Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Notices 20227

differences in packing between the two

markets, we increased home market

price by U.S. packing costs and reduced

it by home market packing costs. Prices

were reported net of value added taxes

(VAT) and, therefore, no deduction for

VAT was necessary. We made

adjustments, where appropriate, for

physical differences in merchandise in

accordance with section 773(a)(6)(C)(ii)

of the Act.

Constructed Value

In accordance with section 773(e) of

the Act, we calculated CV based on the

sum of UES’s cost of materials and

fabrication employed in producing the

subject merchandise, SG&A and profit

incurred and realized in connection

with production and sale of the foreign

like product, and U.S. packing costs. In

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

we based SG&A and profit on the

amounts incurred and realized by UES

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

used the costs of materials, fabrication,

and general and administrative

expenses as reported in the CV portion

of UES’s questionnaire response. We

used the U.S. packing costs as reported

in the U.S. sales portion of UES’s

questionnaire response. We based

selling expenses and profit on the

information reported in the home

market sales portion of UES’s

questionnaire response. See Certain

Pasta from Italy; Notice of Preliminary

Determination of Sales at Less Than

Fair Value and Postponement of Final

Determination, 61 FR 1344, 1349

(January 19, 1996). For selling expenses,

we used the average per-unit home

market selling expenses of above-cost

sales weighted by the total quantity

sold. For actual profit, we first

calculated the difference between the

home market sales value and home

market COP, for all above-cost home

market sales, and divided the sum of

these differences by the total home

market COP for these sales. We then

multiplied this percentage by the COP

for each U.S. model to derive an actual

profit.

Commission Offset

Because there are commissions on

U.S. sales and not on home market

sales, we made an adjustment for

indirect selling expenses in the home

market to offset the U.S. commissions.

We applied the offset to NV or CV, as

appropriate, in accordance with 19 CFR

353.56(b)(1).

We based the commission offset

amount on the amount of the home

market indirect selling expenses. We

limited the home market indirect selling

expense deduction by the amount of the

commissions incurred on sales to the

United States.

Preliminary Results of the Review

As a result of our comparison of EP

and NV, we preliminarily determine

that the following weighted-average

dumping margin exists:

Manufacturer/Exporter Period Margin

(percent)

United Engineering Steels, Limited (UES), (now British Steel, Engineering Steels Limited) ............................. 3/1/94–2/28/95 1.26

Parties to the proceeding may request

disclosure within 5 days of the date of

publication of this notice. Any

interested party may request a hearing

within 10 days of publication. Any

hearing, if requested, will be held 44

days after the publication of this notice,

or the first workday thereafter.

Interested parties may submit case briefs

within 30 days of the date of publication

of this notice. Rebuttal briefs, which

must be limited to issues raised in the

case briefs, may be filed not later than

37 days after the date of publication.

Parties who submit comments are

requested to submit with their

comments (1) a statement of the issue

and (2) a brief summary of the comment.

The Department will publish a notice of

final results of this administrative

review, which will include the results of

its analysis of issues raised in any such

comments.

The Department shall determine, and

the Customs Service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

EP and NV may vary from the

percentage stated above. Upon

completion of this review, the

Department will issue appraisement

instructions directly to the Customs

Service.

Furthermore, the following deposit

rates will be effective upon publication

of the final results of this administrative

review for all shipments of certain hotrolled lead and bismuth carbon steel

products from the United Kingdom

entered, or withdrawn from warehouse,

for consumption on or after the

publication date, as provided for by

section 751(a)(2)(c) of the Act: (1) The

cash deposit rate for the reviewed

company will be the rate established in

the final results of this review; (2) for

merchandise exported by manufacturers

or exporters not covered in these

reviews but covered in the original lessthan-fair-value (LTFV) investigation or a

previous review, the cash deposit 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 or a previous 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) for all other

producers and/or exporters of this

merchandise, the cash deposit rate shall

be 25.82 percent, the ‘‘all others’’ rate

established in the LTFV investigation.

These deposit rates, when imposed,

shall remain in effect until publication

of the final results of the next

administrative review.

This notice also 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)) and 19

CFR 353.22.

Dated: April 26, 1996.

Paul L. Joffe,

Deputy Assistant Secretary for Import

Administration.

