Notice of Final Determination of Sales at Less Than Fair Value: Foam Extruded PVC and Polystyrene Framing Stock From the United Kingdom

DEPARTMENT OF COMMERCE

[A-412-817]

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

Foam Extruded PVC and Polystyrene Framing Stock From the United Kingdom

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: October 2, 1996.

FOR FURTHER INFORMATION CONTACT: Ellen Grebasch, Dorothy Tomaszewski,

or Erik Warga, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, D.C. 20230; telephone:

[[Page 51412]]

(202) 482-3773, (202) 482-0631, or (202) 482-0922, respectively.

THE APPLICABLE STATUTE: Unless otherwise indicated, all citations to

the Tariff Act of 1930, as amended (``the Act'') are references to the

provisions effective January 1, 1995, the effective date of the

amendments made to the Act by the Uruguay Round Agreements Act

(``URAA'').

FINAL DETERMINATION: We determine that foam extruded PVC and

polystyrene framing stock (``framing stock'') from the United Kingdom

is being, or is likely to be, sold in the United States at less than

fair value (``LTFV''), as provided in section 735 of the Act.

Case History

Since the preliminary determination in this investigation (Notice

of Preliminary Determination of Sales at Less Than Fair Value and

Postponement of Final Determination: Foam Extruded PVC and Polystyrene

Framing Stock From the United Kingdom 61 FR 22021, (May 13, 1996), the

following events have occurred:

On May 16, 1996, respondent, Robobond Ltd. (``Robobond''), alleged

the Department made two ministerial errors in its preliminary

determination. The Department found that there were errors made in the

preliminary determination; however, these errors did not result in a

combined change of at least five absolute percentage points in, but no

less than 25 percent of, the weighted-average dumping margin calculated

in the preliminary determination. Accordingly, no revision to the

preliminary determination was made. (See Memorandum from the Framing

Stock Team to Barbara R. Stafford, June 6, 1996.)

On May 16, 1996, the Department issued a supplemental cost

questionnaire to Robobond. Robobond submitted its response on May 31,

1996, and June 6, 1996.

On May 24, 1996, respondent, Magnolia Group Plc. (``Magnolia''),

withdrew from the investigation.

In June 1996, we verified the questionnaire responses of Ecoframe

Plc. (``Ecoframe'') and Robobond. Petitioner and respondents submitted

case briefs on August 12, 1996, and rebuttal briefs on August 19, 1996.

On August 22, 1996, petitioners protested that information in

Ecoframe's rebuttal constituted new information. On August 23, 1996,

the Department rejected certain new information contained in Ecoframe's

rebuttal brief. The Department held a public hearing for this

investigation on August 23, 1996.

On September 3, 1996, the Department requested certain information

from Ecoframe regarding its quantity adjustment claim. Ecoframe

responded on September 5, 1996. Petitioners submitted comments on

September 9, 1996.

Scope of Investigation

This investigation covers all extruded PVC and polystyrene framing

stock regardless of color, finish, width or length. Finished frames

assembled from foam extruded PVC and polystyrene framing stock are

excluded. The merchandise under investigation is currently classifiable

under subheadings 3924.90.20.00; 3926.90.90.90; 3926.90.95.90; and

3926.90.98.90 of the Harmonized Tariff Schedules of the United States

(``HTS''). Although the HTS subheadings are provided for convenience

and customs purposes, our written description of the scope of this

investigation is dispositive.

Period of Investigation

The POI is September 1, 1994, through August 31, 1995.

Facts Available

Section 776(a)(2) of the Act provides that if an interested party

withholds information that has been requested by the Department, fails

to provide such information by the deadlines for the submission of

information or in the form and manner requested, significantly impedes

a proceeding under the antidumping statute, or provides such

information but the information cannot be verified, the Department

shall use facts otherwise available in reaching the applicable

determination. Because respondent Magnolia withdrew from the proceeding

following the preliminary determination, Magnolia's questionnaire

response information on the record is unverifiable. Therefore, we must

use facts otherwise available with respect to Magnolia.

Section 776(b) provides that adverse inferences may be used against

a party that has failed to cooperate by not acting to the best of its

ability to comply with requests for information. (See also Statement of

Administrative Action, H.R. Doc. No. 316, 103d Cong., 2d Sess. 870

(1994) (``SAA'').) Magnolia's failure to participate following the

preliminary determination and to agree to verification of its

information on the record demonstrate that Magnolia has failed to

cooperate to the best of its ability in this investigation. In past

cases, when a company refuses to provide the information requested in

the form required, or otherwise significantly impedes the Department's

investigation, it is appropriate for the Department to assign to that

company the higher of (a) the highest margin alleged in the petition,

or (b) the highest calculated rate of any respondent in the

investigation. (See Final Determination of Sales at Less Than Fair

Value: Certain Hot-Rolled Carbon Steel Flat Products, Certain Cold-

Rolled Carbon Steel Flat Products, and Certain Cut-to-Length Carbon

Steel Plate From Belgium 58 FR 37083, (July 9, 1993).) Therefore, the

Department has determined that, in selecting among the facts otherwise

available with respect to Magnolia, an adverse inference is warranted.

As facts otherwise available, we are making an adverse inference and

assigning to Magnolia the margin calculated based on its submitted

information at the preliminary determination 1 of 84.82 percent.

This rate is the higher of the highest margin alleged in the petition,

or the highest calculated rate of any respondent in the investigation.

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\1\ Following the preliminary determination minor errors were

found in the margin program. These errors have been corrected for

the final determination.

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Fair Value Comparisons

To determine whether sales of the subject merchandise by

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

compared the export price (``EP'') to the normal value (``NV''), as

described in the ``Export Price'' and ``Normal Value'' sections of this

notice. In accordance with section 777A(d)(1)(A)(i), we compared the

weighted-average EP to the weighted-average NV during the POI. In

determining averaging groups for comparison purposes, we considered the

appropriateness of such factors as physical characteristics, comparable

quantities and level of trade.

A. Physical Characteristics

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

products covered by the description in the Scope of Investigation

section, above, produced in the United Kingdom (``UK'') and sold in the

home market during the POI, to be foreign like products for purposes of

determining appropriate product comparisons to U.S. sales. Where there

were no sales of identical merchandise in the home market to compare to

U.S. sales, we compared U.S. sales to the next most similar foreign

like product on the basis of the characteristics listed in the

Department's antidumping questionnaire. In making the product

comparisons, we relied on the following criteria (in order of

preference): material; weight per linear foot; profile

[[Page 51413]]

type; width; finish type (pasta/compo, foil, mylar, laminated/wrapped,

embossed plain substrate, embossed substrate with foil, embossed

substrate with mylar, wet system (e.g., paint, or other); and total

number of finishes.

