Notice of Preliminary Determination of Sales at Less Than Fair Value: Disposable Pocket Lighters From Thailand

DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-810]

Notice of Preliminary Determination of Sales at Less Than Fair

Value: Disposable Pocket Lighters From Thailand

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: October 24, 1994.

FOR FURTHER INFORMATION CONTACT: David Boyland or Susan Strumbel,

Office of Countervailing Investigations, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue NW., Washington, DC 20230; telephone

(202) 482-4198 and 482-1442, respectively.

Preliminary Determination: We preliminarily determine that disposable

pocket lighters from Thailand are being, or are likely to be, sold in

the United States at less than fair value, as provided in section 733

of the Tariff Act of 1930 (the ``Act''), as amended. The estimated

margins of sales at less than fair value are shown in the ``Suspension

of Liquidation'' section of this notice.

Case History

Since the initiation of this investigation on May 31, 1994 (59 FR

29412), the following events have occurred:

On June 29, 1994, the United States International Trade Commission

(``ITC'') issued an affirmative preliminary injury determination (see

ITC Investigation No. 731-TA-701).

In accordance with 19 CFR 353.42(b)(1994), an antidumping duty

questionnaire was presented on July 1, 1994, to Thai Merry Co., Ltd.

(``Thai Merry'') which accounts for over 60 percent of all Thai exports

of lighters to the United States during the POI. On August 11, 1994, we

sent a deficiency questionnaire regarding respondent's section A

questionnaire response. On August 19, 1994, the Department granted

respondent's request to extend the deadline for response to section B

and C of the Department's questionnaire, as well as the section A

deficiency questionnaire. On September 6, 1994, the Department received

responses to section B and C of the Department's questionnaire, as well

as the section A deficiency questionnaire. On September 13, 1994, the

Department issued a deficiency questionnaire with regard to

respondent's section B and C responses. On September 22, 1994, the

Department received the response to the second deficiency

questionnaire. On September 29, 1994, respondent was requested to

submit information regarding the single national distributor in the

home market. On October 3, 1994, the Department received additional

information regarding the home market national distributor.

Scope of the Investigation

The products covered by this investigation are disposable pocket

lighters, whether or not refillable, whose fuel is butane, isobutane,

propane, or other liquified hydrocarbon, or a mixture containing any of

these, whose vapor pressure at 75 degrees fahrenheit (24 degrees

celsius) exceeds a gage pressure of 15 pounds per square inch. Non-

refillable pocket lighters are imported under subheading 9613.10.0000

of the Harmonized Tariff Schedule of the United States (``HTSUS'').

Refillable, disposable pocket lighters would be imported under

subheading 9613.20.0000. Although the HTSUS subheadings are provided

for convenience and Customs purposes, our written descriptions of the

scope of these proceedings are dispositive.

Period of Investigation

The period of investigation (``POI'') is December 1, 1993 through

May 31, 1994.

Product Comparisons

We have determined that the class or kind of merchandise subject to

this investigation constitutes a single such or similar category. In

making our fair value comparisons, in accordance with the Department's

standard methodology, we first compared merchandise identical in all

respects. If no identical merchandise was sold, we compared the most

similar merchandise, as reflected in Appendix V of the questionnaire

(``Appendix V'') (on file in Room B-099 of the main building of the

Department of Commerce (``Public File'')) and incorporated by Thai

Merry in its response. For the U.S. sales compared to sales of similar

merchandise, we made an adjustment, pursuant to 19 CFR 353.57, for

physical differences in merchandise.

Fair Value Comparisons

To determine whether Thai Merry's sales for export to the United

States were made at less than fair value, we compared the United States

price (``USP'') to the foreign market value (``FMV''), as specified in

the ``United States Price'' and ``Foreign Market Value'' sections of

this notice.

Because all of Thai Merry's sales to the U.S. were made to national

distributors, respondent has argued that the Department should base FMV

on sales to a national distributor in Thailand and that sales to other

home market distributors should be excluded from the Department's

analysis. The Department normally makes its comparisons at the same

level of trade when sales are made to customers who fall into broad

categories such as retailers, distributors, and original equipment

manufacturers (see, Import Administration Policy Bulletin 92/1). Thai

Merry has claimed that there are different ``levels of trade'' within

the general category of distributors.

The ``levels of trade'' claimed by Thai Merry, i.e., national

distributor vs. distributor, are not clearly delineated. Both are

resellers, and the record does not establish that different functions

are involved in performing this activity. Hence, we would require

further information to determine whether national distributors and

other distributors are actually different levels of trade, rather than

simply different names for a common level.

We have preliminarily determined that respondent has not provided

sufficient information demonstrating that these two types of

distributors perform different selling functions. The Department has

requested that Thai Merry supply additional information to support its

claim, and we will evaluate this issue further for purposes of the

final determination. For purposes of this preliminary determination, we

are basing FMV on Thai Merry's sales to all distributors in Thailand.

