Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Furfuryl Alcohol From the Republic of South Africa

DEPARTMENT OF COMMERCE

[A-791-802]

Notice of Preliminary Determination of Sales at Less Than Fair

Value and Postponement of Final Determination: Furfuryl Alcohol From

the Republic of South Africa

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: December 16, 1994.

FOR FURTHER INFORMATION CONTACT: Lori Way or John Brinkmann, Office of

Antidumping Investigations, Import Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue, NW, Washington, DC

20230; telephone (202) 482-0656 or 482-5288, respectively.

Preliminary Determination

We preliminarily determine that imports of furfuryl alcohol from

the Republic of South Africa (South Africa) 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, as amended (the Act). The

estimated margins are shown in the ``Suspension of Liquidation''

section of this notice.

Case History

Since the initiation of this investigation on June 20, 1994 (59 FR

32953, June 27, 1994), the following events have occurred.

On July 15, 1994, the U.S. International Trade Commission (ITC)

issued an affirmative preliminary injury determination in this case

(see 59 FR 38201, July 27, 1994).

On July 19, 1994, officials of the Department of Commerce (the

Department) visited the petitioner's facilities to observe the furfuryl

alcohol production process for purposes of developing the

questionnaire.

On August 3, 1994, the Department issued an antidumping

questionnaire to Illovo Sugar Limited (ISL), which accounted for at

least 60 percent of the exports of the subject merchandise to the

United States during the period of investigation (POI). In August 1994,

officials from the Department presented this questionnaire to ISL in

South Africa.

On August 29, 1994, ISL submitted its response to Section A of our

questionnaire. On September 21, 1994, ISL submitted its response to

Sections B and C of our questionnaire. A supplemental questionnaire was

issued on October 19, 1994. On November 7, 1994, ISL submitted its

response to this supplemental questionnaire. QO Chemicals, Inc. (the

petitioner) submitted comments regarding deficiencies in the ISL's

questionnaire responses in September, October and November 1994. ISL

submitted comments regarding the petitioner's submissions in September

and November 1994.

On October 7, 1994, the petitioner requested that the preliminary

determination be postponed until December 9, 1994. We have done so in

accordance with 19 CFR 353.15(c) (1994).

Cost of Production Allegation

On October 25, 1994, the petitioner filed an allegation that ISL's

home market sales of furfuryl alcohol during the POI were sold at less

than the cost of production (COP). On November 9, 1994, we issued a

deficiency letter regarding the allegation. The petitioner filed

supplements to its COP allegation in October, November and December

1994. During November and December 1994, ISL filed numerous submissions

regarding the petitioner's COP allegation. Based on our analysis of

this allegation, we have determined that a COP investigation is

warranted. We will determine whether ISL had made sales below COP for

the final determination.

Postponement of Final Determination

Pursuant to section 735(a)(2)(A) of the Act, ISL requested on

December 2, 1994, that, in the event of an affirmative preliminary

determination in this investigation, the Department postpone the final

determination until no later than 135 days after the date of

publication of an affirmative preliminary determination in the Federal

Register. Pursuant to 19 CFR 353.20(b), because our preliminary

determination is affirmative, and no compelling reasons for denial

exist, we have done so.

Scope of the Investigation

The product covered by this investigation is furfuryl alcohol

(C4H3OCH2OH). Furfuryl alcohol is a primary alcohol, and

is colorless or pale yellow in appearance. It is used in the

manufacture of resins and as a wetting agent and solvent for coating

resins, nitrocellulose, cellulose acetate, and other soluble dyes.

The product subject to this investigation is classifiable under

subheading 2932.13.00 of the Harmonized Tariff Schedule of the United

States (HTSUS). Although the HTSUS subheading is 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 December 1, 1993, through May

31, 1994.

Such or Similar Comparisons

We have determined that the products covered by this investigation

constitute a single category of such or similar merchandise. ISL

reported that it sold merchandise in the home market identical to that

sold in the United States. Accordingly, no difference in merchandise

information was reported in ISL's sales listings. In accordance with 19

CFR 353.58, we made comparisons at the same level of trade, where

possible.

Fair Value Comparisons

To determine whether sales by ISL of furfuryl alcohol 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.

United States Price

For the purpose of this preliminary determination, we have found

that ISL and its exclusive selling agent, Harborchem, are related

parties pursuant to Section 771(13) of the Act (See concurrence

memorandum, dated December 7, 1994, on file in Room B-099 of the Main

Commerce Department building), and that all of ISL's U.S. sales to the

first unrelated purchaser took place after importation into the United

States. Therefore, we based USP on exporter's sales prices, in

accordance with section 772(c) of the Act. The claimed relationship

between ISL and Harborchem is based on one of agency. We will, however,

reexamine the issue of agency for the purpose of the final

determination.