[FR Doc. 96–11248 Filed 5–3–96; 8:45 am]

BILLING CODE 3510–DS–P

[A–423–602]

Industrial Phosphoric Acid From

Belgium; Final Results of Antidumping

Duty Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

antidumping duty administrative

review.
20228 Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Notices

1 Prayon’s accounts receivable are discounted

through a factoring transaction with Prayon

Services, a wholly-owned subsidiary established in

compliance with Belgian law. ‘‘Factoring is a type

of financial service whereby a firm {in this case

Prayon} sells or transfers title to its accounts

receivable to a factoring company {i.e., the factor,

Prayon Services}, which then acts as principal, not

as an agent. The receivables are sold without

recourse, meaning that the factor {Prayon Services}

cannot turn to the seller in the event accounts prove

uncollectible.’’ Barron’s Financial Guides,

Dictionary of Finance and Investment Terms, Third

Edition, 1991, at page 136. Prayon engages in

discount factoring meaning that it sells its accounts

receivables at a discount from face value and

obtains immediate payment from Prayon services.

SUMMARY: On November 15, 1995, the

Department of Commerce (the

Department) published the preliminary

results of review of the antidumping

duty order on industrial phosphoric

acid (IPA) from Belgium (52 FR 31439;

August 20, 1987). The review covers one

manufacturer, Socie ́te ́ Chimique PrayonRupel (Prayon), and exports of the

subject merchandise to the United

States during the period August 1, 1993,

through July 31, 1994.

We gave interested parties an

opportunity to comment on the

preliminary results of review. Based on

our analysis of the comments received,

we have changed our analysis for the

final results from that presented in the

preliminary results of review.

EFFECTIVE DATE: May 6, 1996.

FOR FURTHER INFORMATION CONTACT:

David Genovese or Joseph Hanley,

Office of Antidumping Compliance,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue NW., Washington,

D.C. 20230, telephone: (202) 482–5254.

SUPPLEMENTARY INFORMATION:

Background

On August 31, 1994, Prayon requested

an administrative review of the

antidumping duty order on IPA from

Belgium. The Department initiated the

review on September 16, 1994 (59 FR

47609), covering the period August 1,

1993, through July 31, 1994. On

November 15, 1995, the Department

published the preliminary results of

review (60 FR 57398). The Department

has now completed this review in

accordance with section 751 of the

Tariff Act of 1930, as amended (the Act).

Unless otherwise indicated, all citations

to the statute and to the Department’s

regulations are references to the

provisions as they existed on December

31, 1994.

Scope of the Review

The products covered by this review

include shipments of IPA from Belgium.

This merchandise is currently

classifiable under the Harmonized Tariff

Schedule (HTS) item number 2809.20.

The HTS item numbers are provided for

convenience and U.S. Customs

purposes. The written description

remains dispositive.

Analysis of Comments Received

We gave interested parties an

opportunity to comment on the

preliminary results of review. We

received comments from Prayon and

from FMC Corporation and Monsanto

Company, two domestic producers of

industrial phosphoric acid.

Comment 1

Prayon argues that for purchase price

(PP) sales, when there are commissions

in the U.S. market but not in the home

market, it is the Department’s practice to

make a circumstance-of-sale (COS)

adjustment by first adding U.S.

commissions to the weighted-average

foreign market value (FMV). Prayon

asserts that FMV is then reduced (offset)

by the lesser of the home market

indirect selling expenses or U.S.

commissions. Prayon argues that in the

preliminary results of review, the

Department deducted U.S. commissions

from the United States price rather than

add those commissions to the FMV.

Prayon asserts that in its final

determination, the Department should

add U.S. commission to the weightedaverage FMV and then reduce FMV by

Prayon’s home market indirect selling

expenses capped by U.S. commissions.

Department’s Position

We agree with Prayon. As Prayon

states, in PP situations, when there are

commissions in the U.S. market but not

in the home market, it is the

Department’s practice to add U.S.

commissions to FMV and then subtract

from FMV home market indirect selling

expenses capped by U.S. commission

expense. See, e.g., Certain InternalCombustion Industrial Forklift Trucks

from Japan; Final Results of

Antidumping Duty Administrative

Review, 59 FR 1,374 (January 10, 1994).

Accordingly, for these final results, we

did not subtract U.S. commissions from

U.S. price. Rather, we added U.S.

commissions to FMV and then

subtracted from FMV home market

indirect selling expenses capped by U.S.

commission expense.

Comment 2

Prayon argues that in calculating the

FMV offset for U.S. commissions, the

Department should have included

inventory carrying costs in its pool of

home market indirect selling expenses

since such costs are indirect selling

expenses.

