Extruded Rubber Thread From Malaysia, Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-557-805]

Extruded Rubber Thread From Malaysia, Final Results of

Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

SUMMARY: On December 10, 1996, the Department of Commerce (the

Department) published in the Federal Register its preliminary results

of the administrative review of the antidumping duty order on extruded

rubber thread from Malaysia (61 FR 65019). This review covers Heveafil

Sdn. Bhd. (``Heveafil''), Rubberflex Sdn. Bhd. (``Rubberflex''), Filati

Lastex Elastofibre (Malaysia) (``Filati''), Rubfil Sdn. Bhd.

(``Rubfil'') (collectively ``respondents''), manufacturers/exporters of

the subject merchandise to the United States. The period of review

(POR) is October 1, 1994 through September 30, 1995. We gave interested

parties an opportunity to comment on our preliminary results.

Petitioner and respondents submitted case briefs on March 10, 1997 and

rebuttal briefs on March 17, 1997. Respondents requested a hearing on

January 2, 1997, but later withdrew their request for a hearing.

Therefore, we have based our analysis on the comments received, and

have changed the results from those presented in the preliminary

results of review.

EFFECTIVE DATE: June 20, 1997.

FOR FURTHER INFORMATION CONTACT:

Laurel LaCivita or James Terpstra, AD/CVD Enforcement Group II, Office

4, Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, NW.,

Washington, DC 20230; telephone (202) 482-4740 or (202) 482-3965,

respectively.

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).

[[Page 33589]]

Background

On October 7, 1992, the Department published in the Federal

Register (57 FR 46150) the antidumping duty order on extruded rubber

thread from Malaysia. On October 30, 1995, the petitioner, North

American Rubber Thread, requested that the Department conduct an

antidumping administrative review for the following producers and

exporters of extruded rubber thread: Heveafil Sdn. Bhd (``Heveafil''),

Rubberflex Sdn. Bhd. (``Rubberflex''), Filati Lastex Elastofibre

(Malaysia) (``Filati''), and Rubfil Sdn. Bhd (``Rubfil''). On October

31, 1995, these same producers and exporters requested to be reviewed.

On November 16, 1995, we published a notice of initiation of an

administrative review of this order for the period October 1, 1994,

through September 30, 1995 (60 FR 57573), for the following producers

and exporters of extruded rubber thread: Heveafil, Rubberflex, Filati,

and Rubfil. We conducted a vertification of Rubberflex in Malaysia from

September 23, 1996 until October 5, 1996, and of its U.S. affiliate in

Hickory, North Carolina from October 16 to 18, 1996. Our preliminary

results of review were published in the Federal Register on December

10, 1996 (61 FR 65019). Petitioner and all respondents filed case

briefs on March 10, 1997 and rebuttal briefs on March 17, 1997. The

Department has now completed this administrative review in accordance

with section 751(a) of the Act.

Scope of the Review

The product covered by this review is extruded rubber thread.

Extruded rubber thread is defined as vulcanized rubber thread obtained

by extrusion of stable or concentrated natural rubber latex of any

cross sectional shape, measuring from 0.18 mm, which is 0.007 inch or

140 gauge, to 1.42 mm, which is 0.056 inch or 18 gauge, in diameter.

Extruded rubber thread is currently classified under subheading

4007.00.00 of the Harmonized Tariff Schedule of the United States

(HTSUS). The HTSUS subheadings are provided for convenience and U.S.

Customs purposes. Our written description of the scope of this review

is dispositive.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results. We received comments and rebuttal comments from

North American Rubber Thread (petitioner), and Rubberflex, Rubfil,

Heveafil and Filati (respondents).

Facts Available for Rubberflex

We found that responses provided by Rubberflex could not be

verified within the meaning of section 776(a)(2)(D) of the Act, and

that the complete verification failure renders the response unusable

under section 782(e) of the Act. For a significant portion of the cost

and expense items reviewed at verification, the information provided in

the questionnaire response was inaccurate or could not be verified.

This includes, but is not limited to, indirect selling expenses,

overhead, selling, general and administrative (SG&A) expenses, labor,

materials, rebates, corporate structure, and the completeness of U.S.

sales reporting. For numerous items, Rubberflex attempted to present

revised information at verification. However, Rubberflex failed to

disclose the numerous errors in its response prior to, or at the start

of verification, as repeatedly requested by the Department. Rather,

Rubberflex attempted to present its new information in a piecemeal

manner, often late in the verification. This effectively precluded the

Department from having adequate time to evaluate the scope and

magnitude of the changes. Accordingly, we determined that Rubberflex

failed to demonstrate the completeness and accuracy of its

questionnaire response at verification and thus has failed

verification.

As discussed in comments 1 through 26 below, we carefully reviewed

Rubberflex's arguments in light of the verification report and the

supporting verification exhibits. This analysis reveals that

Rubberflex's brief systematically mischaracterizes, and seeks to

minimize the importance of, all of the myriad problems encountered at

verification. As described below, as in the preliminary results of

review, we find that, pursuant to sections 776(a) and 782(e) of the

Act, the errors and problems found at verification render Rubberflex's

questionnaire response unusable for purposes of calculating a margin.

Where a party provides information requested by the Department but

the information cannot be verified as required by section 782(i) of the

Act, section 776(a)(2)(D) of the Act requires the Department to use

facts otherwise available in reaching the applicable determination.

Section 782(e) of the Act provides that the Department shall not

decline to consider information that is submitted by an interested

party and is necessary to the determination but does not meet all the

applicable requirements established by the Department if: (1) the

information is submitted by the deadline established for its

submission; (2) the information can be verified; (3) the information is

not so incomplete that it cannot serve as reliable basis for reaching

the applicable determination; (4) the interested party has demonstrated

that it acted to the best of its ability in providing the information

and meeting the requirements established by the Department with respect

to the information; and (5) the information can be used without undue

difficulties.

In this case we have determined that the information submitted

could not be verified and that Rubberflex did not act to the best of

its ability. Moreover, using Rubberflex's information would create

undue difficulty. Verification revealed numerous errors in Rubberflex's

information. Using this information would require the Department to use

information it knows is incorrect, unverified or both. At verification,

we determined that a substantial portion of the information submitted

by Rubberflex was incorrect and we were not always able to determine

the correct information for every error found at verification. Thus,

any attempt to use Rubberflex's data, in whole or in part, would be

unduly difficult. Accordingly, we must decline to consider information

submitted by Rubberflex.

Moreover, we determine that, pursuant to section 776(b) of the Act,

Rubberflex did not cooperate to the best of its ability to comply with

our requests for information and therefore we are using adverse facts

available to determine Rubberflex's margin. Such adverse inferences may

include information derived from: (1) the petition, (2) a final

determination in the investigation, (3) any previous review under

section 751 of the Act of determination under section 753 of the Act,

or (4) any other information placed on the record.

In selecting a margin would be sufficiently adverse, we considered

Rubberflex's degree of cooperation and the nature of the deficiencies

detected at verification. Further, we note that Rubberflex's normal

audit cycle coincided with verification in such a way as to hamper

Rubberflex's preparation for the verification of certain items. In

selecting a facts available margin which is appropriate in light of

these circumstances, we determine that (as we did in our preliminary

results) that 20.38 percent, which is Rubberflex's highest rate from a

prior segment of this proceeding, is sufficiently adverse to encourage

full cooperation in future segments of the proceeding. Moreover, this

rate has

[[Page 33590]]

probative value because it is Rubberflex's calculated rate from the

less than fair investigation. Furthermore, there is no evidence on the

record indicating that this selected margin in not appropriate as

adverse facts available (see, e.g., 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, 2088 (January 15, 1997)).

Section 776(c) of the Act requires the Department to corroborate

secondary information used as facts available to the extent

practicable. Secondary information is information derived from the

petition that gave rise to the investigation or review, the final

determination concerning the subject merchandise, or any previous

review under section 751 concerning the subject merchandise. The

Statement of Administrative Action, H.R. Doc. 316, Vol 1, 103d Cong.,

2d Sess. 870 (1994), (``SAA'') provides that ``corroborate'' means

simply that the Department will satisfy itself that the secondary

information to be used has probative value (see SAA at 870). Thus, to

corroborate secondary information, the Department will, to the extent

practicable, examine the reliability and relevance of the information

used. However, unlike other type of information, such as input costs or

selling expenses, there are no independent sources for calculated

dumping margins. The only source for margins is an administrative

determination . After reviewing the record, we are satisfied that this

rate has probative value because it is Rubberflex's calculated rate

from the less than fair value proceeding. Thus, we have determined that

information and inferences which we have applied are reasonable to use

under the circumstances of this review. See SAA at 869. Further, there

is no reliable evidence on the record indicating that this selected

margin is not appropriate as adverse facts available. (See, e.g., Fresh

Cut Flowers from Mexico; Final Results of Antidumping Duty

Administrative Review, 61 FR 6812, 6814 (February 22, 1996).

Comments Concerning Rubberflex

Rubberflex argues that the Department was not justified in

disregarding its responses and assigning facts available in the

preliminary results. Rubberflex contends that the Department verified

Rubberflex's questionnaire responses, and that, at most, the Department

should use partial facts available for certain aspects of its dumping

calculations. Rubberflex made numerous detailed arguments refuting and

rebutting the Department's preliminary results, verification report,

and verification failure memo. We have addressed these to the greatest

extent practicable in this notice. However, many of the comments are

extremely detailed and many can only be completely addressed by

reference to proprietary data. Accordingly, we addressed each comment

in complete detail in a proprietary analysis memorandum to the file

dated June 9, 1997.

