Calcium Aluminate Flux From France; Preliminary Results of Antidumping Duty Administrative Review

INTERNATIONAL TRADE ADMINISTRATION

[A-427-812]

Calcium Aluminate Flux From France; 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 one respondent, Lafarge Fondu

International (LFI) and its U.S. subsidiary, Lafarge Calcium

Aluminates, Inc. (LCA) (collectively, Lafarge), the Department of

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

antidumping duty order on calcium aluminate (CA) flux from France. This

review covers one manufacturer/exporter of the subject merchandise to

the United States, Lafarge, for the period June 15, 1994 through May

31, 1995.

We have preliminarily determined that U.S. sales have been made

below normal value (NV). 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

differences between the United States Price (USP) and NV.

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 issues, and (2) a

brief summary of the argument.

EFFECTIVE DATE: August 2, 1996.

FOR FURTHER INFORMATION CONTACT: Maureen McPhillips or John Kugelman,

Office 8 of the Deputy Assistant Secretary's Enforcement Group 3,

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.

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 25130).

SUPPLEMENTARY INFORMATION:

Background

On June 13, 1994, the Department published in the Federal Register

(59 FR 30337) the antidumping duty order on CA flux from France. On

June 6, 1995 (60 FR 29821), the Department published in the Federal

Register a notice of opportunity to request an administrative review of

the antidumping duty order on CA flux from France. In accordance with

19 CFR 353.22(a)(1)(1995), we received a timely request for review from

a respondent, Lafarge. We published a notice of initiation of this

antidumping duty administrative review on July 14, 1995 (60 FR 36260),

for the period June 15, 1994 through May 31, 1995.

The Department is now conducting this administrative review in

accordance with section 751 of the Act.

Scope of the Review

Imports covered by this review are shipments of CA flux, other than

white, high purity CA flux. This product contains by weight more than

32 percent but less than 65 percent alumina and more than one percent

each of iron and silica.

[[Page 40397]]

CA flux is currently classifiable under the Harmonized Tariff

Schedule of the United States (HTSUS) subheading 2523.10.0000. The

HTSUS subheading is provided for convenience and U.S. Customs' purposes

only. The written description of the scope of this order remains

dispositive.

Constructed Export Price

In calculating Lafarge's USP, the Department treated respondent's

sales as CEP sales, as defined in section 772(b) of the Act, because

the subject merchandise was sold to the first unaffiliated purchaser

after importation into the United States.

We calculated CEP based on packed or bulk, ex-U.S. warehouse or

delivered prices to unaffiliated customers in the United States. We

made deductions from the gross unit price, where appropriate, for the

following movement charges: loading material at the Fos plant in

France, foreign inland freight from plant to port, international

freight, marine insurance, U.S. brokerage and handling, inland freight

from port to U.S. warehouse, unloading costs, inland freight to

processors, demurrage charges, and U.S. freight from the warehouse to

the customer, in accordance with section 772(c)(2)(A) of the Act.

Pursuant to section 772(d)(1)(B), we also deducted credit expenses,

product liability insurance, and travel expenses for technical

services. Pursuant to section 772(d)(1)(D), we deducted U.S. indirect

selling expenses and inventory carrying costs incurred in the United

States. We did not deduct indirect selling expenses (i.e.,

administrative expenses, inventory carrying costs, personnel costs for

technicians) incurred by LFI in France because we did not deem these

expenses to be specifically related to commercial activity in the

United States. We also deducted commissions in accordance with section

772(d)(1)(A) of the Act.

For reasons stated in the level-of-trade section of this notice, we

granted Lafarge a CEP offset under section 773(a)(7)(B) of the Act.

Where applicable, in accordance with 19 CFR Sec. 353.56(b), we offset

any commission paid on a U.S. sale by reducing the NV by any home

market indirect selling expenses remaining after the deduction for the

CEP offset.

Further Manufacture

In addition, we adjusted CEP, where appropriate, for all value

added in the United States, including the proportional amount of profit

attributable to the value added, pursuant to section 772(d)(2) and

772(d)(3) of the Act. The value added consists of the costs associated

with the production of the further manufactured products, other than

costs associated with the imported products. To determine the costs

incurred to produce the further manufactured products, we included (1)

the costs of manufacture, (2) movement and repacking expenses, (3)

selling, general and administrative expenses, and interest expenses.

