Porcelain-on-Steel Cookware From Mexico: Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-504]

Porcelain-on-Steel Cookware From Mexico: Preliminary Results of

Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review.

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SUMMARY: In response to a request by respondents, Cinsa, S.A. de C.V.

(``Cinsa'') and Esmaltaciones de Norte America, S.A. de C.V.

(``ENASA''), the Department of Commerce (the Department) is conducting

an administrative review of the antidumping duty order on porcelain-on-

steel cookware from Mexico. This review covers the above manufacturers/

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

of review (POR) is December 1, 1994, through November 30, 1995. This is

the ninth period of review.

We preliminarily determine that sales have been made below normal

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

results of administrative review, we will instruct U.S. Customs to

assess antidumping duties on all appropriate entries.

Interested parties are invited to comment on these preliminary

results. Parties who submit arguments in this proceeding should also

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

summary of the argument.

EFFECTIVE DATE: January 31, 1997.

FOR FURTHER INFORMATION CONTACT: Dolores Peck or Kate Johnson, AD/CVD

Enforcement Group II, Import Administration--Room B099, International

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

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

4929.

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 Rounds Agreements Act (URAA). In addition, unless otherwise

indicated, all citations to the Department's regulations are to the

current regulations, as amended by the interim regulations published in

the Federal Register on May 11, 1995 (60 FR 25130).

Background

On October 10, 1986, the Department published in the Federal

Register (51 FR 36435) the final affirmative antidumping duty

determination on certain porcelain-on-steel cookware from Mexico. We

published an antidumping duty order on December 2, 1986 (51 FR 43415).

On December 4, 1995, the Department published the Opportunity to

Request an Administrative Review of this order for the period December

1, 1994, through November 30, 1995 (60 FR 62071). The Department

received a request for an administrative review of exports from Cinsa

and ENASA, affiliated producers/exporters of the subject merchandise,

and from General Housewares Corporation, the petitioner. We published a

notice of initiation of the review on February 1, 1996 (61 FR 3670).

Under section 751(a)(3)(A) of the Act, the Department may extend

the deadline for completion of an administrative review if it

determines that it is not practicable to complete the review within the

statutory time limit of 365 days. On August 6, 1996, the Department

extended the time limit for the preliminary results in this case. See

Extension of Time Limit for Antidumping Duty Administrative Review, 61

FR 40819 (August 6, 1996).

The Department is conducting this review in accordance with section

751(a) of the Act.

Scope of the Review

Imports covered by this review are shipments of porcelain-on-steel

cookware, including tea kettles, which do not have self-contained

electric heating elements. All of the foregoing are constructed of

steel and are enameled or glazed with vitreous glasses. This

merchandise is currently classifiable under Harmonized Tariff Schedule

of the United States (HTSUS) subheading 7323.94.00. Kitchenware

currently entering under HTSUS subheading 7323.94.00.30 is not subject

to the order. Although the HTSUS subheadings are provided for

convenience and Customs purposes, our written description of the scope

of this proceeding is dispositive.

Transactions Reviewed

In accordance with section 751(a)(2) of the Act, the Department is

required to determine the EP (or CEP) and NV of each entry of subject

merchandise.

In determining NV, based on a review of respondents' submissions,

the Department determined that ENASA should report all sales of heavy

gauge (HG) cookware in conjunction with a promotion agreement signed

during the POR because the Department determined that the sales in

question occurred during the POR. See Memorandum For Louis Apple From

The Team, dated December 16, 1996 (``Issues Memorandum'').

[[Page 4724]]

Affiliated Parties Issue

Petitioner claimed that the facts on the record of this

administrative review indicate that the relationship of respondents

Cinsa and ENASA to their parent, Grupo Industrial Saltillo, S.A. de

C.V. (``GIS'' or ``GISSA'), is such that there exists a strong

possibility of manipulating prices or affecting production decisions.

In addition, petitioner placed on the record of this review

correspondence from Cinsa in the previous review wherein Cinsa stated

that all GIS majority-owned related companies should be collapsed.

