Federal Register / Vol. 62, No. 8 / Monday, January 13, 1997 / Notices 1719

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 New

Taiwan dollar did not undergo a

sustained movement, nor were there

currency fluctuations during the POI.

Continuation of Suspension of

Liquidation

For Chen Hao Xiamen, Gin Harvest,

and Sam Choan, we calculated a zero or

de minimis margin. Consistent with

Pencils, merchandise that is sold by

these producers but manufactured by

other producers will be subject to the

order, if issued. Entries of such

merchandise will be subject to the

‘‘PRC-wide’’ rate.

In accordance with section 733(d)(1)

of the Act and 735(c)(1), we are

directing the Customs Service to

continue to suspend liquidation of all

entries of MIDPS from the PRC, that are

entered, or withdrawn from warehouse

for consumption, on or after the date of

publication of this notice in the Federal

Register, except for entries of

merchandise manufactured by those

producers receiving a zero or de

minimis margin. The Customs Service to

require a cash deposit or posting of a

bond equal to the estimated amount by

which the NV exceeds the EP as

indicated in the chart below. This

suspension of liquidation will remain in

effect until further notice.

The weighted-average dumping

margins are as follows:

Manufacturer/producer/exporterWeighted-average

margin percentage

Chen Hao Xiamen .... 0.97 (de minimis).

Gin Harvest ............... 0.47 (de minimis).

Sam Choan ............... 0.04 (de minimis).

Tar Hong Xiamen ..... 2.74.

PRC-Wide Rate ........ 7.06.

The PRC-Wide rate applies to all

entries of subject merchandise except

for entries from exporters/factories that

are identified individually above.

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: January 6, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–752 Filed 1–10–97; 8:45 am]

BILLING CODE 3510–DS–P

[A–560–801]

Notice of Final Determination of Sales

at Less Than Fair Value: Melamine

Institutional Dinnerware Products

From Indonesia

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: January 13, 1997.

FOR FURTHER INFORMATION CONTACT:

Everett Kelly or David J. Goldberger,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, N.W.,

Washington, D.C. 20230; telephone:

(202) 482–4194 or (202) 482–4136,

respectively.

The Applicable Statute

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (‘‘the Act’’) are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Act by the Uruguay Rounds

Agreements Act (‘‘URAA’’).

Final Determination

We determine that melamine

institutional dinnerware products

(‘‘MIDPs’’) from Indonesia are being, or

are 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 and

Postponement of Final Determination:

Melamine Institutional Dinnerware

Products from Indonesia (61 FR 43333,

August 22, 1996), the following events

have occurred:

In September 1996, we verified the

questionnaire responses of P. T. Multi

Raya Indah Abadi (Multiraya). On

November 22, 1996, the Department

requested Multiraya to submit new

computer tapes to include data

corrections identified through

verification. This information was

submitted on December 5, 1996.

Petitioner, the American Melamine

Institutional Tableware Association

(‘‘AMITA’), and Multiraya submitted

case briefs on November 26, 1996, and

rebuttal briefs on December 3, 1996. The

Department held a public hearing for

this investigation on December 5, 1996.

Scope of Investigation

This investigation covers all items of

dinnerware (e.g., plates, cups, saucers,

bowls, creamers, gravy boats, serving

dishes, platters, and trays) that contain

at least 50 percent melamine by weight

and have a minimum wall thickness of

0.08 inch. This merchandise is

classifiable under subheadings

3924.10.20, 3924.10.30, and 3924.10.50

of the Harmonized Tariff Schedule of

the United States (‘‘HTSUS’). Excluded

from the scope of investigation are

flatware products (e.g., knives, forks,

and spoons).

Although the HTSUS subheadings are

provided for convenience and customs

purposes, our written description of the

scope of this investigation is dispositive.

Period of Investigation

The period of investigation (‘‘POI’’) is

January 1, 1995, through December 31,

1995.

Fair Value Comparisons

A. P.T. Mayer Crocodile

We did not receive a response to our

questionnaire from P.T. Mayer

Crocodile, an exporter of the subject

merchandise during the POI. Because

P.T. Mayer Crocodile failed to submit

information that the Department

specifically requested, we must base our

determination for that company on the

facts available in accordance with

section 776 of the Act. Section 776(b)

provides that an adverse inference may

be used against a party that has failed

to cooperate by not acting to the best of

its ability to comply with a request for

information. Because P.T. Mayer

Crocodile has failed to respond, the

Department has determined that, in

selecting from among the facts

otherwise available, an adverse

inference is warranted.

Section 776(c) of the Act provides that

where the Department selects from

among the facts otherwise available and

relies on ‘‘secondary information,’’ the

Department shall, to the extent

practicable, corroborate that information

from independent sources reasonably at

the Department’s disposal. See The
1720 Federal Register / Vol. 62, No. 8 / Monday, January 13, 1997 / Notices

Statement of Administrative Action

accompanying the URAA, H.R. Doc. No.

316, 103d Cong., 2d Sess at 870 (1994)

(‘‘SAA’’).

In this proceeding, we considered the

petition as the most appropriate

information on the record to form the

basis for a dumping calculation for this

uncooperative respondent. In

accordance with section 776(c) of the

Act, we attempted to corroborate the

data contained in the petition.