Profit was calculated by deducting all applicable costs, charges,

adjustments, and expenses from the sales price. The total profit was

then allocated proportionally to all components of cost. We deducted

only the profit attributable to the value added in the United States.

No other adjustments to CEP were claimed or allowed.

Normal Value (NV)

A. Viability

Based on a comparison of the aggregate quantity of home market and

U.S. sales, we determined that the quantity of the foreign like product

sold in the exporting country by Lafarge was sufficient to permit a

proper comparison with Lafarge's sales of the subject merchandise to

the United States, pursuant to section 773(a)(1)(B)(i) of the Act.

Therefore, in accordance with sections 773(a)(1)(B)(i) and 773(a)(5),

we based NV on the prices at which the foreign like products were sold

to the first unaffiliated purchaser for consumption in the exporting

country.

B. Model Match

In accordance with section 771(16)(B) of the Act, we considered all

products produced by the respondent, covered by the description in the

Scope of the Review section above, and sold in the home market during

the POR, to be foreign like products for purposes of determining

appropriate product comparisons to U.S. sales. Since there were no

sales of identical merchandise in the home market to compare to U.S.

sales, we matched U.S. sales to the most similar foreign like product

based on the physical characteristics reported by the respondent,

Lafarge. Among similar products sold in the home market we chose that

product with the least difference in variable costs of manufacture

between the home market and the U.S. product. We did not use any home

market product which, when compared to the U.S. model, had a variable

cost of manufacture in excess of 20 percent of the total cost of

manufacture of the U.S. model (see Certain Stainless Steel Cooking Ware

from the Republic of Korea: Preliminary Results of Antidumping Duty

Administrative Review, 61 FR 8253, 8254 (March 4, 1996)).

C. Level of Trade

As set forth in section 773(a)(1)(B)(i) of the Act and in the

Statement of Administrative Action (SAA) accompanying the URAA, at 829-

831, the Department will, to the extent practicable, calculate NV based

on sales at the same level of trade as the U.S. sales. When the

Department is unable to find a sale of the foreign like product in the

comparison market at the same level of trade as the U.S. sale, the

Department may compare the U.S. sales to sales at a different level of

trade in the comparison market.

In accordance with section 773(a)(7)(A) of the Act, if sales at

different levels of trade are compared, the Department will adjust the

NV to account for the difference in levels of trade if two conditions

are met. First, there must be differences between the actual selling

functions performed by the seller at the level of trade of the U.S.

sale and at the level of trade of the comparison market sale used to

determine NV. Second, the differences must affect price comparability

as evidenced by a pattern of consistent price differences between sales

at the different levels of trade in the market in which NV is

determined.

Section 773(a)(7)(B) of the Act establishes that a constructed

export price (CEP) ``offset'' may be made when two conditions exist:

(1) NV is established at a level of trade which constitutes a more

advanced stage of distribution than the level of trade of the CEP; and

(2) the data available do not provide an appropriate basis for a level-

of-trade adjustment.

To implement these principles in this review, we requested

information on the selling activities associated with each channel of

distribution in each of Lafarge's markets. We asked Lafarge to

establish any claimed levels of trade based on the selling functions

provided to each proposed customer group, and to document and explain

any claims for a level-of-trade adjustment.

To determine whether a separate level of trade existed within or

between the United States and the home market, we examined the selling

functions performed by Lafarge for each of the customer groups. Since

all of Lafarge's U.S. sales were CEP sales, we considered the selling

functions reflected in the price after the deduction of expenses and

profit under section 772(d) of the Act.

In the home market Lafarge claimed two customer groups: end-users

and distributors. We reviewed the sales

[[Page 40398]]

functions between these two types of customers in the home market.

There were no significant distinctions in the selling functions

performed for end-users and distributors in the home market. The

distribution systems, pricing policies, inventory maintenance, sales

order processing, and sales agreements were very similar within

customer groups in each market. We concluded, therefore, that Lafarge's

home market sales were made at the same level of trade because the

aggregate selling functions performed within each channel of

distribution were essentially identical.