Furthermore, petitioner argued that in the previous review, in making

the preliminary decision not to collapse these two companies, the

Department had failed to consider other criteria which the Department

normally looks at in making such decisions.

In the preliminary results for the 8th review, the Department

decided not to collapse Cinsa and ENASA because during that review we

verified that ENASA's manufacturing facilities are separate from

Cinsa's. The verification report noted that the machinery that Cinsa

used to make light-gauge (LG) cookware could not be used to make the

heavy-gauge (HG) cookware produced by ENASA without fundamental and

expensive retooling.

The Department's proposed regulations would codify its current

practice for determining when to ``collapse'' producers of subject

merchandise:

In an antidumping proceeding under this part, the Secretary will

treat two or more affiliated producers as a single entity where

those producers have production facilities for similar or identical

products that would not require substantial retooling of either

facility in order to restructure manufacturing priorities and the

Secretary concludes that there is a significant potential for the

manipulation of price or production.

See Antidumping Duties; Countervailing Duties (Notice of Proposed

Rulemaking and Request for Public Comments). 61 FR 7308, 7330 and 7381

(February 27, 1996), at section 351.401.

As is evident from the above regulation, the Department will

collapse two producers if each of three requirements are met: (1) the

producers must be ``affiliated''; (2) they must have manufacturing

facilities sufficiently similar that no substantial retooling would be

needed to restructure manufacturing priorities with respect to the

subject merchandise, and (3) the Department concludes, based on the

listed factors, that there is a significant potential for manipulation

of pricing or production decisions.

Under the new statute (which applies to this 9th review), the

definition of ``affiliated parties'' includes ``[t]wo or more persons

directly or indirectly controlling, controlled by, or under common

control with, any person.'' 19 U.S.C. 1677(33)(F)(1996). The facts on

the record of this review indicate that Cinsa and ENASA are controlled

by the same parent, and are thus affiliated.

Although we consider both HG and LG cookware to be subject

merchandise, they are not similar products and therefore cannot be

reasonably compared for the purposes of determining dumping margins. HG

and LG cookware differ significantly in the area of material

composition and fabrication. HG cookware is made with a heavier gauge

of steel and has a heavier coating of enamel with a different chemical

composition than the enamel types used for LG cookware. Also, HG and LG

are usually not approximately equal in commercial value.

Moreover, we verified in the 8th review that extensive and

expensive retooling would be necessary for Cinsa to produce HG products

or for ENASA to produce LG products. According to Cinsa, although both

Cinsa and ENASA use stamping equipment to stamp metal forms out of

sheet metal, the stamping machines are not interchangeable. Also, more

powerful equipment is needed for the production of HG cookware,

equipment which is not suitable for LG steel. In addition, LG and HG

cookware require totally different die types for use in the stamping

equipment. Moreover, HG cookware production requires three different

furnaces: one for the enamel coatings, one for decorative coatings, and

one for the application of the nonstick surface. However, in LG

cookware production a single furnace is used for enamel and decorative

coatings and there is no application of nonstick coatings. Finally, the

different chemical composition of the enamel coatings used in HG and LG

cookware requires different cleaning treatments prior to the

application of the enamel. (See April 22, 1996, response at 28.)

Verification did not contradict any of these statements.

We have determined that the differences between the production

facilities for LG and HG cookware dictate that the second criterion for

collapsing affiliated parties is not met. Therefore, Cinsa and ENASA

will receive separate dumping margins.

Petitioner further argued that Cinsa and ENASA should be collapsed

because they both have the capability to produce medium gauge cookware.

This issue of medium gauge of cookware was not raised in prior reviews.

Respondents asserted that this issue was irrelevant since neither

respondent sold medium gauge cookware in the United States. We

requested supplemental information from respondents regarding the

possibility that both respondents manufacture an overlapping product.

Respondents claimed that prior to 1994 Cinsa produced a few medium and

heavy gauge products. However Cinsa ceased its production of older

models of medium and heavy gauge after the establishment of ENASA in

late 1993 and Cinsa's tooling was sold off as scrap. Evidence on the

record does not suggest that Cinsa and ENASA both produced medium gauge

cookware during the POR.