Specifically, the petitioner based both

the export price and normal value in the

petition on Multiraya’s ex-factory prices

for nine-inch plates obtained from a

market research report. We compared

the petitioner’s submitted price data to

actual prices reported in Multiraya’s

questionnaire response for products of

the same size and shape. We found the

Multiraya normal value data from the

market research report appears to be

consistent with the normal value data

reported in Multiraya’s questionnaire

response. Thus, we consider the normal

value data in the petition to have been

corroborated and will therefore utilize

such data in our margin calculation for

P.T. Mayer Crocodile.

We did not, however, consider the

export price from the petition to be

corroborated because the Multiraya

export price data in the market research

report was substantially different from

the data reported by Multiraya in its

questionnaire response which was

confirmed through verification.

Therefore, we have not used the export

price in the petition. In selecting from

among the facts otherwise available

with regard to export price, we have

used the lowest ex-factory export price

reported by Multiraya for a nine-inch

plate. We found this information to be

sufficiently adverse to effectuate the

purpose of the statute, and we also note

that the number of EP sales to select

from was small. We compared that

export price to the ex-factory normal

value used in the petition in order to

calculate a margin for P. T. Mayer

Crocodile.

B. Multiraya

To determine whether Multiraya’s

sales of the subject merchandise to the

United States 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 EP to

the weighted-average NV during the

POI. In determining averaging groups

for comparison purposes, we considered

the appropriateness of such factors as

physical characteristics.

(i) 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 of this

notice, produced in Indonesia by

Multiraya and sold in the home market

during the POI, 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

Department’s antidumping

questionnaire. In making the product

comparisons, we relied on the following

criteria (listed in order of preference):

shape type (i.e., flat, e.g., plates, trays,

saucers, etc.; or container, e.g., bowls,

cups, etc.), specific shape, diameter

(where applicable), length (where

applicable), capacity (where applicable),

thickness, design (i.e., whether or not a

design is stamped into the piece), and

glazing (i.e., where a design is present,

whether or not it is also glazed).

(ii) Level of Trade

Multiraya did not claim a difference

in level of trade. Our findings at

verification confirmed that Multiraya

performed essentially the same selling

activities for each reported home market

and U.S. marketing stage. Accordingly,

we find that no level of trade differences

exists between any sales in either the

home market or U.S. market. Therefore,

all price comparisons are at the same

level of trade and an adjustment

pursuant to section 773(a)(7)(A) is

unwarranted.

Export Price

In accordance with subsections 772(a)

and (c) of the Act, we calculated EP for

Multiraya 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 (See Comment 17).

Normal Value

Cost of Production Analysis

As discussed in the preliminary

determination, based on the petitioner’s

allegations, the Department found

reasonable grounds to believe or suspect

that Multiraya made sales in the home

market at prices below the cost of

producing the subject merchandise. As

a result, the Department initiated an

investigation to determine whether

Multiraya made home market sales

during the POI at prices below the cost

of production (COP) within the meaning

of section 773(b) of the Act.

Before making any fair value

comparisons, we conducted the COP

analysis described below.

A. Calculation of COP

We calculated the COP based on the

sum of Multiraya’s reported 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 Multiraya’s raw material

costs to include the change in the workin-process inventory (see Comment 4).

B. Test of Home Market Prices

We used Multiraya’s adjusted

weighted-average COP for the POI. We

compared the weighted-average 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 below-cost prices within an

extended period of time, in substantial

quantities, and not at prices which

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 G&A portion of

COP. We recalculated the total material

costs by including work-in-process (see

Comment 4).

C. Results of COP Test

Pursuant to section 773(b)(2)(C) of the

Act, where less than 20 percent of a

respondent’s home market sales for a

model are at prices less than the COP,

we do not disregard any below-cost

sales of that model because we

determine that the below-cost sales were

not made within an extended period of

time in ‘‘substantial quantities.’’ Where

20 percent or more of a respondent’s

home market sales of a given model

during the POI are at prices less than

COP, we disregard the below-cost sales

because they are (1) made within an

extended period of time in substantial

quantities in accordance with sections

773(b)(2) (B) and (C) of the Act, and (2)

based on comparisons of prices to

weighted-average COPs for the POI,
Federal Register / Vol. 62, No. 8 / Monday, January 13, 1997 / Notices 1721

were 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. The results of

our cost test for Multiraya indicated that

for certain home market models less

than 20 percent of the sales of the model

were at prices below COP. We therefore

retained all sales of the model in our

analysis and used them as the basis for

determining NV. Our cost test for

Multiraya also indicated that within an

extended period of time (one year, in

accordance with section 773(b)(2)(B) of

the Act), for certain home market

models more than 20 percent of the

home market sales were sold at prices

below COP. In accordance with section

773(b)(1) of the Act, we therefore

excluded these below-cost sales from

our analysis and used the remaining

above-cost sales as the basis for

determining NV.

D. Calculation of Constructed Value

(CV)

In accordance with section 773(e) of

the Act, we calculated CV based on the

sum of Multiraya’s cost of materials,

fabrication, selling, general, and

administrative expenses (‘‘SG&A’’), and

profit, plus U.S. packing costs as

reported in the U.S. sales database. In

accordance with section 773(e)(2)(A) of

the Act, we based SG&A and profit on

the amounts incurred and realized by

the respondent in connection with the

production and sale of the foreign like

product in the ordinary course of trade,

for consumption in the foreign country.