Comment 1: Reconciliation of Sales, Profit and Expenses.

Rubberflex maintains that it provided the Department with a

reconciliation of its calendar year 1994 and 1995 trial balances to the

appropriate audited, consolidated financial statements at verification.

Rubberflex states that, contrary to the verification report, total

sales, profit, financing expenses, and indirect selling expenses were

reconciled to the audited financial statements.

DOC Position: We agree that Rubberflex was able to reconcile its

audited financial statements to its trial balance for the above-

mentioned figures. We disagree that this had any bearing on the

verification of specific items. This reconciliation was not what was

requested of them at verification. Rubberflex voluntarily provided all

of this information in response to the Department's request that it

demonstrate that the indirect selling expenses reported in the revised

response provided at verification tied to the audited financial

statements. Rubberflex did not demonstrate that the figures reported in

its revised response for indirect selling expenses and G&A tied to its

audited financial statements.

Comment 2: Reconciliation of Rubberflex's Affiliates' Financial

Statements.

Rubberflex disputes the Department's determination that its home

market indirect selling expenses did not reconcile to its current

financial statement due to the fact that indirect selling expenses

incurred in Rubberlex's U.K. and German branch offices (expenses which

account for differences between the home market indirect selling

expenses and the financial statement) could not be verified. Rubberflex

contends that during verification it demonstrated how total sales,

expenses, and profits of the U.K. and German branches accounted for

differences between consolidation totals and totals for Rubberflex in

Malaysia. Further, Rubberflex claims that it should not be held

accountable for providing original copies of the auditors'

consolidation worksheets in the short time permitted at verification.

Rubberflex also contends that it stressed during verification that

information involving its U.K. and German branches could only be

accurately verified on site in those particular countries.

DOC Position: We disagree. It is one of the primary requirements of

verification that a company is required to tie the information in its

questionnaire response to its audited consolidated financial

statements. Rubberflex failed to do so at verification. Rubberflex is

essentially arguing that we should accept their attempt, but ultimate

failure. We disagree. Given the circumstances of this review, where

Rubberflex provided numerous, inadequately explained or documented,

revisions to its questionnaire response, Rubberflex's failure in this

regard undermines the entire verification.

Comment 3: Home Market Sales List.

Rubberflex states that verification demonstrated that all home

market sales were correctly reported and traced through the accounting

records. In addition, Rubberflex maintains that the Department found

that Rubberflex's date-of-sale methodology accurately reflected the

date that all material terms of the sale were established and that all

credit memos for returned and defective merchandise were accurately

reported.

DOC Position: We agree with Rubberflex in general that the home

market sales list verified. The verification report identifies the

minor discrepancies noted.

Comment 4: Home Market Movement Expenses.

Rubberflex states that the verification report indicates that home

market movement expenses were traced to the general ledger and that all

freight expenses were properly accounted for. Further, Rubberflex

argues that the Department confused the facts in this review with

verification difficulties regarding home market movement expenses in

the 1993/1994 administrative review and that this confusion resulted in

the Department's erroneous decision to use adverse facts available on

issues relating to another review.

DOC Position: We agree with Rubberflex's characterization of the

verification of home market movement expenses. We disagree that any of

the information presented in the 1993-1994 review influenced the use of

adverse facts available in the instant review.

Comment 5: Home Market Credit Expenses.

[[Page 33591]]

Rubberflex states that its original response contained the

information needed to calculate home market credit expenses and that

this response was neither revised nor found to contain any significant

errors during verification. Rubberflex states that the one clerical

error found by the Department at verification resulted in an increase

to the short-term interest rate.

DOC Position: We agree with Rubberflex that we found only small

clerical error at verification which resulted in an increase to the

short-term interest rate. However, we disagree that this was the only

error found at verification. We also found that Rubberflex failed to

include certain expenses related to export credit refinancing (ECR)

expenses in its calculation of the interest rate used to impute credit

expenses on home market sales.

Comment 6: Home Market Packing Expenses.

Rubberflex claims that at the beginning of verification, it

disclosed to the Department that it had erroneously allocated the cost

of all factory workers' benefits in the category of fixed overhead

costs, rather than allocating that cost among direct labor costs, fixed

overhead costs, and packing labor costs. Rubberflex stated that a

corrected worksheet reflecting this reallocation was submitted to the

department at the beginning of the cost verification, and subsequently

verified. Rubberflex contends that a comparison of the original to the

corrected worksheets reveals only minor changes in the calculation of

packing labor costs. Further, Rubberflex also contends that it

submitted an additional worksheet which proved that the reallocation

did not affect the total cost of production (COP) or constructed value

(CV).

DOC Position: We agree with Rubberflex that we found only minor

discrepancies in Rubberflex's calculation of packing material and

labor. However, we disagree that Rubberflex presented any documentation

at the beginning of verification to demonstrate what changes it made to

the classification of labor expenses in its sale and cost response.

Rubberflex did make a general oral statement that it had reallocated

some labor costs across packing, indirect overhead and factory labor,

but it did not spell out those changes. The Department then directly

and repeatedly requested Rubberflex to provide this information in

writing, which it said it would do. However, Rubberflex failed to

report any of its changed allocations until each subject arose in the

course of the verification.

Comment 7: Home Market Indirect Selling Expenses.

Rubberflex states that the worksheets provided in its questionnaire

response regarding home market indirect selling expenses and general

and administrative expenses (G&A) were based on its auditor's

presentation of G&A expenses, which in turn were based on Rubberflex's

trial balance and general ledger. Rubberflex contends that the titles

of the concepts listed in the auditor's presentation did not always

relate directly to the titles of the accounts used by Rubberflex in the

ordinary course of business because the auditor collapsed several

accounts into a single concept. Rubberflex further contends that while

preparing for verification, it discovered that the worksheets in its

response required two corrections. However, Rubberflex maintains that:

(1) it disclosed these changes on the first day of verification, (2)

the Department reviewed these revisions, and (3) these revisions were

tied to the financial statements.

DOC Position: As we explained in the Facts Available for Rubberflex

section of this notice and the Department's position to Comments 1 and

2, Rubberflex failed to demonstrate that it reported all of the

appropriate indirect selling expenses and G&A expenses to the

Department, despite three separate submissions, and that it failed to

tie the reported expenses to its audited financial statements. It

failed to provide a worksheet, or any other type of document,

reconciling the ``titles and concepts'' used in its trial balance to

those on the audited financial statements. (See page 2 of the

Department's December 12, 1996 memorandum concerning the verification

failure for Rubberflex.) Therefore, Rubberflex failed to demonstrate

that it included all appropriate indirect selling expenses and G&A

expenses in its revised exhibit, and that those expenses tied to the

total amount of expenses recorded for Rubberflex Malaysia on

Rubberflex's financial statements.

Comment 8: U.S. Sales Listing.

Rubberflex contends that it demonstrated at the verification in

Malaysia that (1) all export price (EP) sales entered into the United

States during the review period were reported; (2) it accurately

reported the date of sale for EP sales as the Malaysian bill of lading

date; and (3) it accurately reported foreign inland freight, packing,

indirect selling expenses, brokerage and handling, international

freight and marine insurance pertaining to U.S. sales that were

incurred in Malaysia.

DOC Position: We disagree with Rubberflex's characterization of the

portion of the U.S. sales verification which took place in Malaysia. At

the Malaysian portion of verification, Rubberflex showed that it

reported all entries into the United States during the period of review

and that it used the Malaysian bill of lading date as the date of sale

for EP sales, including certain ``consignment'' sales. However, our

review of Rubberflex's U.S. sales reporting during the U.S. portion of

the verification revealed a great deal of confusion concerning the date

of sale and the accuracy of the computer sales listing. Rubberflex was

unable to demonstrate that the price, quantity and date of sale were

accurately reported on the computer sales listing. In Malaysia, and in

the questionnaire response, the date of sale for all EP sales was

identified as the Malaysian bill of lading date. However, in the United

States, company officials stated that for certain consignment sales,

Rubberflex used the date on which the rubber thread is withdrawn from

Rubberflex's customer's inventory as the date of sale. Thus, the

questionnaire response, and the Malaysian verification findings, were

contradicted. Moreover, because Rubberflex failed to indicate on its

computer tape which sales were consignment sales, it was not possible

to know what date of sale was operative for any of the sales listed on

the computer tape.

With respect to the accuracy of the other expenses: (1) the

problems with foreign inland freight and indirect selling expenses are

discussed elsewhere, and (2) we found only minor discrepancies with

ocean freight, marine insurance or brokerage and handling.

Comment 9: The Total Volume and Value of EP and Constructed Export

Price (CEP) Sales.

Rubberflex argues that the Department was able to reconcile the

quantity and value of Rubberflex's sales to the response after certain

adjustments were made at the U.S. verification. Rubberflex contends

that, at the U.S. verification, Rubberflex provided worksheets that

traced the reported quantities and values of the U.S. sales to

Rubberflex's audited financial statements.

DOC Position: We disagree. The verification report establishes that

Rubberflex was never able to conclusively demonstrate that its U.S.

sales were correctly reported. Rubberflex was not able to demonstrate

the validity of the information provided on the computer tapes by the

end of the verification.

