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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-504]

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

Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative

Review.

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SUMMARY: On January 9, 1998, the Department of Commerce published the

preliminary results of the administrative review of the antidumping

duty order on certain porcelain-on-steel cookware from Mexico (63 FR

1430). The review, the tenth review of the underlying order, covers

Cinsa, S.A. de C.V. and Esmaltaciones de Norte America, S.A. de C.V.,

manufacturers/exporters of the subject merchandise to the United States

and the period December 1, 1995, through November 30, 1996. We gave

interested parties an opportunity to comment on the preliminary

results. Based on our analysis of the comments received and the

correction of certain clerical and computer program errors, we have

changed the preliminary results. The final results are listed below in

the section ``Final Results of Review.''

EFFECTIVE DATE: July 16, 1998.

FOR FURTHER INFORMATION CONTACT:

Kate Johnson or David J. Goldberger, Office 5, AD/CVD Enforcement Group

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

Department of Commerce, 14th Street and Constitution Avenue, N.W.,

Washington, D.C. 20230, telephone:

[[Page 38374]]

(202) 482-4929 or (202) 482-4136, respectively.

SUPPLEMENTARY INFORMATION:

Background

On January 9, 1998, the Department of Commerce (the Department)

published in the Federal Register the preliminary results of the 1995-

96 administrative review of the antidumping duty order on certain

porcelain-on-steel (POS) cookware from Mexico (63 FR 1430) (preliminary

results). During February 3-4, 1998, the Department verified the

respondents' submissions concerning the allegation of duty

reimbursement. On February 25, 1998, and March 4, 1998, General

Housewares Corp. (GHC) (the petitioner) and, Cinsa, S.A. de C.V.

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

submitted case and rebuttal briefs. The Department held a hearing on

March 11, 1998. On April 9, 1998, Columbian Home Products, LLC (CHP)

informed the Department that it is the legal successor-in-interest to

GHC pursuant to the March 31, 1998, sale of all of GHC's porcelain-on-

steel cookware production assets, product lines, inventory, real

estate, and brand names to CHP. The Department has now completed its

administrative review in accordance with section 751 of the Tariff Act

of 1930, as amended (the Act).

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 Act by the Uruguay Round Agreements

Act (URAA). In addition, unless otherwise indicated, all citations to

the Department's regulations are to the provisions codified at 19 CFR

Part 353 (April 1997). Where we cite the Department's new regulations

(19 CFR Part 351, 62 FR 27926 (May 19, 1997) (New Regulations)) as an

indication of current Department practice, we have so stated.

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 classifiable 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.

Changes Since the Preliminary Results

We have made the following changes in these final results for both

Cinsa and ENASA:

1. We deducted commissions from constructed export price (CEP)

sales. The adjustment for commission expenses was inadvertently omitted

from the preliminary margin calculations.

2. We converted Mexican peso-denominated brokerage and inland

freight expenses to U.S. dollars.

3. We corrected the U.S. price calculation for export price (EP)

sales by not deducting CEP profit and selling expenses, which were

inadvertently deducted in the preliminary results.

4. We increased direct materials costs to reflect adjustments to

reported frit costs based on verification findings. See Comment 2,

below.

5. We used the Federal Reserve Bank's actual daily exchange rates

for currency conversion purposes because Mexico experienced significant

inflation during the period of review.

6. We recalculated CIC's indirect selling expenses. See Comments 4

and 9, below.

7. We tested home market sales for below-cost prices before

determining the most appropriate match for each U.S. model sold (we

continued to match on a monthly basis). See Comment 6, below.

8. We corrected a clerical error in calculating U.S. inland freight

expenses. See Comment 8, below.

9. We corrected a computer programming error associated with the

cost test because some data were incorrectly replaced from the computer

sales file when the summary cost file was merged back into the home

market database.

10. We applied the cost test on a period-wide as opposed to a

monthly basis.

Interested Party Comments

Comment 1: Alleged Reimbursement of U.S. Affiliate CIC for Antidumping

Duties

The petitioner argues that the record of this review clearly

demonstrates that Cinsa and ENASA are reimbursing Cinsa's and ENASA's

U.S. affiliate, Cinsa International Corporation (CIC), for antidumping

duties. The petitioner states that Cinsa and ENASA admit on the record

that their affiliated holding company, Grupo Industrial Saltillo (GIS),

which functions as corporate treasurer, transferred funds to CIC

expressly to pay antidumping duties. In addition, the petitioner states

that the Department confirmed that the holding company's payment to CIC

was a grant and not a loan because CIC was not required to repay these

funds.

The petitioner further argues that the Department's preliminary

results ignore long-standing principles that (1) money is fungible

within a corporate family, and (2) expenses incurred by holding

companies without operations are for the benefit of their affiliates

with operations. Moreover, the petitioner states that the Department

verified that the funds transferred to CIC contained monies to which

Cinsa and ENASA contributed. Accordingly, the petitioner argues that

the Department should find reimbursement of antidumping duties based on

these facts and assess double the calculated antidumping margin upon

liquidation of the entries subject to this review, pursuant to 19 CFR

353.26(a).

The respondents argue that, for purposes of the final results, the

Department should continue to reject the proposition that a capital

contribution to the importer of record by a corporate entity that is

not the producer or exporter of the subject merchandise constitutes a

reimbursement of antidumping duties within the meaning of the

Department's regulations. Cinsa and ENASA contend that the Department's

regulations require that, in order to trigger the reimbursement

provision, the producer or reseller must have either (1) directly paid

antidumping duties or deposits on behalf of the importer, or (2)

reimbursed the importer for the payment of antidumping duties or

deposits. In addition, Cinsa and ENASA argue that the Department

verified that neither respondent reimbursed CIC for its payment of

antidumping duty deposits or assessments to the U.S. Customs Service.

Moreover, the respondents argue that the Department also verified that

no written agreement exists for the reimbursement of antidumping duties

between CIC and Cinsa or ENASA and that the funds transferred to CIC

from GIS and GISSA Holding USA did not originate from Cinsa and ENASA.

Furthermore, the respondents contend that the Department has

consistently held that the mere existence of intercompany transfers of

funds among affiliated parties does not constitute reimbursement of

antidumping duties. Lastly, Cinsa and ENASA submit that the cases cited

by the petitioner with regard to the principle of the ``fungibility of

money'' relate to the calculation of cost of production (COP)

[[Page 38375]]

and are not relevant to the issue of reimbursement.