Petitioner argues that any collapsing decision must be based on the

totality of the circumstances, such that the absence of overlapping

production facilities must be weighed against the concerns associated

with a substantial degree of common control. However, under the

Department's current practice, the existence of production facilities

for similar or identical merchandise, while not necessarily

determinative, is essential. Thus, while we would not collapse based

solely upon that one criterion, we will not collapse if that criterion

is not met. See Certain Corrosion-Resistant Carbon Steel Flat Products

and Certain Cut-to-Length Carbon Steel Plate From Canada, 60 FR 42511,

42512 (August 16, 1995) (Preliminary); 61 FR 13815 (March 28, 1996)

(Final). In Certain Cold Rolled Carbon Steel Flat Products From Korea,

60 FR 65284, 65285 (December 19, 1995) (Preliminary); 61 FR 18547

(April 26, 1996) (Final).

Because we have preliminarily determined that the production

facilities of Cinsa and ENASA would require substantial retooling in

order to produce similar or identical products, we are not treating

these firms as a single entity for the purpose of assigning an

antidumping margin.

Product Comparisons

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

products produced by the respondents, covered by the description in the

``Scope of the Review'' section, above, and sold in the home market

during the POR, to be foreign like products for purposes of determining

appropriate product comparisons to U.S. sales. Where there were no

sales of identical merchandise in the home market to compare to U.S.

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

product on the basis of the characteristics listed in the description

of the merchandise and product description sections of

[[Page 4725]]

respondents' March 11, 1996, and April 22, 1996, questionnaire

responses. In making the product comparisons, we matched foreign like

products based on the physical characteristics reported by the

respondents.

We have rejected respondent Cinsa's argument that HG and LG

cookware constitute distinct ``classes or kinds'' of merchandise and,

therefore, we should calculate separate margins for HG and LG cookware.

The scope of an order constitutes a single class or kind of

merchandise, i.e. the ``subject merchandise.''

The order under review covers both HG and LG cookware. Cinsa has

conceded that point by requesting rates for both HG and LG cookware.

Thus, in effect, Cinsa argues not that there are separate classes or

kinds of merchandise, but rather that HG and LG are sufficiently

different to warrant separate rates. While the Department has

calculated separate margins for different classes of products in

exceptional circumstances, the record of this proceeding does not

establish circumstances sufficient to warrant product-specific rates.

Date of Sale

For Cinsa sales to the United States, we used the invoice date as

the date of sale since this represents the first occasion where the

price and quantity are fixed.

ENASA stated that its date of sale for sales to the United States

should be the date of the ultimate reconciliation between ENASA's

affiliated distributor, Yamaka China, Inc. (``Yamaka'') and the

unaffiliated customer, while petitioner favored the date of the

contract between Yamaka and its unaffiliated customer.

We reviewed the terms of the contract between Yamaka and an

unaffiliated customer. Because the contract constitutes a binding

agreement in the nature of a requirements contract, whereby Yamaka and

the unaffiliated customer agreed upon the price and quantity (whatever

was sold in connection with the promotion, with a guarantee of

repurchase for items not sold at retail), the date of this contract is

the appropriate date of sale for all cookware sold to the United States

in connection with the promotion. See Issues Memorandum.

For Cinsa and ENASA sales in the home market, we used invoice date

as the date of sale.

Fair Value Comparisons

To determine whether sales of porcelain-on-steel cookware by Cinsa

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

compared EP (or CEP) to the NV, as described in the ``Export Price (or

Constructed Export Price)'' and ``Normal Value'' sections of this

notice.

Mexico experienced significant inflation during the POR, as

measured by the consumer price index published in International

Financial Statistics and the consumer price index from the Bank of

Mexico. Accordingly, to avoid the distortions caused by the effects of

this level of inflation on prices, we limited our comparisons to sales

in the same month and did not apply the Department's 90/60 rule,

whereby the Department uses NV from three months prior to and two

months after the month in which the U.S. sale was made. See Certain

Welded Carbon Steel Pipes and Tubes from Thailand: Final Results of

Antidumping Duty Administrative Review, 56 FR 58356, 58359 (November

19, 1991).