B. Comparable Quantities

In this investigation, Ecoframe requested the Department to make

fair value comparisons of its sales at comparable quantities. We have

examined the sales information submitted by Ecoframe and determined

that this methodology is appropriate. (For further discussion, see

``Interested Parties' Comments'' section of this notice.) Where there

were no home market sales of the most similar merchandise at comparable

quantities to match to U.S. sales, we compared the U.S. sales to the

weighted-average of the most similar foreign like product.

C. Level of Trade

Based on our findings at verification, there was no support for

Robobond's level of trade claim. Therefore, level of trade was not a

factor in Robobond's final margin calculations. (For further

discussion, see ``Interested Parties' Comments'' section of this

notice.)

Export Price

In accordance with subsections 772 (a) and (c) of the Act, we

calculated EP for each of the respondents where the subject merchandise

was sold directly to the first unaffiliated purchaser in the United

States prior to importation. Use of constructed export price was not

otherwise warranted based on the facts of record.

We calculated EP based on the same methodology used in the

preliminary determination, with the following exceptions:

Robobond

Adjustments to reported sale terms, payment dates, and

international freight were made based on verification findings. We made

adjustments for verified commission expense on certain U.S. sales in

the final margin calculation. Credit expense was recalculated to

reflect the verified short-term interest rate. (For details, see

September 25, 1996, Final Determination Calculation Memorandum for

Robobond.)

Ecoframe

Minor adjustments to reported sales data were made based on

verification findings. (For details, see September 25, 1996, Final

Determination Calculation Memorandum for Ecoframe.)

Normal Value; Cost of Production Analysis

In the preliminary determination, the Department found reasonable

grounds to believe or suspect that each respondent made sales in the

home market at prices below the cost of producing the merchandise. As a

result, the Department initiated investigations to determine whether

the respondents made home market sales at prices below their respective

COPs during the POI within the meaning of section 773(b) of the Act.

Before making any fair value comparisons, we conducted the COP

analysis described below.

A. Calculation of COP

We calculated the COP based on the sum of each respondent's cost of

materials and fabrication used in producing the foreign like product,

plus amounts for home market general and administrative expenses

(``G&A'') and packing costs in accordance with section 773(b)(3) of the

Act.

B. Test of Home Market Prices

We used the respondents' adjusted weighted-average COP to test home

market prices. We compared the weighted-average COP figures to home

market sales of the foreign like product as required under section

773(b) of the Act, in order to determine whether these sales had been

made at below-cost prices, within an extended period of time, in

substantial quantities, and were not at prices which permit recovery of

all costs within a reasonable period of time. On a product-specific

basis, we compared the COP to the home market prices, less any

applicable movement charges and direct and indirect selling expenses.

C. Results of COP Test

In accordance with section 773(b)(2)(C) of the Act, where less than

20 percent of a respondent's sales of a given product were at prices

less than the COP, we did not disregard any below-cost sales of that

product because we considered such below-cost sales not to be made in

``substantial quantities.'' Where 20 percent or more of a respondent's

sales of a given product during the POI were at prices less than the

COP, we disregarded those sales because we consider to be made in

substantial quantities within an extended period of time (in accordance

with section 773(b)(2)(B) of the Act) and 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).

Where there were no above-cost sales available for matching

purposes, export prices that would have been compared to home market

prices for these models were compared instead to CV.

D. Calculation of CV

In accordance with section 773(e)(1) of the Act, we calculated CV

based on the sum of a respondent's cost of materials, fabrication,

selling, general, and administrative expenses (``SG&A''), profit and

U.S. packing costs as reported in the U.S. sales databases. In

accordance with section 773(e)(2)(A) of the Act, we based SG&A and

profit on the amounts incurred and realized by the respondent in

connection with the production and sale of the foreign like product in

the ordinary course of trade, for consumption in the foreign country.

Price to CV Comparisons

Where we compared CV to export prices, we deducted from CV the

weighted-average home market direct selling expenses and added the

weighted-average U.S. product-specific direct selling expenses (where

appropriate) in accordance with section 773(a)(8) of the Act.

Adjustments to COP and CV

We based COP and CV on the same methodology used in the preliminary

determination, with the following exceptions:

Ecoframe

Minor adjustments to reported costs were made based on verification

findings. (See Memorandum to the file from Michael Martin dated July

30, 1996 (``cost verification report'').)

Robobond

Robobond's reported G&A expense was adjusted to include a figure

for dividends. An amount for building depreciation expense was added to

reported total depreciation expense. Robobond's reported depreciation

expense for equipment was adjusted to reflect depreciation expense

calculated in accordance with the depreciation methodology historically

used by the company. (For above-noted adjustments concerning Ecoframe

and Robobond, see ``Interested Party Comments.'')

Adjustments to Normal Value

We based normal value on the same methodology used in the

preliminary determination, with the following exceptions:

Ecoframe

Minor adjustments to reported sales data were made pursuant to

verification

[[Page 51414]]

findings. Additionally, credit expense was recalculated to reflect the

verified short-term interest rate used by Ecoframe.

Robobond

Minor adjustments to reported sales terms, inland freight, and

payment dates were made pursuant to verification findings. Certain

reported direct selling expenses were treated as indirect selling

expenses. Credit expense was recalculated to reflect the verified

short-term interest rate used by Robobond.

(For details concerning these adjustments, see ``Interested Party

Comments'' in this notice.)

Currency Conversion

We made currency conversions into U.S. dollars based on the

official exchange rates in effect on the dates of the U.S. sales as

certified by the Federal Reserve Bank. Section 773A(a) of the Act

directs the Department to use a daily exchange rate in order to convert

foreign currencies into U.S. dollars unless the daily rate involves a

fluctuation. It is the Department's practice to find that a fluctuation

exists when the daily exchange rate differs from the benchmark rate by

2.25 percent. The benchmark is defined as the moving average of rates

for the past 40 business days. When we determine a fluctuation to have

existed, we substitute the benchmark rate for the daily rate, in

accordance with established practice. Further, section 773A(b) directs

the Department to allow a 60-day adjustment period when a currency has

undergone a sustained movement. A sustained movement has occurred when

the weekly average of actual daily rates exceeds the weekly average of

benchmark rates by more than five percent for eight consecutive weeks.

(For an explanation of this method, see Policy Bulletin 96-1: Currency

Conversions 61 FR 9434, (March 8, 1996).) Such an adjustment period is

required only when a foreign currency is appreciating against the U.S.

dollar. The use of an adjustment period was not warranted in this case

because the U.K. pound did not undergo a sustained movement, nor were

there currency fluctuations during the POI.

