory carrying costs, up to the amount of the 
U.S. commission.
    For home market price-to-CEP comparisons, we made deductions for 
rebates and foreign inland freight, where appropriate, pursuant to 
section 773(a)(6)(B) of the Act. We also made deductions for credit 
expenses and bank charges.
    For all price-to-price comparisons, we deducted home market packing 
costs and added U.S. packing costs, in accordance with section 
773(a)(6) of the Act. In addition, where appropriate, we made 
adjustments to NV to account for differences in physical 
characteristics of the merchandise, in accordance with section 
773(a)(6)(C)(ii) of the Act and 19 CFR 353.57.
    For CV-to-EP comparisons, we made circumstance of sale adjustments, 
where appropriate, for credit expenses, bank charges, and U.S. 
commissions, in accordance with section 773(a)(6)(C)(iii) and (a)(8) of 
the Act. Where applicable, in accordance with 19 CFR 353.56(b)(1), we 
offset any commission paid on a U.S. sale by reducing the NV by the 
amount of home market indirect selling expenses and inventory carrying 
costs, up to the amount of the U.S. commission.
    For CV-to-CEP comparisons, we made deductions, where appropriate, 
for credit expenses and bank charges. We also deducted indirect selling 
expenses and inventory carrying costs, up to the amount of the U.S. 
commission deducted from the CEP.

B. Rubberflex

    Where NV was based on home market sales, we based NV on the gross 
unit price to unaffiliated customers. We made adjustments to 
Rubberflex's reported sales data based on our findings at verification, 
and, where appropriate, we made deductions for discounts and rebates.
    We also made deductions for foreign inland freight, foreign inland 
insurance and credit expenses. In addition, we deducted home market 
packing costs and added U.S. packing costs, in accordance with section 
773(a)(1) of the Act. Where appropriate, we made adjustments to NV to 
account for differences in physical characteristics of the merchandise, 
in accordance with 19 CFR 353.57.
    For CV-to-CEP comparisons, we made deductions, where appropriate, 
for credit expenses.

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) directs the Department to use a daily exchange rate 
in order to convert foreign currencies into U.S. dollars unless the 
daily rate

[[Page 60225]]

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. (For an explanation of this method, see Policy 
Bulletin 96-1: 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 Malaysian Ringgit did not 
undergo a sustained movement.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Filati, Heveafil and Rubberflex by using standard 
verification procedures, including on-site inspection of the 
manufacturer's facilities, examination of relevant sales and financial 
records, and selection of original source documentation containing 
relevant information.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following margins exist for the period October 1, 1995, through 
September 30, 1996:

------------------------------------------------------------------------
                                                                Margin  
         Manufacturer/exporter              Review period      (percent)
------------------------------------------------------------------------
Filati Sdn. Bhd........................     10/01/95-9/30/96       36.36
Heveafil Sdn. Bhd./Filmax Sdn. Bhd.....     10/01/95-9/30/96       54.31
Rubberflex Sdn. Bhd....................     10/01/95-9/30/96        4.47
Rubfil Sdn. Bhd........................     10/01/95-9/30/96       54.31
------------------------------------------------------------------------

    Interested parties may request a disclosure within 5 days of 
publication of this notice and may request a hearing within 10 days of 
the date of publication. Any hearing, if requested, will be held 44 
days after the date of publication, or the first workday thereafter. 
Interested parties may submit case briefs within 30 days of the date of 
publication. Rebuttal briefs, limited to issues raised in the case 
briefs, may be filed not later than 37 days after the date of 
publication. The Department will publish a notice of the final results 
of this administrative review, which will include the results of its 
analysis of issues raised in any such case briefs.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between USP and NV may vary from the percentages stated 
above. We have calculated an importer-specific duty assessment rate 
based on the ratio of the total amount of AD duties calculated for the 
examined sales made during the POR to the total value of subject 
merchandise entered during the POR. This rate will be assessed 
uniformly on all entries of that particular importer made during the 
POR. The Department will issue appraisement instructions directly to 
the U.S. Customs Service.
    Furthermore, the following deposit requirements will be effective 
for all shipments of extruded rubber thread from Malaysia entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date of the final results of this administrative review, as provided by 
section 751(a)(1) of the Act: (1) The cash deposit rates for Filati, 
Heveafil, Rubberflex, and Rubfil will be the rates established in the 
final results of this review, except if the rate is less than 0.50 
percent and, therefore, de minimis within the meaning of 19 CFR 353.6, 
the cash deposit will be zero; (2) for previously reviewed or 
investigated companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; (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; and (4) if 
neither the exporter nor the manufacturer is a firm covered in this or 
any previous review conducted by the Department, the cash deposit rate 
will be the ``all others'' rate, as set forth below.
    On March 25, 1993, the U.S. Court of International Trade (CIT), in 
Floral Trade Council v. United States, 822 F.Supp. 766 (CIT 1993), and 
Federal-Mogul Corporation v. United States, 822 F.Supp. 782 (CIT 1993), 
decided that once an ``all others'' rate is established for a company, 
it can only be changed through an administrative review. The Department 
has determined that in order to implement this decision, it is 
appropriate to reinstate the original ``all others'' rate from the LTFV 
investigation (or that rate as amended for correction of clerical 
errors or as a result of litigation) in proceedings governed by 
antidumping duty orders. In proceedings governed by antidumping 
findings, unless we are able to ascertain the ``all others'' rate from 
the original investigation, the Department has determined that it is 
appropriate to adopt the ``new shipper'' rate established in the first 
final results of administrative review published by the Department (or 
that rate as amended for correction of clerical errors or as a result 
of litigation) as the ``all others'' rate for the purposes of 
establishing cash deposits in all current and future administrative 
reviews. Because this proceeding is governed by an antidumping duty 
order, the ``all others'' rate for the purposes of this review will be 
15.16 percent, the ``all others'' rate established in the LTFV 
investigation.
    These cash deposit 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 CFR 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 in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: October 31, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-29400 Filed 11-6-97; 8:45 am]
BILLING CODE 3510-DS-P