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

DEPARTMENT OF COMMERCE

[A-428-810]

High-Tenacity Rayon Filament Yarn From Germany; Final Results of

Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of antidumping duty administrative

review.

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SUMMARY: On July 3, 1996, the Department of Commerce (the Department)

published the preliminary results of administrative review of the

antidumping duty order on high-tenacity rayon filament yarn from

Germany. The review covers one manufacturer/exporter of the subject

merchandise to the United States for the period of review (POR)

covering June 1, 1994 through May 31, 1995.

We gave interested parties an opportunity to comment on our

preliminary results. Based on our analysis of the comments and rebuttal

comments received from Akzo Nobel Faser AG, Akzo Nobel Industrial

Fibers Inc., and Akzo Nobel Fibers Inc. (collectively ``Akzo'') (the

respondent), and the North American Rayon Corporation (the petitioner),

we have corrected certain clerical errors in the margin calculations.

The final weighted-average dumping margin for the reviewed firm is

listed below in the section entitled ``Final Results of Review.''

EFFECTIVE DATE: October 2, 1996.

FOR FURTHER INFORMATION CONTACT: Matthew Blaskovich or Zev Primor, AD/

CVD Enforcement, Import Administration, International Trade

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

Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-

5831/4114.

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 25130).

Background

On July 3, 1996, the Department published the preliminary results

of administrative review of the antidumping duty order on high-tenacity

rayon filament yarn from Germany (61 FR 34792). The Department has now

conducted this 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

one manufacturer/exporter of the subject merchandise and the period

June 1, 1994, through May 31, 1995.

Analysis of Comments Received

Comment #1: Respondent contends that the antidumping duty order

should be revoked upon completion of the instant review. Respondent

states that the URAA changed the de minimis standard to two percent.

Arguing that the URAA affects all reviews requested after January 1,

1995, respondent maintains that it is now eligible for revocation,

since it received margins of less than two percent for each of the last

three review periods. Respondent also emphasizes that it filed the

requisite certification pursuant to 19 CFR 353.25(b).

Respondent contends that the Agreement on Implementation of Article

VI of the General Agreement on Tariffs

[[Page 51422]]

and Trade 1994 (Antidumping Agreement) does not establish a clear-cut

definition for the term ``investigation.'' In particular, respondent

states that since an express limitation to the scope of the term

``investigation'' is not established in the Antidumping Agreement, it

contends that an ``investigation'' can be interpreted as applicable to

both the initial investigation phase as well as the review phase of

antidumping proceedings. Therefore it argues that the two percent de

minimis standard for ``investigations'' should apply to an antidumping

review proceeding. Moreover, respondent claims that the Department

should apply this law retroactively to the two earlier reviews, in

which case it will have three years of de minimis margins and

revocation of the order would be required. Finally, respondent contends

that such an approach would provide consistency between the

investigation and review stage of an antidumping proceeding.

The petitioner emphasizes that before the Department shall consider

revoking an antidumping duty order, a de minimis margin (defined as 0.5

percent or below) must be determined for three consecutive years.

Petitioner contends that the Department was correct in its

determination not to revoke the antidumping duty order with respect to

Akzo because, of the three reviews conducted, there has been only one

year during which Akzo received a margin of 0.5 percent or below (i.e.,

the administrative review period of June 1, 1993 through May 31, 1994).

Department's Position: We agree with petitioner that the 0.5

percent de minimis standard set forth in 19 CFR 353.6 continues to

apply to reviews. As a matter of domestic law, the statute and the

Statement of Administrative Action (SAA) which accompanied the passage

of the URAA are very clear that the new two percent de minimis standard

applies only to investigations initiated after January 1, 1995, the

effective date of the URAA. See sections 733(b)(3) and 735(a)(4).

The SAA clearly states that ``[t]he requirements of Article 5.8

apply only to investigations, not to reviews of antidumping duty orders

or suspended investigations.'' See H.R. Doc. No. 316, Vol. 1, Uruguay

Round Trade Agreements, Texts of Agreements, Implementing Bill,

Statement of Administrative Action, and Required Supporting Statements,

103rd Cong., 2nd Sess. (Sept. 27, 1994), at 845. The two percent de

minimis standard is applicable only to investigations: ``* * * in

antidumping investigations, Commerce [shall] treat the weighted-average

dumping margin of any producer or exporter which is below two percent

ad valorem as de minimis.'' SAA at 844. Likewise, ``[t]he

Administration intends that Commerce will continue its present practice

in reviews of waiving the collection of estimated cash deposits if the

deposit rate is below 0.5 percent ad valorem, the existing regulatory

standard for de minimis.'' SAA at 845 (emphasis added), see also 19 CFR

353.2(1) (an ``investigation'' is a distinct proceeding ending, inter

alia, on publication of an order).