As Rubberflex explains in its case brief, it presented a

reconciliation of the

[[Page 33592]]

volume and value of sales from its financial statements to the

response. We found a number of clerical errors and omissions, such as

credit memos that were initially omitted from the reconciliation

exercise because they were omitted from the response. We found that:

(1) certain sales were reported in two review periods; (2) others were

misclassified between EP and CEP sales; (3) the date of sale for

certain EP sales was misreported; and (4) Rubberflex could not

reconcile its credit memos to the specific line items on the computer

tape. Given that we found errors in almost every phase of the numerous

attempted reconciliations of U.S. sales, it is not accurate to claim,

as does Rubberflex, that the quantity of U.S. sales was in any way

reconciled completely. Consequently, we found that these errors and

omissions undermined the integrity of the response and made the

computer tape unusable for the purpose of calculating a margin.

Comment 10: Date of Sale Methodology for U.S. Sales in the 1993-

1994 Review.

Rubberflex notes that the Department's December 12, 1996 memorandum

stated that ``Rubberflex failed to use the appropriate date of sale

methodology for purchase price sales in the 1993-1994 review.''

Rubberflex contends that the date of sale issues relating to the 1993/

1994 review were erroneously considered in the Department's

determination to use ``adverse facts available'' in the 1994-1995

review.

DOC Position: We note that the December 12, 1996 memorandum applied

both to the 1993-1994 and the 1994-1995 reviews. In the example cited

by Rubberflex, the Department identified that the date of sale issue

applied clearly to the 1993-1994 review, based on the evidence on the

record in that segment of the proceeding. Rubberflex is incorrect that

such information was considered in our determination to use ``adverse

facts available'' in the instant review. The Department's determination

in the instant review is based only on information pertaining to the

1994-1995 period of review.

Comment 11: Review Classification According To Date of Entry.

Rubberflex states that its inadvertent error of classifying 37

sales under two different review periods can be easily rectified, and

should not form the basis for the assignment of total facts available.

Rubberflex disputes the Department's contention that Rubberflex was not

able to state with any clarity for which review the 37 sales should

have been reported. Rubberflex claims that the Department verified the

entry dates for the sales in question and noted no discrepancies.

Therefore, Rubberflex requests that the Department revisit this issue

and reclassify those 37 sales into the appropriate review period

according to date of entry.

DOC Position: At verification, Rubberflex was unable to

appropriately classify all of its sales to the United States with

regard to review period and type of sale (export price (EP) or

constructed export price (CEP)). We asked Rubberflex to properly

classify 37, of the approximately 125 EP sales, that we found reported

in both reviews. Rubberflex claimed that all consignment sales should

be classified in the 1994-1995 review. However, this classification did

not coincide with the narrative of its response which indicated that it

used the Malaysian bill of lading date as the date of sale. Some of

these consignment sales had U.S. entry dates which occurred during the

1993-1994 review. Therefore, since the U.S. entry date always follows

the bill of lading date in Malaysia (since the ship arrives in the U.S.

after it leaves Malaysia), these sales could not properly be classified

in the 1994-1995 review. When the Department tried to examine the rest

of the computer sales listing for the treatment of the date of sale in

consignment sales, it found that Rubberflex did not indicate which

sales were consignment sales on the computer sales listing submitted to

the Department. Consequently, the Department cannot determine whether

the rest of the sales reported on the computer tape were appropriately

classified with respect to review period, and therefore, we have no

basis by which to accurately reclassify these 37 sales or to verify the

accuracy of respondent's classification of the remaining U.S. sales as

reported by respondent.

We note again that it is Rubberflex's responsibility, not the

Department's, to prepare the questionnaire response. The errors we

found at verification in the preparation of Rubberflex's U.S. sales

data were so wide-spread and pervasive that the Department could not

ensure that any of the reported information was correct unless we were

to undertake the task of reconstructing the questionnaire response

ourselves.

Comment 12: CEP and EP Sales.

Rubberflex disputes the Department's determination that it

misreported or duplicated the reporting of certain sales (i.e., certain

sales classified as both CEP and EP). Rubberflex explains that it

clarified during verification the reason why certain invoices were

referenced under different review periods and classified under

different U.S. databases. As an example, Rubberflex states that sales

must be reported under various U.S. classification because certain

consignment sales and sales made out of inventory normally result in a

number of invoices issued by the U.S. affiliate, whereas the container

corresponding to those sales is recorded in Rubberflex's books as a

single invoice. Moreover, Rubberflex claims that during verification,

the Department examined a few invoices having similar circumstances and

indicated its satisfaction with Rubberflex's explanations, and did not

request to view additional invoices. Rubberflex contends that it

properly reported all U.S. sales.

Petitioner contends Rubberflex misstates the standard for when

sales are EP versus CEP. If a subsidiary is fully responsible for

setting the terms of the sale (as Rubberflex's U.S. subsidiary is for

all U.S. sales), that alone makes the sales CEP sales according to

Final Determination of Sales at Less Than Fair Value: Brake Drums and

Brake Rotors From the People's Republic of China, 62 FR 9171, 9171-72

(February 28, 1997) (Comments 14 and 16).

DOC Position: We disagree with Rubberflex. the verification report

states that company officials were confused about the classification of

Rubberflex's U.S. sales with respect to CEP and EP and with respect to

review period. At the conclusion of the verification, company officials

were still unable to determine which sales should or should not be

reported, or whether they were EP or CEP sales.

Comment 13: Credit Memos in the U.S. Market.

Rubberflex contends that the Department overstates the impact of

the omitted credit memos during the POR. Rubberflex claims that its

U.S. affiliate identified the omitted credit memos, most of which had

no effect on unit price, and thus no effect on dumping margins of any

U.S. sales. Rubberflex disputes the Department's determination that the

omitted credit memos made it impossible to tie the U.S. sales listing

to the U.S. affiliate's financial statements.

DOC Position: We disagree. Rubberflex reported the U.S. price and

quantity net of credit notes, despite instructions in the questionnaire

to record price and quantity adjustments separately. Therefore, it is

not possible to determine which sales have price and quantity

adjustments attributed to them by examining the computer tape.

At verification, Rubberflex was unable to reconcile the credit

memos to the

[[Page 33593]]

computer sales listing. First, Rubberflex failed to have its

reconciliation (via the mechanism of credit memos) of the EP sales

value from the financial statements to the response prepared at the

beginning of the verification. Secondly, Rubberflex initially failed to

report all of its credit memos with respect to CEP sales on the

reconciliation from the financial statements to the computer sales

listing. Further examination revealed that Rubberflex had also failed

to revise the computer sales listing to account for these missing

credit memos. Finally, Rubberflex company officials in the United

States stated that they did not know how to tie the credit memos listed

in the verification exhibit 52 to the questionnaire responses since

Rubberflex company officials in Malaysia prepared that portion of the

response.

Comment 14: Corrected Worksheets Should Be Part of the Record.

Rubberflex contends that given the time constraints, it was unable

to present corrected worksheets on the first day of verification, and

therefore, those worksheets, which Rubberflex contends were

subsequently submitted and verified, should not be disregarded.

Rubberflex disputes the Department's finding that it had no worksheets

to demonstrate how the original responses were prepared or why they

were changed or what the relationship was between the original and

revised submissions. Rubberflex contends that corrected worksheets were

submitted during verification, are referred to in the Department's

verification report and are found in the verification exhibits.

Rubberflex states that a side-by-side comparison of the original to the

revised worksheets clearly reveals the relationship between the

documents.

Rubberflex also contends that on the first day of verification, it

suggested to the Department that any corrected worksheets be included

as part of the verification exhibits normally submitted after

verification and that the Department did not object to its proposal.

Rubberflex also states that it repeatedly requested to submit revised

computer tapes to reflect corrections it claims to have presented

during the beginning of verification. However, Rubberflex claims that

the Department never responded to its request.

Petitioner emphasized that Rubberflex did not submit to the

Department a listing of reporting errors at the commencement of

verification, nor was petitioner served such a list, as required by the

Department's regulations. Petitioner contends that Rubberflex's claim

that the Department was advised at the commencement of verification of

certain errors in its submissions should be of no consequence.

DOC Position: As stated in our preliminary results, we found that

the responses provided by Rubberflex could not be verified. The

inaccuracies which render the response unusable for purposes of margin

calculations include the fact that Rubberflex attempted to provide

revised questionnaire responses at verification for home market

indirect selling expenses, direct labor and packing labor expense,

variable overhead and cost of goods sold; for these same expenses

Rubberflex could not demonstrate how the original response was

supported by documentation, nor could it document the difference

between the original and revised submission for these items.

Rubberflex failed to provide written disclosure of changes made to

its questionnaire response on the first day of verification, although

it was asked to do so. Rather, it provided verification exhibits which

constitute revised questionnaire responses throughout the course of the

verification. Rubberflex also failed to explain and/or quantify the

effects of these revisions, rending the Department unable to assess the

significance or impact of these changes. As we stated in Elemental

Sulphur From Canada: Preliminary Results of Antidumping Duty

Administrative Review, 62 FR 969, 970 (January 7, 1997), the Department

can accept new information at verification only when (1) the need for

that information was not evident previously, (2) the information makes

minor corrections to information already on the record, or (3) the

information corroborates, supports, or clarifies information already on

the record.

Rubberflex states in its brief that it submitted such revisions at

the beginning of the verification. This is directly contradicted by the

facts on the record. There were 38 verification exhibits covering the

verification in Malaysia. The document concerning packing cost is

exhibit number 18, that regarding direct labor is exhibit number 22 and

that regarding fixed overhead is exhibit number 33. As such, the record

clearly demonstrates that the information was provided piecemeal, and

late in the verification exercise.

We also disagree with Rubberflex's contention that the Department

engaged in any discussion whatsoever during verification concerning a

``suggestion'' that Rubberflex file any corrected worksheets with the

exhibits normally filed after verification. We further disagree that

Rubberflex engaged in any discussion what ever concerning the provision

of a revised computer tape. Given the pervasive errors and changes made

to the questionnaire response and the difficulties verifying those

changes, the Department has no reason to believe that a new computer

tape, submitted after verification, would accurately represent the

changes to the response that were presented during the verification.