DOC Position

We do not believe that it is appropriate to apply the reimbursement

regulation for purposes of this administrative review. Pursuant to its

regulations, the Department will deduct from export price ``the amount

of any antidumping duty which the producer or reseller: (1) Paid

directly on behalf of the importer; or (2) reimbursed to the

importer.'' 19 CFR 353.26(a).

The Department verified during the instant review and previous

administrative review periods that CIC or its predecessor company,

Global Imports, Inc. (Global), paid all antidumping duty deposits and

antidumping duty assessments. The petitioner's claim for a deduction

rests on the April 1997 capital contribution by GISSA Holding USA to

CIC. The monies at issue were paid by GIS (the ultimate parent company

of Cinsa, ENASA, and several other producing entities, as well as of

the importer, CIC) to GISSA Holding USA (which is a holding company for

CIC but not for Cinsa or ENASA). GISSA Holding USA then provided these

funds to CIC for purposes that included payment of antidumping duties

assessed on entries imported by Global during the 5th and 7th review

periods, which were liquidated during 1996.

The Department preliminarily determined not to apply the

reimbursement regulation based on a literal construction of that

regulation and the fact that the transfer in question was not provided

directly by a producer or exporter. Therefore, it took no position on

whether a finding of reimbursement as to the 5th and 7th review entries

could serve as the basis for application of the reimbursement

regulation as to 10th review entries. As a result, the parties have not

had an opportunity to comment on and provide evidence in connection

with any new policy that might involve a finding of reimbursement as to

either the 5th and 7th review entries or as to subsequent entries. Even

if the Department were to agree with petitioners that Cinsa and ENASA

reimbursed CIC for antidumping duties paid on 5th and 7th review

entries, it could not apply the reimbursement regulation to these 10th

review entries. To do so would be equivalent to imposing an

irrebuttable (in this review) presumption that a pattern of

reimbursement of duties paid on entries from earlier periods would be

continued as to entries in later periods. This issue was not raised

during the 10th review. It is well established that potentially

affected parties must be given an opportunity to submit evidence

specifically to rebut a presumption established by the Department,

especially when, as in this case, the Department took a position in the

preliminary results that made the submission of such evidence

unnecessary during the administrative proceeding. See, e.g., British

Steel plc v. United States, 879 F. Supp. 1254, 1316-17 (CIT 1995),

Sigma Corp. v. United States, 841 F. Supp. 1255, 1267 (CIT 1993). The

facts underlying this issue have not changed from the 9th review final

results in which we determined that the reimbursement regulation did

not apply. Therefore, the Department will maintain, for purposes of

this review, the position taken in the 9th review and in the 10th

review preliminary results based on the rationale given therein.

The Department has concerns about the nature of the cash transfer

at issue in this case and intends to reconsider, in future reviews,

whether reimbursement by Cinsa's and ENASA's corporate parent would

constitute reimbursement under the Department's regulations. In the

future, the Department may find it appropriate to apply the

reimbursement regulation in instances in which a parent or other

affiliate of a producer or exporter provided funds specifically for the

payment of antidumping duties. Thus, the Department will examine

closely transfers of funds between the producer/exporter, its

affiliates, and the importer, made for the purpose of paying

antidumping duties and cash deposits.

Further, we disagree with petitioner's arguments that we should

find reimbursement based on (1) the principle of the fungibility of

money and (2) the idea that expenses incurred by holding companies

without operations are for the benefit of their subsidiaries with

operations. See ``Issues Memo for the Final Results'' dated July 8,

1998, for additional information. In antidumping cases, the Department

uses both of these concepts to deal with allocation of expenses

associated with a parent company to the COP and constructed value (CV)

of the company producing subject merchandise. In antidumping cases, the

so-called ``fungibility principle'' is an aspect of the Department's

methodology for calculating financial costs incurred in producing and

selling subject merchandise based on an interest expense ratio

reflecting the overall corporate borrowing experience. E.g., Final

Determination of Sales at Less than Fair Value: New Minivans from

Japan, 57 FR 21937, 21946 (Comment 18) (May 26, 1992). Just as the

``fungibility principle'' is used in dealing with interest expense, the

holding company rule relates to the allocation of a portion of the

general and administrative (G&A) expenses incurred by a non-producing

parent company to the cost calculations for a firm producing subject

merchandise that benefits from the activities/services generating such

expenses. In the Final Determination of Sales at Less Than Fair Value:

Certain Hot-Rolled Carbon Steel Flat Products * * * From Canada, 58 FR

37099, 37114 (Comment 47) (July 9, 1993), the Department expressed this

principle as follows: ``The general expenses incurred by a parent

company, without operations, relate to all of its subsidiaries with

operations.'' This simply allows the Department to allocate a portion

of general costs to the cost of producing subject merchandise.

Comment 2: Enamel Frit Cost

For purposes of the final results, respondents Cinsa and ENASA

argue that the Department should use the transfer prices reported for

enamel frit obtained from their affiliated supplier, ESVIMEX, without

adjustment. However, the respondents state that, if the Department

decides to adjust materials costs to reflect an ``adjusted market

price,'' both the respondents and the petitioner agree that the

Department erred in calculating the amount of the differential between

market price and adjusted market price. The respondents believe that

the Department improperly focused solely on the price difference

between ESVIMEX's prices to Cinsa and ENASA, and ESVIMEX's prices to

unaffiliated customers, rather than comparing the price paid by Cinsa

and ENASA for ESVIMEX's frit, and the price paid by those producers for

the enamel frit purchased from an unaffiliated producer, in order to

determine whether ESVIMEX's prices to Cinsa and ENASA reflect fair

market prices.

The respondents argue that the Department improperly concluded that

the difference between ESVIMEX's prices to affiliated parties and those

to unaffiliated parties was not attributable entirely to cost savings

to ESVIMEX on its sales to affiliated parties, because the preliminary

results failed to take into account prompt payment discounts, the

existence of which was verified by the Department. Furthermore, the

respondents argue that, even if prompt payment discounts are not taken

into consideration, any remaining portion of the price differential not

accounted for by verified cost savings represented a quantity discount

granted to affiliated

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purchasers because such purchasers accounted for a large majority of

ESVIMEX's sales of enamel frit. Therefore, the transfer prices paid by

Cinsa and ENASA to ESVIMEX would be fair market prices, according to

the respondents.