Verification

As provided in section 782(i)(1) of the Act, we verified the

information submitted by respondents for use in our final

determination. We used standard verification procedures, including

examination of relevant accounting and production records and original

source documents provided by respondents.

Interested Party Comments

Robobond

Comment 1: Final Determination Based on Adverse Facts Available

Petitioner asserts that Robobond has misled the Department during

the course of this investigation through a series of omissions,

discrepancies, and misrepresentation of data provided on the record.

While certain misstatements and inaccuracies in the information

supplied by Robobond may be inadvertent, petitioner maintains that

other instances appear to be deliberate attempts by Robobond to mislead

the Department and to manipulate and distort the results of this

proceeding. Petitioner submits that the cumulative impact of the

omissions and misrepresentations attributable to Robobond render

Robobond's responses inherently unreliable as a whole. As such,

petitioner requests the Department to reject Robobond's responses for

the final determination and assign it a margin based on the most

adverse facts available.

Robobond counters that there is no merit whatsoever in petitioner's

claims that Robobond misled the Department. Robobond maintains that its

sales and cost of production data were successfully verified, and those

topics for which discrepancies were noted involve only minor issues

which can easily be corrected for the final determination. Accordingly,

Robobond urges the Department to reject petitioner's allegations.

DOC Position

Certain discrepancies and omissions in Robobond's reported sales

and cost data were discovered during verification (see e.g., comment 6

below, regarding missing accounting records). However, the

discrepancies and omissions do not warrant the use of adverse facts

available. Such errors will be addressed individually. (See, e.g.,

Certain Corrosion-Resistant Carbon Steel Flat Products from Korea;

Final Results of Antidumping Duty Administrative Review 61 FR 18558

(April 26, 1996).)

Comment 2: International Freight

For certain sales observations where international freight was

incorrectly reported as zero, Robobond argues that these omissions were

clerical errors, consistent with criteria recently announced in Certain

Fresh Cut Flowers from Ecuador; Final Results of the Antidumping Duty

Administrative Review, 61 FR 37044, (July 16, 1996) 2

(``Flowers''). According to Robobond, the omission of international

freight from these sales constitutes inadvertent errors that satisfy

the test set forth in Flowers and should be treated accordingly.

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\2\ ``* * * We will accept corrections of clerical errors under

the following conditions: (1) The error in question must be

demonstrated to be a clerical error, not a methodological error, an

error in judgement, or a substantive error; (2) the Department must

be satisfied that the corrective documentation provided in support

of the clerical error allegation is reliable; (3) respondent must

have availed itself of the earliest reasonable opportunity to

correct the error; (4) the clerical error allegation, and any

corrective documentation, must be submitted to the Department no

later than the due date for the respondent's administrative case

brief; (5) the clerical error must not entail a substantial revision

of the response; and (6) the respondent's corrective documentation

must not contradict information previously determined to be accurate

at verification.'' (pages 37044-37045)

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Further, Robobond contends that the use of the highest reported per

unit international freight figure would unnecessarily overstate the

actual international freight cost associated with the sales in

question. Robobond notes that application of the highest reported

figure is inconsistent with the Department's actions regarding errors

in international freight described in the sales verification report for

Ecoframe, the other UK respondent in this investigation.

Alternatively, if the Department does not decide that these

omissions constitute clerical errors, Robobond suggests that the

Department apply a weighted-average freight expense from the initial

invoice or invoices to the correcting invoice as a more reasonable

method of adjustment.

Petitioner argues that Robobond's failure to report international

freight for certain U.S. sales clearly does not constitute an

inadvertent error, but was either a methodological error, error in

judgement, or substantive error, within the definition given in

Flowers. Petitioner requests that the Department reject Robobond's

claims for the correction of clerical errors because Robobond has not

satisfied the test set forth in Flowers, and assign the highest

reported international freight rate per linear foot to these sales

transactions.

DOC Position

The test set forth in Flowers defines a clerical error as being

``not a methodological error, an error in judgement, or a substantive

error.'' In the case of the one invoice (4275), where international

freight was not reported for one out of 23 line items, we agree with

Robobond's assessment that this was a clerical error. The fact that

international freight was reported for all line items listed on the

invoice except for one (amounting to 6% of total sales

[[Page 51415]]

value and 9% of total footage of the invoice) indicates that this

movement expense was inadvertently missed when compiling the database.

Accordingly, we have treated this omission as a clerical error for the

final determination.

With respect to the other six invoices in question, we determine

that the omission does not constitute a clerical error. The omission of

international freight figures for certain reported sales resulted where

certain product line items listed on the delivery notes (and

transported to the customer) were overlooked by invoicing staff when

preparing the original sales invoice. Subsequently, additional invoices

were issued to account for the missed product line items on the

original invoice. When compiling the sales database, however, Robobond

neglected to account for international freight for these six invoices

even though it was known that international freight was provided for

these sales. This omission occurred consistently for six invoices which

were issued under similar circumstances. In all six instances, the

actual invoice document noted the error and, in most cases, referred to

the original sales invoice. Accordingly, we find that Robobond did not

act to the best of its ability to comply with the Department's request

for information. Therefore, pursuant to section 776(b) of the Act, we

are applying the highest international freight figure reported for

merchandise listed in the original invoice for the six invoices in

question.

Comment 3: Error in Calculating International Freight

For sales listed on one sales invoice (invoice 4331), petitioner

notes that the international freight figure was understated because the

amount of the expense was incorrectly billed to the U.S. customer at a

lower rate. Therefore, petitioner requests that the Department make a

correction to account for this understatement.

DOC Position

We agree with petitioner and have corrected this error accordingly.

Comment 4: Exclusion of Certain Reported Sales

Robobond asserts that certain reported sales should not be

considered in the final margin calculation because those transactions

are not sales to the ``first unaffiliated U.S. customer.'' According to

Robobond, these sales were of merchandise initially sold to a U.S.

customer, but portions of these sales were not paid for and,

subsequently, they were directed to another U.S. customer. Robobond

requests that these sales be excluded from the final margin

calculation. Alternatively, if the Department were to include these

sales in its final margin calculation, Robobond requests that the

Department use a weighted-average international freight cost of the

initial invoice to calculate the freight cost for the subsequent sale.

Petitioner counters that the sales in question should be considered

in the final margin calculation. According to petitioner, the initial

sales to the U.S. customer were not actually concluded because the

customers did not pay for the merchandise or keep the merchandise.

Petitioner requests the Department reject Robobond's argument and

consider applying international freight for these reported sales based

upon facts available.

