Industrial Phosphoric Acid From Belgium; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-423-602]

Industrial Phosphoric Acid From Belgium; Preliminary Results of

Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of Antidumping Duty

Administrative Review.

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SUMMARY: In response to a request from the petitioners, FMC Corporation

and Albright & Wilson Americas, two domestic producers of industrial

phosphoric acid (IPA), the Department of Commerce (the Department) is

conducting an administrative review of the antidumping duty order on

IPA from Belgium. The review covers exports by one manufacturer,

Societe Chimique Prayon-Rupel (Prayon), during the period August 1,

1995 through July 31, 1996.

We have preliminarily determined that sales have been made below

normal value (NV). If these preliminary results are adopted in our

final results of administrative review, we will instruct the U.S.

Customs Service (Customs) to assess antidumping duties on all

appropriate entries. Interested parties are invited to comment on these

preliminary results. Parties who submit argument in this proceeding are

requested to submit with the argument: (1) A statement of the issue;

and (2) a brief summary of the argument.

EFFECTIVE DATE: June 6, 1997.

FOR FURTHER INFORMATION CONTACT: David Genovese or Jim Terpstra, Office

of Antidumping/Countervailing Duty Enforcement, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

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

(202) 482-4697/3965.

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

The Department published in the Federal Register the antidumping

duty order on IPA from Belgium on August 20, 1987 (52 FR 31439). The

Department published in the Federal Register a notice of ``Opportunity

To Request an Administrative Review'' of the antidumping duty order on

IPA from Belgium covering entries during the period August 1, 1995

through July 31, 1996, on August 12, 1996 (61 FR 41768). On August 30,

1996, petitioners requested that the Department conduct an

administrative review of sales by Prayon during the 1995-96 period of

review. The Department initiated the review on September 17, 1996 (61

FR 48882). The Department is conducting this administrative review in

accordance with section 751 of the Act.

Scope of the Review

The products covered by this review include shipments of IPA from

Belgium. This merchandise is currently classifiable under the

Harmonized Tariff Schedule (HTS) item number 2809.20. The HTS item

number is provided for convenience and Customs purposes. The written

description remains dispositive.

Verification

In accordance with section 353.25(c)(2)(ii) of the Department's

regulations, we verified information provided by Prayon using standard

verification procedures, including the examination of relevant sales

and financial records, and selection of original documentation. Our

verification results are outlined in the public version of the

verification report.

Level of Trade

Differences in levels of trade exist when sales are made at

different stages in the marketing process, as determined by different

classes of customers and the performance of qualitatively or

quantitatively different selling functions in selling to them. See

Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts

Thereof from France, Germany, Italy, Japan, Singapore, and the United

Kingdom; Final Results of Antidumping Duty Administrative Review, 62 FR

2081, 2105, (January 15, 1997).

In its questionnaire response, Prayon did not state that there were

differences in selling activities by customer categories within each

market or between markets. Therefore, in the absence of information in

Prayon's questionnaire responses which might lead us to a different

conclusion, we have determined for purposes of these preliminary

results that all sales in the home market and the U.S. market were made

at the same level of trade and no adjustment pursuant to section

773(a)(7)(A) of the Act is warranted.

Commissions

The Department operates under the assumption that commission

payments to affiliated parties (in either the United States or home

market) are not at arm's length. The Court of International Trade has

held that this is a reasonable assumption. See Outokumpu Copper Rolled

Products AB v. United States, 850 F. Supp. 16, 22 (1994).

Accordingly, the Department has established guidelines to determine

whether affiliated party commissions are paid on an arm's-length basis

such that an adjustment for such commissions can be made. See Tapered

Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan

and Tapered Roller Bearings, Four Inches or Less in Outside Diameter,

and Components Thereof, From Japan, 61 FR 57,629 (November 7, 1996).

First, we compare the commissions paid to affiliated and unaffiliated

sales agents in the same market. If there are no commissions paid to

unaffiliated

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parties, we then compare the commissions earned by the affiliated

selling agent on sales of merchandise produced by the respondent to

commissions earned on sales of merchandise produced by unaffiliated

sellers or manufacturers. If there is no benchmark which can be used to

determine whether the affiliated party commission is an arm's-length

value (i.e., the producer does not use an unaffiliated selling agent

and the affiliated selling agent does not sell subject merchandise for

an unaffiliated producer), the Department assumes that the affiliated

party commissions are not paid on an arm's-length basis.

In this case, Prayon used an affiliated sales agent in the home

market and a different affiliated sales agent in the United States.