We calculated Multiraya’s CV based on

the methodology described above for the

calculation of COP.

Price to Price Comparisons

Where we compared CV to export

prices, we deducted from CV the

weighted-average home market direct

selling expenses and added the

weighted-average U.S. product-specific

direct selling expenses (where

appropriate) in accordance with section

773(a)(8) of the Act. We calculated

price-based normal value using the

same methodology used in the

preliminary determination, with the

following exceptions: (1) We disallowed

Multiraya’s warranty claim as a

circumstance of sale warranty claim

adjustment (see, Comment 8) and 2) We

recalculated home market credit to

reflect verification findings (see

Comment 7).

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 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 Indonesian rupiah did not undergo

a sustained movement, nor were there

currency fluctuations during the POI.

Verification

As provided in section 782(i) of the

Act, we verified the information

submitted by Multiraya 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.

Interested Party Comments

Comment 1: Scope of Investigation

Respondents argue that the scope of

this investigation should be revised to

exclude melamine dinnerware that

exceeds a thickness of 0.08 inch and is

intended for retail markets when such

products are accompanied by

appropriate certifications presented

upon importation to the United States.

Petitioner objects to respondents’’

scope revision proposal because, it

believes, it has no legal or factual basis

and would result in an order that would

be very difficult to administer.

Petitioner further contends that

antidumping orders based on importer

certifications of use, such as the

proposal advocated by respondents, are

difficult to administer and should be

avoided where possible. Petitioner

argues that if respondents want to

produce merchandise for the retail

market that presents no scope issue,

respondents can produce merchandise

of a thinner wall thickness that falls

outside of the scope.

DOC Position

We agree with petitioner. Petitioner

has specifically identified which

merchandise is to be covered by this

proceeding, and the scope reflects

petitioner’s definition. As we stated in

Final Determination of Sales at Less

Than Fair Value: Carbon and Alloy

Steel Wire Rod from Brazil (59 FR 5984,

February 9, 1994), [p]etitioners’’ scope

definition is afforded great weight

because petitioners can best determine

from what products they require relief.

The Department generally does not alter

the petitioner’s scope definition except

to clarify ambiguities in the language or

address administrability problems.

These circumstances are not present

here.

The petitioner has used a thickness of

more than 0.08 inch, not end use, to

define melamine ‘‘institutional’’

dinnerware. The physical description in

the petition is clear, administrable and

not overly broad. Thus, we agree with

petitioner that there is no basis for

redefining the scope based on intended

channel of distribution or end use, as

respondents propose.

Comment 2: Alleged Underreporting of

U.S. Sales

Petitioner states that information on

Multiraya’s U.S. invoices reviewed at

verification demonstrates that Multiraya

seriously underreported its U.S. sales

because the data taken from the invoices

establishes that the product weight

reported by Multiraya is less than that

found on the actual invoices. Further,

petitioner claims Multiraya

compounded its underreporting of U.S

sales by not providing the Department

with an explanation during the

verification to validate the weight

discrepancy. Therefore, petitioner

asserts the Department should rely on

adverse facts available for the final

margin calculation for Multiraya.

However, if the Department were to

determine that facts available should

not be applied to Multiraya, petitioner

suggests that at a minimum, the

Department should apply partial facts

available and treat the unreported

quantities as ‘‘free merchandise.’’

Multiraya argues that it did not

underreport any U.S. sales, and that

petitioner’s arguments claiming

Multiraya has underreported its U.S.

sales is based on petitioner’s

misunderstanding of the information on

the record. Multiraya adds that the
1722 Federal Register / Vol. 62, No. 8 / Monday, January 13, 1997 / Notices

Department verified that it did not ship

anything to the U.S. other than the

subject merchandise in the quantities

listed. Therefore, Multiraya argues that

petitioner’s claim that it has ‘‘ghost’’ or

‘‘free’’ merchandise is false. Finally,

Multiraya argues that the differences in

weight do not constitute underreporting

of its sales to the United States.

DOC Position

We verified that Multiraya sold

subject merchandise by the number of

pieces and not by weight, and that

Multiraya keeps track of its sales by the

number of pieces sold. Multiraya’s sales

reporting was based on the quantity

sold, not on the weight of the

merchandise. For purposes of

responding to the Department’s

questionnaire, Multiraya reported actual

weights, which we verified. Thus, the

discrepancies in the weight actually

reported to the Department and the

‘‘standard’’ weights which were listed

on the U.S. invoices for purposes of

duty drawback payments to the

Indonesian government are not evidence

of any misrepresentation on Multiraya’s

part. Therefore, we disagree with

petitioner’s allegation that, since the

standard weight and the actual weight

differed, Multiraya actually shipped

additional ‘‘free merchandise’’ to the

U.S. Accordingly, we have used

Multiraya’s response for our final

determination.

Comment 3: Product Characteristics

Petitioner states that, based on the

Department’s verification of Multiraya’s

sales data, Multiraya’s reporting of

product characteristics (i.e., shape,

capacity, weight and thickness) is

replete with errors. As a result,

petitioner argues that the errors make it

impossible for the Department to

accurately use home market sales data

to identify the proper comparisons to

U.S. sales. Therefore, petitioner claims

that the Department should rely on the

facts available for Multiraya’s final

margin calculation.