DOC Position

We agree with petitioner. The transactions in question were sales

by Robobond of returned goods to the first unaffiliated U.S. customer.

Accordingly, these sales are included in the final margin calculation.

Additionally, Robobond's argument for using weighted-average

international freight fails to address the fact that the cost to

transport the merchandise from the UK to US was not reported for these

sales even though such freight costs were incurred by Robobond. We do

not consider the omission of the known freight expense for all five

invoices to be a clerical error and, accordingly, we find that Robobond

did not act to the best of its ability to comply with the Department's

request for information. Therefore, pursuant to section 776(b) of the

Act, we have applied the highest reported international freight figure

per linear foot.

Comment 5: Affiliated Party

Petitioner asserts that an unreported affiliated party was

disclosed at verification. Robobond counters that the status of the

alleged affiliated party was thoroughly examined at verification where

it was found that the company in question was dissolved prior to the

POI and, therefore, should not be considered a factor in determining

whether to base the final determination on facts available.

DOC Position

We agree with Robobond. Company records from the U.K. Registrar of

Companies were examined for all listed shareholders of Robobond, Robam,

D&J Simons, Ltd., D&J Simons & Sons, Ltd, Danant Holdings and Gransim

Properties. As noted in the verification report, no discrepancies were

discovered concerning the corporate structure and affiliated parties

reported by Robobond. Therefore, this issue does not require further

consideration for purposes of the final determination.

Comment 6: Accounting Records

Petitioner contends that Robobond's accounting records were

incomplete to the extent that the Department was precluded from

verifying the accuracy of Robobond's questionnaire responses and, in

particular, reconciling Robobond's reported quantity and value of sales

during the POI. Because of this deficiency at verification, petitioner

requests the Department to reject Robobond's responses and determine

that the most adverse inference is warranted in the selection of facts

otherwise available for purposes of the final determination.

Robobond counters that the Department's verification report makes

no mention of any major discrepancies in its review of company sales

and accounting records for the POI. Robobond maintains that to the

extent that accounting records were incomplete, this did not hinder the

Department's verification. Further, Robobond notes that, according to

the verification report, nominal ledger daybooks and sales invoice

files were available for verifying completeness.

DOC Position

We consider Robobond's reported volume and value of sales to be

verified as complete and accurate for purposes of this investigation.

While the missing accounting records are a cause for concern, as noted

in the Department's verification report, source records and nominal

ledger daybooks were available for review and used for reconciling

Robobond's reported volume and value of sales and testing completeness

of Robobond's reported sales of subject merchandise made during the

POI. Therefore, there is no basis for making a final determination in

this proceeding based solely upon facts available.

Comment 7: Level of Trade

Petitioner contends that Robobond made statements supporting its

level of trade claim that were subsequently proven false at

verification. According to petitioner, such misleading statements

reflect Robobond's consistent equivocation on the record of this

proceeding and, therefore, the Department should use facts available

for the final determination.

Robobond maintains that it stated nothing false on the record of

this proceeding. According to Robobond, all statements made concerning

its sales

[[Page 51416]]

process, size of orders, and inventory maintenance in support of its

level of trade claim were accurate. Robobond requests the Department to

dismiss petitioner's assessment of these statements.

DOC Position

We did not grant Robobond's level of trade claim for the

preliminary determination because it did not provide sufficient

information to indicate that separate levels of trade existed (see May

3, 1996, Decision Memorandum from the Team to Deputy Assistant

Secretary Barbara Stafford). Verification failed to disclose any

evidence to support Robobond's claim that its sales were made at

different levels of trade. Therefore, the Department has rejected

Robobond's alleged level of trade claim.

Comment 8: Treatment of Commission Expense

Petitioner contends that there is no reasonable basis to conclude

that no other commission payments were made for sales of subject

merchandise during the POI because Robobond's accounting records were

incomplete. Therefore, for the final determination, petitioner requests

the Department to apply a commission expense to all sales made during

the three-month period of the POI for which the accounting records were

incomplete.

Robobond submits that it properly reported relevant commission

expense data prior to verification, in accordance with the Department's

regulations, and notes that the verification report disclosed no

discrepancies regarding this subject. Therefore, Robobond argues an

application of a commission expense to U.S. sales as facts available is

unwarranted.

DOC Position

The commission expense was reported by Robobond to the Department

prior to verification. As noted in the verification report, with the

exception of the reported commission payment, no evidence of any other

commission payments were discovered to be linked to any POI sales of

the subject merchandise. Therefore, we have considered the verified

commission expenses relating to U.S. sales observations in the final

margin calculation.

Comment 9: Home Market Direct Selling Expenses

Bank Charges (Returned Check Fees)

Petitioner asserts that the sales verification revealed that the

returned check fees, reported by Robobond as direct selling expenses,

were not the actual expenses charged by the bank. The difference

between the reported and verified amounts for this expense, petitioner

contends, was grossly overstated and, as such, should be rejected as a

direct selling expense.

Robobond contends that the actual difference between the reported

and verified amounts was insignificant when compared to the total value

of home market POI sales. Robobond argues the difference cannot be

characterized as an ``extreme overstatement'' of the expense.

Therefore, the Department should reject petitioner's arguments.

DOC Position

As stated in the verification report, the returned check fees

reported by Robobond were not the actual amounts charged by the bank

for returned checks. However, the Department was able to verify the

actual returned check fees charged to Robobond. We agree with Robobond

that the difference between what was reported and what was verified is

negligible in proportion to the home market sales database and does not

warrant the use of facts otherwise available. We have therefore

corrected this field in Robobond's database to reflect the verified

amounts of returned check fees.

Freight Revenue (credit notes clearing customer accounts that were

incorrectly billed for freight)

Petitioner asserts that verification revealed Robobond over-

credited certain customers for freight, thereby improperly inflating

the adjustment to normal value. Therefore, petitioner argues the

Department should reject freight revenue as a direct selling expense.

Robobond contends that it reported the amount actually credited to

the customer's account when the freight charges were removed.

Therefore, Robobond argues that it appropriately reported the actual

credits incurred and the Department should adjust the normal value

accordingly.

DOC Position

We agree with petitioner, in part. At verification, it was revealed

that, due to the nature of the expense, the freight credit should not

exceed the amount reported for freight revenue. Where this situation

occurred in Robobond's database, we find that Robobond did not act to

the best of its ability to comply with the Department's request for

information. Therefore, pursuant to section 776(b) of the Act, we have

used, as the facts available, zero in this expense field. However, the

remaining freight revenue was verified. Accordingly, this error does

not warrant rejecting the entire expense.