Export Price and Constructed Export Price

For certain sales made by Cinsa, and all sales made by ENASA, we

calculated EP in accordance with section 772(a) of the Act, because the

subject merchandise was sold directly to the first unaffiliated

purchaser in the United States prior to importation and because CEP was

not otherwise indicated. We based EP on packed prices to unaffiliated

purchasers in the United States. We made deductions from the gross unit

price, where appropriate, for U.S. and foreign inland freight, U.S. and

Mexican brokerage and handling expenses, U.S. duty and rebates.

For certain sales made by Cinsa during the POR, we used CEP in

accordance with section 772(b) of the Act, because the subject

merchandise was sold for the account of the Cinsa by its affiliated

sales companies after having been imported into the United States. We

based CEP on packed prices to unaffiliated purchasers in the United

States. We made deductions from the gross unit price, where

appropriate, for U.S. and foreign inland freight, U.S. and Mexican

brokerage and handling expenses, U.S. duty and rebates.

We made further deductions, where appropriate, for credit,

commissions, and indirect selling expenses that were associated with

economic activities occurring in the United States. Finally, we made an

adjustment for CEP profit in accordance with section 772(d)(3) of the

Act.

Normal Value

Based on a comparison of the aggregate quantity of home market and

U.S. sales, we determined that the quantity of the foreign like product

sold in the exporting country was sufficient to permit a proper

comparison with the sales of the subject merchandise to the United

States, pursuant to section 773(a) of the Act. Therefore, in accordance

with section 773(a)(1)(B)(i) of the Act, we based NV on (1) either the

VAT-exclusive price at which the foreign like product was first sold

for consumption in the home market or (2) CV, as noted in the ``Price

to Price Comparisons'' and ``Price to CV Comparisons'' sections of this

notice.

Level of Trade

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

Statement of Administrative Action (SAA) accompanying the URAA, H.R.

Doc. No. 316, 103d Cong., 2d Sess at 870. (1994) (SAA), at 829-831, to

the extent practicable, the Department will calculate NV based on sales

at the same level of trade as the U.S. sale. When the Department is

unable to find sale(s) in the comparison market at the same level of

trade as the U.S. sale(s), the Department may compare sales in the U.S.

to foreign market sales at a different level of trade. See Final

Determination of Sales at Less than Fair Value; Certain Pasta from

Italy, 61 FR 30326 (June 14, 1996) (Pasta from Italy).

In accordance with section 773(a)(7)(A) of the Act, in comparing

U.S. sales to NV sales, the Department will adjust the NV to account

for any difference in level of trade if two conditions are met. First,

the sales must in fact be made at different levels of trade, which can

exist only if there are differences between the actual selling

functions performed by the seller at the level of trade of the U.S.

sale and the level of trade of the NV sale. Second, the difference must

affect price comparability as evidenced by a pattern of consistent

price differences between sales at the different levels of trade in the

market in which NV is determined.

Section 773(a)(7)(B) of the Act establishes that a CEP ``offset''

may be made when two conditions exist: (1) NV is established at a level

of trade which constitutes a more advanced stage of distribution than

the level of trade of the CEP and; (2) the data available do not

provide an appropriate basis for a level-of-trade adjustment.

In order to determine that there is a difference in level of trade,

the Department must find that two sales have been made at different

stages of marketing, or the equivalent. Different stages of marketing

necessarily involve differences in selling functions, but differences

in selling functions (even substantial ones) are not alone sufficient

to establish a difference in the level of

[[Page 4726]]

trade. Similarly, seller and customer descriptions (such as

``distributor'' and ``wholesaler'') are useful in identifying different

levels of trade, but are insufficient to establish that there is a

difference in the level of trade. See Certain Corrosion-Resistant

Carbon Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate

from Canada: Preliminary Results of Antidumping Duty Administrative

Review, 61 FR 51891, 51895-96 (October 4, 1996) (Steel from Canada).