Finally, Cinsa and ENASA contend that, even if it were appropriate

for the Department to adjust Cinsa's and ENASA's reported raw material

costs, the preliminary results overstated the adjustment. The

respondents argue that, rather than corresponding to the percent of

list price that is not documented by cost savings, the Department's

adjustment incorrectly corresponds to the percent of list price that is

documented by verified cost savings.

The petitioner maintains that Cinsa's and ENASA's cost of enamel

frit purchased from its affiliate, ESVIMEX, should be based on

unadjusted market prices, defined as the prices that unrelated parties

paid ESVIMEX for frit, which is equivalent to the list prices less only

the general discount given to all unrelated parties. The petitioner

contends that the Department cannot conclude that Cinsa's and ENASA's

transfer prices reflect market value, as claimed by the respondents,

because the record demonstrates that ESVIMEX's prices for frit to Cinsa

and ENASA were lower than the prices charged to unaffiliated customers.

Moreover, the petitioner claims that the respondents base their claim

on a comparison with a de minimis volume purchased from an unaffiliated

supplier.

Alternatively, the petitioner argues that the Department should

correct its preliminary calculation for purposes of the final results

so that it adjusts Cinsa's and ENASA's material costs upward by what it

terms the full difference between the market prices for frit and the

adjusted market prices for frit, and provides a calculation which it

claims will have this effect.

Furthermore, the petitioner asserts that regarding discounts (1)

the Department should disregard the prompt payment discount because the

respondents did not even allege the existence of such a discount prior

to verification and provided no evidence indicating how often ESVIMEX

granted this discount, and (2) there is no evidence to support the

respondents' claimed quantity discount.

Finally, the petitioner contends that the Department should reject

Cinsa's and ENASA's alternate calculation of the adjustment to

materials costs because it calculates the percentage difference between

market prices and theoretical transfer prices, not actual transfer

prices, and therefore understates the appropriate percentage increase

to Cinsa's and ENASA's materials costs.

DOC Position

For purposes of the preliminary results, we intended to increase

the frit portion of the direct materials cost to account for difference

between market prices and reported transfer prices that is not

accounted for by documented cost savings. However, we agree with the

respondents that we inadvertently overstated the amount necessary to

increase the transfer price to equal an ``adjusted market price''

corresponding to the situation in which ESVIMEX sells to Cinsa and

ENASA. Accordingly, for purposes of the final results, we have used in

our calculation the percent of list price that is not documented by

cost savings, as opposed to the percent of list price that is

documented by verified cost savings, which we incorrectly used in our

preliminary calculations.

We disagree with the petitioner's suggestion that the Department

should make an adjustment to material costs based on the difference

between the market prices for frit and the Department's calculation of

an ``adjusted market price'' (i.e., a price that the Department

believes Cinsa and ENASA would have paid had they been unaffiliated

purchasers). The adjustment made by the Department is intended to

increase Cinsa's and ENASA's submitted frit costs (i.e., transfer

prices) so that they include the portion of the ``affiliates'' discount

off list price which was not supported at verification as being

attributable to cost savings. Therefore, the appropriate calculation

measures the difference between the reported transfer price and the

Department's adjusted market price.

With regard to the petitioner's argument that the reported prices

are ``theoretical'' prices as opposed to ``actual prices,'' we verified

invoices showing that the reported transfer prices (prices from ESVIMEX

to Cinsa and ENASA) correspond to list prices minus the standard

discount to affiliated parties.

In addition, we do not agree with Cinsa's and ENASA's argument that

the Department must accept ESVIMEX's frit transfer prices as reported

on the theory that the transfer price sales were made at a fair market

value. Pursuant to section 773(f)(2) of the Act, a transaction between

affiliated parties is considered an appropriate source of ascertaining

the value of an input if it fairly represents the amount usually

reflected in sales of subject merchandise in the relevant market. Based

on the documents examined at verification, we have determined that,

although the respondents adequately supported their claim with respect

to all cost efficiencies listed on the schedule submitted at

verification, these costs efficiencies did not account for the full

extent of the discount accorded only to affiliated parties. Although

Cinsa and ENASA then claimed that the unaccounted for portion of the

affiliated party discount should be attributed to a volume discount,

they were unable to quantify and support how the volume of their

purchases resulted in market-based savings equivalent to that

unaccounted for portion. Therefore, in accordance with the Department's

longstanding policy of considering that transactions between affiliated

parties are not at arm's length in the absence of sufficient evidence

to the contrary, the Department reasonably determined that this

standard had not been met with respect to ESVIMEX's frit transfer

prices to Cinsa and ENASA, and based its cost calculations instead upon

the ``adjusted market price'' described above.

We have also rejected Cinsa's and ENASA's suggestion that, in

measuring the extent to which market forces do not account for the

difference between the discount off list price given to affiliates and

the discount off list price given to unaffiliated parties, we should

take into account prompt payment discounts. Although the Department

verified that such discounts are offered, Cinsa and ENASA have not

provided any information on the frequency with which such discounts are

actually given. In addition, such discounts constitute a recognition

that a limited number of customers will require a lesser extension of

credit by Cinsa and ENASA, not a general adjustment to price. Thus, the

Department reasonably did not assume the existence of such a discount

in calculating the normal market price for unaffiliated purchasers of

frit.

Similarly, we decline to find that the prices for Cinsa's minimal

purchases of enamel frit from an unaffiliated producer are an

appropriate basis for determining whether their purchases from ESVIMEX

reflect fair market prices. Because certain information regarding these

transactions is business proprietary, see the Issues Memo.

Moreover, we do not agree with the respondents that it is

sufficient to show that ESVIMEX's frit prices to affiliates are above

ESVIMEX's COP. The respondents' argument to this effect ignores the

provisions of section 773(f)(2) of the Act, which requires a comparison

of transfer prices and market prices when the latter are available, and

permits the use of the

[[Page 38377]]

higher of those prices. Thus, we compared the transfer prices Cinsa and

ENASA paid to prices charged to unaffiliated customers. We noted that

the prices charged to unaffiliated customers were greater than both the

affiliated transfer prices and the actual costs incurred to produce the

frit supplied to Cinsa and ENASA. Because the prices charged to

unaffiliated customers did not reflect certain market-based savings

unique to ESVIMEX's affiliates, however, we constructed an ``adjusted

market price'' which did reflect these elements. Because this price was

higher than both ESVIMEX's COP and the transfer price, in conformity

with section 773(f)(2) and (3) of the Act, we based Cinsa's and ENASA's

frit cost on the ``adjusted market price.''