Shortage Credits

Petitioner cites Robobond's submissions stating that there were no

referenced invoices on the face of the credit notes issued by Robobond

for shortages. Petitioner argues that verification found this statement

to be false and, as such, the Department should reject this adjustment

as a direct selling expense.

Robobond contends that the allocation methodology is correct, in

that Robobond believed that these credit notes incorrectly identified

the applicable invoice. Therefore, allocating the credit notes on a

customer-specific basis, Robobond contends, is an acceptable

methodology.

DOC Position

Verification revealed that the shortage credit notes could be

accurately tied to specific invoices. Therefore, we have allocated the

credit notes to the applicable invoices.

Return Freight Charges (freight charges for merchandise returned to

Robobond)

Robobond asserts that it adequately tied certain returned freight

charges (DIRSEL7B) to the appropriate customer. Regarding the remaining

returned freight charges (DIRSEL7A), Robobond contends that the freight

company did not provide sufficient documentation to link the freight

charges to a specific customer. Therefore, the charges were allocated

over total sales during the POI. Robobond argues that the methodology

used is legitimate and the adjustments should be accepted as direct

selling expenses for the final determination.

Petitioners argue that because the returned freight charges listed

in DIRSEL7A could not be tied to sales within the POI, the expense

should be considered indirect. As for the returned freight charges

listed in DIRSEL7B, Petitioners believe that the credit notes did not

adequately establish that they were tied to sales within the POI and as

such should be considered indirect.

DOC Position

We agree with petitioner in part. The antidumping questionnaire

directs respondents to report those expenses which can be directly tied

to a sale within the POI as direct selling expenses. Where an expense

cannot be tied to a sale within the POI, the expense is considered

indirect. Therefore, we treated the returned

[[Page 51417]]

freight charges which were not tied to a sale within the POI as

indirect selling expenses for purposes of the final determination. As

for the remaining returned freight expenses (i.e., those expenses tied

to a specific customer) we determine that the documentation provided at

verification adequately established that the expenses were tied to

sales during the POI. Accordingly, we have considered these to be

direct selling expenses for purposes of the final determination.

Freight Credit (credit notes issued by the freight company to Robobond)

Petitioner argues that Robobond failed to tie the credit notes

issued by the freight company to specific sales during the POI. As

such, petitioner contends that these expenses should be considered

indirect.

DOC Position

We agree with petitioner in part. The antidumping questionnaire

directs respondents to report those adjustments which can be directly

tied to a sale within the POI as direct. Where an adjustment cannot be

tied to a sale within the POI, it is considered indirect. Therefore, we

treated the freight credits which were not tied to a sale within the

POI (DIRSEL6A) as indirect selling expenses for purposes of the final

determination. As for the remaining freight credits (DIRSEL6B), we

determine that the documentation provided at verification adequately

established that the revenues were tied to sales during the POI.

Accordingly, we have considered these to be direct for purposes of the

final determination. (See Memorandum to the File from the Framing Stock

Team, September 25, 1996, for a discussion of specific freight credit

notes.)

Bankruptcy Credit Notes (credit notes issued to clear the accounts of

customers that went bankrupt)

Robobond contends that the Department should accept the bankruptcy

credit notes reported in its database as a direct selling expense.

Robobond cites Daewoo Electronics Company Ltd. v. United States, 712 F.

Supp. 931, 938 (CIT 1989), aff'd in part and rev'd in part on other

grounds, 6 F.3d 1511 (Fed. Cir. 1993), cert. Denied, 114 S. Ct. 2672

(1994) and Color Television Receivers from the Republic of Korea 61 FR

4,408, February 6, 1996) as supporting its position that these credit

notes have been accepted in the past as bad debt expense which is

treated as a direct selling expense.

Petitioners argue that the credit notes could not be tied to sales

within the POI and, therefore, should be considered an indirect selling

expense.

DOC Position

We agree with Robobond. The Department verified the bad debt

expenses and found these expenses to be incurred with respect to sales

of the subject merchandise and to specific customers which went

bankrupt during the POI. Furthermore, we found no discrepancies with

respect to the allocation methodology. We have therefore, accepted

these expenses as direct selling expenses for purposes of the final

determination.

Accounts Receivable (credit notes to clear the outstanding balance of

customer's accounts)

Petitioner contends that Robobond deliberately attempted to

manipulate the sales database by issuing credit notes to clear the

outstanding balance of certain customers. Petitioner argues that the

Department should reject the credit notes as a direct selling expense.

Instead, petitioner contends, the Department should calculate the

imputed credit expense on the total amount of the credit notes, for

each customer, from September 1, 1994, through the present and apply

that credit expense to every sale made by Robobond to the customer in

question as the facts otherwise available.

Robobond disputes petitioner's interpretation as unreasonable and

contends the use of the facts otherwise available is not justified

because none of the criteria of Section 776(a)(2) of the Act are

applicable in this situation. Finally, Robobond asserts that if the

Department disagrees with the classification of these credit notes as

direct selling expenses it should simply treat them as indirect.

DOC Position

The documentation regarding the accounts in question was thoroughly

examined at verification. While we do not find evidence that the data

were manipulated for the purposes of this proceeding, the credit notes

in question could not be tied to specific sales during the POI. We have

therefore treated this expense as indirect.

Remaining Credit Notes

Petitioner contends that the discrepancies found during the review

of the randomly sampled credit notes additionally call into question

the reliability and credibility of Robobond's responses. Petitioner

argues that, due to the abundant discrepancies found at verification,

the Department should assign to Robobond a margin based on the facts

otherwise available.

Robobond argues that it correctly reported its credit notes and

that the Department should disregard petitioner's claim.

DOC Position

We disagree with petitioner. Verification revealed minor errors

with respect to two credit notes. These errors have been corrected for

the final determination. As for not using total adverse facts

available, see, interested party comment 1.

Comment 10: Home Market Warranty Claims (based on credit notes)

Robobond asserts that the questionnaire directs respondents to

report warranty expenses on a product-specific basis. If this is not

possible, Robobond continues, the respondent should use a broader

allocation basis (i.e., a customer-specific basis), not a narrower

invoice-specific basis (i.e., tying warranty credit notes to specific

sales during the POI). Robobond cites Antifriction Bearings and Parts

Thereof from Germany: Final Results of AD Administrative Review 56 FR

31692, (July 11, 1991) (``AFBs from Germany''), to support its claim

that the methodology used is consistent with the Department's

established practice regarding warranty expenses. Moreover, Robobond

argues that it would have been impractical and unduly burdensome to

report warranty expenses on an invoice-specific basis. Therefore,

Robobond contends that it correctly reported its warranty expenses and

the Department should adjust normal value accordingly.