Department’s Position

We agree with Prayon. For these final

results, we have included inventory

carrying costs in the pool of home

market indirect selling expenses when

calculating the FMV offset for U.S.

commissions.

Comment 3

Petitioners argue that by accepting

Prayon’s reported credit expense, the

Department has based the date of

payment on the date that Prayon

received a transfer of funds from its

wholly-owned subsidiary, Prayon

Services et Finance S.A. (Prayon

Services). Petitioners contend that this

approach treats a transfer of funds

between a parent company and its

wholly-owned subsidiary as the

equivalent of an independent payment

for the merchandise in question.

Petitioners assert that in accepting the

discounted transaction between Prayon

and Prayon Services, the Department

appears to rely on Prayon’s allegation

that the Belgian tax law required Prayon

Services to use a market-based discount

rate. Petitioners assert that the issue of

whether Prayon Services’ discount rate

is acceptable under Belgian tax law is

irrelevant. Rather, the central issue is

when payment is received on the sale of

the merchandise in question. Petitioner

argues that a transfer of funds between

a wholly-owned subsidiary and its

parent is simply not, as a matter of

economic reality, a payment in the

context of the sale of this merchandise.

Petitioner further contends that for

these final results, the Department,

when calculating credit expense, should

measure the time period in which credit

is extended in a particular transaction

from the date of shipment of the

merchandise to the date payment is

received from the purchaser of such

merchandise.

Prayon argues that the amount by

which accounts receivables are

discounted in factoring transactions is

an appropriate measure of credit cost

since the discount accepted by Prayon

is Prayon’s cost of financing.1 Prayon

asserts that there is no merit in

Petitioners’ argument that credit costs

must always be calculated as the cost of

financing the resulting accounts

receivable from the date of shipment of

the merchandise until payment is

received from the purchaser of such

merchandise. Moreover, asserts Prayon,

where a factoring transaction has taken

place and payment is received from a

third party, Petitioners’ calculation of
Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Notices 20229

credit cost does not measure the seller’s

cost of financing the sale, and

consequently its use would be

inappropriate.

Furthermore, Prayon asserts that the

anticipated date of payment of the

receivable is taken into account in

determining the amount of the discount.

Accordingly, the actual date on which

Prayon Services ultimately receives

payment from the purchaser has no

effect on Prayon’s return. Prayon argues

that the Department has expressly

recognized this in an analogous

circumstance where a seller is given a

promissory note in exchange for

merchandise and, prior to the stipulated

payment date, sells the note at a

discount to a financial institution.

Prayon cites Lightweight Polyester

Filament Fabrics from the Republic of

Korea, 48 FR 49,679 (1983), in which

the Department stated that:

By imputing an interest expense from the

date of delivery to the date of payment, the

expense incurred for granting credit is

recognized. Further, when a note received for

payment of a sale is discounted prior to its

maturity, this amount represents the credit

cost and we recognize this.

Prayon asserts that it is clear that,

where the seller of merchandise

concerned engages in a bona fide sale of

a purchaser’s debt to a factor or other

financing entity, the seller’s credit cost

for the merchandise sales transaction is

the discount taken by the purchaser of

the receivable.

With regard to Prayon’s relationship

to Prayon Services, Prayon argues that

the amount of discount taken in the sale

of the accounts receivable can be used

since the record shows that transactions

between the two companies were

conducted on an arm’s-length basis.

Prayon states that it sold all of its

receivables at a discount to Prayon

Services, which is an official

coordination center certified under

Belgian law. Prayon, citing to its

supplemental questionnaire response of

April 27, 1995 (at page 12), states that

under Belgian law:

The statutory requirement is that the

factoring of accounts by the coordination

center be conducted on arm’s-length terms.

As part of the certification process and on an

ongoing basis, Prayon must demonstrate that

the rates negotiated between Prayon and

Prayon Services et Finance do not exceed

those charged between independent parties

and are in fact comparable to those charged

by independent banks and other financial

institutions.

Prayon argues that the antidumping

law does not contemplate, and it is not

the Department’s practice, that all

related party transactions are to be

disregarded regardless of their terms

and circumstances. As an example,

Prayon cites to the antidumping

regulations’ related party provision (19

C.F.R. § 353.45(a)) which states that the

Department will calculate foreign

market value based on a sale by a

producer or reseller to a related party if

the Department is satisfied that ‘‘the

price is comparable to the price at

which the producer or reseller sold such

or similar merchandise to a person not

related to the seller.’’ Prayon also cites

to 19 U.S.C. § 1677b(e)(2) which

provides that the Department may

disregard related party transactions in

determining any element of value in

constructed value calculations, if ‘‘the

amount representing that element does

not fairly reflect the amount usually

reflected in sales in the market under

consideration of merchandise under

consideration.’’