Under the circumstances of this case, the Department would undermine

its purpose in verifying the questionnaire response by accepting such

new information after verification.

Comment 15: Corporate Structure.

Rubberflex disputes the Department's finding that Rubberflex failed

to identify the owners of its company and the existence of an

affiliated European company. Rubberflex claims that it demonstrated the

identify of its parent company through its ``annual return'' to the

Government of Malaysia which reports information regarding its

shareholders and directors. Further, Rubberflex contends that it tied

the shareholdings from the ``annual return'' to a corporate structure

worksheet provided in its response.

In addition, regarding any European affiliates, Rubberflex contends

that it could not provide documentation regarding the sale of these

companies, which it explained to the Department at verification.

Rubberflex further states that, regardless, the sale of affiliated

European resellers have no relevance to Rubberflex's sales verification

in the home and U.S. markets.

DOC Position: We disagree with Rubberflex that corporate structure

was adequately verified. Rubberflex provided new information at

verification by introducing the existence of a previously unreported

corporate owner. We asked Rubberflex to provide information regarding

whether this company had any affiliation with Rubberflex's customers or

suppliers. However, Rubberflex declined to produce such information.

Rubberflex merely stated, as it does in its case briefs, that the

affiliated European resellers have no relevance to Rubberflex's sales

in the home market and the United States. Consequently, the Department

was unable to satisfy itself regarding whether any related-party sales,

loans, equipment purchases or raw material purchases occurred during

the POR. As the U.S. Court of International Trade stated Krupp Stahl

A.G. v. United States, 17 CIT 450; 822 F. Supp. 789, 792 (1993), it is

inappropriate for respondents to limit or control which information

they present to the Department in a way that it impedes the

Department's ability to confirm the accuracy of the questionnaire

response or forces the

[[Page 33594]]

Department to use information most beneficial to them.

Comment 16: Direct Material Costs.

Rubberflex claims that the Department verified the direct material

costs used in its cost of production (COP) and constructed value (CV)

submissions. Rubberflex contends that the Department examined the

following steps Rubberflex used to calculate the direct material costs:

(1) the compound recipes of direct materials latex and chemicals used

as the basis for determining product-specific cost of productions for

all types of rubber thread; (2) the budgeted costs used to derive the

standard per-unit costs; (3) the actual cost of materials used; and (4)

the variance between standard and actual material costs. Rubberflex

argues that the Department verified the steps by examining batch

records (computer listings which aggregate a number of invoices that

will appear as a single line item in the general ledger), testing

inventory formulas, and determining that Rubberflex accurately captured

and reflected all direct material costs incurred during the review

period.

Rubberflex notes that the Department questioned the budgeted costs

because they were derived in 1991 and differed from the weighted-

average costs of materials in inventory. Rubberflex stated that these

budgeted costs had not been revised since 1991 because they were still

a reasonable estimation of the costs of the various materials used to

produce rubber thread and none of the costs had changed significantly.

Rubberflex argues that the budgeted costs are a reasonably accurate

tool for predicting costs over time.

DOC Position: We disagree with Rubberflex that per-unit direct

materials cost was verified. We did verify the total material cost

during the POR as well as the actual quantity of materials used.

However, neither of these figures alone is sufficient to calculate the

per-unit cost reported in the questionnaire response. Rubberflex

reported its per-unit material cost by multiplying actual material used

per product by standard material prices to arrive at a standard cost.

To calculate a variance Rubberflex calculated the total material cost

at standard; it then made a factory-wide adjustment for the difference

between total actual material cost and the total material cost at

standard. This methodology is not, in itself, a problem.

There are two problems which arise from Rubberflex's use of the

1991 standard prices. The first is that Rubberflex was unable to

substantiate how those prices were calculated in 1991 and what those

figures represent. Therefore, it is not possible to evaluate the

accuracy of the per-unit cost calculations. Rubberflex made no attempt

to demonstrate that these prices were reasonable, or that the use of

1991 prices to calculate costs for 1995 products was non-distortive.

The second problem is that the 1991 standard prices presumably

reflect the relative prices sometime prior to that time. However, these

relative prices have changed. As the verification report on page 16

states, we compared the 1991 standard prices with the actual POR prices

and found that the prices of individual materials increased or

decreased at different rates. Because each product uses a different mix

of materials, the cost of producing each different product would change

relative to the cost of other products produced in the factory.

However, by applying as a factory-wide variance the total actual

material cost as compared with the 1991 standard prices, Rubberflex

reported per-unit material costs failed to account for the changes in

the relative costs. Thus, these costs are inaccurate.

Comment 17: Direct Labor Costs.

Rubberflex contends that the Department verified its labor costs in

full. Rubberflex argues that it used the following steps to calculate

the direct labor costs reported in its COP/CV submissions: (1)

calculate actual direct labor cost per minute of production by dividing

total direct labor costs during the review period by the total

production time during the review period; (2) allocate the cost per

minute to specific products based on the standard number of minutes

required to produce particular types of rubber thread; and (3) adjust

the product-specific costs calculated using the standard yield for the

variance between actual and predicted factory operation.

Rubberflex notes that at the beginning of verification, it

disclosed certain minor revisions, and provided a corrected worksheet,

to the Department. Rubberflex claims that a side-by-side comparison of

the original and corrected worksheets reveals only minor corrections.

In order to verify the corrected worksheet, Rubberflex states that it

traced all of the reported expenses to its trial balance, and traced

from the trial balance to the general ledger and relevant source

documentation.

DOC Position: We agree that Rubberflex followed the method it

outlined to determine direct labor expenses. However, we disagree with

Rubberflex's characterization that these expenses were fully verified.

See DOC Position to comment 14. Rubberflex failed to clearly

demonstrate the impact of these changes on the calculations in the

questionnaire response. For example, Rubberflex contends that the

revised data was merely a reclassification. Despite the fact that much

of Rubberflex's explanation is post hoc, their own exhibits belie their

assertions. An examination of the exhibits placed side-by-side in

exhibit 3 of Rubberflex's brief reveals numerous and significant

differences in the exhibits, differences not explained at verification

nor in the case brief.

A second problem arose during the verification of labor expenses.

As we explain on pages 13 of our February 14, 1997 verification report,

Rubberflex failed to provide the original source documentation for

managerial labor, despite the Department's request, thus ``placing

control . . . in the hands of uncooperative respondents who could force

Commerce to use possibly unrepresentative information most beneficial

to them.'' Krupp Stahl, 822 F. Supp. at 792.

Comment 18: Variable Overhead Costs.

Rubberflex contends that at the beginning of verification, it

disclosed to the Department two minor errors concerning its variable

overhead costs: (1) Rubberflex reported the salary of the factory

supervisor and manager as variable overhead costs, rather than fixed

overhead costs; and (2) certain components of variable overhead needed

to be corrected to reflect year-end adjustments. Rubberflex stated that

a corrected worksheet reflecting this reallocation was submitted to the

Department during the cost verification. Rubberflex claims that a side-

by-side comparison of the original and corrected worksheets reveal only

minor changes. Rubberflex states that the costs were verified by the

Department and that final expense figures used were appropriately

recorded in monthly accounts, according to the Department's

verification report. In addition, Rubberflex states that these minor

changes were necessitated by adjustments made by the auditors after

performing a physical inventory of materials.

DOC Position: We disagree. See DOC Position to comment 14.

Comment 19: Fixed Overhead Costs.

Rubberflex contends that at the beginning of verification, it

disclosed to the department several minor errors concerning its fixed

overhead costs: (1) Rubberflex reported the salary of the factory

supervisor and manager as variable overhead costs, rather than fixed

overhead costs; (2) the cost of all benefits for workers in the factor

was included in fixed overhead cost, rather than being allocated among

direct labor

[[Page 33595]]

costs, fixed overhead costs, and packing labor costs; and (3)

Rubberflex's auditor made a provision for writing-off finished goods

inventory, which did not exists at the time of the original

questionnaire response. Rubberflex stated that it provided a corrected

worksheet reflecting this reallocation during the cost verification.

Rubberflex contends that the magnitude of any corrections made with

regard to the original worksheet were minor. Rubberflex contends that

the Department verified the corrected worksheet by tracing expense

amounts to source documents, the trial balance and the general ledger.

DOC Position: We disagree. See DOC Position to comment 14.

Comment 20: Depreciation.

Rubberflex claims that the Department verified the reported

depreciation figures by tracing the figures to the trial balance,

general ledger, asset schedules, and selected purchase invoices for

assets. Rubberflex disputes the Department's finding in the

verification report that it could not rely on the accuracy of reported

depreciation expense due to the fact that the ``original cost basis''

for certain assets acquired prior to 1990 could not be traced to the

appropriate asset schedule in the year of purchase. Rubberflex

justifies its inability to produce ``original cost basis'' information

on certain assets by claiming that: (1) it is unreasonable for

accounting or tax purposes to maintain accounting documents for more

than five years, particularly where Malaysian tax authorities do not

require the retention of these documents for that period of time; (2)

Rubberflex was not notified that such documents may be needed for

verification purposes; and (3) the Department traced the annual

depreciation for assets purchased before 1990 to trial balances and

asset schedules for fiscal years 1993, 1994, and 1995, and could

plainly see that the assets were being depreciated in a systematic

manner, which was reviewed and approved by its auditors. Therefore,

Rubberflex claims that its inability to provide original asset

schedules for years prior to 1990 does not provide grounds for the

Department to question the accuracy of the reported costs.