Multiraya argues that, although

certain product characteristics were

misreported for some products (i.e.,

capacity and thickness), the Department

did not find any discrepancies in more

determinative characteristics such as

length, width, and diameter. Multiraya

argues that such misreporting will have

an insignificant effect on model

matching.

DOC Position

We agree with petitioner’s allegation

that Multiraya misreported certain

product characteristics such as the

weight and thickness of the product.

However, we have concluded that these

errors are minor with regard to both the

product matching criteria and the extent

of the incorrect reporting. We have

corrected those errors accordingly. We

determined that Multiraya misreported

the thickness of some of its products

because of the point of measurement

used for reporting to the Department.

We did not specify in the Department’s

questionnaire where the appropriate

point of measurement would be, hence

there were differences between the

Department’s measurement at

verification and Multiraya’s

measurement. We have also determined

that the more determinative product

characteristics were, in fact, reported

correctly (see Memorandum from MIDP

Team to Louis Apple, Acting Office

Director, August 12, 1996). Therefore,

we have rejected petitioner’s argument

that facts available are required as a

result of the differences in Multiraya

product matching characteristics.

Comment 4: Work-in-Process Inventory

(WIP)

Petitioner claims that Multiraya

underreported its material costs by

excluding the costs of WIP inventory

and points to Multiraya’s own

submission indicating that WIP

decreased from the beginning of the year

to year-end. Petitioner states that

Multiraya reported only those inputs

withdrawn from raw material inventory

during the POI, but that the change in

Multiraya’s WIP inventory should also

have been included as part of the

material costs. Since opening WIP is

much greater than closing WIP,

petitioner claims that Multiraya’s

exclusion of the change in WIP

significantly distorted the costs. As a

result of Multiraya’s deficient response,

and the inability of the Department to

verify the data completely, petitioner

claims that the Department should

apply total facts available for

Multiraya’s final margin calculation.

Multiraya argues that the Department

performed numerous tests on its

production costs at verification and

found no information to indicate that

Multiraya had under-reported its costs

due to changes in WIP or any other

factor. Moreover, Multiraya argues that

WIP is irrelevant unless raw material

costs fluctuate during the year, and the

Department verified that Multiraya’s

cost of raw materials did not fluctuate

during that time period.

DOC Position

We agree with petitioner that

Multiraya’s reported production costs

are understated; however, we disagree

with petitioner’s suggestion that the

remedy for this error is to apply total

facts available. Multiraya reported its

per-unit costs based on the cost incurred

during the period (without considering

the WIP balances), allocated over the

total amount of finished goods

produced. Because Multiraya failed to

include the change in WIP (which

represents the costs of semi-finished

goods that were completed during the

period) the reported costs are

understated. We have corrected for this

understatement by allocating the net

change in WIP balances to all of the

goods produced. This allocation was

accomplished by determining the

percentage relationship between the

change in WIP and the reported material

cost.

Further, we disagree with Multiraya’s

assertion that the change in WIP is only

significant when the price of raw

materials is fluctuating, because the

change in WIP represents costs incurred

to produce the units recorded as

finished goods in this period, thus the

amount can be significant.

Comment 5: Transaction and ProductSpecific Yields

Petitioner contends that verification

revealed that Multiraya could have

calculated product-specific yields for

home market sales based on stock cards

and sales invoices. By Multiraya

maintaining its claim that it could not

calculate more specific yields and thus

using an average yield, it has in effect

minimized its dumping margin.

Consequently, petitioner argues that this

is another reason for the Department

should apply total facts available.

Multiraya states that it did not

maintain production records in its

normal course of business that would

have enabled it to calculate productspecific yields. Multiraya contends that

petitioner has misunderstood

Multiraya’s accounting system.

Multiraya explains that, because it

tracks its consumption of imported

melamine powder for purposes of

supporting duty drawback claims with

the Indonesian government, it can link

the purchase of imported melamine

powder specifically to the production of

melamine dinnerware sold for export. In

so far as, Multiraya does not receive a

duty drawback refund for domestic

melamine, it had no reason to track

yields for products that use domestic

melamine powder. Thus, Multiraya

states that it cannot link the purchase of

domestic melamine powder to specific

production and sale of melamine

dinnerware products. As a result,

Multiraya asserts that would be unable

to calculate product-specific or batchspecific production yields for products
Federal Register / Vol. 62, No. 8 / Monday, January 13, 1997 / Notices 1723

manufactured from domestic melamine

powder. Accordingly, Multiraya

contends that it is unfair for the

Department to apply facts available for

failure to provide information on

product-specific yields that cannot be

derived from its records.

DOC Position

The Department’s preference is to use

product-specific cost data, which

includes product specific yield results,

for calculating COP and CV. The

Department uses the most specific and

reasonable allocation methodology

possible given the available data (see

Final Determination at Sales Less Than

Fair Value: Welded Stainless Steel Pipe

From Malaysia, 59 FR 4023, 4027,

January 28, 1994). In this instance,

Multiraya reported its costs based on

overall yield information because it

claimed that its records do not permit it

to calculate cost data on a more specific

basis. Our verification revealed nothing

to contradict Multiraya’s claim that it

does not maintain product-specific yield

data in its normal course of business.

The accounting records petitioner

identified could arguably be used to

calculate an average yield for each

specific order. Nevertheless, compiling

and aggregating this data would not

provide product-specific yield

information as petitioner claims.

