[Federal Register Volume 61, Number 129 (Wednesday, July 3, 1996)]
[Notices]
[Pages 34791-34794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17014]


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[[Page 34792]]


DEPARTMENT OF COMMERCE
International Trade Administration
[A-428-810]


High-Tenacity Rayon Filament Yarn From Germany; Preliminary 
Results of Antidumping Duty Administrative Review

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review

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SUMMARY: In response to a request from the North American Rayon 
Corporation (petitioner), and from Akzo Nobel Faser A.G., Akzo Nobel 
Industrial Fibers Inc., and Akzo Nobel Fibers Inc. (collectively, Akzo; 
respondent), the Department of Commerce (the Department) is conducting 
an administrative review of the antidumping order on high-tenacity 
rayon filament yarn from Germany. This review covers one manufacturer 
of the subject merchandise to the United States during the June 1, 1994 
through May 31, 1995 period of review (POR).
    We have preliminarily determined that U.S. sales have been made 
below normal value (NV) during the POR. If these preliminary results 
are adopted in our final results of administrative review, we will 
instruct the U.S. Customs Service (Customs) to assess antidumping 
duties equal to the difference between the United States price (USP) 
and the NV. In accordance with section 353.25(a)(2)(i) of the 
Department's regulations, we do not intend to revoke the antidumping 
duty order with respect to Akzo, as requested, because even if we find 
a de minimis margin in the final results of this review, it would mark 
only the second consecutive year in which Akzo sold the subject 
merchandise at not less than NV, and therefore, the conditions for 
revocation have not been satisfied. Interested parties are invited to 
comment on these preliminary results. Parties who submit arguments in 
this proceeding are requested to submit with the argument: (1) A 
statement of the issue; and (2) a brief summary of the argument.

EFFECTIVE DATE: July 3, 1996.

FOR FURTHER INFORMATION CONTACT: Matthew Blaskovich or Zev Primor, 
Office of Antidumping Compliance, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
5253.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay 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 225130).

Background

    The Department published an antidumping duty order on high- 
tenacity rayon filament yarn from Germany on June 30, 1992 (57 FR 
29062). The Department published a notice of ``Opportunity to Request 
an Administrative Review'' of the antidumping order for the 1994-95 
review period on June 6, 1995 (60 FR 29821). On June 30, 1995, both 
petitioner and respondent requested that the Department conduct an 
administrative review of the antidumping duty order on high-tenacity 
rayon filament yarn from Germany. In its June 30, 1995 letter, Akzo 
requested revocation of the order pursuant to section 353.25(b) of the 
Department's regulations. We initiated the review on July 14, 1995 (60 
FR 36260).
    The Department fully extended the time limits for the deadlines for 
the preliminary and final results of review, because of the scheduling 
difficulties in arranging the mandatory verification for this review. 
See Antidumping Duty Administrative Reviews; Time Limits, 60 FR 11613 
(March 21, 1996). See also, Memorandum from Joseph A. Spetrini to Susan 
G. Esserman (March 14, 1996). The Department is conducting this 
administrative review in accordance with section 751 of the Act.

Scope of the Review

    The product covered by this administrative review is high-tenacity 
rayon filament yarn from Germany. During the review period, such 
merchandise was classifiable under Harmonized Tariff Schedule (HTS) 
item number 5403.10.30.40. High-tenacity rayon filament yarn is a 
multifilament single yarn of viscose rayon with a twist of five turns 
or more per meter, having a denier of 1100 or greater, and a tenacity 
greater than 35 centinewtons per tex. The HTS item numbers are provided 
for convenience and Customs purposes. The written description remains 
dispositive as to the scope of the product coverage. This review covers 
Akzo and the period June 1, 1994, through May 31, 1995.

Verification

    In accordance with section 353.25(c)(2)(ii) of the Department's 
regulations, we verified information provided by Akzo using standard 
verification procedures, including on-site inspection of the 
manufacturer's facilities, the examination of relevant sales and 
financial records, and selection of original documentation containing 
relevant information. Our verification results are outlined in the 
public version of the verification reports.