Comment 3: Cinsa's and ENASA's Classification of Certain U.S. Sales as

EP Rather Than CEP

The petitioner argues that Cinsa's and ENASA's classification of

certain sales as EP is incorrect because, it claims, this

classification is based only on the first of the three factors used by

the Department for determining the classification of sales made through

affiliated importers, i.e., the fact that the merchandise in question

was shipped directly from the manufacturer to the unrelated buyer,

without being introduced into the physical inventory of the related

selling agent. The petitioner claims that, in order to classify U.S.

sales through an affiliated importer as EP sales, the respondent must

also provide evidence that EP was the customary commercial channel for

sales of this merchandise between the parties involved, and that the

affiliated importer acted only as a processor of documentation and a

communication link with the unaffiliated U.S. buyer.

With regard to the second criterion, the petitioner argues that the

relative volumes and values of sales direct from Mexico are not high

enough for EP sales channel to be considered customary. With regard to

the third criterion, the petitioner asserts that CIC's level of

activity with respect to all U.S. sales, including those sales

classified as EP sales, was far beyond what would be undertaken by a

mere ``processor of sales documentation.'' Accordingly, the petitioner

believes that the Department should reclassify as CEP sales all sales

reported as EP sales.

Cinsa and ENASA argue that all three factors the Department uses to

classify certain sales as EP were present with respect to the sales

they classified as EP, claiming that the EP channel of trade with the

participation of its U.S. affiliate is customary because it has been

present since the initial investigation and in all subsequent reviews

and that, although perhaps significant, the affiliate's activities

consist of ministerial functions, such as the processing of purchase

orders, collection of payment, arrangement of transportation, etc., as

opposed to setting sales terms and prices and negotiating sales

contracts.

DOC Position

We agree with the respondents that the facts on the record of this

review shows that the sales reported as EP sales in this review should

continue to be classified as EP sales. Pursuant to section 772(a) and

(b) of the Act, an EP sale is a sale of merchandise by a producer or

exporter outside the United States for export to the United States that

is made prior to importation. A CEP sale is a sale made in the United

States, before or after importation, by or for the account of the

producer or exporter or by an affiliate of the producer or exporter. In

determining whether the sales activity in the United States warrants

using the CEP methodology, the Department has examined the following

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

manufacturer to the unaffiliated U.S. customer, (2) whether this was

the customary commercial channel between the parties involved, and (3)

whether the function of the U.S. affiliate is limited to that of a

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

link'' with the unrelated U.S. buyer. See e.g., Final Results of

Antidumping Duty Administrative Review: Certain Corrosion-Resistant

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

From Canada (Canadian Steel) 63 FR 12725, 12738 (March 16, 1998). In

the Canadian Steel case, the Department clarified its interpretation of

the third prong of this test, as follows. ``Where the factors indicate

that the activities of the U.S. affiliate are ancillary to the sale

(e.g., arranging transportation or customs clearance, invoicing), we

treat the transactions as EP sales. Where the U.S. affiliate has more

than an incidental involvement in making sales (e.g., solicits sales,

negotiates contracts or prices) or providing customer support, we treat

the transactions as CEP sales.''

With respect to the first prong, it is undisputed that the

merchandise associated with these sales was shipped directly to the

unaffiliated customer, without passing through the U.S. affiliate.

With respect to the second prong, this is the customary commercial

channel between the parties involved. We agree with the respondents

that it is not necessary for EP sales to be the predominant channel of

trade in a given review for it to be the customary channel between the

parties involved. EP sales have been made, with the participation of a

U.S. affiliate, in the investigation and in all subsequent reviews.

Thus, this is clearly a customary channel of trade.

With respect to the third prong, the verification report confirms

that, for the sales classified as EP, prices are set by the Cinsa

export office in Saltillo, Mexico. The participation of affiliate CIC

in these sales relates primarily to: issuing payment invoices,

accepting payment and forwarding it to Mexico, posting antidumping duty

deposits, and clearing products through Customs. These services are

clearly among those the Department considers ``ancillary'' to the sale.

CIC does not solicit or negotiate these sales, does not set the price

for these sales, and does not provide customer support in connection

with these sales.

Therefore, for the purposes of this review, we will continue to

treat as EP those sales which Cinsa and ENASA reported as EP sales. For

further details see the Issues Memo.

Comment 4: Reallocation of Indirect Selling Expenses

The petitioner argues that, if the Department accepts Cinsa's and

ENASA's designation of certain of their U.S. sales as EP sales, the

Department should revise the indirect selling expense calculations and

allocate CIC's total expenses over a sales value that excludes sales

designated as EP based on the respondents' claim that CIC had no role

in making EP sales. Otherwise, at a minimum, the petitioner maintains

that the Department should not allocate to EP sales any of the indirect

selling expenses incurred by CIC related to salesmen's salaries and

benefits, travel expenses, warehouse lease, office rental, advertising,

and any other expenses relating to functions that the respondents claim

were not performed by CIC in support of EP sales.

The respondents argue that they properly allocated these expenses

to all U.S. sales because indirect selling expenses are incurred on

overall operations, which necessarily include both EP and CEP sales.

DOC Position

We agree with the petitioner that, for purposes of calculating

indirect selling expenses, CIC expenses are more properly allocated

over a U.S. sales value that excludes the EP sales. We

[[Page 38378]]

verified Cinsa's and ENASA's claim that CIC performed very limited

sales-related functions with respect to these EP sales, and equal

allocation of all CIC expenses across all U.S. sales in which CIC is

involved would disproportionately shift these costs from CEP to EP

sales. However, we disagree with the petitioner's suggested allocation

because it would allocate all EP expenses to CEP sales. The numerator

proposed by the petitioner would include all of CIC's expenses, i.e.,

expenses for both EP and CEP sales, whereas the denominator would

include the sales value of only CEP sales. We interpret the

petitioner's alternative allocation methodology to mean we should, to

the extent possible, allocate only to CEP sales (the only sales from

which indirect selling expenses are deducted) the expenses that are

only incurred on CEP sales. Accordingly, we have reallocated CIC's

indirect selling expenses by including in the numerator the indirect

selling expenses pertaining only to CEP sales (warehouse lease,

advertising, forklift rental, salesmen's salaries and salesmen

training) and a portion of the joint CEP and EP expenses (based on the

percentage that CEP sales represent, by value, of total CIC sales). The

new denominator is the value of only CEP sales. See also Final Results

Calculation Memorandum. (Calculation Memo). Thus, we have excluded EP

indirect selling expenses from the numerator and have excluded the

value of EP sales from the denominator.