Instead, this calculation would result in

average yield data, which would be no

more specific than the information

provided by Multiraya. Accordingly, we

have accepted Multiraya’s average yield

rate calculation which we tested at

verification.

Comment 6: Land Rental

Petitioner claims that Multiraya failed

to disclose until verification that it

leased land from an affiliated party for

use in its dinnerware business, and that

Multiraya was unable to demonstrate

the arm’s length pricing of the land rent.

Citing Indonesian financial statistics for

support its contention that the rent

expense is too low, petitioner argues

that this lease amount must be adjusted

to reflect the true cost of Multiraya’s

lease and cites

Multiraya argues that rental payments

as affiliated party transactions are

merely another form of capital

contribution by shareholders and the

Department’s practice is to ignore such

intracompany transfers, regardless of

whether they relate to sales or

production. Multiraya explains that the

land was owned by a company official

or ‘‘shareholder’’ who contributed the

land to Multiraya for a fixed payment.

Thus, according to Multiraya, the rent

the shareholder receives is equivalent to

a dividend or profit sharing amount.

DOC Position

We verified that Multiraya reported

the land rental expense that was

reflected in its financial statements. We

analyzed the amount of the recorded

expense in relation to the total costs and

the overhead expense and noted that the

reported amount is immaterial. Further

the effect of adjusting the recorded

amount by the inflation rate

experienced from 1991 until the POI, as

requested by the petitioner, is also

immaterial as petitioner has not shown

any substantial link between inflation in

Indonesia and the land rental costs.

Accordingly, we have accepted the land

rental amount as the figure recorded in

the financial statement.

Comment 7: Home Market Credit

Expenses

Petitioner states that Multiraya

overstated its home market credit

expenses for most reported transactions.

Petitioner argues that the Department

should either recalculate or disallow

entirely the claimed credit expense.

Multiraya argues that the

overstatement of home market credit

expense is directly related to a computer

programming error and should not

warrant applying facts available.

Multiraya requests that the Department

use verified information for its final

margin calculation.

DOC Position

We agree with petitioner that

Multiraya’s home market credit

expenses were overstated, and we also

agree that it is appropriate to recalculate

these expenses to correct the error. At

verification, the Department found that,

aside from a computer error, the

reported credit expenses were accurate.

This computer error does not warrant

the application of facts available. In

response to the Department’s request,

Multiraya has resubmitted corrected

payment dates. Hence, we have

recalculated the home market credit

expense using the corrected information

submitted by Multiraya.

Comment 8: Home Market Warranty

Expense

Petitioner claims that Multiraya

improperly allocated home market

warranty expenses over all sales, instead

of on a more specific basis. According

to petitioner, verification demonstrated

that Multiraya could have calculated

this expense on a customer-specific

basis. Accordingly, petitioner contends

the Department should treat the claimed

warranty amount as an indirect selling

expense rather than a direct selling

expense.

Multiraya argues that the

Department’s practice with respect to

warranty expenses does not require a

respondent to report a sale-by-sale

breakdown of direct warranty expenses.

Contrary to petitioner’s claim, Multiraya

argues that verification proved its

warranty expenses are directly related to

the subject merchandise because the

expenses were incurred for melamine

institutional dinnerware products. In

addition, Multiraya argues that given its

accounting records, an overall allocation

methodology was the only feasible

method available for it to calculate its

warranty expense. Multiraya argues that

a customer-specific methodology would

not provide any greater accuracy than

an overall warranty expense

methodology.

DOC Position

It is the burden of the respondent to

demonstrate it is entitled to an

adjustment under the Act. At

verification, Multiraya was unable to

provide any documentation to support

its claim for warranty expenses. Rather,

the claimed warranty expenses had been

derived from Multiraya’s best estimate

and not based on actual results. Because

Multiraya was unable to meet its

burden, we are calculating normal value

without adjustment for home market

warranty expenses.

Comment 9: Home Market Inland

Freight

Petitioner claims that Multiraya’s

reported home market freight expense

claim could not be verified and

contained many discrepancies.

Specifically that Multiraya’s reported

freight expenses was deficient because it

did not reflect: (1) Use of diesel fuel,

rather than gasoline as reported, (2) lack

of documentation to support an

allocation methodology of how it

determined the freight per transaction,

and (3) inclusion of non subjectmerchandise.

Multiraya argues that its reported

home market freight expenses were

verified. As such, Multiraya states that

it has reported its home market inland

freight expense to the best of its ability,

and recommends that the Department

not apply facts available to its final

margin calculation.

DOC Position

The Department’s preference is that,

wherever possible, freight adjustments

should be reported on a sale-by-sale

basis, rather than an overall basis (see,

e.g., Final Results of Antidumping Duty

Administrative Review: Replacement
1724 Federal Register / Vol. 62, No. 8 / Monday, January 13, 1997 / Notices

Parts for Self-Propelled Bituminous

Paving Equipment from Canada 56 FR

47451, 47455, September 19, 1991). If a

respondent does not maintain its

records to enable freight expense

reporting at this level, then our

preference is to apply an allocation

methodology at the most specific level

permitted by a respondent’s records,

unless a respondent can demonstrate

that doing so is overly burdensome or

that its alternative methodology is

representative and non-distortive of

transaction-specific sales. Multiraya

allocated all home market freight by

weight over all home market sales

inclusive of subject and non-subject

merchandise. Verification did not

contradict Multiraya’s claim that it is

unable to report freight expenses on a

transaction-specific basis. The nonsubject merchandise included in the

freight allocation is all melamine

products not covered by the scope of

this investigation. In so far as we find

that expense allocation of melamine

product weight, it is a reasonable

approach to account for the inclusion of

non-subject merchandise in the reported

freight expenses. We have accepted a

Multiraya’s methodology as

representative and non-distortive of

transaction-specific sales information

(see Final Determination of Sales at Less

than Fair Value: Oil Country Tubular

Goods from Korea, 60 FR 33561, June

28, 1995).