Petitioner argues that Robobond was unable to produce historical

warranty expense information. Additionally, not all of the warranty

credit notes could be tied to sales within the POI (i.e., on an

invoice-specific basis). Therefore, the Department should reject

Robobond's reported warranty expenses. Further, petitioner contends

that AFBs from Germany does not support Robobond's argument, instead it

confirms that Robobond ignored the Department's stated policy regarding

warranty expenses in that the acceptance of surrogate product-specific

data is acceptable only when the respondent has provided the Department

with historical warranty expense data with which to measure the

reasonableness of the product-specific data.

DOC Position

We agree with Robobond. As stated in AFBs from Germany:

[[Page 51418]]

With respect to warranty expense, our past practice has been to

accept variable warranty expenses which were incurred during the

review period as a surrogate for such expenses actually incurred on

sales during the review period, provided such expenses reasonably

reflect the firm's historical experience with respect to warranty

expenses. We use a surrogate expense amount because warranty

commitments for sales under review may not reach fruition until

after the review period is over. Therefore, the Department does not

require a sale-by-sale breakdown of direct warranty expenses, just a

reasonable allocation of these expenses.

(AFBs from Germany, 56 FR at 31723.)

In this case, as in AFBs in Germany, we are satisfied that the

accounting system of Robobond prevents reporting these expenses on a

sale-by-sale basis or compiling historical data. Therefore, we have

determined that the verified allocation for warranty expense is

accurate, reasonable, and complete.

Comment 11: Home Market Credit Expense

Robobond argues that the Department should accept the verified home

market short-term interest rate reported in its questionnaire response

to calculate home market credit costs.

Petitioner contends that the Department should not accept the

reported short-term interest rate and should instead base credit

expense on the equivalent interest rate plus 1.5 per cent (i.e., for

U.S. sales, the U.S. prime rate plus 1.5 per cent and for home market

sales, the U.K. interest rate equivalent to the U.S. prime rate plus

1.5 per cent).

DOC Position

We agree with Robobond. The documentation regarding the Robobond's

short-term interest rate agreement was thoroughly examined at

verification--no discrepancies were noted. We have therefore used the

reported interest rate in our final calculations.

Comment 12: Depreciation

Petitioner asserts that Robobond should not be permitted to

selectively change its depreciation methodology during the POI in order

to lower costs. Petitioner notes that Robobond's May 31, 1995,

financial statement indicates that this change in accounting

methodology reduced the company's depreciation expense and POI

production costs by a significant amount. According to petitioner, the

change in depreciation methodology was made well after this

investigation was initiated. Moreover, petitioner notes that Robobond

has continued to depreciate all other categories of assets on the basis

of its normal accelerated depreciation methodology and the company's

parent and sister companies also continue to use an accelerated

methodology on all of their assets. Expenditures for plant and

machinery, the only class of assets subject to the change in

depreciation methodology, increased in the fiscal year ending May 31,

1995. Robobond's change in depreciation methodology is nothing more

than an after-the-fact attempt to artificially reduce production costs.

Respondent maintains that the Department should use Robobond's

submitted plant and machinery depreciation expense because it

accurately reflects the company's POI depreciation expense. Robobond

argues that the accelerated depreciation methodology it followed in the

past reflected the uncertainty of any given asset's useful life, while

Robobond was developing the subject merchandise. However, with the

establishment of its new facility and equipment, Robobond maintains

that it has the right to adopt a depreciation methodology more

representative of the assets' useful lives. Moreover, the methodology

adopted by Robobond is an acceptable methodology under the generally

accepted accounting principles (``GAAP'') of the UK. Robobond further

argues that under section 773(f)(1)(A) the Department must calculate

costs ``based on the records of the exporter or producer of the

merchandise'', if those records are in accordance with the country's

GAAP and reasonably reflect the costs associated with the production of

the subject merchandise.

DOC Position

We disagree with Robobond. Section 773(f)(1)(A) of the Act states

that ``[c]osts shall normally be calculated based on the records of the

exporter or producer of the merchandise, if such records are kept in

accordance with the generally accepted accounting principles of the

exporting country (or the producing country where appropriate) and

reasonably reflect the costs associated with the production and sale of

the merchandise.'' Further, as explained in the SAA, ``[t]he exporter

or producer will be expected to demonstrate that it has historically

utilized such allocations, particularly with regard to the

establishment of appropriate amortization and depreciation periods and

allowances for capital expenditures and other development costs.'' SAA

at 834.

In this instance, Robobond historically used an accelerated

depreciation methodology in preparing its financial statements.

Notwithstanding this long-established practice, Robobond has now

changed to a straight-line depreciation method in its financial

statements (as reflected in Robobond's May 31, 1995, statements), which

were completed after the filing of the petition in this proceeding.

Moreover, this change in methodology is limited solely to calculating

depreciation expense for equipment; all other assets continue to be

depreciated according to the historically utilized methodology. Also,

Robobond's financial statements, prepared by outside auditors, do not

provide any business reason for this change.

In past cases, where respondents have switched accounting

methodologies following the initiation of an investigation, the

Department has closely examined such modifications and has rejected

those changes which do not reasonably reflect costs and which redounds

to the benefit of the respondent in the proceeding. (See, e.g., Final

Determination of Sales at Less Than Fair Value: Certain Hot-Rolled

Carbon Steel Flat Products, Certain Cold-Rolled Steel Flat Products,

Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain

Cut-to-Length Carbon Steel Plate From Brazil, 58 FR 37091 (July 9,

1993); Amended Order and Final Determination of Sales at Less Than Fair

Value: Ferrosilicon From Venezuela, 60 FR 64018 (December 13, 1995).)

Where changes in historically-utilized company practice are made

contemporaneous to the investigation, the burden plainly is on the

respondent to show that the change was made for business reasons other

than the AD proceeding and that the new methodology reasonably reflects

the company's costs of producing subject merchandise. In such

circumstances, the fact that a changed methodology is permissible under

GAAP will not automatically justify the change if there is no

legitimate business reason.

Robobond asserts that the change in depreciation methodology was

due to the opening of a new production facility at the beginning of the

fiscal year. However, the company's records and other record

information do not provide evidence in support of this assertion. As to

Robobond's assertion that the change in methodology was in accordance

with the UK's GAAP, Robobond has presented no information in support of

its arguments that the straight-line depreciation methodology more

reasonably reflects costs than its historically-used accelerated

methodology, which also is in accordance with UK's GAAP. With

[[Page 51419]]

regard to Robobond's comments on useful life, we note that both methods

use the same estimate of useful life; however, the accelerated method

allocates more of the expense in the early years. Additionally, the

notes to Robobond's May 31, 1995, financial statements state that the

change in depreciation methodologies reduces the depreciation expense

relative to the expense calculated according to the historically-

utilized methodology.