Pursuant to section 773(a)(7)(B)(i) of the Act and the SAA at 827,

in identifying levels of trade for EP and home market sales, we

considered the selling functions reflected in the starting price of

these transactions before any adjustments. For CEP sales, we considered

only the selling activities reflected in the constructed price, i.e.,

after expenses and profit were deducted under section 772(d) of the

Act. Whenever sales were made by or through an affiliated company or

agent, we considered all selling activities by affiliated parties,

except for those selling activities associated with the expenses

deducted under section 772(d) of the Act in CEP situations.

In implementing this principle in this review, we examined

information regarding the selling activities of the producers/exporters

associated with each stage of marketing, or the equivalent. In

addition, we examined any claimed levels of trade (LOTs) reported by

each respondent in response to our initial and supplemental

questionnaires (see February 8, 1996, and September 10, 1996, letters

from the Department to respondents).

In reviewing the selling functions reported by the respondents, we

considered all types of selling activities, both claimed and unclaimed,

that had been performed. In analyzing whether separate LOTs existed in

this review, we found that no single selling activity was sufficient to

warrant a separate LOT (see Notice of Proposed Rulemaking and Request

for Public Comments, 61 FR 7307, 7348 (February 27, 1996)). For this

review, we determined that the following selling functions and

activities are relevant to the cookware industry: (1) Inventory

maintenance; (2) technical services; (3) warranty services; (4)

customer advice and product information; (5) delivery arrangements; (6)

sales from warehouse vs. direct sales; and (7) direct advertising. We

did not consider trade discounts as a selling function (see Pasta from

Italy).

When examining claimed LOTs, we analyzed the selling activities

associated with the classes of customers and marketing stages the

respondents reported. In applying this analysis, we expect that, if

claimed LOTs are the same, the functions and activities of the seller

should be similar. Conversely, if a party claims that LOTs are

different for different groups of sales, the functions and activities

of the seller should be dissimilar. The Department not only examines

the types of selling activities, but weighs the overall function

performed for each claimed level of trade. In determining whether

separate LOTs existed in the home market, pursuant to section

773(a)(1)(B)(i) of the Act, we considered the selling functions

reflected in the starting price of the home market sales before any

adjustment.

In their questionnaire responses, Cinsa and ENASA stated that there

were no differences in selling activities by customer categories within

each market. Respondents requested a level of trade adjustment based on

the fact that U.S. sales are made at a level of trade more remote from

the customer and in significantly larger quantities than sales in the

home market. However, as discussed below, we did not find any

differences in levels of trade and therefore no level of trade

adjustment or CEP offset is warranted.

We reviewed respondents' questionnaire responses in order to

confirm that the selling functions of Cinsa and ENASA did not differ

among customer categories in the U.S. and home market.

Cinsa and ENASA sold to multiple customers both in the United

States and home markets. In their April 22, 1996, questionnaire

responses both Cinsa and ENASA indicated that they do not differentiate

pricing, sales terms or delivery terms by type of customer. They also

stated in their request for a level of trade adjustment that sales

support activities for both markets were generally the same. Thus, our

analysis of the questionnaire responses leads us to conclude that sales

within each market and between markets are not made at different levels

of trade. Accordingly, we preliminarily find that all sales in the home

market and the U.S. market are made at the same level of trade.

Therefore, all sales comparisons are at the same level of trade and an

adjustment pursuant to section 773(a)(7)(A) is unwarranted.

Cost of Production Analysis

The Department disregarded certain sales made by Cinsa for the

period December 1, 1991, through November 30, 1992, (the most recently

completed review of Cinsa) pursuant to a finding in that review that

sales were made below cost. Thus, in accordance with section

773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or

suspect that respondent Cinsa made sales in the home market at prices

below the cost of producing the merchandise in the current review

period. As a result, the Department initiated an investigation to

determine whether the respondent made home market sales during the POR

at prices below their COP within the meaning of section 773(b) of the

Act.

A. Calculation of COP

We calculated the COP based on the sum of Cinsa's cost of materials

and fabrication costs for the foreign like product, plus amounts for

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

and packing costs in accordance with 19 C.F.R. 353.51(c).

