Industrial Belts and Components and Parts Thereof, Whether Cured or Uncured, From Japan; Termination of Circumvention Inquiry of Antidumping Duty Order

DEPARTMENT OF COMMERCE

[A-588-807]

Industrial Belts and Components and Parts Thereof, Whether Cured

or Uncured, From Japan; Termination of Circumvention Inquiry of

Antidumping Duty Order

AGENCY: International Trade Administration, Import Administration,

Commerce.

ACTION: Notice of termination of circumvention inquiry of antidumping

duty order.

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SUMMARY: On June 9, 1992, the Department of Commerce (the Department)

received a request from Brecoflex Corporation (Brecoflex) for a

circumvention inquiry of the antidumping duty order on industrial belts

and components and parts thereof, whether cured or uncured, from Japan

with respect to imports by Mectrol Corporation (Mectrol). Pursuant to

that request, the Department initiated a circumvention inquiry on

October 18, 1993 (58 FR 53706). The circumvention inquiry covers the

period January 1, 1992 through June 30, 1993.

Based on a review of Brecoflex's submissions in conjunction with

the International Trade Commission's (ITC) analysis of the

manufacturing process for production of industrial power belts, the

Department determines that Brecoflex does not have standing as a

domestic producer of a like product to file the request in the instant

inquiry. Therefore, we are terminating the circumvention inquiry.

EFFECTIVE DATE: May 6, 1994.

FOR FURTHER INFORMATION CONTACT:Kimberley Huffman at (202) 482-0780 or

Wendy Frankel at (202) 482-5253, Office of Antidumping Compliance,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th and Constitution Avenue, NW., Washington,

DC 20230.

SUPPLEMENTARY INFORMATION:

Background

On June 14, 1989, the Department published the antidumping duty

order on industrial belts and components and parts thereof, whether

cured or uncured, from Japan (54 FR 25314). On August 4, 1989, we

published an amended order (54 FR 32104). On June 9, 1992, Brecoflex,

who identified itself as a producer of a like product in the United

States, alleged that the antidumping duty order on industrial belts

from Japan was being circumvented and requested that the Department

investigate the matter. The Department initiated a circumvention

inquiry on October 18, 1993.

In several submissions, Mectrol alleged that Brecoflex did not have

standing to file a request for a circumvention inquiry. Therefore, on

February 1, 1994, and February 28, 1994, the Department issued a

standing questionnaire and supplemental standing questionnaire,

respectively, to Brecoflex. Brecoflex responded to the standing

questionnaires on February 17, 1994, and March 4, 1994.

Analysis

Standing To File a Request for a Circumvention Inquiry

Section 353.29 of the Department's regulations states that ``[a]ny

interested party, as defined in Sec. 353.2(k), may file'' a request for

a circumvention inquiry (19 CFR 353.29). In its June 9, 1993, request

for a circumvention inquiry, Brecoflex claimed standing to bring the

request as a domestic producer of industrial power belts. The provision

in the Department's regulations for standing as a producer is

Sec. 353.2(k)(3) which includes in the definition of interested party

``[a] producer in the United States of the like product'' (19 CFR

353.2(k)(3)).

Brecoflex's U.S. Operations

In its June 9, 1992, request for a circumvention inquiry, Brecoflex

claimed standing to bring the request as a producer in the United

States of a like product as covered by the antidumping duty order on

industrial belts from Japan. Pursuant to questions raised by Mectrol

concerning Brecoflex's standing to bring this request for a

circumvention inquiry, the Department issued a standing questionnaire

to Brecoflex. In its standing questionnaire response, Brecoflex

explained its U.S. operations as follows.

Brecoflex states that it imports from Germany polyurethane timing

belts and performs secondary operations on these belts in its only

United States facility in Eatontown, New Jersey. The secondary

operations consist of the following:

(1) Slitting of roll stock and truly endless belts to narrower belt

widths;

(2) Cutting roll stock to specific lengths;

(3) Splicing and welding of open-ended roll stock to finished belts;

(4) Attaching injection molded profiles to belt backs; and

(5) Machining of finished belts such as edge grinding, removing

sections of teeth, providing holes for joining belts in linear drives,

and grinding of belt back.

Brecoflex states that it fabricates, markets and sells three basic

types of synchronous polyurethane timing belts that it considers to be

subject merchandise. These belts include the Breco M, the Breco V, and

the Brecoflex. Brecoflex performs the operations listed above on these

three belts. (See the Department's April 15, 1994, Recommendation

Memorandum for further detail.)

Production of Industrial Power Belts

In its final report during the injury investigation in 1989, the

ITC determined that there are four main stages in the manufacturing of

industrial power transmission belts:

(1) Parts manufacturing,

(2) Assembling or building,

(3) Curing or vulcanizing, and

(4) Finishing and packaging (see Industrial Belts from Japan, USITC

Pub. 2194 (1989) (ITC Report) at 6 and 7). In addition, the ITC Report

describes the three main components of most industrial power belts: (1)

A tensile member (a textile, fiberglass, or steel cord, yarn, or

fabric), which adds strength to withstand the tension imposed in

transmitting power;

(2) The base material (usually synthetic rubber, such as neoprene

or plastics), which forms the bulk of the belt and encloses the tensile

member, and is referred to as the undercord and the overcord; and

(3) Adhesion material or gum, which bonds all the components

together (USITC Pub. 2194 at a-2).

As discussed above, Brecoflex either sells the German belts as

imported, or performs secondary operations on the belts in preparation

for sale. We determine that these secondary operations listed above do

not add to the material composition of the belts or fundamentally alter

the essential nature of the merchandise as imported. Specifically, the

merchandise as imported already incorporates the three main components

of industrial belts as described in the ITC Report. Furthermore, the

belting stock as imported has already undergone, before arrival in the

United States, the first three stages of the belt manufacturing process

as described in the ITC Report.

As Brecoflex indicated in its request for a circumvention inquiry,

the major cost in producing timing belts is incurred in production of

the belt stock from which the finished belts are made. As Brecoflex

itself explained, completion of a finished belt from belt stock

requires merely slitting to width, cutting to length, and possibly die

cutting to length and welding. According to Brecoflex, these

operations--the same secondary operations that Brecoflex performs in

its U.S. facility--involve some skilled labor but little in the way of

machinery or capital investment. Thus, as indicated in its submissions,

Brecoflex performs only secondary operations in its U.S. facility, all

of which fall within the fourth stage of the belt manufacturing process

as described in the ITC Report, i.e., finishing and packaging.

Brecoflex also markets and services the imported roll stock it sells in

the United States.

Based on the above analysis and the information submitted by

Brecoflex, the Department determines that Brecoflex is not a domestic

producer of industrial belts and, therefore, is not an interested party

within the meaning of 19 CFR 353.2(k)(3) entitled to file a request for

a circumvention inquiry. As such, the Department determines that

Brecoflex does not have standing to file a request for a circumvention

inquiry against Mectrol.

Conclusion

Because Brecoflex Corporation is not a producer of industrial power

belts in the United States and, therefore, does not have standing under

19 CFR 353.2(k) to file a request for a circumvention inquiry with

regard to the antidumping duty order on industrial belts and components

and parts thereof, whether cured or uncured, from Japan, the Department

hereby terminates this circumvention inquiry.

Dated: April 27, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-10986 Filed 5-5-94; 8:45 am]

BILLING CODE 3510-DS-M