Comment 10: Understating of U.S.

Credit Expenses

Petitioner claims that Multiraya

improperly calculated reported credit

on U.S. sales by reporting shipment date

as the date of ocean shipment, rather

than as the date of factory shipment. To

correct this error, petitioner argues that

the Department should recalculate

credit using invoice date as shipment

date.

Multiraya responds that it correctly

reported the shipment date for this

expense based on the date from the bill

of lading because it is on that date that

the merchandise left the factory.

DOC Position

We have accepted Multiraya’s

reported credit expense, because at

verification we found no evidence to

indicate any differences between the

date of factory shipment and the bill of

lading date, i.e., shipment date.

Comment 11: U.S. Dollar Interest Rate

vs Rupiah Interest Rate

Petitioner states that, although

Multiraya invoices its U.S. customer in

U.S. dollars, it ultimately receives

payment in Indonesian rupiahs because

the bank converts the customer’s

payment. As a result, petitioner claims

that Multiraya’s opportunity cost is

incurred in rupiah, not dollars.

Therefore, petitioner argues that the

Department should apply a rupiah

interest rate to calculate U.S. credit

expenses.

Multiraya argues that the Department

properly applied a U.S. dollar rate to the

calculation of U.S. credit expenses.

Multiraya states that the fact that it

ultimately receives payment for its

dollar-denominated sales in rupiahs is

not determinative. However, Multiraya

states that it invoices its customers in

U.S. dollars, and its customers pay in

U.S. dollars via letter of credit.

Therefore, its opportunity costs are

properly associated with U.S. dollars.

DOC Position

We agree with Multiraya’s claim that

based on the facts in this investigation

the opportunity cost experienced by

Multiraya was in U.S. dollars. The

Department’s policy is to calculate

imputed credit costs using a weighted

average short term borrowing which

reflects the currency in which the sale

was invoiced. Consistent with the

Department’s practice we have

determined no credit cost adjustments

are warranted. (See, e.g., Final

Determination at Sales Less Than Fair

Value: Pasta from Turkey, 61 FR 30309,

30324 (June 14, 1996)).

Comment 12: Duty Drawback Claim

Petitioner claims that Multiraya

improperly included as an offset to

costs, drawbacks on duties paid prior to

the POI. Petitioner argues that the

Department should deny Multiraya’s

duty drawback claim entirely. Petitioner

argues that Multiraya’s duty amount

should be lowered because: (1)

Multiraya did not include duties

associated with opening WIP, ( 2)

Multiraya recorded material costs

inclusive of duties, and (3) Multiraya’s

WIP that was incorporated in materials

was not included in reported material

costs. Finally, petitioner states that

Multiraya did not demonstrate a tie

between the quantity of imported

melamine powder on which the duty

was paid and the quantity of exports of

imported melamine upon which the

drawback was received. For the abovementioned reasons, petitioner argues

that the Department should reject

Multiraya’s claim for a duty drawback

in its final margin calculation.

Multiraya argues that it reported its

duty drawback refund based on duties

paid before the POI in an effort to reflect

actual refunds received during the POI.

Further, Multiraya argues that

petitioner’s claim with regard to

unreported duty on the change in WIP

is irrelevant to the reported duty

drawback amount because the

Department requires a respondent to

report duty drawback claims on the

same basis as it receives duty drawback

refunds. Multiraya states that the

absence of WIP costs and quantities

from its calculation of reported costs is

not beneficial to its final margin

calculation. Multiraya states that, at

verification, the Department confirmed

that all imported melamine was indeed

used in exported melamine production

during the POI.

DOC Position

As discussed in Comment 4, we

believe that the change in WIP should

be included in the total material costs,

and we have adjusted the total cost of

melamine production to take this into

account. However, we do not agree with

petitioner that Multiraya has not

demonstrated that it is entitled to a duty

drawback. We verified Multiraya’s duty

drawback process, its method of

tracking total duties paid and weights

and quantities of production and

determined it was appropriate.

Accordingly, there is no basis to deny

Multiraya’s duty drawback claim (See

Verification Report at page 11 and Cost

Verification Exhibit 109).

Comment 13: Exclusion of Excise Tax

From Material Costs

Petitioner argues that Multiraya’s

claim of an income tax credit for excise

taxes paid on exported melamine

products is incorrect and should not

have been reported as duty drawback

because said excise tax is not supported

by a link between imports and exports.

In addition, petitioner states that Cost

Verification Exhibit 111 indicates that

the income tax is allocated over a large

number of products, including domestic

products. Petitioner claims that there is

no information on the record to suggest

that this tax credit is directly linked to

export or export quantities exclusively.

Since the burden of proof to support its

claim is with Multiraya, petitioner

argues the Department must deny

Multiraya’s duty drawback claim for an

income tax credit for paid excise taxes.