We disagree with the respondents that (all) indirect selling

expenses are incurred on ``overall operations.'' Certain of CIC's

indirect selling expenses (see list above) are not incurred on EP

sales.

Comment 5: CEP Offset Adjustment

Cinsa and ENASA state they are entitled to a CEP offset because a

comparison of the normal value (NV) level of trade to the CEP level of

trade demonstrates that the NV level of trade is more advanced as well

as at a different point in the chain of distribution because it

includes a greater number of selling functions than the CEP level of

trade. Cinsa and ENASA state that the Department's regulations require

that when the CEP level of trade is determined, all economic activities

in the United States and the indirect selling expenses attributable

thereto are to be excluded. In contrast, when the normal value level of

trade is determined it is inclusive of substantive selling functions

and the indirect selling expenses necessary to execute a sale to

unaffiliated customers. Accordingly, for purposes of comparison to the

NV level of trade, Cinsa and ENASA argue that the selling functions and

the indirect selling expenses of the CEP level of trade are limited to

the initial sale by Cinsa's and ENASA's export department to CIC. Cinsa

and ENASA further state that they are entitled to the CEP offset under

the terms of the statute, 19 U.S.C. 1677b(a)(7)(B), because only one

level of trade has been determined to exist in the home market, and

Cinsa and ENASA are unable to quantify any pricing differential between

the home market level of trade and the nonexistent CEP level of trade

in the home market.

The petitioner argues that the Department should reject the

respondents' claim for a CEP offset adjustment in the final results,

based on the respondents' failure to establish that home market and CEP

sales are at different levels of trade. The petitioner states that the

record shows that the respondents sold to wholesalers and distributors

in both markets and that these customers are not at a more remote point

in the chain of distribution than CIC. In addition, the petitioner

concludes that the selling functions are the same in both markets.

DOC Position

We agree with the petitioner. Section 773(a)(1)(B) of the Act

requires that the Department establish NV, to the extent possible,

based on home market sales at the same level of trade as the CEP or the

EP sale. The SAA notes that if the Department is able to compare sales

at the same level of trade, it will not make any level of trade

adjustment or CEP offset in lieu of a level of trade adjustment. SAA at

829. Further, section 773(a)(7) expressly requires a difference in

level of trade between the U.S. and home market sales as a prerequisite

to a CEP offset. Specifically, sales in the home market must be at a

more advanced stage of distribution.

In the home market, Cinsa and ENASA sell directly to wholesalers,

distributors, large retailers and supermarkets. Cinsa and ENASA did not

identify which of their home market customers fell into which of these

categories and did not claim that there were differences in selling

functions with respect to these designations. In short, the respondents

treated these customers as being similarly situated for purposes of the

LOT analysis. CIC is also a wholesaler/distributor of POS cookware.

With regard to selling functions, Cinsa and ENASA reported in their

April 28, 1997, questionnaire response that they performed the

following selling functions for home market sales: freight and delivery

services, inventory maintenance, and order processing and billing

services. For sales to CIC, Cinsa's export department arranged freight

and delivery services, incurred inventory maintenance, and provided

sales support services such as invoice processing and billing.

Therefore, Cinsa and ENASA have not demonstrated that their home market

purchasers are at a different point in the chain of distribution than

CIC and that the selling functions associated with Cinsa's and ENASA's

sales to CIC were different from those associated with sales to

customers in the home market. Thus, our analyses leads us to conclude

that sales within each market and between markets are not made at

different levels of trade.

Finally, we disagree with Cinsa's and ENASA's argument that the

preliminary results failed to account for the fact that home market

indirect selling expenses are included in the price associated with the

``NV level of trade'', whereas CIC's indirect selling expenses are

excluded from the price associated with the ``CEP level of trade.''

First, the indirect selling expenses incurred in the United States by

CIC's sales departments are, pursuant to section 772(d)(1)(D) of the

statute, properly excluded from the price calculated for the U.S. CEP

sales. Pursuant to this and other section 772(d) adjustments, CIC's

price to its unaffiliated customer (the ``starting price'') is

transformed into a constructed export price, i.e., a constructed

equivalent of a market-based sale by Cinsa or ENASA to CIC. This is the

point at which the level of trade comparison is made. See New

Regulations, 62 FR at 27414.\1\ Second, Cinsa's and ENASA's itemized

home market indirect selling expenses and itemized indirect selling

expenses incurred in Mexico with respect to making sales to CIC are

virtually the same. Therefore, the record reflects no difference

between the functions performed by the respondents in selling to home

market customers and the functions performed in selling to CIC.

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

\1\ This approach was recently challenged in Borden, Inc. v.

United States (Borden) Slip Op. 98-36 (March 26, 1998), at 55-59

(rejecting the Department's practice of making 1677a(d) adjustments

prior to making the level of trade comparisons). The Department

intends to appeal this decision, and thus will continue to apply the

methodology set forth in the New Regulations. We note, however,

that, because the sales made by Cinsa and ENASA in the home market

are not at a more advanced stage in the chain of distribution than

either those made to CIC or those made by CIC (both are at a

wholesale/distributor level of trade), implementation of the Borden

decision would not affect the outcome in this case.

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

Accordingly, we can compare sales in the home market and the U.S.

market at

[[Page 38379]]

the same level of trade. Therefore, a CEP offset is not warranted.

Comment 6: Whether to Limit NV Comparisons to Sales Made in Same Month

Cinsa and ENASA argue that the Department's high inflation margin

calculation methodology, which limits NV comparisons to the month of

the U.S. sale, results in unduly high margins in the instant review

because the Department based NV on CV when there were no home market

sales of the most comparable model in the same month as the U.S. sale.

Cinsa and ENASA suggest that, in order to obtain more price-to-price

matches, the Department should use home market matches within the full

90/60 window period surrounding each U.S. sale, but index prices when

it is necessary to compare a U.S. sale to a home market sale during a

different month.

Alternatively, Cinsa and ENASA argue that the Department should

expand the one-month window forward and use prices for identical

merchandise in one of the two months subsequent to the date of the U.S.

sales, without price adjustment.

