Calcium Aluminate Flux From France; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-427-812]

Calcium Aluminate Flux From France; 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.

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

SUMMARY: In response to a request from one respondent, Lafarge

Aluminates (LA), and its U.S. subsidiary, Lafarge Calcium Aluminates,

Inc. (LCA) (collectively, Lafarge), the Department of Commerce (the

Department) is conducting an administrative review of the antidumping

duty order on calcium aluminate (CA) flux from France. This review

covers one manufacturer/exporter of the subject merchandise to the

United States, Lafarge, for the period June 1, 1995 through May 31,

1996.

We have preliminarily determined that U.S. sales have been made

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

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

Customs Service (Customs) to assess antidumping duties equal to the

differences between the United States Price (USP) and NV.

Interested parties are invited to comment on these preliminary

results. Parties who submit arguments in this proceeding are requested

to submit with the argument (1) a statement of the issues, and (2) a

brief summary of the argument.

EFFECTIVE DATE: March 11, 1997.

FOR FURTHER INFORMATION CONTACT: Maureen McPhillips or Linda Ludwig,

AD/CVD Enforcement Group III, Import Administration, International

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

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

3019.

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).

SUPPLEMENTARY INFORMATION:

Background

On June 13, 1994, the Department published in the Federal Register

(59 FR 30337) the antidumping duty order on CA flux from France. On

June 6, 1996 (61 FR 28840), the Department published in the Federal

Register a notice of opportunity to request an administrative review of

the antidumping duty order on CA flux from France. In accordance with

19 CFR 353.22(a)(1)(1995), we received a timely request for review from

a respondent, Lafarge. We published a notice of initiation of this

antidumping duty administrative review on August 8, 1996 (61 FR 41373),

for the period June 1, 1995 through May 31, 1996.

The Department is now conducting this administrative review in

accordance with section 751 of the Act.

Scope of the Review

Imports covered by this review are shipments of CA flux, other than

white, high purity CA flux. This product contains by weight more than

32 percent but less than 65 percent alumina and more than one percent

each of iron and silica.

CA flux is currently classifiable under the Harmonized Tariff

Schedule of the United States (HTSUS) subheading 2523.10.0000. The

HTSUS subheading is provided for convenience and U.S. Customs' purposes

only. The written description of the scope of this order remains

dispositive.

Constructed Export Price

In calculating Lafarge's USP, the Department treated respondent's

sales as constructed export price (CEP) sales, as defined in section

772(b) of the Act, because the subject merchandise was sold to the

first unaffiliated purchaser after importation into the United States.

We calculated CEP based on packed or bulk, ex-U.S. warehouse or

delivered prices to unaffiliated customers in the United States. We

made deductions from the gross unit price, where appropriate, for the

following movement charges: loading material at the Fos plant in

France, foreign inland freight from plant to port, foreign brokerage

and handling costs, international freight, marine insurance, U.S.

brokerage and handling, inland freight from port to U.S. warehouse,

unloading charges, inland freight to processors, demurrage and stop-off

charges, and U.S. freight from the warehouse to the customer, in

accordance with section 772(c)(2)(A) of the Act. Pursuant to section

772(d)(1)(B), we also deducted credit expenses, product liability

insurance, and travel expenses for technical services. Pursuant to

section 772(d)(1)(D), we deducted U.S. indirect selling expenses, and

inventory carrying costs incurred in the United States. We did not

deduct indirect selling expenses (i.e., administrative expenses,

inventory carrying costs, personnel costs for technicians) incurred by

LA in France because these expenses were for commercial activity taking

place outside the United States. We also deducted commissions in

accordance with section 772(d)(1)(A) of the Act.

We also deducted an amount for profit in accordance with section

772 (d)(3) of the Act.

[[Page 11151]]

Level of Trade and CEP Offset

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

Statement of Administrative Action (SAA) accompanying the Uruguay Round

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

practicable, calculate NV based on sales at the same level of trade as

the U.S. sales. When the Department is unable to find sales of the

foreign like product in the comparison market at the same level of

trade as the U.S. sale, the Department may compare the U.S. sale to

sales at a different level of trade in the comparison market.