Multiraya argues that Cost

Verification Exhibit 109 clearly details

that import duties and value added tax

paid on imported melamine powder

were eventually recovered via a tax

credit on exported melamine

dinnerware products. Thus, Multiraya

argues, the Department should accept

the duty drawback claim.
Federal Register / Vol. 62, No. 8 / Monday, January 13, 1997 / Notices 1725

DOC Position

We agree with Multiraya. We verified

that Multiraya’s excise tax was imposed

on imported melamine powder (which

was used to produce MIDP for export)

and was credited through the income

tax return upon export of the finished

product. Accordingly, the claimed

drawback amount was properly

classified (see Cost Verification Exhibit

111).

Comment 14: Foreign Inland Freight

Petitioner claims that Multiraya

improperly reported a U.S. sale without

including the foreign inland freight

expense incurred on that sale based on

the Department’s verification

information. Because of this exclusion

petitioner contends that the Department

should apply facts available and assign

the highest amount of foreign inland

freight to this sale in the calculation of

Multiraya’s final margin.

Multiraya argues that it properly

reported foreign inland freight for all its

U.S. sales. Multiraya contends that

foreign inland freight should not have

been applied to the U.S. sale at issue

because it in fact was not shipped via

ground transportation.

DOC Position

We agree with Multiraya. We verified

that foreign inland freight was properly

applied to U.S. sales and, for the sale in

question, we find that foreign inland

freight expenses were not incurred (see

Verification Exhibit 13 and 19).

Comment 15: U.S. Warranty Expenses

Petitioner contends that Multiraya

failed to report warranty expenses

incurred on U.S. sales. Petitioner states

that the Department’s verification of

sales documents and customer files

revealed that although Multiraya did not

have a formal warranty policy, it

allowed customers to return

unsatisfactory merchandise, which is

the equivalent of a warranty expense.

Consequently, petitioner contends that

the Department should apply facts

available to Multiraya’s final margin

calculation.

Multiraya responds that it did not

incur any warranty expenses on U.S.

sales. Multiraya states that the

Department verified that it did not grant

any warranty-related claims during the

POI. In addition, Multiraya contends

that the Department’s reconciliation of

U.S. sales to Multiraya’s financial

statements at verification proved that its

U.S. customer did not receive any

credits toward its payment to Multiraya.

DOC Position

Although the Department’s

verification report indicates that

Multiraya’s customers are able to return

unsatisfactory merchandise, at

verification we did not find any

evidence to suggest that Multiraya is

contractually obligated to provide credit

or any other redress for unsatisfactory

merchandise. Therefore we do not

consider this informal return policy to

constitute a warranty obligation

associated with Multiraya’s sales.

Accordingly we determined that

Multiraya does not incur warranty

expenses and application of facts

available is not warranted.

Comment 16: U.S. Containerization

Costs

Petitioner states that Multiraya failed

to report containerization expenses on

U.S. sales. Therefore, petitioner

contends that the Department should

estimate the expense to be equal to labor

costs for packing or use the public

record figure for Indonesian

containerization and include this

amount in the final determination

margin calculations.

Multiraya argues that the costs of

containerization are included in

Multiraya’s reported expenses.

DOC Position

We agree with Multiraya. We verified

that costs associated with

containerization are included in

Multiraya’s packing expenses. (See

Verification Exhibit 17).

Comment 17: U.S. Sales Treated as

Affiliated Party Sales

Petitioner claims that information on

the record indicates a close supplier

relationship between Multiraya and its

sole U.S. customer. Consequently,

petitioner states Multiraya’s failure to

provide all the information to the

Department relevant to its affiliation is

equivalent to Multiraya submitting a

seriously deficient response. Further,

petitioner states that the Department

verified all U.S. sales are made to one

customer and would fall within the

definition of affiliated party set forth in

Section 771(33) of the Tariff Act. In

addition, petitioner argues that there is

clearly an exclusive seller/purchaser

relationship with respect to shipments

of the subject merchandise from

Indonesia to the United States. As a

result of Multiraya’s failure to provide

the Department with the information

required to calculate CEP for its U.S.

sales, petitioner suggests that the

Department apply facts available, as set

forth in the petition, to the final margin

calculation for Multiraya.

Multiraya states there is not an

affiliation with its sole U.S. customer, as

neither has the authority or is in the

position to exercise restraint or

discretion over the other. Multiraya

states that Multiraya and its customer

do not have an exclusive business

relationship, as Multiraya is not the

only supplier of the subject

merchandise for the U.S. customer.

Multiraya states that the Department

reviewed supporting documentation

that demonstrated that Multiraya, in

fact, has sought new business and other

customers. In addition, Multiraya states

that there is no corporate relationship

between it and its U.S. customer.

Multiraya states that the Department

reviewed its corporate documentation

and did not find any reference to the

U.S. customer’s owners, directors, or

managers.

DOC Position

We disagree that Multiraya’s U.S.

sales should be classified as CEP sales

because we do not find that the

evidence establishes that the sole U.S.

importer and Multiraya are affiliated

parties. Section 771(33)(G) of the Act

provides, inter alia, that parties will be

considered affiliated when one controls

the other. A person controls another

person if the person is ‘‘legally or

operationally in a position to exercise

restraint or direction over another

person.’’ SAA at 838. The SAA further

states that a company may be in a

position to exercise restraint or

direction through, among other things,

‘‘close supplier relationships in which

the supplier or buyer becomes reliant

upon the other.’’ Id.