Comment #2: Petitioner claims that the Department did not use the

proper shipment dates (as reported in respondent's supplemental

response) in the calculation of imputed credit costs incurred on those

sales made from Germany but shipped from the respondent's warehouse in

Canada.

Respondent states that credit expenses for these transactions were

indeed calculated based on the shipment dates submitted in the

supplemental response, in accordance with the Department's

questionnaire instructions, and not on the shipment dates originally

submitted by respondent.

Department's Position: We have confirmed that respondent correctly

calculated the credit expense on these transactions by using the dates

on which the subject merchandise was shipped from Germany. These dates

were included in respondent's supplemental questionnaire response.

Comment #3: Petitioner claims that the Department performed a

programming error in identifying the period of review. Petitioner

states that in order to remove from the margin analysis any U.S. sales

made outside of the POR, the beginning and ending period dates should

be June 1, 1994, and May 31, 1995, respectively.

Respondent disagrees with petitioner's claim. Respondent contends

that if petitioner's proposal is accepted, one of its export price (EP)

sales would be eliminated from the Department's margin analysis since

the date of sale for this transaction occurred prior to June 1, 1994,

whereas the merchandise entered the United States subsequent to that

date. In justifying why this particular sale should be included during

the POR, respondent contends that it adhered to the Department's

questionnaire instructions which state, ``Report each U.S. sale of

merchandise entered for consumption during the POR, except: (1) For EP

sales, if you do not know the entry dates, report each transaction

involving merchandise shipped during the POR.'' Therefore, although the

sale date fell outside the POR, respondent reported this transaction

due to the fact that the merchandise entered the United States during

the POR. Further, respondent claims that petitioner's proposed

correction to the margin program would not advance the objective stated

in the preamble to the Department's proposed regulations which is to

liquidate entire periods of review and to avoid tying entries to sales.

Department's Position: We agree with petitioner that we used

improper dates in our margin program to identify the period of review.

For these final results, we have corrected the dates to accurately

reflect the POR. However, we agree with respondent that we should

analyze the one U.S. sale made before the POR because the merchandise

was entered into the United States during the POR and because the sale

was not reviewed in the previous administrative review. Therefore, we

have included the sale in this review.

This decision comports with the Department's effort, as reflected

in the preamble to the Department's Proposed Rule 353.212, to promote

the objective of offering clarity and predictability to the antidumping

law by normally requiring that duties be assessed on merchandise

entering during a particular review period:

With respect to the use of duty assessment rates, the Department

believes that, except in unusual situations, we should assess duties

on subject merchandise entered during each review period. Therefore,

paragraph (b)(1) provides that the Department normally will

calculate a duty assessment rate based on sales reviewed, and will

apply those rates to entries made during the review period. In all

cases, this will result in the assessment of duties on merchandise

entered during the review period.

See Notice of Proposed Rulemaking and Requests For Public Comment, 61

FR 7308, 7316 (Feb. 27, 1996).

Comment #4: Petitioner contends that in the preliminary

results, the Department incorrectly classified an ``emergency sale'' as

an EP sale. Petitioner argues that since the subject merchandise was

sold to a U.S. customer after its importation into the United States,

this sale, which respondent terms as an emergency transaction, should

therefore be classified as a constructed export price (CEP) sale.

Petitioner argues that as a CEP sale, the Department is required to

deduct selling expenses incurred by Akzo's U.S. subsidiaries as well as

CEP profit in accordance with section 772(d)(3) of the Act. Further,

petitioner contends that credit expenses are understated, since the

Department did

[[Page 51423]]

not take into consideration credit expenses incurred during the period

beginning with the original date of shipment from Akzo's factory until

the ``emergency transaction'' sale date in the United States.

Respondent argues that what it describes as an ``emergency

transaction'' of approximately several thousand pounds of yarn cannot

be considered a CEP sale since the sale meets all the requirements of

an EP sale. Respondent explains that this particular subject

merchandise was sold to the original unrelated customer prior to

importation into the United States, the sales procedure involved with

this ``emergency transaction'' was no different from other EP sales

made. In the alternative, respondent states that the original sale of

this subject merchandise took place during the period of the second

administrative review, whereupon, the merchandise was stored in the

original customer's warehouse. In the subsequent review period,

respondent issued a credit note to that customer, canceling the first

sale, and resold the merchandise to another customer. The original

transaction was previously reviewed by the Department, and was covered

by liquidation instructions issued for that review. Therefore,

respondent states that the Department has the discretion to exclude the

``emergency transaction'' from this review.