United States Price

Because Thai Merry's U.S. sales of disposable pocket lighters were

made to unrelated purchasers prior to importation into the United

States, and the exporter's sales price methodology was not indicated by

other circumstances, in accordance with section 772(b) of the Act, we

based USP on the purchase price (``PP'') sales methodology. We

calculated Thai Merry's PP sales based on packed, CIF prices to

unrelated customers in the United States. We made deductions to the

U.S. price, where appropriate, for foreign inland freight, foreign

brokerage/handling expenses, marine insurance, and ocean freight. In

calculating U.S. credit expense, we used the borrowing rate in the

United States on short-term dollar-denominated loans. For a further

discussion of the Department's treatment of U.S. credit expense, please

see Memorandum from Barbara R. Stafford to Susan G. Esserman (September

26, 1994) on file in room B-099 of the U.S. Department of Commerce.

In accordance with Section 772(d)(1)(B) of the Act, we made an

addition to the U.S. price for the amount of import duties imposed on

inputs which were subsequently rebated upon exportation of the finished

merchandise to the United States.

We made an adjustment to U.S. price for VAT taxes paid on the

comparison sales in Thailand, in accordance with our practice, pursuant

to the Court of International Trade (CIT) decision in Federal-Mogul, et

al v. United States, 834 F. Supp. 1993. See Preliminary Antidumping

Duty Determination and Postponement of Final Determination; Color

Negative Photographic Paper and Chemical Components Thereof from Japan,

59 FR 16177, 16179, April 6, 1994, for an explanation of this tax

methodology.

Foreign Market Value

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating

FMV, we compared the volume of home market sales of subject merchandise

to the volume of third country sales of subject merchandise, in

accordance with section 773(a)(1)(B) of the Act. As a result, we

determined that the home market was viable.

We calculated FMV based on delivered prices, inclusive of packing,

to customers in the home market. From the delivered price, we deducted

home market packing and added U.S. packing costs. Pursuant to section

773(a)(4)(B) of the Act and 19 CFR 353.56(a)(2), we made circumstance-

of-sale-adjustments for differences in movement charges between

shipments to the United States and shipments in the home market. We

also made circumstance-of-sale-adjustments for differences in

advertising expenses and expenses related to securing credit (i.e.,

bank charges, and the imputed cost of credit).

For packing, movement, credit, and advertising expense we adjusted

respondent's reported values by using the net unit price as the

multiple of the value-based allocation factor. Additionally, because

average credit days were reported in the home market, as opposed to

transaction specific data, we are using average credit days to

calculate an imputed credit cost for all home market sales.

Currency Conversion

We made currency conversions based on the official exchange rates

in effect on the dates of the U.S. sales as certified by the Federal

Reserve Bank of New York.

Verification

As provided in section 776(b) of the Act, we will verify

information used in making our final determination.

Suspension of Liquidation

In accordance with section 733(d)(1) of the Act, we are directing

the Customs Service to suspend liquidation of all entries of disposable

pocket lighters from Thailand, as defined in the ``Scope of the

Investigation'' section of this notice, that are entered, or withdrawn

from warehouse, for consumption on or after the date of publication of

this notice in the Federal Register. The Customs Service shall require

a cash deposit or posting of a bond equal to the estimated dumping

margins, as shown below. This suspension of liquidation will remain in

effect until further notice. The weighted-average dumping margins are

as follows:

------------------------------------------------------------------------

Margin

Manufacture/producer/exporter percent

------------------------------------------------------------------------

Thai Merry.................................................... 14.74

All others.................................................... 14.74

------------------------------------------------------------------------

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of our determination. If our final determination is affirmative,

the ITC will determine whether these imports are materially injuring,

or threaten material injury to, the U.S. industry within 75 days after

our final determination.

Public Comment

Interested parties who wish to request a hearing must submit a

written request to the Assistant Secretary for Import Administration,

U.S. Department of Commerce, Room B-099, within ten days of the

publication of this notice. Requests should contain: (1) the party's

name, address, and telephone number; (2) the number of participants;

and (3) a list of the issues to be discussed.

In accordance with 19 CFR 353.38, case briefs or other written

comments in at least ten copies must be submitted to the Assistant

Secretary no later than November 28, 1994, and rebuttal briefs no later

than December 5, 1994. A hearing, if requested, will be held on

December 8, 1994, at 1:00 pm at the U.S. Department of Commerce in Room

1815. Parties should confirm by telephone the time, date, and place of

the hearing 48 hours prior to the scheduled time. In accordance with 19

CFR 353.38(b), oral presentations will be limited to issues raised in

the briefs.

We will make our final determination not later than 75 days after

this preliminary determination.

This determination is published pursuant to section 733(f) of the

Act and 19 CFR 353.15(a)(4).

Dated: October 17, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-26325 Filed 10-21-94; 8:45 am]

BILLING CODE 3510-DS-P