Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide From the Netherlands; Preliminary Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-421-805]

Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide From

the Netherlands; Preliminary Results of Antidumping Administrative

Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of the Antidumping Duty

Administrative Review; Aramid Fiber Formed of Poly Para-Phenylene

Terephthalamide from the Netherlands.

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SUMMARY: The Department of Commerce (the Department) is conducting an

administrative review of the antidumping duty order on aramid fiber

formed of poly para-phenylene terephthalamide (PPD-T aramid) from the

Netherlands in response to requests by respondent, Akzo Nobel Fibers

Inc. and Aramid Products V.o.F. (Akzo) and petitioner, E.I. du Pont de

Nemours and Company. This review covers sales of this merchandise to

the United States

[[Page 15767]]

during the period December 16, 1993 through May 31, 1995.

We have preliminarily determined that sales have been made below

normal value (NV). Interested parties are invited to comment on these

preliminary results. Parties who submit argument are requested to

submit with the argument (1) a statement of the issue and (2) a brief

summary of the argument.

EFFECTIVE DATE: April 9, 1996.

FOR FURTHER INFORMATION CONTACT: Donald Little or Maureen Flannery,

Office of Antidumping Compliance, Import Administration, International

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

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

4733.

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

The Department published in the Federal Register the antidumping

duty order on PPD-T aramid from the Netherlands on June 24, 1994 (59 FR

32678). On June 6, 1995, we published in the Federal Register (60 FR

29821) a notice of opportunity to request an administrative review of

the antidumping duty order on PPD-T aramid from the Netherlands

covering the period December 16, 1993 through May 31, 1995.

In accordance with 19 CFR 353.22(a)(1), Akzo and petitioner

requested that we conduct an administrative review of Akzo's sales. We

published a notice of initiation of this antidumping duty

administrative review on July 14, 1995 (60 FR 36260). The Department is

conducting this administrative review in accordance with section 751 of

the Act.

Scope of Review

The products covered by this review are all forms of PPD-T aramid

from the Netherlands. These consist of PPD-T aramid in the form of

filament yarn (including single and corded), staple fiber, pulp (wet or

dry), spun-laced and spun-bonded nonwovens, chopped fiber and floc.

Tire cord is excluded from the class or kind of merchandise under

review. This merchandise is currently classifiable under the Harmonized

Tariff Schedule (HTS) item numbers 5402.10.3020, 5402.10.3040,

5402.10.6000, 5503.10.1000, 5503.10.9000, 5601.30.0000, and

5603.00.9000. The HTS item numbers are provided for convenience and

Customs purposes. The written description remains dispositive.

This review covers one manufacturer/exporter of PPD-T aramid, Akzo,

and the period December 16, 1993 through May 31, 1995.

Constructed Export Price

The Department based its margin calculation on constructed export

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

subject merchandise was first sold to unrelated purchasers after import

into the United States.

We based CEP on packed, ex-U.S. warehouse and delivered prices to

unaffiliated purchasers in the United States. The Department made the

following adjustments to prices used to establish CEP, pursuant to

section 772(c) of the Act. The price was increased for repacking

pursuant to section 772(c)(1) and reduced for movement expenses

(international freight, brokerage and handling, U.S. duties, domestic

inland freight and insurance) pursuant to section 772(c)(2). The price

used to establish CEP was also reduced by an amount for the following

expenses incurred in selling the subject merchandise in the United

States pursuant to section 772(d)(1): discounts, rebates, credit,

warranty, technical services, and inventory carrying costs and other

indirect selling expenses. Pursuant to section 772(d)(3), the price was

further reduced by an amount for profit to arrive at the CEP.

Normal Value

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating NV,

we compared Akzo's volume of home market sales of the foreign like

product to the volume of U.S. sales of the subject merchandise, in

accordance with section 773(a)(1)(B) of the Act. Because Akzo's

aggregate volume of the home market sales of the foreign like product

was greater than five percent of its aggregate volume of U.S. sales for

the subject merchandise, we determined that the home market provides a

viable basis for calculating NV for Akzo, pursuant to section

773(a)(1)(B) of the Act.

On January 31, and February 7, 1996, petitioner submitted comments

identifying its concerns regarding Akzo's cost calculations. In a

letter dated February 28, 1996, Akzo commented on petitioner's

submissions, and provided explanations for each of petitioner's points.

