Industrial Phosphoric Acid from Belgium; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-423-602]

Industrial Phosphoric Acid from Belgium; 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 respondent,

Soci\1t\1 Chimique Prayon-Rupel (Prayon), the Department of

Commerce (the Department) is conducting an administrative review of the

antidumping duty order on industrial phosphoric acid (IPA) from

Belgium. The review covers one manufacturer, Prayon, and exports of the

subject merchandise to the United States during the period August 1,

1993, through July 31, 1994.

We preliminarily determine that no margin exists for Prayon for the

period August 1, 1993, through July 31, 1994. Interested parties are

invited to comment on these preliminary results. Parties who submit

argument 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: November 15, 1995.

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, N.W., Washington, D.C. 20230, telephone: (202)

482-5254.

SUPPLEMENTARY INFORMATION:

Background

On August 3, 1994, the Department published a notice of

``Opportunity to Request an Administrative Review'' (59 FR 39543) of

the antidumping duty order on IPA from Belgium (52 FR 31439; August 20,

1987). On August 31, 1994, Prayon requested an administrative review.

The Department initiated the review on September 16, 1994 (59 FR

47609), covering the period August 1, 1993, through July 31, 1994. The

Department is conducting 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.

United States Price

In calculating United States Price (USP), the Department used

purchase price, as defined in section 772(b) of the Act. The Department

based USP on the delivered price to unrelated purchasers.

The Department made deductions, where appropriate, for commissions,

foreign inland freight, ocean freight, foreign inland freight and ocean

freight insurance, U.S. inland freight, U.S. brokerage fees and

European brokerage fees associated with U.S. sales. Additionally, we

adjusted USP for taxes that would have been assessed on merchandise had

it been sold in the home market.

In light of the Federal Circuit's decision in Federal Mogul v.

United States, CAFC No. 94-1097, the Department has changed its

treatment of home market consumption taxes. Where merchandise exported

to the United States is exempt from the consumption tax, the Department

will add to the U.S. price the absolute amount of such taxes charged on

the comparison sales in the home market. This is the same methodology

that the Department adopted following the decision of the Federal

Circuit in Zenith v. United States, 988 F. 2d 1573, 1582 (1993), and

which was suggested by that court in footnote 4 of its decision. The

Court of International Trade (CIT) overturned this methodology in

Federal Mogul v. United States, 834 F. Supp. 1391 (1993), and the

Department acquiesced in the CIT's decision. The Department then

followed the CIT's preferred methodology, which was to calculate the

tax to be added to U.S. price by multiplying the adjusted U.S. price by

the foreign market tax rate; the Department made adjustments to this

amount so that the tax adjustment would not alter a ``zero'' pre-tax

dumping assessment.

The foreign exporters in the Federal Mogul case, however, appealed

that decision to the Federal Circuit, which reversed the CIT and held

that the statute did not preclude Commerce from using the ``Zenith

footnote 4'' methodology to calculate tax-neutral dumping assessments

(i.e., assessments that are unaffected by the existence or amount of

home market consumption taxes). Moreover, the Federal Circuit

recognized that certain international agreements of the United States,

in particular the General Agreement on Tariffs and Trade (GATT) and the

Tokyo Round Antidumping Code, required the calculation of tax-neutral

dumping assessments. The Federal Circuit remanded the case to the CIT

with instructions to direct Commerce to determine which tax methodology

it will employ.

The Department has determined that the ``Zenith footnote 4''

methodology should be used. First, as the Department has explained in

numerous administrative determinations and court filings over the past

decade, and as the Federal Circuit has now recognized, Article VI of

the GATT and Article 2 of the Tokyo Round Antidumping Code required

that dumping assessments be tax-neutral. This requirement continues

under the new Agreement on Implementation of Article VI of the General

Agreement on Tariffs and Trade. Second, the URAA explicitly amended the

antidumping law to remove consumption taxes from the home market price

and to eliminate the addition of taxes to U.S. price, so that no

consumption tax is included in the price in either market. The

Statement of

[[Page 57399]]

Administrative Action (p. 159) explicitly states that this change was

intended to result in tax neutrality.

While the ``Zenith footnote 4'' methodology is slightly different

from the URAA methodology, in that section 772(d)(1)(C) of the pre-URAA

law required that the tax be added to United States price rather than

subtracted from home market price, it does result in tax-neutral duty

assessments. In sum, the Department has elected to treat consumption

taxes in a manner consistent with its longstanding policy of tax-

neutrality and with the GATT.

No other adjustments were claimed or allowed.

Foreign Market Value

In calculating foreign market value (FMV), we used home market

price, as defined in section 773(a) of the Act, since quantities of

merchandise sufficient to provide a reasonable basis for comparison

were sold in the home market. Home market price was based on the

delivered or FOB plant price to unrelated purchasers in the home

market.

The Department made adjustments, where applicable, for inland

freight, inland insurance, and for differences in packing material and

credit. We also made an adjustment for home market indirect selling

expenses up to the amount of U.S. commissions deducted from the U.S.

price. Furthermore, since the respondent reported home market sales net

of consumption taxes, we calculated the amount of such tax and added

the amount back to FMV.

No other adjustments were claimed or allowed.

Preliminary Results of Review

As a result of our comparison of USP to FMV, the Department

preliminarily determines that no margin exists for Prayon for the

period August 1, 1993, through July 31, 1994.

Interested parties may request disclosure within 5 days of the date

of publication of this notice and may request a hearing within 10 days

of publication. Any hearing, if requested, will be held 44 days after

the date of publication of this notice, or the first workday

thereafter. Case briefs and written comments from interested parties

may be submitted not later than 30 days after the date of publication.

Rebuttal briefs and rebuttals to written comments, limited to the

issues raised in the case briefs and comments, may be filed not later

than 37 days after the date of publication. The Department will publish

the final results of this administrative review, including the results

of its analysis of any such written comments or hearing.

The Department shall determine, and U.S. Customs shall assess,

antidumping duties on all appropriate entries. The Department will

issue appraisement instructions directly to U.S. Customs.

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 the

final results of this administrative review, as provided by section

751(a)(1) of the Act: (1) the cash deposit rate for the reviewed

company will be that rate established in the final results of this

administrative review; (2) the cash deposit rate for merchandise

exported by manufacturers or exporters not covered in this review but

covered in a previous review or the original less-than-fair-value

(LTFV) investigation, 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

determined in the LTFV 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 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)(1)) and 19 CFR 353.22.

Dated: November 6, 1995.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 95-28242 Filed 11-14-95; 8:45 am]

BILLING CODE 3510-DS-P