DOC Position: We disagree with Rubberflex that its inability to

provide original asset ledgers for certain items requested is not a

verification problem. The verification report specifies that we became

aware that Rubberflex purchased certain major pieces of capital

equipment from an affiliated party. Examples of these purchases are

recorded on verification exhibit 36. Page 18 of the verification report

notes that we attempted to determine whether the transfer price of such

equipment, and the associated depreciation expenses, represented arm's-

length transactions. Rubberflex failed to provide information

responsive to our request. Thus, we were unable to satisfy ourselves in

this regard.

We agree that Rubberflex reported the depreciation expenses on its

books and records, which were audited and in accordance with Malaysian

GAAP. Normally we use the costs and expenses recorded on the company's

books and records, provided that we are satisfied that such costs are

non-distortive. In this case, we had reason to question whether the

depreciation expenses recorded on Rubberflex's books where under- or

overstated (i.e. distortive) by reason of an affiliated party

transaction.

Finally, it is reasonable to request Rubberflex to document the

figures that it used to record its depreciation expense on its books

and records. Rubberflex depreciates certain machines and buildings for

more than 5 years and reflects those figures on its books and records.

It is standard verification practice to ask companies to demonstrate

the figures, and to keep documentation supporting information submitted

in an antidumping proceeding, for the purpose of verification. The U.S.

Court of International Trade held in Krupp Stahl, 822 F. Supp. at 792,

that, despite the fact that the German authorities did not require the

company to maintain business records for more than five years, it did

not absolve a respondent in an antidumping proceeding of the

responsibility of providing source documents to support its

questionnaire response.

Comment 21: General and Administrative (G&A) Expenses.

Rubberflex states that at the beginning of verification, it

submitted a revised worksheet which properly captured certain G&A

expenses. Some of these expenses were misclassified as G&A expenses in

the original questionnaire response and, therefore, were not properly

included in the worksheet for indirect selling expenses. Rubberflex

further explains that it provided worksheets and source documentation

which substantiated its allocation methodology with regard to indirect

selling expenses and G&A expenses. Rubberflex contends that the

Department traced the amounts shown in the revised worksheet to

relevant trial balances, source documentation, and the general ledger.

DOC Position: We disagree, See DOC Position to comment 14. The G&A

expenses in the original questionnaire response were presented in a

different format from the G&A expenses in the revisions presented at

verification, so direct comparisons are not possible. Rubberflex never

presented a systematic explanation of how individual elements of G&A

were affected by the revisions, nor how or why the total changed.

Rather, as with variable overhead, the Department was left with

insufficient time and information to evaluate the magnitude of the

change. Again, this was a situation where a company's ``failure to

reconcile its submitted costs to its normal books and records prevents

us from quantifying the magnitude of the distortions which exist in its

submitted data.'' Certain Cut-to-Length Carbon Steel Plate From Sweden:

Preliminary Results of Antidumping Duty/Administrative Review, 61 FR

51898, 51899 (October 4, 1996) (the Department's position adopted in

the final results of review, 62 FR 18396 (April 15, 1997)).

Finally, contrary to Rubberflex's assertion, it was unable to tie

the specific line items from its revised worksheets to the audited

financial statements. The fact that total profit, sales, and cost of

goods sold (COGS) figures were traced is irrelevant. It is precisely

the items which could not be traced--the components of G&A--which were

under evaluation at verification.

Comment 22: Financing Expense.

Rubberflex states that while preparing for verification it

discovered slight errors related to the amounts reported for bank

charges and interest on bills refinanced. Rubberflex further states

that these corrections were presented to the Department at verification

and that it demonstrated the accuracy of the revised worksheet by tying

the total financing expenses and interest received to the total

expenses stated in the trial balance for financing expenses and

interest received, respectively.

DOC Position: We disagree. See DOC Position to comment 14.

Comment 23: Conduct of the review.

Rubberflex contends that it fully cooperated under difficult

circumstances during this proceeding and that the Department must bear

a significant portion of the responsibility for any problems that arose

at verification. In addition to the short preparation time given to

Rubberflex prior to the verification, Rubberflex enumerates a list of

Departmental procedural errors, which Rubberflex contends unfairly

prejudiced its interests and resulted in the use of facts available in

the preliminary results. According to Rubberflex, these procedural

errors were due to the

[[Page 33596]]

Department's untimely handling of the case. Rubberflex stated that it

did the best it could under these circumstances to cooperate fully and

that it submitted its responses and verification exhibits in a timely

manner, and prepared for the verification to the extent possible given

the time available.

DOC Position: We agree with Rubberflex that there was a great deal

of case activity within a relatively short period in 1996. However, we

disagree that we unfairly prejudiced Rubberflex by our conduct of the

case. The supplemental questionnaires for this and the prior review

were relatively short and not overly demanding and Rubberflex was given

adequate time to respond. The record reflects that Rubberflex was given

several extensions of time to submit its data; in fact, Rubberflex was

granted every extension request it made. Finally Rubberflex was given

sufficient notice of the timing of verification, and the Department

followed the same standard procedures, and issued a standard

verification outline which was substantially similar for the

verification of information in both the 1993-1994 and 1994-1995 review.

These procedures were similar to those followed in the original

investigation, when Rubberflex underwent verification. Thus, there is

little evidence that the Department's conduct of the case placed an

``unreasonable'' burden on Rubberflex. Rather, in this case, as in

virtually every case the Department conducts, the burden on respondents

is to provide accurate and timely data which can be verified. To the

greatest extent possible, the Department strives to be flexible with

deadlines for respondents; ultimately, however it is respondents'

responsibility to meet this burden. Nevertheless, we took into account

Rubberflex's level of cooperation in this case in our selection of the

appropriate facts available for Rubberflex's antidumping margin. (See

Facts Available for Rubberflex section above.)

Comment 24: Rubberflex's Cooperation.

Rubberflex argues that the evidence on the record disputes the

Department's assertion in the preliminary determination that Rubberflex

failed to cooperate. Rubberflex contends that it timely filed its April

15, 1996 questionnaire response as well as its September 17, 1996

supplemental response. Further, Rubberflex argues that it prepared for

verification to the best of its ability and prepared worksheets

requested by the Department to the extent possible given the time

constraints. Rubberflex states that in the second administrative

review, the Department stated the Rubberflex ``cooperated throughout

the administrative review by submitting questionnaire responses and

with verification.'' Rubberflex argues that the level and quality of

its participation in this review was precisely the same as the second

review. Therefore, Rubberflex maintains that the Department cannot

logically conclude that it did not cooperate in this review.

DOC Position: Rubberflex points to the Department's application in

the preliminary results of the 1993-1994 review in this case of the

second-tier `'cooperative'' BIA rate set forth in Antifriction Bearings

(Other Than Tapered Roller Bearings) and Parts Thereof From France, et

al.; Final Results of Antidumping Duty Administrative Reviews, Partial

Termination of Administrative Reviews, and Revocation in Part of

Antidumping duty Orders, 60 FR 10900 (February 28, 1995) to argue that

the Department's treatment in this review is inconsistent with that of

the prior review. Contrary to Rubberflex's characterization, there is

nothing inconsistent about the Department's treatment of Rubberflex in

theses two administrative reviews. We explained in our Notice of

Preliminary Results of Antidumping Duty Administrative Review: Extruded

Rubber Thread from Malaysia, 62 FR 6758 (February 13, 1997), concerning

the 1993-1994 administrative review, that Rubberflex cooperated

throughout the review by submitting questionnaire responses and by

participating in verification. However, we found that information could

not be verified and thus resorted to BIA pursuant to section 776(b) of

the Act. Although the degree of cooperation by Rubberflex in the two

reviews is substantially the same, this final results is governed by

the new statutory provisions concerning the use of facts otherwise

available. As stated in our Preliminary Results, Rubberflex has not

cooperated to the best of its ability.

Comment 25: Partial Facts Available.

Because of the arguments presented, Rubberflex claims that the

application of a total adverse facts available is not warranted.

Rubberflex contends that during verification, it tied all information

submitted in its original response to its trial balance, and

ultimately, to its audited financial statements. Further, Rubberflex

emphasizes that because the Department verified virtually all of the

submitted sales and cost data, the fact that a few minor errors

disclosed at the commencement of verification should not provide the

legal basis for the Department to disregard its entire response and

resort to adverse facts available. Rubberflex cites to prior

Departmental determinations in which the Department states that it will

resort to facts available ``only for those specific items of the

response that it was not able to verify.'' See Notice of Final

Determination of Sales at Less Than Fair Value: Brake Drums and Brake

Rotors from the People's Republic of China, 62 FR 9160, 9167 (February

28, 1997); and Certain Internal Combustion Industrial Forklift Trucks

from Japan; Final Results of Antidumping Duty Administrative Review, 62

FR 5592, 5594 (February 6, 1997). Rubberflex concedes that it did not

submit an error-free response. However, Rubberflex states that minor

errors and corrections were presented to the Department during

verification. Rubberflex argues that the fact that some corrections

were not presented on the first day of verification does not provide

the Department reasonable grounds for disregarding them because

Rubberflex was provided only two days for verification preparation.

Therefore, in light of the above-mentioned circumstances, Rubberflex's

cooperation in this review, and that Rubberflex's claims that the

Department was able to verify its responses, Rubberflex argues that the

Department does not have legal grounds to use adverse facts available.