Prayon, citing to Certain Cold-Rolled

Carbon Steel Flat Products from

Germany, 60 FR 65,264 (December 19,

1995) (hereinafter Steel Flat Products

from Germany), states that the

Department squarely held that it would

use related party transactions in

calculating the credit cost adjustment

where ‘‘information on the record

indicates that the intracompany loans in

question were made at what could be

considered market rates.’’ Similarly, in

Fresh Kiwifruit from New Zealand, 57

FR 13,695 (April 17, 1992), the

Department rejected an effort by a

respondent to disregard a related-party

loan on the ground that ‘‘there was no

evidence that the interest rate on the

related party loan did not reflect market

interest rates.’’

Prayon concludes by stating that the

record in this proceeding affirmatively

shows that the sales of Prayon’s

accounts receivable to the coordination

center are conducted on arm’s-length

terms and, specifically, that the

discount rates negotiated between the

parties are comparable to those charged

by independent banks and other

financial institutions in Belgium.

Accordingly, Prayon argues, the

Department’s preliminary determination

that the amount of discount taken

represents Prayon’s actual cost of

financing is appropriate and consistent

with the law and the Department’s

practice.

Department’s Position

When determining credit expense in

the home market, the Department is

concerned with the expense, real or

imputed, incurred by a respondent

when it sells its merchandise on

account. Accordingly, we agree with

Prayon that since factoring is a

recognized method of financing

receivables, the discount from face

value can be used to establish credit

expense if the factoring transactions are

at arm’s-length (i.e., the discount is

representative of market rates).

Moreover, if the payment between

Prayon and Prayon Services (i.e.,

between a parent and its wholly-owned

subsidiary) is determined to be at arm’slength, it is the Department’s policy to

recognize this payment as payment for

the collection services in question rather

than as an intra-company transfer of

funds. See, e.g., Steel Flat Products from

Germany cited by the respondent.

However, upon a further examination of

the record in this review, the

Department is not satisfied that the

discount rate ‘‘charged’’ by Prayon

Services, when factoring Prayon’s

accounts receivables, is representative

of market rates.

In its supplemental questionnaire

response of April 27, 1995 (at page 14–

15), Prayon calculated a weightedaverage credit expense for its home

market sales to each customer for each

month during the POR using two

different methods, one which calculates

Prayon’s actual cost of discounting the

invoices to the coordination center and

one which calculates an imputed credit

expense based on the date of payment

by the customer and the short-term

interest rate for loans denominated in

Belgian francs. In almost all home

market observations, the credit expense

calculated using the discount rate

method is substantially higher than the

imputed credit expense (i.e., the market

rate) Prayon would have incurred had it

not sold its accounts receivable to

Prayon Services.

Due to the substantial difference

between the two methodologies, the

Department is not satisfied that the

discount rate ‘‘charged’’ by Prayon

Service is representative of market rates.

Moreover, since Prayon sold all of its

accounts receivable to Prayon Services,

the Department is unable to compare the

discount rate charged by Prayon

Services with a discount rate charged by

an unrelated party to insure that the rate

is comparable to market rates.

Additionally, we are not convinced

that Prayon Service’s legal obligation

under Belgian law is sufficient proof

that Prayon Services actually charged an

arm’s-length discount rate to Prayon.

Prayon states that Prayon Services was

established under Belgian law, which

provides certain tax benefits for

companies organized and operated

according to certain specified

requirements. However, the requirement

that the factoring of accounts meet

Belgian law requirements in order to

capture certain tax benefits may not be
20230 Federal Register / Vol. 61, No. 88 / Monday, May 6, 1996 / Notices

2 Indeed, a review of the translated official

certification letter and royal decree recognizing

Prayon Services (submitted as Appendix 6 of

Prayon’s supplemental questionnaire of April 27,

1995) indicates that there are allowable exceptions

to the arm’s-length requirements.

a reliable benchmark for U.S.

antidumping purposes. This is

supported by the Department’s

determination in Certain Hot-Rolled

Carbon Steel Flat Products, Certain

Cold-Rolled Carbon Steel Flat Products,

and Certain Corrosion-Resistant Carbon

Steel Flat Products from Japan, 58 FR

37154, 37158 (July 9, 1993) (‘‘There is

no requirement that U.S. antidumping

practice conform to Japanese antitrust

laws or practices which have entirely

different purposes and standards’’).

