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

[[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

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

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