Department's Position: We have determined to exclude the sale at

issue in this review from our margin calculations. Section 772 of the

Act defines both EP and CEP as those sales made to the first unrelated

buyer located in the United States. In this case, the original sale to

the first unrelated U.S. buyer occurred during the previous review. The

subject merchandise entered the United States during the previous POR.

The Department captured this sale of approximately several thousand

pounds of yarn in that review and subsequently assessed an antidumping

duty on this sale. Thus, the ``emergency sale'' in question, which

occurred during the instant review, is a resale of the merchandise

within the United States and not subject to additional assessment.

Therefore, we have excluded it from our analysis for these final

results.

Comment #5: Petitioner asserts that discrepancies exist between

Akzo's reported POR quantity of U.S. sales and U.S. Customs data.

Petitioner asserts that respondent was not able to convincingly

demonstrate the reason for the quantity discrepancy. Moreover,

petitioner states that the discrepancy is even larger than originally

measured, since petitioner did not include the amount associated with

the ``emergency transaction'' in its subsequent comparisons.

Respondent contends that because the Department conducted a

thorough verification of Akzo's reported sales, petitioner's comments

in this regard hold no merit. Respondent claims that the Department

substantiated the accuracy of its U.S. sales data base by reconciling

the reported quantities to the 1994 fiscal year and POR financial

statements. Further, respondent contends that according to petitioner's

own calculations, the allegation of underreporting of sales is proven

false. Respondent cites to petitioner's November 13, 1995 letter in

which petitioner acknowledged that it neglected to account for a

particular sale when matching respondent's reported data to U.S.

Customs data. Respondent contends that when these sales are added, and

the ``emergency transaction'' subtracted from its reported U.S. sales,

its total quantity for U.S. sales exceeds U.S. Customs data.

Department's Position: We agree with respondent. We conducted a

thorough verification of the quantity and value of respondent's U.S.

sales during verification and determined that respondent's reported

U.S. quantity and value amounts reconciled to its general ledger and

audited financial statement amounts. See Sales Verification Report, at

7.

Comment #6: Respondent contends that the Department's methodology

used for model matching is ineffective. Specifically, respondent

contends that certain models sold in its home market were not properly

identifiable as having identical contemporaneous matches to models sold

in the United States. Respondent proposes programming language which,

in its estimation, would remedy the matching problems. Petitioner does

not rebut respondent's comment.

Department's Position: Overall, our model matching methodology

properly identifies and matches identical merchandise in respondent's

home market with contemporaneous U.S. sales.

However, we detected a minor programing error which resulted in

certain sales not being appropriately matched. Therefore, we made

appropriate corrections to the program to remedy this error.

Comment #7: Both petitioner and respondent allege clerical errors

made in the margin program for the preliminary results. First,

petitioner claims that the Department erred in its foreign inland

freight and foreign brokerage currency conversion calculations.

Respondent concurs with petitioner's claim.

Second, respondent contends that the Department inadvertently

misspelled a particular variable in the margin program with the result

that home market and U.S. sales were not properly matched since the

months included within the extended period of review are not utilized

for matching purposes. Petitioner does not dispute respondent's

contention.

Department's Position: We agree with both petitioner and respondent

and have made the appropriate corrections to the margin program for

these final results.

Final Results of Review

As a result of the comments received, we have changed the results

from those presented in our preliminary results of review:

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

Margin

Manufacturer/exporter (percent)

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

Akzo Nobel Faser A.G., Akzo Nobel Industrial Fibers, Inc.,

Akzo Nobel Fibers, Inc. (Akzo)............................. 0.60

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

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. The Department will

issue appraisement instructions directly to Customs.

Furthermore, the following deposit requirements will be effective

for all shipments of the subject merchandise entered, or withdrawn from

warehouse, for consumption on or after the publication date of these

final results of this administrative review, as provided by section

751(a) of the Act: (1) The cash deposit rate for Akzo will be the rate

established above; (2) for merchandise exported by manufacturers or

exporters not covered in this review but covered in the original less

than fair value (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 these final results of review or the

less-than-fair-value (LTFV) investigation; and (4) if neither the

exporter nor the manufacturer is a firm covered in this or any previous

review, the cash deposit rate will be 24.58 percent, the ``all others''

rate established in the LTFV investigation.

[[Page 51424]]

These deposit requirements shall remain in effect until publication

of the final results of the next administrative review.

This notice also serves as final reminder to importers of their

responsibility 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 notice also is the only reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the return or destruction of proprietary information

disclosed under APO in accordance with 19 CFR 353.34(d). Failure to

comply is a violation of the APO.

This administrative review and notice are in accordance with

section 751(a)(1)(B) of the Act and 19 CFR 353.22.

Dated: September 25, 1996.

Barbara R. Stafford,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-25245 Filed 10-1-96; 8:45 am]

BILLING CODE 3510-DS-P