In sum, in light of the evidence of record, we find that Robobond

has not met its burden on this issue. The record evidence does not

reflect that this methodological change was done for business reasons.

Although Robobond provided post-hoc rationalizations for the change, it

did not provide record evidence from a time period prior to the

initiation of the investigation to show that the change was made for

business reasons. Additionally, the SAA indicates that the exporter

will be expected to demonstrate that it has historically utilized such

accounting practices. Robobond has not historically used the straight-

line method of depreciation in its accounting records. Further,

Robobond did not consistently apply this change in methodology to all

of its asset categories.

For purposes of the final determination, we therefore are adjusting

Robobond's reported depreciation expense to reflect depreciation

calculated according to its historically-utilized method.

Comment 13: G&A Expense

Petitioner contends that there is ample evidence on the record that

the various companies owned by the Simons family are related for

purposes of this dumping investigation. According to petitioner, in

such situations, the Department normally combines the G&A expense of

all related companies and then allocates the aggregate total across the

consolidated cost of sales of those companies. In addition, petitioner

notes that Robobond submitted for the record on June 6, 1996, the D&J

Simons and Sons, Ltd. financial statements for the fiscal year ending

October 31, 1995. The end of D&J Simons & Sons' 1995 fiscal year

extends approximately seven weeks beyond the initiation of this

investigation. The Department normally derives G&A and financial

expense ratios from data contained in the financial statements for the

fiscal year that most closely corresponds with the POI. However,

petitioner argues that these financial statements cannot be used

because Robobond has manipulated the information contained in them.

Specifically, petitioner notes that the historical amounts paid for

compensation decreased significantly in the October 31, 1995, financial

statements. Furthermore, it appears that some compensation was

purposefully shifted to dividends rather than normal methods in order

to further reduce period costs.

Robobond counters that the Department should use Robobond's

submitted G&A expense because they accurately represent the POI expense

associated with the subject merchandise. Robobond maintains that its

reported G&A expense included its own expense, as well as, those G&A

expenses incurred by affiliates on its behalf. Additionally, Robobond

notes that the Department verified that Robobond identified all G&A

expenses incurred by affiliates on the company's behalf. According to

Robobond, the fact that its affiliates neither produce nor sell the

subject merchandise defeats any presumption that the remaining G&A

expenses incurred by the affiliates are incurred on behalf of Robobond.

DOC Position

We agree with respondent in part. Verification showed no evidence

to indicate that Robobond misreported its G&A expenses for itself or

any of its affiliates.

While petitioner is correct in observing that directors'

compensation as reported was significantly lower in Robobond's October

31, 1995, financial statement than in previous years, it appears that

Robobond reallocated the difference in directors' compensation to its

pension fund, which is captured along with directors' salaries in

Robobond's reported G&A. Additionally, dividends were issued to

Robobond's shareholders as another portion of the directors'

compensation package.

Additionally, where a manager/owner in a closely-held company could

potentially reallocate costs through the issuance of dividends in lieu

of directors' salaries, we reviewed the Robobond's past practices on

issuing dividends and found that Robobond has never issued dividends in

prior years. This change in policy reallocates directors' compensation

to dividends. Further, this change in policy on issuing dividends

occurred following the initiation of this investigation. For purposes

of the final determination, we have adjusted Robobond's reported G&A

figure to include dividends.

Comment 14: Building Depreciation

To avoid double counting for the same type of expense, Robobond

contends that the Department should include in COP and CV only building

maintenance and not building depreciation. Robobond notes that, under

UK accounting principles, a company may not report depreciation on a

freehold building (i.e., an estate held in fee) if it elects to

maintain the building in a manner that preserves or extends its useful

life and to record, as current expense, the cost of maintaining the

buildings. Accordingly, Robobond requests that the Department include

only building maintenance expense in calculating Robobond's COP

because: (1) Building maintenance expenses are recorded in Robobond's

normal cost accounting records, and (2) Robobond does not record

building depreciation in its normal course of business.

DOC Position

As noted in the previous comment concerning depreciation, Section

773(f)(1)(A) of the Act directs the Department to calculate COP based

on the company's records if those records are in accordance with the

country's accepted practice and reasonably reflect the costs associated

with the production of the subject merchandise. While the UK accounting

principles do not require companies to depreciate buildings, U.S.

accounting principles require building depreciation as a means of cost

allocation. Under UK GAAP the cost of the building is never recognized

as an expense, however, U.S. GAAP recognizes both the cost of the

building and the maintenance as expenses, in order to properly match

the expenses to revenues. Routine building maintenance expense,

therefore, does not capture associated building depreciation. In this

instance, we find that the accounting principles of the UK do not

reasonably reflect the costs associated with the production of the

subject merchandise. For the final determination, we have included

building maintenance expenses and building depreciation expense in

calculating Robobond's COP.

Ecoframe

Comment 15: Start-Up Costs

Petitioner argues that the Department should not make a startup

adjustment to Ecoframe's cost of production. Petitioner contends that

Ecoframe failed to provide sufficient evidence that it meets the

criteria under Section 773(f)(1)(C)(ii) of the Act. Specifically,

petitioner argues that Ecoframe failed to establish that it was still

in the start-up phase during the POI and that production levels were

limited by technical factors associated with the initial phase of

commercial production.

[[Page 51420]]

Petitioners argue that the POI in this case starts nine months after

Ecoframe commenced production of framing stock and was therefore well

into full operation during the POI.

Petitioner argues that the yield loss information provided by

Ecoframe is not evidence of technical factors associated with the

initial phase of commercial production. Further petitioner's own

analysis indicates that these yield losses are a normal part of routine

production, and are most probably indicative of the degree of

ornateness of the profiles produced. The more ornate the profile the

higher the yield loss. Finally, petitioner argues that respondent must

demonstrate that production levels were limited by technical factors

associated with the initial phase of commercial production and not by

factors unrelated to start-up such as chronic production problems,

demand, or business cycle.

Ecoframe argues that it provided sufficient information to warrant

a startup adjustment to the cost of production. Specifically, Ecoframe

points to the fact that the plant had been operational for less than

two years by the end of the POI and at that time even the major U.K.

manufacturer of framing stock was still producing substandard moulding.

Ecoframe also contends that numerous technical factors were limiting

initial production during the POI. Therefore, the Department should

make a startup adjustment to Ecoframe's cost of production.

DOC Position

We agree with petitioners. According to section 773(f)(1)(C)(ii) of

the Act adjustments ``shall be made for startup operations only where--

(I) a producer is using new production facilities or producing a

new product that requires substantial additional investment, and

(II) production levels are limited by technical factors

associated with the initial phase of commercial production.