Therefore, because the standard

established by Belgian law is not

sufficiently similar to that established

by the Department, as evidenced by the

substantial difference between Prayon’s

discount rate and the Department’s date

of payment method, we cannot rely on

Prayon’s compliance with that law as

evidence that the rate charged by Prayon

Services to Prayon is at arm’s-length.2

Accordingly, for these final results,

the Department, when determining

credit expense incurred by Prayon on its

home market sales, has relied upon

Prayon’s reported credit expense based

upon the date of payment by Prayon’s

customer to Prayon Services.

Final Results of Review

Based on our analysis of the

comments received, and our changes to

the final computer program, we have

determined, as we did in the

preliminary determination, that no

antidumping margin exists for Prayon

for the period August 1, 1993 to July 31,

1994. 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 the subject merchandise,

entered or withdrawn from warehouse,

for consumption on or after the

publication date of these final results of

administrative review, as provided by

section 751(a)(1) of the Act: (1) the cash

deposit rate for Prayon will be zero

percent; (2) for merchandise exported by

manufacturers or exporters not covered

in this review but covered in a previous

review or the original less-than-fairvalue (LTFV) investigation, the cash

deposit rate will continue to be the rate

published in the most recent final

results or determination for which the

manufacturer or exporter received a

company-specific rate; (3) if the exporter

is not a firm covered in this review,

earlier reviews, or the original

investigation, but the manufacturer is,

the cash deposit rate will be that

established for the manufacturer of the

merchandise in these final results of

review, earlier reviews, or the original

investigation, whichever is the most

recent; and (4) the ‘‘all others’’ rate, as

established in the original investigation,

will be 14.67 percent.

These deposit requirements, when

imposed, shall remain in effect until

publication of the final results of the

next administrative review.

This notice also serves as a final

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 notice also serves as a reminder

to parties subject to administrative

protective orders (APOs) of their

responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with 19 CFR 353.34(d). Timely written

notification of return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.

Failure to comply with the regulations

and the terms of an APO is a

sanctionable violation.

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: April 26, 1996.

Susan G. Esserman,

Assistant Secretary for Import

Administration.

[FR Doc. 96–11117 Filed 5–3–96; 8:45 am]

BILLING CODE 3510–DS–P

[A–508–604]

Industrial Phosphoric Acid From

Israel; Final Results of Antidumping

Duty Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of

antidumping duty administrative

review.

SUMMARY: On February 8, 1996, the

Department of Commerce (the

Department) published the preliminary

results of administrative review of the

antidumping duty order on industrial

phosphoric acid from Israel (61 FR

4766). The review covers one exporter,

Haifa Chemicals, Ltd. (Haifa), and the

period August 1, 1994 through July 31,

1995.

We gave interested parties an

opportunity to comment on the

preliminary results of review. Because

the Department received no comments,

these final results of review remain

unchanged from the preliminary results

of review.

EFFECTIVE DATE: May 6, 1996.

FOR FURTHER INFORMATION CONTACT:

Amy S. Wei or Zev Primor, Office of

Antidumping Compliance, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue NW., Washington, DC 20230;

telephone (202) 482–5253.

The Applicable Statute and Regulations

Unless otherwise indicated, all

citations to the statute are references to

the provisions effective January 1, 1995,

the effective date of the amendments

made to the Tariff Act of 1930 (the Act),

by the Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to the

Department—s regulations are to the

current regulations, as amended by the

interim regulations published in the

Federal Register on May 11, 1995 (60

FR 25130).

Background

On August 25, 1995, FMC Corporation

and Monsanto Company, two domestic

producers of industrial phosphoric acid,

requested an administrative review of

the antidumping duty order on

industrial phosphoric acid from Israel.

On September 15, 1995, the Department

published the initiation of its

administrative review of the

antidumping duty order on industrial

phosphoric acid from Israel, covering

one exporter, Haifa, and the period

August 1, 1994 through July 31, 1995

(60 FR 47930). On

February 8, 1996, the Department

published the preliminary results of

review. In the preliminary results of

review, the Department preliminarily

determined that there were no

shipments of the subject merchandise

during the period of review and

assigned Haifa the rate applicable to it

from its most recent administrative

review. The Department has now

completed this administrative review in

accordance with section 751 of the Act.

Scope of the Review

Imports covered by the review are

shipments of industrial phosphoric

acid, classifiable under item number