We calculated ISL's exporter's sales price sales based on FOB U.S.

storage or delivered prices to unrelated customers in the United

States. We made deductions, where appropriate, for the following

movement charges in accordance with section 772(e) of the Act: foreign

loading on ship, foreign inland freight, ocean freight, marine

insurance, tank car rental, U.S inland freight, U.S. inland insurance,

U.S. brokerage and handling, and U.S. duty. We also made deductions,

where appropriate, for credit expenses, indirect selling expenses

incurred in South Africa, and indirect selling expenses incurred in the

United States, including quality control testing, inventory carrying

expenses, warehousing expenses, and U.S. storage insurance.

We did not make one of the adjustments for freight claimed by

Harborchem because there is not adequate information on the record to

support this adjustment. Further, we did not make an adjustment to the

margin for export incentive payments received by ISL from the

Government of the Republic of South Africa through the Government's

General Export Incentive Scheme because there is no on-going companion

countervailing duty investigation and no such duties are currently

being collected (see concurrence memorandum, dated December 7, 1994).

We adjusted USP for taxes in accordance with our practice, pursuant

to the U.S. Court of International Trade (CIT) decision in Federal-

Mogul Corp. v. United States, 834 F. Supp. 1391 (CIT 1993). (See Notice

of Final Determination of Sales at Less Than Fair Value: Calcium

Aluminate Cement, Cement Clinker and Flux from France, 59 FR 14136

(March 25, 1994).)

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 the subject

merchandise to the volume of third country sales of subject

merchandise, in accordance with section 773(a)(1)(B) of the Act. Since

the total volume of subject merchandise sold by ISL in South Africa

during the POI was greater than five percent of the aggregate volume of

third country sales for such or similar merchandise, we determined that

the home market was viable within the meaning of 19 CFR 353.48(a).

Therefore, we based FMV on home market sales.

In accordance with 19 CFR 353.46, we calculated FMV based on FOB

storage or delivered prices to unrelated customers. We treated both

pre-sale home market movement expenses and pre-sale home market

warehousing expenses as indirect expenses and adjusted for these

expenses under the exporter's sales price offset provision set forth in

19 CFR 353.56(b)(2), as appropriate.

We treated post-sale home market inland freight as a direct expense

and deducted this expense from FMV. Pursuant to 19 CFR 353.56(a)(2), we

made circumstance-of-sale adjustments, where appropriate, for

differences in credit expenses. We recalculated home market credit

expenses based on gross prices exclusive of imputed value added tax

expenses. We also deducted from FMV rebates and the weighted-average

home market indirect selling expenses including, where appropriate,

inventory carrying costs, pre-sale warehousing expenses and certain

home market inland freight expenses. The deduction for home market

indirect selling expenses was capped by the sum of U.S. indirect

selling expenses, in accordance with 19 CFR 353.56(b)(1) and (2). We

deducted home market packing and added U.S. packing costs, in

accordance with section 773(a)(1) of the Act.

We adjusted for taxes in accordance with our practice. (See the

``United States Price'' section of this notice, above.)

Although we allowed a discount, we did not deduct an amount for

quantity discounts because ISL failed to place adequate information on

the record to demonstrate that the discount met the criteria for

quantity discounts set forth in 19 CFR 353.55(b) (see concurrence

memorandum). We did not exclude home market sales of furfuryl alcohol

packed in drums from the base of home market sales used for comparison

to U.S. sales, as requested by ISL, because ISL did not demonstrate

that these sales were outside its ordinary course of business.

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.

Verification

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

information that we determine is acceptable for use 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 furfuryl

alcohol from South Africa 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 preliminary

dumping margins, as shown below. This suspension of liquidation will

remain in effect until further notice. The less than fair value margins

are as follows:

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

Weighted-

average

Producer/manufacturer/exporter margin

percentage

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

Illovo Sugar Limited........................................ 10.84

All others.................................................. 10.84

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

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 before the later of

120 days after the date of this preliminary determination or 45 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 March 17, 1995, and rebuttal briefs no later

than March 22, 1995. A public hearing, if requested, will be held on

March 24, 1995, at 9:30 a.m. at the U.S. Department of Commerce, in

Room 1414, 14th Street and Constitution Avenue, NW, Washington, DC

20230. 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.

If this investigation proceeds normally, we will make our final

determination no later than 135 days after publication of this notice

in the Federal Register.

This determination is published pursuant to section 733(f) and

735(d) of the Act and 19 CFR 353.15(a)(4) and 353.20(b)(2).

Dated: December 9, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-30983 Filed 12-15-94; 8:45 am]

BILLING CODE 3510-DS-P