The petitioner states that Cinsa's and ENASA's proposed methodology

is not in accordance with the Department's policy regarding high

inflation comparisons. In short, according to the petitioner, Cinsa and

ENASA have not demonstrated that there is anything in the way they

manufacture and sell subject merchandise that makes application of the

Department's high inflation price comparison methodology inappropriate

or unfair.

Finally, the petitioner believes the Department should reject

Cinsa's and ENASA's alternative request to expand the price comparison

window by two months because the further away from the same month the

Department looks for a comparable home market sale in a high inflation

case, the more likely it is that there would be distortion caused by

inflation.

DOC Position

We agree with the petitioner. As in our preliminary results, we

have limited our comparisons to sales in the same month rather than

applying the Department's 90/60 rule, whereby the Department may use as

NV comparison market prices from the three months prior to and the two

months after the month in which the U.S. sale was made. The same month

comparison rule accords with the Department's current practice in cases

involving high inflation.

We disagree with the respondents' claim that the Department's high

inflation methodology creates unduly high margins in this review. The

Department's inflation methodology is designed to eliminate distortion

caused by high inflation. It is neutral in purpose and is not designed

to punish or benefit anyone. However, as a result of a recent court

decision, the respondents' concerns have been addressed at least in

part, albeit indirectly. On January 8, 1998, the Court of Appeals for

the Federal Circuit issued a decision in CEMEX v. United States, 133

F.3d 897 (CEMEX). In that case, based on the pre-URAA version of the

Act, the Court addressed the appropriateness of using CV (rather than

similar merchandise) as the basis for foreign market value when the

Department finds home market sales of the most similar merchandise to

be outside the ``ordinary course of trade.'' This issue was not raised

by any party in this proceeding. However, in response to the Court's

decision in Cemex, the Department has revised its application of the

cost test and has determined that it would be inappropriate to resort

directly to CV, in lieu of foreign market sales, as the basis for NV

upon finding foreign market sales of merchandise identical or most

similar to that sold in the United States to be outside the ``ordinary

course of trade.'' Instead we will match a given U.S. sale to foreign

market sales of the next most similar model sold during the same month

when all sales of the most comparable model are below cost. The

Department will use CV as the basis for NV only when there are no

above-cost sales in the appropriate comparison period that are

otherwise suitable for comparison.

Therefore, for the final results in this proceeding, when making

comparisons in accordance with section 771(16) of the Act, we

considered all products sold in the home market, as described above in

the ``Scope of Review'' section of this notice, that were in the

ordinary course of trade during the same month for purposes of

determining appropriate product comparisons to U.S. sales. Where there

were no sales of identical merchandise in the home market made in the

ordinary course of trade during the same month to compare with U.S.

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

product made in the ordinary course of trade during the same month,

based on the characteristics listed in Sections B and C of our

antidumping questionnaire.

With regard to comparisons involving sets, where there were no

sales of identical merchandise in the home market in the same month to

compare to U.S. sales of subject merchandise sold in sets, we compared

U.S. sales of sets to the CV of the set as we do not have the

appropriate data in this review to compare non-identical sets. We will,

however, request such information for purposes of future reviews.

In a few instances involving comparisons of open stock merchandise,

we have still resorted to the use of CV due to the absence of

comparable above-cost matches in the same month for certain U.S. sales.

Finally, the respondent's suggestion that we account for the

effects of inflation by indexing prices for POS cookware is contrary to

the Department's high inflation methodology. Although it is necessary

to use cost indexing in high-inflation cases in order to calculate

meaningful POR-average costs, the Department has rejected the use of

indexed prices. It is the Department's position that price-to-price

margin calculations should be made based only on actual, rather than

indexed, prices, as using indexed prices would yield less accurate

results.

Comment 7: Home Market Freight Expense Allocation

The petitioner argues that Cinsa's and ENASA's claim for an

adjustment to NV for freight expenses incurred to ship subject

merchandise from the factories in Saltillo to (1) the remote warehouses

in Mexico City and Guadalajara, and (2) unaffiliated customers in the

Monterrey region is distortive and should be rejected because these

shipments contained both Cinsa- and ENASA-produced merchandise, as well

as both subject and non-subject merchandise. The petitioner further

argues that Cinsa billed ENASA for its share of the freight expenses

based on the number of boxes of ENASA merchandise in each shipment, as

opposed to the weight of the ENASA merchandise, which is heavier gauge

that Cinsa's merchandise, thus incorrectly shifting expense from ENASA

to Cinsa and artificially reducing Cinsa's NV.

In addition, with regard to post-sale freight expenses, the

petitioner contends that allocating the total expense over subject and

non-subject merchandise could inappropriately shift expense to subject

merchandise if non-subject merchandise customers are located farther

from the factories, on average, than customers of subject merchandise.

The petitioner urges the Department to either reject Cinsa's and

ENASA's claim for a freight adjustment or require them to revise their

freight expense allocation.

[[Page 38380]]

The respondents argue that they were unable to report transaction-

specific freight expenses because they received freight bills on a

monthly basis, rather than a shipment-by-shipment basis. According to

the respondents, the allocation of mixed-shipment freight expenses

between the companies was reasonable because the packing list generated

by the freight company indicated the number of boxes but not the weight

of boxes. Moreover, the respondents argue that, because the freight

expense was incurred on the basis of weight and the freight rate did

not vary by the type of merchandise shipped, inclusion of sales of non-

subject merchandise was not distortive to the calculation. Finally, the

respondents note that not only has the Department accepted Cinsa's and

ENASA's comparable allocations in all previous proceedings, but that

the respondents' reporting of warehouse-specific freight factors

represents a refinement in their reporting of pre- and post-sale

freight expenses.

DOC Position

We have accepted the respondents' methodology for the calculation

of home market freight expenses, including their allocation of such

expenses (1) between Cinsa and ENASA and (2) between subject and non-

subject merchandise.

The Department's preference is that, wherever possible, freight

adjustments should be reported on a sale-by-sale basis rather than

allocated over all sales. See Final Results of Antidumping Duty

Administrative Review: Replacement Parts for Self-Propelled Bituminous

Paving Equipment from Canada, 56 FR 47451 (September 19, 1991). If the

respondent does not maintain freight records on a sale-by-sale basis,

then our preference is to apply an allocation methodology at the most

specific level permitted by the respondent's records kept in the normal

course of business. See Final Determination of Sales at Less Than Fair

Value: Melamine Institutional Dinnerware Products from Indonesia, 62 FR

1719, 1724 (January 13, 1997).

