# Furfuryl Alcohol From the Republic of South Africa; Preliminary Results of Antidumping Duty Administrative Review > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A98-5867 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** March 6, 1998 - **Citation:** 63 FR 11209 ## Text DEPARTMENT OF COMMERCE International Trade Administration [A-791-802] Furfuryl Alcohol From the Republic of South Africa; 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 by the respondent, Illovo Sugar Ltd., the Department of Commerce is conducting an administrative review of the antidumping duty order on furfuryl alcohol from the Republic of South Africa. The review covers one manufacturer/exporter of the subject merchandise to the United States. The period of review is June 1, 1996, through May 31, 1997. We preliminarily find that sales have not been made below normal value. If these preliminary results are adopted in our final results of administrative review, we will instruct the U.S. Customs Service not to assess antidumping duties on the subject merchandise exported by this company. Interested parties are invited to comment on the preliminary results. Parties who submit case briefs in this proceeding are requested to provide, for each comment: (1) a statement of the issue; and (2) a brief summary of the argument. EFFECTIVE DATE: March 6, 1998. FOR FURTHER INFORMATION CONTACT: Michelle Frederick or Kris Campbell, AD/CVD Enforcement Group I, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, Washington, D.C. 20230; telephone: (202) 482-0186 or 482-3813, respectively. SUPPLEMENTARY INFORMATION: The Applicable Statute and Regulations Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), 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 of Commerce's (the Department's) regulations are to the regulations last codified at 19 CFR Part 353 (April 1, 1997). Background On June 21, 1995, the Department published in the Federal Register (60 FR 32302) the antidumping duty order on furfuryl alcohol from the Republic of South Africa. On June 11, 1997, the Department published a notice of ``Opportunity to Request an Administrative Review'' (62 FR 31786) of this antidumping duty order for the period June 1, 1996, through May 31, 1997. On June 27, 1997, we received a timely request for review from Illovo Sugar Ltd. (ISL). On August 1, 1997, we published the notice of initiation of this review (62 FR 41339). We issued a questionnaire to ISL on August 5, 1997, followed by a supplemental questionnaire on January 8, 1998. On August 29, 1997, the petitioner requested that the Department determine whether the respondent absorbed antidumping duties. Scope of Review The merchandise covered by this order is furfuryl alcohol (C4H3OCH2OH). Furfuryl alcohol is a primary alcohol and is colorless or pale yellow in appearance. It is used in the manufacture of resins and as a wetting agent and solvent for coating resins, nitrocellulose, cellulose acetate, and other soluble dyes. The product subject to this order is classifiable under subheading 2932.13.00 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of this proceeding is dispositive. Fair Value Comparisons We compared the constructed export price (CEP) to the normal value (NV), as described in the Constructed Export Price and Normal Value sections of this notice. Pursuant to section 777A(d)(2) of the Act, we compared the CEPs of individual transactions to contemporaneous monthly weighted-average prices of sales of the foreign like product. We were able to match all subject merchandise sold during the POR to identical merchandise sold in the home market. Constructed Export Price For sales to the United States, we calculated a CEP as defined in section 772(b) of the Act because we determined that ISL is affiliated with its exclusive U.S. agent, Harborchem, and because the subject merchandise was sold to unaffiliated U.S. purchasers after the date of importation. Our finding that ISL and Harborchem are affiliated is consistent with our findings in the less- [[Page 11210]] than-fair-value (LTFV) investigation and the first administrative review. See Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from the Republic of South Africa, 60 FR 22550, 22552 (Comment 1) (May 8, 1995), and Notice of Final Results of Antidumping Duty Review: Furfuryl Alcohol from the Republic of South Africa, 62 FR 61084, 61087-88 (Comment 5) (November 14, 1997) (1994-96 Final Results). We reviewed the information submitted on the record of this segment of the proceeding (e.g., Exhibit A-4 of the September 9, 1997 response) and found that the facts that led to this finding in the above-cited segments have not changed. For example, this evidence indicates that ISL and Harborchem have an exclusive distributor agreement and routinely coordinate marketing and sales activity, including pricing, with respect to sales to U.S. customers. We calculated CEP based on f.o.b. and delivered prices to unaffiliated purchasers in the United States. We made deductions, where applicable, for foreign inland movement expenses, (including foreign