Petitioner contends that because the Department determined during

verification that Rubberflex's questionnaire responses were wholly

deficient and unverifiable, Rubberflex should therefore be assigned a

total facts available rate. Petitioner cites to the Department's

Analysis Memorandum of December 12, 1996 and verification report, which

document Rubberflex's uncooperativeness due to misreportings,

inaccuracies and omissions of certain information. Petitioner therefore

argues that the Department should assess a margin which corresponds to

criteria outlined in the Department's Antidumping Manual; ``* * * when

a substantial amount of a response does not verify, the Department will

normally assign the highest margin for the relevant class or kind of

merchandise among (1) the margins in the petition, (2) the highest

calculated margin of any respondent within that country * * *'' See

U.S. Department of Commerce, Antidumping Manual, July 1993, Ch. 6, at

3. Further, Petitioner disputes that Rubberflex's claimed errors are

minor. Petitioner contends that Rubberflex's purported justification

for such errors, which Rubberflex claims were the result of year-end

accounting adjustments, are unsubstantiated, and unpersuasive.

Petitioner contends that any year-end

[[Page 33597]]

adjustments should have been reported long before verification.

Petitioner emphasizes that even minor errors would nevertheless

generate an inaccurate margin calculation, which would place the U.S.

industry at a disadvantage, given that extruded rubber thread is a

commodity, price-sensitive product.

Petitioner emphasizes that Rubberflex did not submit to the

Department a listing of errors at the commencement of verification, nor

was petitioner served such a list, as required by the Department's

regulations. Petitioner contends that Rubberflex's claim that the

Department was advised at the commencement of verification regarding

certain errors in its submission is therefore of no consequence.

DOC Position: We disagree with Rubberflex that the Department was

able to verify Rubberflex's questionnaire response and tie all of the

information provided in the original response to the trial balance, and

ultimately to the audited financial statements. We have addressed this

issue in the Facts Available for Rubberflex section of this notice.

Comments Concerning Other Respondents

Comment 26: CEP versus EP Sales.

The petitioner alleges that Heveafil's ``back-to-back'' sales are

CEP, and not EP sales, as reported in the questionnaire response. The

petitioner argues that the name ``back-to-back'' sales indicates that

the U.S. subsidiary makes the sale and determines the price of the

merchandise in the United States. Petitioner also notes that both

Heveafil's and Filati's April 22, 1996 questionnaire responses indicate

that the company's per-unit price is not fixed until the U.S.

subsidiary issues the invoice to the U.S. customer. (Heveafil's

response at page A-10 and Filati's response at page A-13.)

Petitioner further contends that the Department has found that

sales made under circumstances like those made by Heveafil and Filati

are CEP sales. Petitioner notes that in Brake Drums and Brake Rotors

from the PRC; Preliminary Determination of Sales at Less Than Fair

Value and Postponement of Final Determination, 61 FR 53190, 53194

(October 3, 1996), the Department stated that the ``responsibilities of

the U.S. affiliates go well beyond those of a processor of sales

related documentation'' or a ``communication link'' and therefore

designated the sales in question as CEP sales. Petitioners note that in

Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products

from Korea; Preliminary Results of Antidumping Duty Administrative

Review, 61 FR 51882, 51885 (October 4, 1996), the Department found it

more appropriate to determine that sales were CEP sales where: the U.S.

subsidiary was the importer of record and took title to the

merchandise; the U.S. subsidiary financed the relevant sales

transactions; and the U.S. subsidiary assumed the seller's risk.

Petitioner argues that Heveafil's and Filati's sales meet these

criteria.

Heveafil and Filati contend that the Department has repeatedly

treated ``back-to-back sales'' as EP sales in the original

investigation and in all prior administrative reviews. They note that

Commerce verified that the characterization of the sales is correct in

both the original investigation and the first review.

Specifically, respondents argue that back-to-back sales must

continue to be treated as export price sales, in accordance with the

Department's practice for determining ``indirect'' purchase price/EP

sales as set forth in Certain Corrosion-Resistant Carbon Steel Flat

Products from Korea; Final Results of Antidumping Duty Administrative

Review, 61 FR 18547 (April 26, 1996). Heveafil and Filati argue that

because petitioner has not submitted any new factual information on the

record to alter prior treatment of these sales, respondents contend the

Department must not depart from previous determinations. Accordingly,

Heveafil and Filati argue that back-to-back sales conform to the

Department's practice in the following ways: (1) sales were made prior

to importation; (2) subject merchandise was not introduced into the

inventory of U.S. affiliates; (3) the subsidiaries selling activities

are consistent with the EP classification; and (4) neither subsidiary

is engaged in advanced marketing or product development. For the sales

made prior to important, Filati and Heveafil further note that date of

sale was reported as the bill of lading date, which occurred before

importation, a methodology argued to be consistent with the

Department's past determinations.

DOC Position: We agree that Heveafil's and Filati's ``back-to-

back'' sales are properly treated as EP sales. With respect to EP

sales, section 772(a) of the Act states that: ``the term `export price'

means the price at which the subject merchandise is first sold (or

agreed to be sold) before the date of importation by the producer or

exporter of the subject merchandise outside of the United States to an

unaffiliated purchaser in the United States or to an unaffiliated

purchaser for exportation to the United States.'' Based on the

Department's practice, we examine several criteria for determining

whether sales made prior to importation through an affiliated sales

agent to an unaffiliated customer in the United States are EP sales,

including: (1) Whether the merchandise was shipped directly from the

manufacturer to the unaffiliated U.S. customer; (2) whether the sales

follow customary commercial channels between the parties involved; and

(3) whether the function of the U.S. selling agent is limited to that

of a ``processor of sales-related documentation'' and a ``communication

link'' with the unrelated U.S. buyer. Where all criteria are met, the

Department has regarded the routine selling functions of the exporter

as ``merely having been relocated geographically from the country of

exportation to the United States,'' and has determined the sales to be

EP sales. Where all conditions are not met, the Department has

classified the sales in question as CEP sales. See, e.g., Final

Determination of Sales at Less Than Fair Value: Brake Drums and Brake

Rotors From the People's Republic of China, 62 FR 9171 (February 28,

1997). Based on our analysis of the selling activities of Filati's and

Heveafil's U.S. affiliates, we determine that EP is appropriate. The

customary commercial channels between Heveafil and Filati their

respective unaffiliated customers are that Heveafil and Filati ship the

EP merchandise directly to the unaffiliated U.S. customer without

having the merchandise enter into the inventory of the U.S. subsidiary,

and that the U.S. selling agent is limited to that of a ``processor of

sales-related documentation'' and a ``communications link'' with the

unrelated U.S. buyer. Moreover we disagree with petitioner's

characterization that the U.S. affiliate sets the price after

importation. There has been no record evidence submitted in this

segment of the proceeding that would cause us to alter our treatment of

these sales as EP sales.

Comment 27: Indirect Selling Expenses and Inventory Carrying Costs

Incurred in the Home market for U.S. Sales.

Heveafil, Filati and Rubfil argue that indirect selling expenses

and inventory carrying costs incurred in the home market should not be

deducted from CEP under section 772(d) of the Act. They note that the

Department articulated a standard whereby it deducts selling expenses

incurred in the home market from CEP only if they are specifically

related to commercial activities in the United States. (See

Antifriction Bearings (Other Than

[[Page 33598]]

Tapered Roller Bearings) from France, Germany, Italy, Japan, Singapore,

and the United Kingdom; Final Results of Antidumping Duty

Administrative Reviews 62 FR 2081, 2124 (January 15, 1997) and

Preliminary Results of Antidumping Duty Administrative Review: Calcium

Aluminate Flux from France, 61 FR 40396, 40397 (August 2, 1996).

DOC Position: We agree with Heveafil, Filati and Rubfil. In

Antifriction Bearings (Other Than Tapered Roller Bearings) from France,

Germany, Italy, Japan, Singapore, and the United Kingdom; Final Results

of Antidumping Duty Administrative Reviews 62 FR 2081, 2124 (January

15, 1997) states that the ``statutory definition of `constructed export

price' contained in section 772(d) of the Act indicates clearly that

were are to base CEP on the U.S. resale price as adjusted for U.S.

selling expenses and profit. As such, the CEP reflects a price

exclusive of all selling expenses and profit associated with economic

activities occurring in the United States.'' Our analysis of

Heveafil's, Filati's and Rubfil's responses indicates that the indirect

selling expenses and inventory carrying costs incurred in the home

market were not specifically related to the economic operations of the

U.S. affiliate. As a result, indirect selling expenses and inventory

carrying costs incurred in the home market were no longer included in

the CEP deduction. Consequently, we have revised our calculations to

include in the CEP deduction only those expenses specifically related

to the economic operations of the U.S. affiliate.

Comment 28: U.S. Packing Expenses.

Heveafil, Rubfil and Filati claim that we erroneously deducted U.S.

packing expenses from the U.S. price. As stated by these respondents,

the Act does not provide for the deduction of U.S. packing expenses

from either EP or CEP.

DOC Position: We agree. These calculations were made in error and

have been corrected.

Comment 29: Adjustments for Countervailing Duties (CVDs) Paid.

Heveafil, Filati and Rubfil contend that the Department must

increase the U.S. price for certain countervailing duties paid on

imports of the subject merchandise pursuant to the CVD order. In

accordance with section 772(c)(1)(C) of the Act, the Department should

increase U.S. price by the ``amount of any countervailing duty imposed

on the subject merchandise to offset an export subsidy.'' The

Department, however, has not made adjustments nor increased U.S. price

for export subsidies if normal value (NV) has been based on constructed

value. Respondents note that the Department has declined to make and

adjustments when normal value is based on constructed value, on the

grounds that any benefit conferred through the export subsidy is

reflected in the production costs as well as in U.S. price. (See Notice

of Final Results of Antidumping Duty Administrative Review: Extruded

Rubber Thread from Malaysia, 61 FR 54767 (October 22, 1996).