We then examined the level of trade of the CEP sale in the U.S.

market (i.e., the level of trade for sales from LFI to LCA). We

determined that the selling functions of the level of trade of the home

market sales were sufficiently different from the level of trade of

Lafarge's CEP sales to establish a different level of trade. For

example, the level of trade of the CEP sale did not involve extensive

technical assistance, product liability, credit insurance, inventory

maintenance, and sales administration costs. Since the same level of

trade as that of the CEP did not exist in the home market, we could not

match U.S. sales to home market sales at the same level of trade, nor

could we determine whether there was a pattern of consistent price

differences between the levels of trade, in accordance with section

773(a)(7)(A) of the Act, based on Lafarge's home market sales of

merchandise under review. However, the SAA states that ``if information

on the same product and company is not available, the adjustment may

also be based on sales of other products by the same company. In the

absence of any sales, including those in recent time periods, to

different levels of trade by the exporter or producer under

investigation, Commerce may further consider the selling experience of

other producers in the foreign market for the same product or other

products.'' SAA at 830. Accordingly, we examined the alternative

methods for calculating a level-of-trade adjustment. In this review, we

did not have information that would allow us to apply these alternative

methods.

Because the data available do not provide an appropriate basis for

making a level-of-trade adjustment, but the level of trade in the home

market is at a more advanced stage than the level of trade of the CEP

sales, a CEP offset is appropriate, in accordance with section

773(a)(7)(B) of the Act. We also determined NV at the same level of

trade as the starting price for the CEP and made a CEP offset

adjustment. We deducted from NV the general and administrative overhead

expenses and inventory carrying costs reported by Lafarge as home

market indirect selling expenses. We limited the home market indirect

selling expense deduction by the amount of indirect selling expenses

incurred in the United States as determined under section 772(d)(1)(A).

D. Price to Price Comparisons

Pursuant to section 777(A)(d)(2) of the Act, we compared the CEPs

of individual transactions to the monthly weighted-average price of

sales of the foreign like product.

We based NV on the price at which the foreign like product is sold

for consumption in the exporting country to the first unaffiliated

party, in the usual commercial quantities and in the ordinary course of

trade in accordance with sections 773(a)(1)(B)(i) and 773(a)(5) of the

Act. Where appropriate, we deducted loading expenses, inland freight,

credit, credit insurance, travel expenses incurred by technicians,

product liability insurance, and packing. Prices were reported net of

value-added taxes (VAT) and, therefore, no adjustment for VAT was

necessary. No other adjustments were claimed or allowed.

Preliminary Results of Review

As a result of this review, we preliminarily determine that the

following weighted-average dumping margin exists:

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Margin

Manufacturer/exporter Period of review (percent)

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

Lafarge Fondu Inter'l. Inc........... 06/15/94-05/31/95 16.15

All Others........................... 06/15/94-05/31/95 37.93

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Parties to the proceeding may request disclosure within five days

of the date of publication of this notice. 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 workday thereafter. Interested parties may submit case briefs

within 30 days of the date of publication of this notice. Rebuttal

briefs and rebuttals to written comments, limited to issues raised in

the case briefs and comments, may be filed not later than 37 days after

the date of publication. 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. The Department will

issue the final results of this administrative review, including the

results of its analysis of issues raised in any such written comments.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Individual differences

between CEP 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 the publication of the final results of this administrative review

for all shipments of CA flux from France 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)(2)(C) of the Act: (1) The cash deposit rate for Lafarge will be

the rate established in the final results of this administrative

review; (2) for merchandise exported by manufacturers or exporters not

covered in these reviews 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 less-than-fair-value investigation, but the manufacturer is,

the cash deposit rate will be the rate established for the most recent

period for the manufacturer of the merchandise; and (4) for all other

producers and/or exporters of this merchandise, the cash deposit rate

will be 37.93 percent, the rate established in the less-than-fair value

investigation (59 FR 5994, February 9, 1994).

[[Page 40399]]

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 (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: July 26, 1996.

Robert. L. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-19726 Filed 8-1-96; 8:45 am]

BILLING CODE 3510-DS-P