Pursuant to section 771(33) of the Act,

we reviewed Multiraya’s relationship

with its U.S. importer. The evidence

indicates that there is no corporate or

family relationship between the two

companies. The Department requested

Multiraya to provide evidence to

support its assertion that it was not

under the control of its sole U.S.

customer and it freely negotiated its

U.S. prices for the subject merchandise.

Multiraya submitted written

documentation between Multiraya and

this U.S. customer which demonstrated

that negotiations occurred between

Multiraya and its sole U.S. customer

regarding melamine product prices, and

that Multiraya was not controlled by the

customer in setting the price of the

subject merchandise (See Multiraya’s

June 7, 1996, Supplemental

Questionnaire Response at Exhibit 1 and

2). We verified that the negotiated prices

reflected the prices reported in

Multiraya U.S. sales listing. The

evidence on the record also
1726 Federal Register / Vol. 62, No. 8 / Monday, January 13, 1997 / Notices

demonstrates that Multiraya does not

have an exclusive supplier relationship

with its U.S. customer as it attempted to

solicit business from other U.S.

companies (See Multiraya’s July 15,

1996, Supplemental Questionnaire

Response at Exhibit 3). Therefore, we

have determined that the evidence on

the record supports the claim that

Multiraya is not affiliated with its U.S.

customer.

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 MIDPs that

are entered, or withdrawn from

warehouse, for consumption on or after

August 22, 1996, 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 NV exceeds the export price,

as indicated in the chart below. This

suspension of liquidation will remain in

effect until further notice.

Exporter/manufacturer

Weightedaverage

margin percentage

P. T. Mayer Crocodile ............... 12.90

P. T. Multi Raya Indah Abah .... 8.10

All Others .................................. 8.10

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

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

Department has not included zero, de

minimis weighted-average dumping

margins, and 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: January 6, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–753 Filed 1–10–97; 8:45 am]

BILLING CODE 3510–DS–P

[A–583–825]

Notice of Final Determination of Sales

at Less Than Fair Value: Melamine

Institutional Dinnerware Products

From Taiwan

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: January 13, 1997.

FOR FURTHER INFORMATION CONTACT:

Everett Kelly or David J. Goldberger,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW., Washington,

DC 20230; telephone: (202) 482–4194, or

(202) 482–4136, respectively.

The Applicable Statute

Unless otherwise indicated, all

citations to the Tariff Act of 1930, as

amended (‘‘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’’).

Final Determination

We determine that melamine

institutional dinnerware products

(‘‘MIDPs’’) from Taiwan are being, or are

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 and

Postponement of Final Determination:

Melamine Institutional Dinnerware

Products from Taiwan (61 FR 43341,

August 22, 1996)), the following events

have occurred:

In September and October 1996, we

verified the questionnaire responses of

respondents Yu Cheer Industrial Co.,

Ltd. (Yu Cheer) and Chen Hao Plastic

Industrial Co., Ltd. (Chen Hao Taiwan).

On November 23, 1996, the Department

requested Chen Hao Taiwan to submit

new computer tapes to include data

corrections identified through

verification. This information was

submitted on December 5, 1996.

Petitioner, the American Melamine

Institutional Tableware Association

(‘‘AMITA’’), and respondents submitted

case briefs on November 27, 1996, and

rebuttal briefs on December 3, 1996. The

Department held a public hearing for

this investigation on December 5, 1996.

Scope of Investigation

This investigation covers all items of

dinnerware (e.g., plates, cups, saucers,

bowls, creamers, gravy boats, serving

dishes, platters, and trays) that contain

at least 50 percent melamine by weight

and have a minimum wall thickness of

0.08 inch. This merchandise is

classifiable under subheadings

3924.10.20, 3924.10.30, and 3924.10.50

of the Harmonized Tariff Schedule of

the United States (HTSUS). Excluded

from the scope of investigation are

flatware products (e.g., knives, forks,

and spoons).

Although the HTSUS subheadings are

provided for convenience and customs

purposes, our written description of the

scope of this investigation is dispositive.

Period of Investigation

The POI is January 1, 1995, through

December 31, 1995.

Facts Available

IKEA and Gallant

We did not receive a response to our

questionnaire from either IKEA Trading

Far East Ltd. (IKEA) or Gallant Chemical

Corporation (Gallant). Section 776(a)(2)

of the Act provides that if an interested

party withholds information that has

been requested by the Department, fails

to provide such information in a timely

manner and in the form requested,

significantly impedes a proceeding, or

provides such information but the

information cannot be verified, the

Department shall use the facts otherwise

available in reaching the applicable

determination. Because IKEA and

Gallant failed to submit the information

that the Department specifically

requested, we must base our

determinations for those companies on

the facts available.

Section 776(b) of the Act provides

that adverse inferences may be used

against a party that has failed to

cooperate by not acting to the best of its

ability to comply with a request for

information. IKEA’s and Gallant’s

failure to respond to our questionnaire

demonstrates that IKEA and Gallant

have failed to cooperate to the best of

their abilities in this investigation.

Accordingly, the Department has

determined that, in selecting from

among the facts otherwise available, an

adverse inference is warranted.

Section 776(c) of the Act provides that

where the Department selects from