Cinsa and ENASA stated in their June 2, 1997, supplemental response

that they do not maintain freight records on a sale-by-sale basis

because Cinsa, which handles freight arrangements for both itself and

ENASA, is billed only on a weight-per-truckload basis by its

unaffiliated freight carrier. The freight company does not provide a

weight-based breakout between Cinsa merchandise and ENASA merchandise.

However, the packing list for each shipment indicates how many boxes

contain Cinsa merchandise and how many boxes contain ENASA merchandise.

We disagree with the petitioner's claim that allocating the cost

for each truckload between the two companies on the basis of number of

boxes shifts freight expense to Cinsa. Although ENASA's products are

heavy gauge steel and Cinsa's are light and medium gauge steel, a Cinsa

``box'' is not necessarily lighter than an ENASA ``box''; different

boxes may contain different cookware items (i.e., different models and

sizes), and some boxes contain multiple items. In the absence of

weight-based data, the box-based comparison is the most reasonable

overall.

Likewise, we disagree with the petitioner's claim that the

respondents' allocation of freight costs between subject and non-

subject merchandise is distortive since the June 2, 1997, response

shows that subject and non-subject merchandise destined for the same

delivery point are charged the same weight-based rate. Further, the

record shows that the respondents reported warehouse-specific freight

factors. Thus, calculation of a weight-based factor based upon the

freight expense and shipping weight for all merchandise and application

of the resulting factor to the weight of subject merchandise yields a

non-distortive allocation of the freight expense attributable only to

subject merchandise. Finally, Cinsa and ENASA have used comparable

allocation methodologies in each of the previous segments of this

proceeding, in each of which the Department has determined that they

are reasonable in light of the objectives of the antidumping law.

Accordingly, we accepted Cinsa's and ENASA's freight calculations as

submitted in their sales databases in this review as reasonable and

non-distortive.

Comment 8: Freight Expenses on U.S. Sales

The petitioner states that Cinsa and ENASA reported freight

expenses incurred to ship subject merchandise to the United States by

allocating total freight expenses incurred over the weight of all

merchandise shipped. These freight expenses were reported in two steps:

(1) expenses incurred to ship merchandise from Saltillo to the U.S.

border (for EP and CEP sales), and (2) expenses incurred to ship

merchandise from the U.S. border to CIC's warehouse in San Antonio,

Texas (CEP sales only). The petitioner argues that the denominators in

the above-referenced calculations are incorrect because the weight of

the merchandise shipped in Step 1, which should contain both EP and CEP

sales, is significantly lower than the weight of the merchandise

shipped in Step 2, which should contain only CEP sales. Furthermore,

according to the petitioner, the weights used in these calculations do

not correspond to the weights of merchandise sold as reported on the

respondents' sales tapes. Accordingly, for purposes of the final

results, the petitioner maintains that the Department should reject

Cinsa's and ENASA's U.S. freight calculations and, as facts available,

recalculate the per kilogram expenses based on the weight of

merchandise sold as reported on the sales tapes.

Cinsa and ENASA concede that the weight amount reported by CIC for

shipment from Laredo to San Antonio was inadvertently overstated, but

state that the error can be corrected using information already in the

record. The respondents disagree with the petitioner's suggestion that

the weight of EP and CEP sales from the sale tape be used as the

denominator for Mexican inland freight because that freight factor was

calculated on the basis of expenses incurred upon sales of both subject

and non-subject merchandise, which were shipped together. Therefore,

according to the respondents, the reported weight of the merchandise

shipped must include both subject and non-subject merchandise.

Likewise, the respondents also disagree with using the weight of CEP

sales from the sales tape as the denominator for the U.S. inland

freight factor because in addition to the inclusion of non-subject

merchandise, the U.S. inland freight factor was calculated based on

freight expenses incurred on all merchandise shipped from Laredo to San

Antonio, regardless of whether it was resold to unrelated U.S.

customers during the period of review (POR) or whether it remained in

inventory in San Antonio.

DOC Position

The Department agrees that the denominator of the U.S. inland

freight ratio (Step 2, above) should be recalculated by subtracting the

weight of the merchandise shipped from Saltillo to Laredo, which was

inadvertently also included in the Step 2 weight calculation. The

petitioner's suggestion that the weight of CEP sales, as derived from

the sales tape, be used as the denominator for U.S. inland freight is

incorrect because it fails to take into consideration two important

details. First, the numerator in the calculation (freight expenses)

includes both subject and non-subject merchandise. Second, the

numerator also includes expenses incurred on all merchandise shipped

from Laredo to San Antonio, Texas,

[[Page 38381]]

regardless of whether it was resold to unrelated U.S. customers or

whether it remained in inventory in San Antonio. Accordingly, in order

to obtain a proper ratio, the denominator (weight shipped) must be

based correspondingly upon the weight of all subject and non-subject

merchandise as well as on the weight of both merchandise sold and that

remaining in inventory in San Antonio. The weight on the sales tapes

represents total CEP sales; thus this figure does not include non-

subject merchandise or merchandise remaining in inventory in San

Antonio. Therefore, for purposes of the final results, we have deducted

freight expenses, corrected as noted above, from U.S. price. See

Calculation Memo.

Comment 9: Calculation of Indirect Selling Expenses and CEP Profit

The petitioner argues that the Department's preliminary results

calculation of U.S. indirect selling expenses and CEP profit for Cinsa

and ENASA are understated because they do not include (1) all of CIC's

reported indirect selling expenses (depreciation, financial and bad

debt expenses were excluded), (2) expenses incurred by CIC to finance

antidumping duty cash deposits and assessments, and (3) indirect

selling expenses incurred in Mexico in support of sales to the United

States. The petitioner believes that the Department should include the

above-mentioned expenses in the calculation of U.S. indirect selling

expenses and CEP profit for purposes of the final results.

Cinsa and ENASA disagree with the petitioner's claim that the

Department should have deducted the above-referenced expenses from CEP.

The respondents claim that: (1) Depreciation, financial and bad debt

expenses are financial and operating expenses and do not involve

expenses related to the sale of the subject merchandise or overhead

expenses of the U.S. affiliate and, according to the statute, only

direct selling expenses, indirect selling expenses and general and

administrative expenses are to be deducted from CEP; (2) expenses

incurred in the payment of antidumping duties are not indirect selling

expenses that benefit U.S. sales of subject merchandise; and (3)

indirect selling expenses of Cinsa's export department and the

inventory carrying costs for the period in which the exported

merchandise was in Mexican inventory do not relate to economic activity

in the United States.