In order to properly examine the cost issue, we would require that Akzo

provide substantial additional cost information, including data from

the period of investigation. Moreover, we would need time to analyze

and verify this information. Given the above requirements, we have

determined that petitioner did not provide its comments on the issue in

time for the Department to adequately examine the issue in this review.

Cost of Production Analysis

In the less-than-fair-value (LTFV) investigation of Akzo, we

disregarded sales found to be below the cost of production (COP).

Therefore, in accordance with section 773(b)(2)(A)(ii) of the Act, the

Department has reasonable grounds to believe or suspect that sales

below the COP may have occurred during this review period. Thus,

pursuant to section 773(b) of the Act, in this review we initiated a

COP investigation of Akzo.

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 Akzo's cost of materials

and fabrication employed in producing the foreign like product, plus

amounts for home market selling, general, and administrative expenses

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

Act. We relied on the home market sales and COP information provided by

Akzo in its questionnaire responses.

B. Test of Home Market Prices

After calculating COP, we tested whether home market sales of PPD-T

aramid were made at prices below COP within an extended period of time

in substantial quantities, and whether such prices permit recovery of

all costs within a reasonable period of time. We compared model-

specific COP to the reported home market prices less any applicable

movement charges, discounts, rebates, and direct and indirect selling

expenses.

C. Results of COP Test

Pursuant to section 773(b)(2)(C), where less than 20 percent of

Akzo's sales of a given model were at prices less than COP, we did not

disregard any

[[Page 15768]]

below-cost sales of that product because we determined that the below-

cost sales were not made in ``substantial quantities.'' Where 20

percent or more of home market sales of a given product were at prices

less than the COP, we disregarded only the below-cost sales where such

sales were found to be made 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). We found

that, for certain types of PPD-T aramid, more than 20 percent of the

home market sales were sold at below-cost prices within the period of

review in substantial quantities. We therefore find that these below-

cost sales were made in substantial quantities within an extended

period of time, and were at prices which did not permit recovery of all

costs within a reasonable period of time. As a result, we excluded

these below cost sales and used the remaining above-cost sales as the

basis of determining NV if such sales existed, in accordance with

section 773(b)(1). For those models of PPD-T aramid for which there

were no above-cost sales available for matching purposes, we compared

CEP to constructed value (CV).

Price-to-Price Comparisons

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

transactions to the monthly weighted-average price of sales of the

foreign like product where there was an adequate number of sales at

prices above COP, as discussed above. We based NV on packed, ex-factory

or delivered prices to unaffiliated purchasers in the home market. We

made adjustments, where applicable, in accordance with section

773(a)(6) of the Act. Where applicable, we made adjustments to home

market price for discounts, rebates, inland freight and insurance. To

adjust for differences in circumstances of sale between the home market

and the United States, we reduced home market price by an amount for

home market credit expenses. In order to adjust for differences in

packing between the two markets, we increased home market price by U.S.

packing costs and reduced it by home market packing costs. Prices were

reported net of value added taxes (VAT) and, therefore, no deduction

for VAT was necessary. We made adjustments, where appropriate, for

physical differences in merchandise in accordance with section

773(a)(6)(C)(ii) of the Act.

Level of Trade/CEP Offset

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

Statement of Administrative Action (SAA) accompanying the Uruguay Round

Agreements Act, at 829-831, to the extent practicable, the Department

will calculate NV based on sales at the same level of trade as the U.S.

sale. When the Department is unable to find sale(s) in the comparison

market at the same level of trade as in the U.S. sale(s), the

Department may compare sales in the U.S. and foreign markets at a

different level of trade.

In accordance with section 773(a)(7)(A) of the Act, if we compare a

U.S. sale at one level of trade to NV sales at a different level of

trade, the Department will adjust the NV to account for the difference

in level 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 NV sale. 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. When CEP is applicable, section 773(a)(7)(B) of the Act

establishes the procedures for making a CEP offset when: (1) NV is at a

different level of trade, and (2) the data available do not provide an

appropriate basis for a level of trade adjustment from the U.S. sale.

Also, in accordance with section 773(a)(7)(B), to qualify for a CEP

offset, the level of trade in the home market must also constitute a

more advanced stage of distribution than the level of trade of the CEP

sale.