As noted above in the Fair Value section, we determined that the

Mexican economy experienced high inflation during the POR. Therefore,

in order to avoid the distortive effect of inflation on our comparisons

of costs and prices, we requested that Cinsa submit current monthly

model-specific production costs incurred during each month of the POR.

For certain models sold during the POR, Cinsa approximated current

production costs because the company did not manufacture these models

during the POR. We calculated a model-specific total and variable cost

of manufacturing during the POR. Using the consumer price index for

Mexico maintained by the Bank of Mexico and provided by respondents in

their response, we indexed the total and variable POR model-specific

costs to an common point (November, 1995), the last month of the POR).

We then divided the sum of the total POR model-specific costs by the

total model-specific production quantity to obtain a model-specific POR

weighted-average cost corresponding to the November, 1995, common

point. The weighted average cost of manufacturing was then restated in

the currency value of each respective month and used to calculate a

monthly COP for each product.

We relied on COP information submitted by Cinsa, except in the

following instances where it was not appropriately quantified or valued

: (1) frit prices from an affiliated supplier did not approximate fair

market value prices; therefore, we increased direct materials by the

percentage required to adjust the reported cost of frit to reflect fair

market prices; (2) we included revalued depreciation in our calculation

of fixed overhead since this cost related to depreciation of the

production plant and equipment; (3) we added profit

[[Page 4727]]

sharing expenses to the variable cost of manufacture because they

relate to the compensation of direct labor; and (4) we revised Cinsa's

submitted interest costs to exclude the calculation of negative

interest expense.

B. Test of Home Market Prices

We compared the monthly weight-averaged per unit COP figures,

indexed to account for the effects of inflation as noted above, to home

market sales of the foreign like product as required under section

773(b) of the Act, in order to determine whether these sales were made

at prices below the COP. In determining whether to disregard home

market sales made at prices below the COP, we examined whether (1)

within an extended period of time, such sales were made in substantial

quantities, and (2) such sales were made at prices which permitted the

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

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

applicable movement charges, rebates, discounts, and direct and

indirect selling expenses.

C. Results of COP Test

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

respondent's sales of a given product were at prices less than the COP,

we did not disregard any below-cost sales of that product because we

determined that the below-cost sales were not made in ``substantial

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

given product during the POR were at prices less than the COP, we

disregarded the below-cost sales where such sales were found to be made

at prices which would not permit the recovery of all costs within a

reasonable period of time (in accordance with section 773(b)(2)(D) of

the Act). Where all sales of a specific product were at prices below

the COP, we disregarded all sales of that product, and calculated NV

based on CV, in accordance with section 773(b)(1)of the Act .

D. Calculation of CV

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

based on the sum of respondents' cost of materials, fabrication, SG&A,

and U.S. packing costs as reported in the U.S. sales listing. We

calculated CV based on the methodology described in the calculation of

COP above.

In accordance with section 773(e)(2)(A), we based SG&A and profit

on the actual amounts incurred and realized by Cinsa and ENASA in

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

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

For selling expenses, we used the weighted average home market selling

expense. Where we compared EP to CV, we deducted from CV the weighted-

average home market direct selling expenses and added the weighted-

average U.S. product-specific direct selling expenses, in accordance

with section 353.56(a)(2) of the Department's regulations.

E. Price to Price Comparisons

For those comparison products for which there were sales at prices

above the COP, we based Cinsa's NV on home market prices. We based

ENASA's NV on home market prices. For both respondents, we calculated

NV based on the VAT-exclusive gross unit price and deducted, where

appropriate, inland freight, rebates, and early payment discounts.

For comparisons to Cinsa and ENASA's EP sales, we made a

circumstance-of-sale adjustment, where appropriate, for differences in

credit expenses. For comparisons to Cinsa's CEP sales, we also deducted

credit expenses and commissions from NV. We did not make an adjustment

for packing expenses because both respondents reported that such costs

were identical on a per-unit basis in the two markets. We also made

adjustments to NV, where appropriate, for differences in costs

attributable to differences in physical characteristics of the

merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act.