Respondents also assert that export subsidies, specifically income

tax holidays and income tax abatements, are not reflected in a

company's production costs and must be included in an adjustment to

U.S. price. They note that income taxes are not an element of the cost

of production. Respondents note that the following Malaysian export

subsidy programs found in the second and third countervailing duty

reviews, qualify as income tax holidays or income tax abatements and

thus, should be used in an adjustment to U.S. price: (1) Pioneer

Status; (2) Abatement of Income Tax based on Ratio of Export Sales to

Total Sales; (3) Abatement of Five Percent of the Value of Indigenous

Malaysian Materials Used in Exports; (4) Industrial Building Allowance;

and, (5) Double Deduction for Export Promotion Expenses.

DOC Position: We agree with respondents that the programs: (1)

Pioneer Status, (2) Abatement of Income Tax Based on the Ratio of

Export Sales to Total Sales, (3) Abatement of Five Percent of the Value

of Indigenous Malaysian Materials Used in Exports, (4) Industrial

Building Allowance, and (5) Double Deduction for Export Promotion

Expenses have been found countervailable and classified as export

subsidies in the most recently completed countervailing duty review,

Extruded Rubber Thread from Malaysia; Final Results of Countervailing

Duty Administrative Review, 61 FR 55272 (October 25, 1996).

Therefore, in accordance with section 772(c)(1)(C) of the Act, we

increase U.S. price by ``the amount of any countervailing duty imposed

on the subject merchandise to offset an export subsidy.'' The most

recently completed CVD review, Extruded Rubber Thread from Malaysia;

Final Results of Countervailing Duty Administrative Review, 61 FR 55272

(October 25, 1996), found ad valorem net subsidies of 0.23% for

Heveafil; 0.19% for Rubberflex; 1.39% for Filati; and, 0.38% Rubfil for

1994. In the context of an administrative review (as opposed to a less-

than-fair value investigation), these rates, with the exception of

Filati's, are de minimis pursuant to the language of the SAA, at page

939, and thus will not be collected, i.e., ``imposed,'' within the

meaning of section 772(c)(1)(C) of the Act. As a result, because we are

comparing Filati's sales to the United States to home market sales or

constructed value in the home market for this review, we will adjust

the 1994 U.S. prices of Filati to account for the net export subsidies

of 0.15%. We will also make adjustments to assessment and deposit rates

for any export subsidies in the final results of the 1995 CVD review,

which has not been completed.

Comment 30: Import Duties.

Filati claims that the Department erred in not making an adjustment

for TAXH, which represents the impact of a duty imposed on imported

inputs used to produce rubber thread which will later be exported, and

is collected only on home market sales. Filati notes that TAXH is not

collected on export sales. It claims that TAXH is included in the price

of its home market sales and is passed on to its Malaysian customers,

and, therefore, constitutes an indirect tax imposed directly upon the

foreign like product which has not been collected on the subject

merchandise. Therefore, Filati argues that TAXH must be deducted from

normal value in accordance with section 773(a)(6)(B)(iii) of the Act.

Alternatively, Filati proposes that the Department treat TAXH as a

difference in circumstances of sale, and make a downward adjustment to

normal value, in accordance with section 773(a)(6)(C)(iii) of the Act.

Rubfil maintains that the Department must deduct DUTYH from the

home market price in the calculation of normal value since it claims,

for the first time in its rebuttal brief, that DUTYH is the same 3

percent indirect tax adjustment reported by Filati, although Rubfil

mistakenly referred to it as TAXH in the narrative portion of the

response.

Petitioner disputes Filati's and Rubfil's arguments. It claims that

Filati did not claim that the home market prices it reported to the

Department include these indirect taxes. Petitioner notes that, as a

general matter, respondents, including Rubfil, usually report home

market prices to the Department already exclusive of indirect taxes. As

a result, petitioner argues that TAXH should not be netted from

reported home market sales.

DOC Position: We disagree that these expenses represent a tax. Both

Filati's and Rubfil's April 22, 1996 questionnaire response identifies

the expense reported in the TAXH or DUTYH column as a duty on imported

merchandise. It is imposed when the goods are sold in the home market,

and remains uncollected when the subject

[[Page 33599]]

merchandise is exported. Consequently, contrary to the respondents'

characterization of the expense, the expenses recorded in the TAXH or

DUTYH columns represent a duty, and not a tax. Filati and Rubfil

explain that they include the amount of this duty in their home market

price and pass it on to their customers. The duty is neither added to

nor included in the price of the export goods. Because this duty is

only collected on home market sales, and not on export sales, we have

determined it to be an uncollected duty within the meaning of section

772(c)(1)(B) of the Act, rather than an uncollected tax within the

meaning of 773(a)(6)(B)(iii) of the Act. Consequently, pursuant to

section 772(c)(2)(B) of the Act, we have revised our calculations by

adding the amount of the uncollected duty to the U.S. price.

Comment 31: Re-exports of Covered Merchandise.

Filati contends that it is the Department's long-standing policy,

which has been upheld by the U.S. Court of Appeals for the Federal

Circuit (The Torrington Company v. United States, 82 F.3d 1039 (Fed.

Cir. 1996)), not to calculate or collect antidumping duties on subject

merchandise that is re-exported without any sale to unaffiliated

parties in the United States. Filati contends that the Department

cannot calculate or collect antidumping duties regarding such imports,

because in the absence of sales in the United States, there is no basis

for calculating United States price. Thus, Filati explains, where a

respondent provides evidence that merchandise has been re-exported, the

Department has modified its assessment methodology formula to account

for the re-exports. Filati argues that it provided evidence of such

entries in its September 23, 1996 supplemental response and that there

were no computer programming instructions in the preliminary results of

review to accommodate such re-exports. Filati further argues that the

Department should structure its assessment instructions along the lines

outlined in the Department's proposed regulations (by dividing the

total duties calculated for the period of review (PUDD) by the entered

value of the sales during the POR, and directing Customs to apply the

resulting ad valorem rule to entries in the POR) as modified by the

``per-unit'' methodology used in the Department's August 31, 1992

memorandum for Richard W. Moreland, First Administrative Review of 3.5

Inch Microdisks and Coated Media Thereof from Japan (Microdisks)

Decisions Made with Respect to Issuing Assessment Instructions for all

Five Japanese Companies which had a either PP and ESP Sales

Transactions of 3.5-Inch Microdisks and Coated Media. Filati argues

that this new ad valorem, assessment rate should be calculated as

follows: PUDD/entered value of sales* (value of entries-value of re-

exports)/value of entries.

DOC Position: The Department agrees with Filati that it is

inappropriate to calculate or assess antidumping duties on covered

merchandise that is re-exported from the United States before the goods

are sold to an unaffiliated party in the United States. An examination

of the facts of this record indicates that all of the merchandise was

entered into the United States commerce for consumption. However, at

the time of entry, Filati did not know whether the merchandise would be

sold in the United States or Canada. At the end of the review period,

Filati was aware of which entries were sold in the United States and

which were re-exported without a sale to an unaffiliated party in the

United States. It reported U.S. sales to the Department in its

questionnaire response, and the re-exports to Canada in its

supplemental response.

Section 731 of the Act provides that once merchandise is subject to

an antidumping order ``then there shall be imposed upon such

merchandise an antidumping duty * * * in an amount equal to the amount

by which the normal value exceeds the export price (or the constructed

export price) for the merchandise.'' Section 751(a)(2) of the Act

provides that, in computing the amount of the antidumping duty, the

Department ``shall determine'' (1) the normal value and export price

(or constructed export price) of each entry of the subject merchandise,

and (2) the dumping margin for each entry. Thus, sections 731 and

751(a)(2) of the Act call for the Department to determine the United

States price (either the export price or the constructed export price).

In the instant case, because there is no sale to an unaffiliated party

in the United States, despite the fact that the goods have entered into

the U.S. customs territory, there is no means by which the Department

can calculate a United States price with respect to these particular

imports. See The Torrington Company v. United States, 82 F.3d 1039,

1044-1047 (Fed. Cir. 1996) (``Torrington'') (held that the re-exported

goods do not enter into the calculation of the total antidumping duties

owed by the respondent).

Further the U.S. Court of Appeals for the Federal Circuit held in

Torrington that under these circumstances the Department acts lawfully

when it does not assess antidumping duties on the covered merchandise.

See Torrington, 82 F.3d at 1040. The holding in Torrington sanctions

the Department's longstanding practice in the regard. See, e.g., Final

Results of Antidumping Duty Administrative Review and Revocation in

Part of Antidumping Duty Order: Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts Thereof from France, et al., 58 FR

39729, 39784 (July 26, 1993) (Department's position was that where the

bearings that entered the customs territory of the United States were

re-exported prior to sale to an unrelated customer in the United

States, there is no assessment of antidumping duties on those entries).

Finally, the Torrington Court held that, in upholding the Department's

practice not to calculate a United States price or assess with respect

to entries that are later re-exported from the United States without a

sale here to an unaffiliated party, this practice does not conflict

with the U.S. duty drawback laws. Torrington, 82 F.3d at 1045.

Comment 32: Currency Conversion Error.

Filati argues that the Department erroneously failed to convert its

inventory carrying costs into U.S. dollars.

DOC Position: We agree and have corrected the error.

Comment 33: The Difference in Physical Characteristics of

Merchandise (DIFMER) Calculation.