In accordance with section 773(a)(7)(A) of the Act, if sales at

different levels of trade are compared, the Department will adjust the

NV to account for the difference in levels of trade if two conditions

are met. First, there must be differences between the actual selling

activities performed by the exporter at the level of trade of the U.S.

sale and at the level of trade of the comparison market sale used to

determine NV. Second, the differences must affect price comparability

as evidenced by a pattern of consistent price differences between sales

at the different levels of trade in the market in which NV is

determined.

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

may be made when two conditions exist: First, 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 second, the data available do

not provide an appropriate basis for a level-of-trade adjustment.

To implement these principles in this case, we requested

information on the selling activities of Lafarge in each of its

markets. We asked Lafarge to establish any claimed levels of trade

based on the selling activities provided to each proposed customer

group, and to document and explain any claims for a level-of-trade

adjustment. In its October 11, 1996 submission, and subsequent

supplemental response of February 5, 1996, Lafarge explained that LA,

acting as the national distributor in France for Lafarge's CA flux

products, sold to distributors and end users in the home market.

Lafarge's U.S. CEP sales were made through its subsidiary, LCA, which

performed the same basic role in the United States that LA performed in

the home market, selling to distributors and end users. For both

channels of distribution the selling activities in both the home market

and the United States were similar.

To determine whether separate levels of trade existed in the United

States and the home market, we reviewed the selling activities

associated with each channel of distribution claimed by Lafarge. Since

all of Lafarge's U.S. sales were CEP sales, we considered only the

selling activities reflected in the price after the deduction of

expenses and profit under section 772(d) of the Act.

In the home market Lafarge reported two customer groups: end-users

and distributors. We reviewed the sales activities between these two

types of customers in the home market. There were no significant

distinctions in the selling activities performed for end-users and

distributors in the home market. The distribution systems, inventory

maintenance, sales order processing, and sales agreements were very

similar across customer groups in each market. Because channels of

distribution do not qualify as separate levels of trade when the

selling activities performed for each customer class are sufficiently

similar, we concluded that Lafarge's home market sales to end-users and

resellers were made at the same level of trade since the aggregate

selling activities performed for both channels of distribution were

essentially identical.

We then examined the level of trade of the CEP sales in the U.S.

market (i.e., the level of trade for sales from LA to LCA). Based on

Lafarge's responses to the Department's questionnaires, we concluded

that the selling activities of the level of trade of the home market

sales were sufficiently different from the level of trade of Lafarge's

CEP sales to establish a different level of trade between the two

markets. For example, the level of trade of the CEP sales did not

involve extensive technical assistance, credit insurance, inventory

maintenance, and sales administration costs. Since the same level of

trade as that of the CEP did not exist in the home market, we could not

determine whether there was a pattern of consistent price differences

between the levels of trade, in accordance with section 773(a)(7)(A) of

the Act, based on Lafarge's home market sales of merchandise under

review. Further, we do not have the information which would allow us to

examine pricing patterns of Lafarge's sales of other products, and

there is no other respondent's or other producer's information on the

record to analyze whether the adjustment is appropriate. See SAA at

830.

Because the data available do not provide an appropriate basis for

making a level-of-trade adjustment, but the level of trade in the home

market is at a more advanced stage than the level of trade of the CEP

sales, a CEP offset is appropriate in accordance with section

773(a)(7)(B) of the Act. To calculate the CEP offset, we deducted from

NV the general and administrative expenses, inventory carrying costs,

and salaries and overhead expenses associated with technical service

reported by Lafarge as home market indirect selling expenses. We

limited the home market indirect selling expense deduction by the

amount of the indirect selling expenses incurred in the United States

as determined under section 772(d)(1)(D) of the Act.

Further Manufacture

In calculating CEP, where appropriate, we deducted all value added

in the United States, including the proportional amount of profit

attributable to the value added, pursuant to section 772(d)(2) and

772(d)(3) of the Act. The value added consists of the costs associated

with the production of the further manufactured products, other than

costs associated with the imported products. To determine the costs

incurred to produce the further manufactured products, we included (1)

the costs of manufacture, (2) movement and repacking expenses, (3)

selling, general and administrative expenses, and interest expenses.