In order to make appropriate comparisons of differences in costs

between models sold over the POR, and to account for the effects of

inflation, all costs were expressed in currency values corresponding to

November, 1995, the last month of the POR. Using these November based

costs, we then calculated a per-unit model-specific weighted-average

variable and total cost of manufacturing. These weighted-average costs

were then indexed to the currency value of the month of the comparison

U.S. sale. The adjusted monthly variable costs of manufacturing for

U.S. and home market products were then compared to arrive at the

difference in merchandise adjustment. Where the difference in

merchandise adjustment for any product exceeded 20 percent of the

indexed COM of the U.S. product, we based NV on CV.

F. Price to CV

Where we compared EP or CEP to CV, we deducted from CV the

weighted-average home market direct selling expenses and added the

United States direct selling expenses.

Currency Conversion

For purposes of the preliminary results, we made currency

conversions based on the official exchange rates in effect on the dates

of the U.S. sales as certified by the Federal Reserve Bank of New York.

Section 773 A(a) of the Act directs the Department to use a daily

exchange rate in order to convert foreign currencies into U.S. dollars,

unless the daily rate involves a ``fluctuation.'' In accordance with

the Department's practice, we have determined as a general matter that

a fluctuation exists when the daily exchange rate differs from a

benchmark by 2.25 percent. The benchmark is defined as the rolling

average of rates for the past 40 business days. When we determine a

fluctuation existed, we substitute the benchmark for the daily rate.

However, for the preliminary results in this review, we have not

determined that a fluctuation exists, and we have not substituted the

benchmark for the daily rate.

Preliminary Results of the Review

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

following weighted-average dumping margins exist:

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

Manufacturer/exporter Period Margin

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

Cinsa.............................. 12/1/94-11/30/95 12.39

ENASA.............................. 12/1/94-11/30/95 12.64

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

Parties to the proceeding may request disclosure within five days

of the date of publication of this notice. Any interested party may

request a hearing within 10 days of publication. Any hearing, if

requested, will be held 44 days after the date of publication or the

first business day thereafter.

Issues raised in hearings will be limited to those raised in the

respective case briefs and rebuttal briefs. Case briefs from interested

parties and rebuttal briefs, limited to the issues raised in the

respective case briefs, may be submitted not later than 30 days and

[[Page 4728]]

37 days, respectively, from the date of publication of these

preliminary results. Parties who submit case briefs or rebuttal briefs

in this proceeding are requested to submit with each argument (1) a

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

The Department will subsequently publish the final results of this

administrative review, including the results of its analysis of issues

raised in any such written briefs or at the hearing, if held, not later

than 120 days after the date of publication of this notice.

The Department shall determine and the Customs Service shall

assess, antidumping duties on all appropriate entries. The Department

will issue appropriate appraisement instructions directly to the

Customs Service upon completion of this review.

Furthermore, the following deposit requirements will be effective

upon publication of the final results of this antidumping duty review

for all shipments of porcelain-on-steel cookware from Mexico, entered,

or withdrawn from warehouse, for consumption on or after the

publication date, as provided by section 751(a) of the Tariff Act: (1)

The cash deposit rates for the reviewed companies will be those

established in the final results of review; (2) for exporters not

covered in this review, but covered in the LTFV investigation or prior

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

rate from the LTFV investigation or the prior review; (3) if the

exporter is not a firm covered in this review, a prior review, or the

original LTFV investigation, but the manufacturer is, the cash deposit

rate will be the rate established for the most recent period for the

manufacturer of the merchandise; (4) the cash deposit rate for all

other manufacturers or exporters will continue to be 29.52 percent, the

``All Others'' rate made effective by the LTFV investigation. These

requirements, when imposed, shall remain in effect until publication of

the final results of the next administrative review.

This notice serves as a preliminary reminder to importers of their

responsibility under 19 C.F.R. 353.26 to file a certificate regarding

the reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are published in accordance

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

Dated: January 21, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-2350 Filed 1-30-97; 8:45 am]

BILLING CODE 3510-DS-P