Heveafil contends that the Department incorrectly subtracted the

DIFMER adjustment from home market prices since it calculated the

DIFMER adjustment as the U.S. cost of manufacture (VCOMU) minus the

home-market variable cost of manufacture (VCOMH). In this situation,

the Department should add the DIFMER to the normal value (NV).

DOC Position: We agree that, pursuant to section 773(6)(c)(ii) of

the Act, it is appropriate to add the DIFMER to NV when the DIFMER is

calculated as VCOMU minus VCOMH. However, our standard program was

written to subtract it from normal value. Therefore, to keep Heveafil's

program in conformity with the Department's standard computer program,

we recalculated DIFMER as VCOMH minus VCOMU, then subtracted it from

NV. This equation is identical to the remedy proposed by Heveafil.

Comment 34: The Calculation of the Average Actual Profit for

Constructed Value.

Petitioner contends the Department erroneously used Heveafil's,

Filati's and Rubfil's average actual profit on both

[[Page 33600]]

profitable and unprofitable sales for the profit figure in the

constructed value calculation. Petitioner argues that only profit on

profitable sales is used in the calculation.

Respondents dispute petitioner's contention, arguing that the

Department calculates constructed value profit without excluding below-

cost sales. In support of its argument, respondents rely on Federal-

Mogul Corp. v. United States, 918 F. Supp. 386, 403 (CIT 1996) and

Torrington Co. v. United States, 881 F. Supp. 622, 633 (CIT 1995), as

well as a number of results of reviews of Antifriction Bearings (Other

Than Tapered Roller Bearings) and Parts thereof.

DOC Position: We agree with petitioner. Section 773(e)(2)(A) of the

Act states that the constructed value of the imported merchandise shall

be the ``actual amounts incurred and realized by the specific exporter

or producer being examined in the investigation or review for selling,

general, and administrative expenses, and for profits, in connection

with the production and sale of a foreign like product, in the ordinary

course of trade, for consumption in the foreign country.'' Section

771(15)(A) of the Act specifies that the Department shall consider the

sales disregarded under section 773(b)(1) of the Act to be outside the

ordinary course of trade. See also SAA, at 839. Therefore, we have

changed our calculations to include only the profit from sales not

disregarded under section 773(b) of the Act.

Respondents cite a number of instances where the Department and the

courts have included sales below cost in the calculation of profit for

constructed value. We not that all of the cases cited by respondents

pertain to the calculation methodology spelled out in the old law, and

have been superseded by the new law, which establishes new methods of

calculating profit for CV. See SAA, at 839

Comment 35: The Use of Color as a Model Match Criterion.

Petitioner argues that color should be excluded as a matching

criterion. Petitioner cites Melamine Institutional Dinnerware from

Taiwan: Final Determination of Sales at Less Than Fair Value

(Melamine), 62 FR 1726, at 1773 (January 13, 1997), in which the

Department stated that ``[c]olor is not a matching criteria in this

investigation; thus, it is inappropriate to treat these products, if

otherwise identical, as identical for purposes of model matching.''

According to respondents, color should not be excluded as a

matching criteria. Since color was used in the original investigation

and subsequent reviews, the Department must apply the same matching

criteria in this period of review.

DOC Position: We agree with respondents that color is an

appropriate model matching-criterion in this case. The Department has

consistently used color as a product matching criteria in the

investigation and reviews of the AD order. As we stated in our response

to Comment 3 in the Final Determination of Sales at Less Than Fair

Value: Extruded Rubber Thread from Malaysia, 57 FR 38465, 38468 (August

25, 1992) ``because color can materially affect cost and be important

to the customer and the use of the product, the Department determined

at an early stage of this investigation that color should be included

among the several product matching criteria.'' See, Final Determination

of Sales at Less Than Fair Value: Extruded Rubber Thread from Malaysia,

57 FR 38465 (August 25, 1992). At this time, petitioner supported this

decision and has since not offered any substantive reasons for changing

the matching criteria. Moreover, color is a characteristic fully in

accordance with the matching criteria as outlined in the January 26,

1994 memorandum to the file, entitled Changing the Department's

Questionnaire Order of the Product Concordance. Petitioner did not

comment on this memo which ranked color as third in the level of

importance for the product matching criteria. With respect to Melamine,

this determination covers a product with different physical

characteristics, different uses and different expectations by the

ultimate purchasers and, therefore, is irrelevant to this instant case.

Comment 36: The Erroneous Deduction of CEP Profit from U.S. Sales.

Heveafil argues that the Department incorrectly deducted CEP profit

from certain CEP sales, despite the fact that CEP profit calculated by

Commerce was negative. Heveafil suggests that we refer to observations

one and two in the hard-copy of the results of the Department's

preliminary margin program. Heveafil suggests that the Department

revised the calculation of net CEP sales prices in the final results of

review to ensure that CEP profit is not subtracted where none exists.

DOC Position: We have examined the hard copy of the results of

review for the 1994-1995 margin calculation program. None of the sales

include CEP profit of less than zero. Therefore, we have made no change

to our calculations.

Comment 37: Heveafil's Reported Cost Figures.

Petitioner notes that Heveafil reported more than one cost figure

for a number of products without providing any explanation for the

provision of more than one weighted-average cost. In addition,

petitioner also notes that in its preliminary results of review, the

Department erred in using the average of these cost figures to

calculate the cost of production for Heveafil. Petitioner argues that

by using this average cost, rather than the highest available cost,

Heveafil benefits from the unexplained ambiguity in the response.

DOC Position: We agree. Heveafil reported more than one per-unit

cost of production for certain products. However, in this case, there

is no evidence on the record to suggest that the highest reported cost

is appropriate. Consequently, we determined the simple average value of

each of the underlying components of the COP: material, labor, variable

overhead, fixed overhead, indirect selling expenses, general and

administrative expenses, net interest expense and home market packing.

We then added the revised values for these expenses to obtain the

average COP of each of the reported models as we did in the preliminary

results of review.

Comment 38: Rebates in Calculation of a Home Market Price for

comparison to COP.

Petitioner asserts that the Department failed to deduct Heveafil's

rebates for home market prices prior to conducting the sales below cost

test.

DOC Position: As indicated on line 2821 of the home market sales

program issued in the preliminary results of review, we have taken

rebates and discounts into account in our determination of the

appropriate home market price to be compared with the cost of

production in our cost test. Therefore, we have made no change to our

calculation.

Comment 39: Marine Insurance.

Petitioner asserts that Rubfil did not explain how it calculated

its reported cost of marine insurance. Accordingly, it cannot be

determined if marine insurance was correctly calculated. Petitioner

therefore contends that the Department should use, as the facts

available, the highest unit U.S. marine insurance cost to all U.S.

sales by Rubfil.

Rubfil responds that in its April 22, 1996 response, it explained

that marine insurance was paid according to the terms of a global

insurance policy that covers all risks associated with the shipment of

merchandise from Rubfil's factory to its customers throughout the

world. Rubfil provided a copy of the insurance agreement in exhibit C-

1, which did not explicitly spell out the per-shipment terms of the

policy. Rubfil

[[Page 33601]]

notes that the Department did not request further information in its

supplemental questionnaire. It argues that this policy has been in

effect since 1990 and was spelled out in the narrative of the

questionnaire response and was in effect during the 1994-1995 review.

Therefore, Rubfil argues that the Department should not change its

calculations.

DOC Position: In the December 19, 1996, Preliminary Results

Analysis Memorandum for Rubfil, the Department noted that Rubfil did

not fully explain its calculations for marine insurance. However, we

used the information provided in the questionnaire response to

calculate our margins. We did not request Rubfil to submit further

information, and there is no basis for making adverse inferences as

suggested by petitioner. Therefore, we have not changed our

calculations in this regard.

Final Results of Review

As a result of comments received we have revised our preliminary

results and determine that the following margins exist for the period

October 1, 1994, through September 30, 1995:

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

Percent

Manufacturer/exporter margin

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

Heveafil Sdn. Bhd............................................ 7.88

Rubberflex Sdn. Bhd.......................................... 20.38

Rubfil Sdn. Bhd.............................................. 54.31

Filati Lastex Elastofibre (Malaysia)......................... 8.11

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

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between United States price and foreign market value may

vary from the percentages stated above. The Department will issue

appraisement instructions directly to the U.S. Customs Service.

Further, the following deposit requirements will be effective, upon

publication of this notice of final results of review for all shipments

of extruded rubber thread from Malaysia entered, or withdrawn from

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

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

rates for the reviewed companies will be the rates for those firms as

stated above (except that for Filati the cash deposit rate will be

reduced by 0.15 percent, the current cash deposit rate attributable to

export subsidies); (2) for previously investigated companies not listed

above, the cash deposit rate will continue to be the company-specific

rate published for the most recent period; (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 the rate established for

the most recent period for the manufacturer of the merchandise; and (4)

the cash deposit rate for all other manufacturers or exporters will

continue to be 15.16 percent, the all others rate established in the

LTFV investigations.

These deposit requirements, when imposed, shall remain in effect

until publication of the final results of the next administrative

review.

This notice serves as a final 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 notice also serves as the only reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with section 353.34(d) of the Department's

regulations. Timely notification of return/destruction of APO materials

or conversion to judicial protective order is hereby requested. Failure

to comply with the regulations and the terms of an APO is a

sanctionable violation.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)), section 771(i) of

the Act (19 U.S.C. 1677f(i)) and 19 CFR 353.22.

Dated: June 9, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-16046 Filed 6-19-97; 8:45 am]

BILLING CODE 3510-DS-M