DOC Position

For purposes of the final results, we have deducted from CEP

depreciation, financial and bad debt expenses, as well as commissions.

We did not deduct the indirect selling expenses of Cinsa's export

department or the inventory carrying costs for the period in which the

exported merchandise was in Mexican inventory.

CIC's sole function is to sell merchandise produced by Cinsa,

ENASA, and their affiliates in the U.S. market. In such circumstances,

the Department's practice is to deduct CIC's selling, general, and

administrative expenses from CEP. See Notice of Final Determination of

Sales at Less Than Fair Value: Large Newspaper Printing Presses and

Components Thereof, Whether Assembled or Unassembled, from Germany, 61

FR 38166, 38176 (July 23, 1996). This includes CIC's depreciation,

financial and bad debt expenses, which are considered related to CIC

sales of the subject merchandise and thus deducted from CEP pursuant to

section 772(d)(1)(D). With regard to CIC's expenses to finance loans

from Cinsa used for payment of antidumping cash deposits, although we

have long maintained, and continue to maintain, that antidumping duties

and cash deposits of antidumping duties are not expenses that we should

deduct from U.S. price, it is also the Department's position that,

unlike the duties and cash deposits themselves, financial expenses

associated with cash deposits are not a direct, inevitable consequence

of an antidumping duty order. Therefore, we agree with the petitioner

that it is reasonable to include such financing expenses in the

indirect selling expense calculation for the CEP sales made by CIC. See

Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,

from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside

Diameter, and Components Thereof, from Japan, 63 FR 2558, 2571 (January

15, 1998). However, the record of this review does not indicate whether

CIC's interest expenses with respect to intracorporate loans to pay

antidumping duties and cash deposits that were either incurred or

accrued during the POR were included in CIC's reported U.S. indirect

selling expense calculation. Therefore, the Department made no

adjustment to U.S. indirect selling expenses, which may already include

CIC's interest expenses to finance loans from Cinsa. We will, however,

request clarification of this issue on the record of future reviews.

With regard to indirect selling expenses incurred in Mexico in

support of sales to the United States, we agree with the respondents

that such expenses do not relate to economic activity in the United

States. The Department's current practice, as indicated by the preamble

to the Department's New Regulations, is to deduct indirect selling

expenses incurred in Mexico from the CEP calculation only if they

relate to sales to the unaffiliated purchaser in the United States. We

do not deduct from the CEP calculation indirect selling expenses

incurred in Mexico on the sale to the affiliated purchaser.

Accordingly, because Cinsa and ENASA reported that certain indirect

expenses incurred in Mexico are not associated with selling activity

occurring in the United States, but are limited to selling activities

associated with the sale of merchandise in Mexico to the affiliated

party, CIC, we have not deducted these Mexican indirect selling

expenses from the CEP calculation.

Comment 10: Calculation of U.S. Imputed Credit Expenses

According to the respondents, although the Department's analysis

memorandum for the preliminary results (see Antidumping Duty

Administrative Review of Porcelain-on-Steel Cookware from Mexico (95-

96): Adjustments to Submitted Data) stated that the Department modified

the calculation of reported credit cost to reflect U.S. imputed credit

cost based on unit prices net of discounts, the computer program used

for the preliminary results failed to reflect this intent. Therefore,

credit cost was overstated because imputed credit on U.S. sales was

based on gross price rather than net price.

The petitioner argues that the Department did not deduct any values

from gross unit price in its calculation of U.S. credit expense because

Cinsa and ENASA reported that they did not grant any discounts or

rebates on U.S. sales during the POR. According to the petitioner, the

values identified as rebates by Cinsa and ENASA are actually warranty

expenses and the calculation of U.S. credit expenses net of warranty or

any other direct selling expenses would be contrary to the Department's

policy.

DOC Position

We agree with Cinsa and ENASA that discounts should be deducted

from the U.S. imputed credit calculation. However, for purposes of this

review, the issue is moot because no discounts were reported in the

U.S. market. We also agree with the respondents that the rebates

reported by Cinsa and ENASA are not warranties, as claimed by the

[[Page 38382]]

petitioner. The respondents have characterized these rebates as ``post-

sale price adjustments to account for short-shipments or returned

merchandise.'' There is no information on the record to indicate that

the returned merchandise is defective--a prerequisite for a warranty

expense. However, this issue is also moot since we did not deduct

rebates or warranties from the price on which imputed credit is based.

Final Results of Review

As a result of this review, we have determined that the following

margins exist for the period December 1, 1995 through November 30,

1996:

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

Margin

Manufacturer/Exporter (percent)

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

Cinsa...................................................... 17.33

ENASA...................................................... 62.75

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

The Department shall determine, and the U.S. Customs Service shall

assess, antidumping duties on all appropriate entries. We have

calculated an importer-specific assessment rate based on the ratio of

the total amount of antidumping duties calculated for the examined

sales to the total value of those same sales. This rate will be

assessed uniformly on all entries of that particular importer made

during the POR. The Department will issue appraisement instructions

directly to the Customs Service.

Furthermore, the following deposit requirements shall be effective,

upon publication of this notice of final results of administrative

review, for all shipments of the subject merchandise from Mexico that

are entered, or withdrawn from warehouse, for consumption on or after

the publication date, as provided for by section 751(a)(1) of the

Tariff Act: (1) The cash deposit rates for Cinsa and ENASA will be the

rates established above; (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 of this merchandise will continue to be 29.52 percent, the

all others rate established in the final results of the less than fair

value investigation (51 FR 36435, October 10, 1986). The cash deposit

rate has been determined on the basis of the selling price to the first

unaffiliated customer in the United States. For appraisement purposes,

where information is available, the Department will use the entered

value of the merchandise to determine the assessment rate.

The 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 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 19 CFR 353.34(d). Timely written notification of

return/destruction of APO materials or conversion to judicial

protective order is hereby requested. Failure to comply with the

regulation and the terms of an APO is a sanctionable violation.

This administrative review and notice are in accordance with

sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 353.22.

Dated: July 8, 1998.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-18884 Filed 7-15-98; 8:45 am]

BILLING CODE 3510-DS-M