warehousing and warehousing insurance), domestic brokerage and handling, ocean freight, marine insurance, U.S. brokerage and handling, U.S. inland freight expenses (offset by freight revenue), U.S. warehousing and insurance, and quality testing,1 in accordance with section 772(c)(2)(A) of the Act. --------------------------------------------------------------------------- \1\ Consistent with the 1994-96 Final Results (62 FR 61084, 61091 (Comment 9)), we have determined that quality testing expenses incurred by ISL are movement expenses that the company incurs upon the arrival of the subject merchandise at the U.S. port of entry. The testing is performed at the time the product is unloaded from the maritime vessel in order to detect any impurities that may have entered the product while in transit. --------------------------------------------------------------------------- We also deducted direct selling expenses and indirect selling expenses associated with commercial activity in the United States in accordance with section 772(d)(1) of the Act. These include credit expenses, inventory carrying costs, and other indirect selling expenses. Finally, we deducted an amount of profit allocated to direct, indirect, and imputed selling expenses associated with commercial activity in the United States in accordance with section 772(d)(3) of the Act. For a further discussion of the calculation of this profit amount, see Memorandum from Michelle Frederick and Constance Handley to the File: Preliminary Results of 1996-97 Administrative Review of Furfuryl Alcohol from South Africa (March 2, 1998). No other adjustments to CEP were claimed or allowed. Normal Value In order to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared ISL's volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise. Pursuant to section 773(a)(1) of the Act, because ISL's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise, we determined that the home market was viable. We based NV on the price at which the foreign like product was first sold for consumption in South Africa, in the usual commercial quantities, in the ordinary course of trade, and at the same level of trade as the CEP,2 in accordance with section 773(a)(1)(B)(i) of the Act. We made deductions from the starting price for home market packing and movement expenses in accordance with sections 773(a)(6)(B)(i) and (ii) of the Act. Pursuant to section 773(a)(6)(C)(iii) of the Act, we made a circumstance-of-sale (COS) adjustment to NV by deducting home market credit expenses. --------------------------------------------------------------------------- \2\ As noted below, we found that all home market and CEP sales were made at the same level of trade. --------------------------------------------------------------------------- No other adjustments to NV were claimed or allowed. Level of Trade/CEP Offset In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade as the U.S. sales. The NV level of trade is that of the starting-price sales in the comparison market. For CEP sales, such as those made by ISL in this review, the U.S. level of trade is the level of the constructed sale from the exporter to the importer. To determine whether NV sales are at a different level of trade than that of the U.S. sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison-market sales are at a different level of trade and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison- market sales at the level of trade of the export transaction, we make a level-of-trade adjustment under section 773(a)(7)(A) of the Act. Finally, if the NV level is more remote from the factory than the CEP level and there is no basis for determining whether the difference in the levels between NV and CEP affects price comparability, we adjust NV under section 773(a)(7)(B) of the Act (the CEP-offset provision). See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732 (November 19, 1997). In implementing these principles in this review, we obtained information from ISL about the marketing stage involved in the reported U.S. and home market sales, including a description of the selling activities performed by ISL for each channel of distribution. In identifying levels of trade for CEP and home market sales, we considered the selling functions reflected in the CEP, after the deduction of expenses and profit under section 772(d) of the Act, and those reflected in the home market starting price before making any adjustments. We expect that, if claimed levels of trade are the same, the functions and activities of the seller should be similar. Conversely, if a party claims that levels of trade are different for different groups of sales, the functions and activities of the seller should be dissimilar. The record evidence before us in this review indicates that the home market and CEP levels of trade have not changed from the 1994-96 Review.3 Although in this review, as in prior segments of the proceeding, ISL claimed entitlement to a CEP offset, we determined that for ISL there was one home market level of trade and one U.S. level of trade (i.e., the CEP