Profit was calculated by deducting all applicable costs, charges,

adjustments, and expenses from the sales price. The total profit was

then allocated proportionally to all components of cost. We deducted

only the profit attributable to the value added in the United States.

No other adjustments to CEP were claimed or allowed.

Normal Value (NV)

A. Viability

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

U.S. sales, and absent any information that a particular market

situation in the exporting country does not permit a proper comparison,

we determined that the quantity of the foreign like product sold in the

exporting country by Lafarge was sufficient to permit a proper

comparison with Lafarge's sales of the subject merchandise to the

United States, pursuant to section 773(a)(1)(B)(i) of the Act.

Therefore, in accordance with section 773(a)(1)(B)(i), we based NV on

the prices at which the foreign like products were sold to the first

unaffiliated purchaser for consumption in the exporting country.

B. Model Match

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

products produced by the respondent, covered by

[[Page 11152]]

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.

Since there were no sales of identical merchandise in the home market

to compare to U.S. sales, we matched U.S. sales to the most similar

foreign like product based on the physical characteristics reported by

the respondent, Lafarge. Among similar products sold in the home market

we chose that product with the least difference in size (i.e., the type

of crushing and screening performed) and packaging between the home

market and the U.S. product. In any case, we did not use any home

market product which, when compared to the U.S. model, resulted in a

difference-in-merchandise adjustment in excess of 20 percent of the

total cost of manufacture of the U.S. model.

C. Price to Price Comparisons

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

individual transactions to the monthly weighted-average price of sales

of the foreign like product.

We based NV on the price at which the foreign like product is sold

for consumption in the exporting country to the first unaffiliated

party, in the usual commercial quantities and in the ordinary course of

trade in accordance with sections 773(a)(1)(B)(i) and 773(a)(5) of the

Act. Where appropriate, we deducted loading expenses, inland freight,

credit, credit insurance, travel expenses incurred by technicians,

product liability insurance, and packing. We deducted indirect selling

expenses incurred in the home market up to the amount of the U.S.

indirect selling expenses. We also made adjustments for home market

indirect selling expenses to offset U.S. commissions. Prices were

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

for VAT was necessary. No other adjustments were claimed or allowed.

Preliminary Results of Review

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

following weighted-average dumping margin exists:

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

Margin

Manufacturer/exporter Period of review (percent)

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

Lafarge Aluminates...................... 06/01/95-05/31/96 7.30

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

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 workday thereafter. Interested parties may submit case briefs

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

briefs and rebuttals to written comments, limited to issues raised in

the case briefs and comments, may be filed not later than 37 days after

the date of publication. Parties who submit arguments in this

proceeding are requested to submit with the argument (1) a statement of

the issue and (2) a brief summary of the argument. The Department will

issue the final results of this administrative review, including the

results of its analysis of issues raised in any such written comments.

The Department shall determine, and Customs shall assess,

antidumping duties on all appropriate entries. Individual differences

between CEP and NV may vary from the percentage stated above. The

Department will issue appraisement instructions directly to Customs.

The final results of this review shall be the basis for the assessment

of antidumping duties on entries of merchandise covered by the

determination and for future deposits of estimated duties.

Furthermore, the following deposit requirements will be effective

upon the publication of the final results of this administrative review

for all shipments of CA flux from France entered, or withdrawn from

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

final results of this administrative review, as provided by section

751(a)(2)(C) of the Act: (1) The cash deposit rate for Lafarge will be

the rate established in the final results of this administrative

review; (2) for merchandise exported by manufacturers or exporters not

covered in these reviews but covered in the original less-than-fair-

value (LTFV) investigation or a previous review, the cash deposit will

continue to be the most recent rate published in the final

determination or final results for which the manufacturer or exporter

received a company-specific rate; (3) if the exporter is not a firm

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

manufacturer is, the cash deposit rate will be the rate established for

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

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

deposit rate will be 37.93 percent, the rate established in the LTFV

investigation (59 FR 5994, February 9, 1994).

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26 to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

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

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

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: March 3, 1997.

Robert. S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-6039 Filed 3-10-97; 8:45 am]

BILLING CODE 3510-DS-P