United States Price

    We based our margin calculations on export price (EP), as defined 
in section 772(a) of the Act, because the merchandise was sold to 
unaffiliated U.S. purchasers prior to the date of importation. EP sales 
were based on packed, f.o.b. prices to unaffiliated purchasers in the 
United States. We made adjustments, where applicable, for U.S. and 
foreign inland freight, brokerage and handling, U.S. duty, foreign 
insurance, and international freight, in accordance with section 772(c) 
of the Act, because these expenses were incident to bringing the 
subject merchandise from the original place of shipment in the 
exporting country to the place of delivery in the United States. We 
made an additional adjustment to certain EP sales to account for post-
sale price adjustments reported on a transaction-specific basis and 
granted by Akzo in connection with having obtained the services of a 
new U.S. sales agent. No other adjustments to EP were claimed or 
allowed.

Normal Value

A. Viability

    In order to determine whether there was sufficient volume of sales 
in the home market (HM) to serve as a viable basis for calculating NV, 
we compared Akzo's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(B) of the Act. Because Akzo's 
aggregate volume of HM sales of the foreign like product was greater 
than five percent of its aggregate volume of U.S. sales for the subject 
merchandise, we determined that the HM provides a viable basis for 
calculating NV for Akzo, pursuant to section 773(a)(1)(C) of the Act.

[[Page 34793]]

B. Cost of Production Analysis

    In the last review, we disregarded Akzo's sales found to be below 
the cost of production (COP). Therefore, in accordance with section 
773(b)(2)(A)(ii) of the Act, the Department has reasonable grounds to 
believe or suspect that sales below the COP may have occurred during 
this review period. Thus, pursuant to section 773(b) of the Act, we 
initiated a COP investigation of Akzo in this review. Before making any 
fair value comparisons, we conducted the COP analysis described below.
1. Calculation of COP
    We calculated the COP based on the sum of Akzo's cost of materials 
and fabrication employed in producing 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 relied on the home market sales and COP information provided by 
Akzo in its original and supplemental questionnaire responses.
2. Test of Home Market Prices
    After calculating COP, we tested whether within an extended period 
of time home market sales of high-tenacity rayon filament yarn were 
made at prices below COP in substantial quantities, and whether such 
prices permit recovery of all costs within a reasonable period of time. 
We compared model-specific COP to the reported home market prices less 
any applicable movement charges, discounts, rebates, and direct and 
indirect selling expenses.
3. Results of COP Test
    Pursuant to section 773(b)(2)(C), where less than 20 percent of 
Akzo's sales of a given model were at prices less than 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. We 
found that, for certain models of high-tenacity rayon filament yarn, 20 
percent or more of the home market sales were sold at below-cost 
prices. Where 20 percent or more of home market sales of a given model 
were at prices less than the COP, we disregarded the below-cost sales 
because such sales were found to be made in substantial quantities 
during the POR (i.e., within an extended period of time) at prices 
which would not permit recovery of all costs within a reasonable period 
of time, in accordance with section 773(b)(2)(D) of the Act (i.e., the 
sales were made at prices below the weighted average per unit COP for 
the POR). We used the remaining above-cost sales as the basis of 
determining NV if such sales existed, in accordance with section 
773(b)(1). For those models of the subject merchandise for which there 
were no above-cost sales available for matching purposes, we compared 
EP to constructed value (CV).