Akzo reported one level of trade and one channel of distribution in

the home market (direct to end users/converters). For the U.S. market,

Akzo reported that all sales were made on a CEP basis. The level of

trade of the U.S. sales is determined by the adjusted CEP rather than

the starting price. The adjusted CEP sales do not reflect the selling

functions to end users/converters, such as customer sales contacts,

technical services, and inventory maintenance. The home market sales

reflect these additional selling functions performed for direct sales

to end users/converters. Therefore, the selling functions performed for

CEP sales are sufficiently different than for home market sales to

consider CEP sales and home market sales to be at different levels of

trade.

Because we compared these CEP sales to home market sales at a

different level of trade, we examined whether a level of trade

adjustment may be appropriate. In this case, Akzo only sold at one

level of trade in the home market; therefore, there is no basis upon

which Akzo can demonstrate a consistent pattern of price differences

between levels of trade. Further, we do not have information which

would allow us to examine pricing patterns on Akzo's sales of other

products and there are no other respondents or other record information

on which such an analysis could be based.

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 a more advanced stage of distribution than the level of trade

of the CEP sale, a CEP offset is appropriate. Akzo has claimed a CEP

offset. We applied the CEP offset to NV or CV, as appropriate.

We based the CEP offset amount on the amount of the home market

indirect selling expenses. We limited the home market indirect selling

expense deduction by the amount of the indirect selling expenses

incurred on sales to the United States, in accordance with section

772(d)(1)(D).

Constructed Value

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

based on the sum of Akzo's cost of materials and fabrication employed

in producing the subject merchandise, SG&A and profit incurred and

realized in connection with production and sale of the foreign like

product, and U.S. packing costs. In accordance with section

773(e)(2)(A), we based SG&A and profit on the amounts incurred and

realized by Akzo in connection with the production and sale of the

foreign like product in the ordinary course of trade, for consumption

in the foreign country. We used the costs of materials, fabrication,

and G&A as reported in the CV portion of Akzo's questionnaire response.

We used the U.S. packing costs as reported in the U.S. sales portion of

Akzo's questionnaire response. We based selling expenses and profit on

the information reported in the home market sales portion of Akzo's

questionnaire response. See Certain Pasta from Italy; Notice of

Preliminary Determination of Sales at Less Than Fair Value and

Postponement of Final Determination, 61 FR 1344, 1349 (January 19,

1996). For selling expenses, we used the average of above-cost per-unit

home market selling expenses weighted by the total quantity sold. For

actual profit, we first calculated the difference between the home

market sales value and home market COP for all above-cost home market

sales, and divided the sum of these differences by

[[Page 15769]]

the total home market COP for these sales. We then multiplied this

percentage by the COP for each U.S. model to derive an actual profit.

We derived the CEP offset amount from the amount of the indirect

selling expenses on above-cost sales in the home market. We limited the

home market indirect selling expense deduction by the amount of the

indirect selling expenses incurred on sales to the United States.

Preliminary Results of the Review

As a result of our comparison of CEP and NV, we preliminarily

determine that the following weighted-average dumping margin exists:

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Manufacturer/exporter Period Margin

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Akzo...................................... 12/16/93-5/31/95 21.31

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Parties to the proceeding may request disclosure within 5 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 publication of this notice,

or the first workday thereafter. Interested parties may submit case

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

Rebuttal briefs, which must be limited to issues raised in the case

briefs, may be filed not later than 37 days after the date of

publication. Parties who submit argument are requested to submit with

the argument (1) a statement of the issue and (2) a brief summary of

the argument. The Department will publish a notice of final results of

this administrative review, which will include the results of its

analysis of issues raised in any such comments. '

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Upon completion

of this review, the Department will issue appraisement instructions

directly to the Customs Service.

Furthermore, the following deposit rates will be effective upon

publication of the final results of this administrative review for all

shipments of PPD-T aramid from the Netherlands entered, or withdrawn

from warehouse, for consumption on or after the publication date, as

provided for by section 751(a)(2)(c) of the Act: (1) The cash deposit

rate for the reviewed company will be the rate established in the final

results of this review; (2) if the exporter is not a firm covered in

this review, or the original LTFV 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 (3) for all

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

rate shall be 66.92 percent, the ``all others'' rate established in the

LTFV investigation (59 FR 32678, June 24, 1994).

These deposit rates, when imposed, shall remain in effect until

publication of the final results of the next administrative review.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26 to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during this review period. Failure to comply

with this requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act.

Dated: March 29, 1996.

Susan G. Esserman,

Assistant Secretary, for Import Administration.

[FR Doc. 96-8683 Filed 4-8-96; 8:45 am]

BILLING CODE 3510-DS-P