level of trade), and that ISL's CEP level of trade was equivalent to the level of trade for the home market. ISL has claimed that ``a different level of trade must exist'' 4 because the level-of-trade analysis does not consider the selling activities of Harborchem (the affiliated U.S. distributor). However, we find that the selling activities performed by ISL with respect to its home market and CEP sales 5 are not sufficiently different to constitute separate levels of trade. In both markets, ISL's selling activities consist primarily of order processing, marketing assistance, and technical support (including quality control [[Page 11211]] reports provided by ISL to Harborchem with respect to U.S. sales). --------------------------------------------------------------------------- \3\ See 62 FR 61084, 61089-90 (Comment 7). \4\ ISL February 6, 1998, supplemental response at 26. \5\ ISL's home market and U.S. selling activities are detailed at pages 24-26 of its September 9, 1998, response and at page 25 of its February 6, 1998, response, respectively. --------------------------------------------------------------------------- ISL claims that there is a qualitative difference in the amount of selling activities provided, since its home market sales significantly outnumber its shipments to Harborchem. However, as we stated in the 1994-96 Final Results, while we examine selling functions on both a qualitative and quantitative basis, our examination is not contingent on the number of customers nor on the number of sales for which the activity is performed.6 --------------------------------------------------------------------------- \6\ 62 FR 61084, 61090 (Comment 7). --------------------------------------------------------------------------- Accordingly, having determined that ISL's sales in the home market were at a level of trade that does not constitute a more advanced stage of distribution than the level of trade of the CEP, we did not make a CEP offset to NV. Absorption of Antidumping Duties On August 29, 1997, the petitioner requested that the Department determine whether antidumping duties have been absorbed by ISL. Since the preliminary assessment rate for the review is zero, we preliminarily determine that ISL has not absorbed antidumping duties. Currency Conversion We made currency conversions based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York. Section 773A(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 our 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 exists, we substitute the benchmark for the daily rate. See Policy Bulletin 96-1 Currency Conversions, 61 FR 9434 (March 8, 1996). Preliminary Results of Review As a result of this review, we preliminarily determine that the following margin exists for the period June 1, 1996--May 31, 1997: ------------------------------------------------------------------------ Margin Manufacturer/exporter (percent) ------------------------------------------------------------------------ Illovo Sugar Ltd........................................... 0.00 ------------------------------------------------------------------------ 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 ten days of publication. Any hearing, if requested, will be held 44 days after the publication of this notice, or the first workday thereafter. Interested parties may submit case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than 37 days after the date of publication. The Department will issue a notice of the final results of this administrative review, which will include the results of its analysis of issues raised in any such briefs, within 120 days from the publication of these preliminary results. The Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. If these preliminary results are adopted in our final results, we will instruct the Customs Service not to assess antidumping duties on the merchandise subject to review. Upon completion of this review, the Department will issue appraisement instructions directly to the Customs Service. Furthermore, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of furfuryl alcohol from the Republic of South Africa 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 ISL will be the rate established in the final results of this review, except, if the rate is less than 0.5 percent and, therefore, de minimis, the cash deposit will be zero; (2) if the exporter is not a firm covered in this review, the previous 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 (3) if neither the exporter nor the manufacturer is a firm covered in this or any previous review conducted by the Department, the cash deposit rate will be 11.55 percent, the ``All Others'' rate established in the LTFV investigation. These cash deposit 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 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 2, 1998. Robert S. LaRussa, Assistant Secretary for Import Administration. [FR Doc. 98-5867 Filed 3-5-98; 8:45 am] BILLING CODE 3510-DS-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A98-5867. Public record. Not legal advice.