C. Price-to-Price Comparisons

    Pursuant to section 777(A)(d)(2), we compared the EP of individual 
transactions to the monthly weighted-average price of sales of the 
foreign like product where there were sales at prices above COP, as 
discussed above. We based NV on the f.o.b. price to unaffiliated 
purchasers in the HM. We made adjustments, where applicable, in 
accordance with section 773(a)(6) of the Act. Where applicable, we made 
adjustments to HM price for early payment discounts, other discounts, 
handling charges, rebates, inland freight (post-sale), inland 
insurance, interest revenue, and third party payments. To adjust for 
differences in circumstances of sale between the HM and the U.S., we 
deducted HM credit expenses from HM price, and increased HM price by an 
amount for technical services and credit expenses incurred in the U.S. 
In order to adjust for differences in packing between the two markets, 
we increased HM price by U.S. packing cost and reduced it by HM packing 
costs. Prices were reported net of value added taxes (VAT) and, 
therefore, no deduction for VAT was necessary.
    Akzo reported that its sales in the home and U.S. markets were made 
at the same level of trade and channel of distribution (direct to end 
users/converters). Therefore, Akzo did not request a level of trade 
adjustment. Our analysis and verification of Akzo's response confirmed 
that the selling functions performed for EP sales are not sufficiently 
different than for home market sales to consider EP sales and home 
market sales to be at different level of trade. Therefore, in 
accordance with section 773(a)(7)(A) of the Act, we did not make a 
level of trade adjustment to NV for these preliminary results.

D. Constructed Value

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of Akzo'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 Akzo 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 G&A as reported in the CV portion of Akzo's questionnaire response. 
We used the U.S. packing costs as reported in the U.S. sales portion of 
Akzo's response. We based selling expenses and profit on the 
information reported in the home market sales portion of Akzo's 
responses. 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 of above-cost per-unit home market 
selling expenses 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 HM COP for these 
sales. We then multiplied this percentage by the COP for each U.S. 
model to derive an actual profit.
    We adjusted CV for technical services, credit expenses, and packing 
as reported in the U.S. sales portion of Akzo's original and 
supplemental questionnaire responses.

Preliminary Results

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

------------------------------------------------------------------------
                                                                Margin  
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Akzo Nobel Faser A.G., Akzo Nobel Industrial Fibers, Inc.,              
 Akzo Nobel Fibers, Inc. (Akzo).............................        0.54
------------------------------------------------------------------------

    Parties to this proceeding may request disclosure within five days 
of publication of this notice and any interested party may request a 
hearing within 10 days of publication. Any hearing, if requested, will 
be held 44 days after the date of publication, or the first working day 
thereafter. Interested parties may submit case briefs and/or written 
comments no later than 30 days after the date of publication. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 37 days after the 
date of publication. The Department will publish a notice of the final 
results of the administrative review, which will include the results of 
its analysis of issues raised in any such written comments or at the 
hearing, within 90

[[Page 34794]]

days from the issuance of these preliminary results.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Individual differences 
between USP and NV may vary from the percentage stated above. The 
Department will issue appraisement instructions directly to Customs. 
The final results of this review shall be the basis for the assessment 
of antidumping duties on entries of merchandise covered by the 
determination and for future deposits of estimated duties.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of these administrative reviews 
for all shipments of high-tenacity rayon filament yarn from Germany 
entered, or withdrawn from warehouse, for consumption on or after 
publication date of the final results of these administrative reviews, 
as provided by section 751(a)(1) of the Act: (1) the cash deposit rate 
for Akzo will be that established in the final results of this review; 
(2) for merchandise exported by manufacturers or exporters not covered 
in this review but covered in the original LTFV investigation or a 
previous review, the cash deposit will continue to be the most recent 
rate published in the final determination or final results for which 
the manufacturer or exporter received a company-specific rate; (3) if 
the exporter is not a firm covered in this review, or the original 
investigation, but the manufacturer is, the cash deposit rate will be 
that established for the manufacturer of the merchandise in the final 
results of this review, or the LTFV investigation; and (4) if neither 
the exporter nor the manufacturer is a firm covered in this or any 
previous reviews, the cash deposit rate will be the ``all others rate'' 
of 24.58 percent established in the LTFV investigation.
    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 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.

    Dated: June 24, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-17014 Filed 7-2-96; 8:45 am]
BILLING CODE 3510-DS-P