Prayon did not use unaffiliated commissionaires during the POR and

Prayon's affiliated home market and U.S. selling agents did not act as

commissionaires for unaffiliated producers of the subject merchandise.

As a result, we were unable to establish a benchmark for use in

determining whether commission payments Prayon made to the affiliated

selling agents were at arm's length. Accordingly, we did not make a

circumstance of sale adjustment for commissions in either market.

United States Price

We based our margin calculations on export price (EP), as defined

in section 772(a) of the Act, because Prayon sold the merchandise

directly to unaffiliated U.S. purchasers prior to the date of

importation and the constructed export methodology was not indicated by

information on the record. We based EP on the delivered price to

unaffiliated purchasers in the United States. In accordance with

section 772(c)(2)(A) of the Act, we made deductions for inland and

marine insurance, brokerage and handling costs and freight expenses

incurred to deliver the merchandise to the first unaffiliated customer

in the United States. We also made a deduction for early payment

discounts.

No other adjustments to EP were claimed or allowed.

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 Prayon'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 Prayon's

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

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

subject merchandise, we determined that the home market provides a

viable basis for calculating NV for Prayon, pursuant to section

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

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

individual transactions to the monthly weighted-average price of sales

of the foreign like product. We based NV on the delivered or ex-works

price at which the foreign like product is first sold to unaffiliated

purchasers for consumption in the exporting country, in the usual

commercial quantities and in the ordinary course of trade, and to the

extent practicable, at the same level of trade as the export price, as

required by section 773(a)(1)(B)(i) of the Act.

We excluded from our analysis of NV sales to an affiliated home

market customer because the weighted-average sales price to the

affiliated party was less than 99.5 percent of the weighted-average

sales price to unaffiliated parties. See Usinor Sacilor v. United

States, 872 F. Supp. 1000, 1004 (CIT 1994).

We reduced NV by freight costs, including inland insurance costs,

incurred in the home market, in accordance with section

773(a)(6)(B)(ii). We also reduced NV for rebates and early payment

discounts. We made a circumstance of sale adjustment to NV to account

for any differences between EP and NV due to differences in credit

expenses, pursuant to 773(a)(6)(C)(iii) of the Act.

In calculating credit expense, Prayon reported the weighted-average

discount on accounts receivable sold to its affiliated coordination

center. Since the reported weighted-average credit expense is greater

than the weighted-average credit expense calculated using the standard

credit calculation (i.e., (date of payment less date of shipment/

365)*monthly home market short-term interest rates * gross price), we

have determined that the discount transaction between Prayon and its

affiliated coordination center is not conducted at arm's-length.

Accordingly, we have used the standard credit calculation when

calculating the amount of credit to deduct from normal value. We used

the monthly home market short-term borrowing rates provided by Prayon

in calculating inventory carrying costs as the basis for the monthly

home market short-term interest rates used in the credit calculation.

No other adjustments were claimed or allowed.

Preliminary Results

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

margin of 8.54 percent exists for Prayon for the period August 1, 1995,

through July 31, 1996.

Parties to this proceeding may request disclosure within five days

of publication of this notice and any interested party may request a

hearing within 10 days of publication. Any hearing, if requested, will

be held 44 days after the date of publication, or the first working day

thereafter. Interested parties may submit case briefs no later than 30

days after the date of publication. Rebuttal briefs, which must be

limited to issues raised in the case briefs, may be filed no later than

37 days after the date of publication. Parties who submit arguments 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 the final results of the administrative review, which will

include the results of its analysis of issues raised in any such

comments, within 120 days of publication of this notice.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Individual differences

between USP and NV may vary from the percentage stated above. Upon

completion of this review, the Department will issue appraisement

instructions directly to Customs.

Furthermore, the following deposit requirements will be effective

upon completion of the final results of this administrative review for

all shipments of IPA from Belgium entered, or withdrawn from warehouse,

for consumption on or after the publication date of the final results

of this administrative review, as provided by section 751(a)(2)(C) of

the Act: (1) the cash deposit rate for Prayon will be the rate

established in the final results of this administrative review; (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 rate established for the most recent period 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 most recent period for the manufacturer of the

merchandise; and (4) if neither the exporter nor the manufacturer is a

firm covered in this or any previous reviews,

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the cash deposit rate will be 14.67 percent, the all-others rate

established in the LTFV investigation.

These deposit requirements, when imposed, shall remain in effect

until publication of the final results of the next administrative

review.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26(b) 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 and 19 CFR 353.22.

Dated: May 30, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-14870 Filed 6-5-97; 8:45 am]

BILLING CODE 3510-DS-P