For purposes of subclause (II), the initial phase of commercial

production ends at the end of the startup period. In determining

whether commercial production levels have been achieved, the

administering authority shall consider factors unrelated to startup

operations that might affect the volume of production processed,

such as demand, seasonality, or business cycles.''

The SAA also states ``any determination of the appropriate startup

period involves a fact-intensive inquiry.'' This includes a

consideration of ``factors unrelated to startup operations that may

have affected the volume of production processed, such as demand,

seasonality, or business cycles.'' The SAA further states that the

``start-up [period] will be considered to end at the time the level of

commercial production characteristic of the merchandise, producer, or

industry concerned is achieved. The attainment of peak production

levels will not be the standard for identifying the end of the start-up

period, because the start-up period may end well be for a company

achieves optimum capacity utilization.'' SAA at 836 (emphasis added).

Moreover, ``[t]o determine when a company reaches commercial production

levels, Commerce will consider first the actual production experience

of the merchandise in question.'' SAA at 836.

In this case, although Ecoframe was using new production facilities

and techniques, the Department does not have sufficient information on

the record to determine when the start-up period ended and the

commercial production period began. Specifically, Ecoframe did not

submit a production level analysis demonstrating that it had not yet

reached full commercial production levels. Such an analysis would

include information distinguishing the production levels, the product

cost levels, and the prices during the start-up phase and the

commercial phase. Furthermore, the analysis would have to address

``factors unrelated to start-up operations that may have affected the

volume of production processed, such as demand, seasonality, or

business cycles.'' SAA at 837.

Ecoframe only provided information that its yield losses decreased

dramatically in March 1996. The start-up adjustment is not intended to

adjust for high yield losses experienced by respondent, but rather it

is intended to state product costs at amounts realized when commercial

production levels are reached. Yield losses are only one factor that

would have to be considered in such an analysis. In this regard, the

SAA states that ``Commerce will not extend the start-up period so as to

cover improvements and cost reductions that may occur over the entire

life cycle of a product.'' This suggests that improvements in product

yields over time do not constitute ``start-up costs.'' SAA at 836.

In sum, we reject Ecoframe's claim for a start-up adjustment

because it did not demonstrate the existence of a start-up phase that

warrants such treatment under section 773(f)(1)(C)(ii) of the Act.

Comment 16: Quantity Adjustment

Ecoframe stated that all its products are custom products and as

such are made to order. Because everything is made to order, Ecoframe

contends, numerous factors reduce the unit cost of the product as the

order size increases. Therefore, in order to make an accurate

comparison the Department must match at comparable quantities. Where a

match at comparable quantities is not possible, an adjustment should be

made to account for the price differences based on order size.

Petitioner contends that Ecoframe's request is untimely and

unsupported by evidence on the record. Specifically, petitioner cites

19 CFR 353.55(b) which states that the calculation of normal value

based on sales with quantity discounts will occur if:

(1) During the period examined or during a more representative

period, the producer or reseller granted quantity discounts of at

least the same magnitude on 20 percent or more of sales of such or

similar merchandise for the relevant country; or

(2) The producer or reseller demonstrates to the Secretary's

satisfaction that the discounts reflect saving specifically

attributable to the production of different quantities.

Petitioner argues that Ecoframe's responses fail to demonstrate a

clear and direct correlation between price differences and quantities

sold or costs incurred.

DOC Position

We agree with Ecoframe in part. Information on the record

demonstrates that the prices between the different quantity bands were

sufficiently varied to warrant comparisons at comparable quantity

bands, where possible as outlined in Ecoframe's September 5, 1996,

submission (see ``Fair Value Comparisons'' section of this notice).

Ecoframe, however, did not provide sufficient information to warrant a

quantity adjustment where a comparison sale at a comparable quantity

was not available.

Comment 17: Credit Expense Calculation

Ecoframe asserts that the method for verifying the reported rate

used for calculating the home market credit expense is highly

inaccurate. Because the bank calculates the interest on a daily basis,

the balance changes daily and, therefore, the interest expense charged

may be above or below the average interest rate. According to Ecoframe,

a more appropriate way to check Ecoframe's interest expense is to

compare it with Ecoframe's agreement with the bank, which notes the

interest rate given to Ecoframe.

DOC Position

For checking the reported interest rate used for figuring credit

expense for home market sales, we calculated the short-term interest

for the POI based on

[[Page 51421]]

the quarterly interest expense and outstanding balances which resulted

in an actual interest rate of approximately two percentage points

higher than the interest rate reported by Ecoframe. It is important to

note that Ecoframe's interest rate agreement with its UK bank was never

submitted to the Department prior to verification or presented at

verification for review. For purposes of the final determination, we

are calculating credit expense for home market sales based on the

quarterly interest expense and outstanding balances examined at

verification.

Suspension of Liquidation

In accordance with section 735(c) of the Act, we are directing the

Customs Service to continue to suspend liquidation of all entries of

the subject merchandise that are entered, or withdrawn from warehouse,

for consumption on or after May 13, 1996, the date of publication of

our preliminary determination in the Federal Register. Because Robobond

received a de minimis final dumping margin, entries of subject

merchandise from Robobond are excluded from these instructions. We will

instruct the Customs Service to require a cash deposit or the posting

of a bond equal to the weighted-average amount by which the NV exceeds

the export price, as indicated in the chart below. This suspension of

liquidation will remain in effect until further notice.

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

Weighted-average margin

Exporter/manufacturer percentage

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

Ecoframe.............................. 20.01

Robobond/Simons....................... de minimis

Magnolia.............................. 84.82

All Others............................ 20.01

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

Pursuant to section 733(d)(1)(A) and section 735(c)(5) of the Act,

the Department has not included zero and de minimis weighted-average

dumping margins and margins determined entirely under section 776 of

the Act, from the calculation of the ``all others'' deposit rate.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the

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

the ITC will determine, within 45 days, whether these imports are

causing material injury, or threat of material injury, to an industry

in the United States. If the ITC determines that material injury, or

threat of material injury, does not exist, the proceeding will be

terminated and all securities posted will be refunded or canceled. If

the ITC determines that such injury does exist, the Department will

issue an antidumping duty order directing Customs officials to assess

antidumping duties on all imports of the subject merchandise entered,

or withdrawn from warehouse, for consumption on or after the effective

date of the suspension of liquidation.

This determination is published pursuant to section 735(d) of the

Act.

Dated: September 25, 1996.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-25242 Filed 10-1-96; 8:45 am]

BILLING CODE 3510-DS-P