Notice of Preliminary Determination of Sales at Not Less Than Fair Value and Preliminary Negative Critical Circumstances Determination: Certain Polyester Staple Fiber From Taiwan

DEPARTMENT OF COMMERCE

International Trade Administration

[A-583-833]

Notice of Preliminary Determination of Sales at Not Less Than

Fair Value and Preliminary Negative Critical Circumstances

Determination: Certain Polyester Staple Fiber From Taiwan

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: November 8, 1999.

FOR FURTHER INFORMATION CONTACT: Cynthia Thirumalai or Alysia Wilson,

Office 1 AD/CVD Enforcement, Import Administration, International Trade

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

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

4087 or (202) 482-0108, respectively.

The Applicable Statute and Regulations

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 Department of Commerce (Department)

regulations refer to the regulations codified at 19 CFR Part 351 (April

1998).

Preliminary Determination

We preliminarily determine that certain polyester staple fiber

(PSF) from Taiwan is not being sold, nor is likely to be sold, in the

United States at less than fair value (LTFV), as provided in section

733(b) of the Act.

Case History

This investigation was initiated on April 22, 1999. See Initiation

of Antidumping Duty Investigations: Certain Polyester Staple Fiber From

the Republic of Korea and Taiwan, 64 FR 23053 (April 29, 1999)

(Initiation Notice). Since the initiation of this investigation, the

following events have occurred:

On May 17, 1999, the United States International Trade Commission

(the ITC) preliminarily determined that there is a reasonable

indication that imports of the product under investigation are

materially injuring the United States industry.

In the Initiation Notice and in a letter dated May 24, 1999, the

Department solicited comments on the scope of the investigation and

matching criteria. We received comments on the scope of the

investigation and matching criteria from various interested parties May

12, 1999 through June 7, 1999. On June 2, 1999, the Department issued

antidumping questionnaires to the two largest producers/exporters of

subject merchandise (i.e., Far Eastern Textile Ltd. (Far Eastern) and

Nan Ya Plastics Corporation (Nan Ya), collectively referred to as ``the

respondents''), as indicated by information on the record of the

proceeding at that time.

The respondents submitted their initial responses to the

questionnaire July 2 through 29, 1999. The petitioners submitted

comments on these responses. After analyzing the responses and the

petitioners' comments, we issued supplemental questionnaires to the

respondents on August 6, 1999. We received the narrative responses to

these supplemental questionnaires August 12 through 27, 1999, and the

associated databases on September 3, 1999. On September 14, 1999, we

asked respondents to provide explanations for all of the updates and

changes to their databases submitted September 3. 1999. The respondents

submitted their explanations on September 17 and 20, 1999. On October

13, 1999, the petitioners submitted additional comments on respondents'

questionnaire responses. The Department issued another supplemental

questionnaire to Nan Ya on October 19, 1999. On October 25, 1999, Nan

Ya responded to the last supplemental questionnaire. In addition, the

Department requested certain documentation from Nan Ya on September 16,

1999; Nan Ya supplied these documents on October 26, 1999.

The petitioners submitted an allegation that critical circumstances

exist with respect to imports of PSF from Taiwan on July 30, 1999. On

August 6, 1999, the Department issued critical circumstances

questionnaires as part of the supplemental questionnaires.

On August 25, 1999, at the request of the petitioners, the

Department extended the preliminary determination until no later than

September 29, 1999. See Notice of Postponement of Preliminary

Antidumping Duty Determinations: Certain Polyester Staple Fiber from

the Republic of Korea and Taiwan, 64 FR 47766 (September 1, 1999). On

September 29, 1999, the petitioners requested another extension. In

response, the Department extended

[[Page 60772]]

the preliminary determination until no later than October 4, 1999. See

Notice of Postponement of Preliminary Antidumping Duty Determinations:

Certain Polyester Staple Fiber from the Republic of Korea and Taiwan,

64 FR 55248 (October 12, 1999). We further extended the preliminary

determination until no later than October 29, 1999 based on

petitioners' September 29, 1999 request. See Notice of Postponement of

Preliminary Antidumping Duty Determinations: Certain Polyester Staple

Fiber from the Republic of Korea and Taiwan, 64 FR 557001 (October 14,

1999).

Period of Investigation

The period of investigation (POI) is April 1, 1998, through March

31, 1999.

This period corresponds to each respondent's four most recent

fiscal quarters prior to the filing of the petition.

Scope of Investigation

For purposes of this investigation, the product covered is certain

polyester staple fiber. Certain polyester staple fiber is defined as

synthetic staple fibers, not carded, combed or otherwise processed for

spinning, of polyesters measuring 3.3 decitex (3 denier, inclusive) or

more in diameter. This merchandise is cut to lengths varying from one

inch (25 mm) to five inches (127 mm). The merchandise subject to this

investigation may be coated, usually with a silicon or other finish, or

not coated. Certain polyester staple fiber is generally used as

stuffing in sleeping bags, mattresses, ski jackets, comforters,

cushions, pillows, and furniture. Merchandise of less than 3.3 decitex

(less than 3 denier) classified under the Harmonized Tariff Schedule of

the United States (HTSUS) at subheading 5503.20.00.20 is specifically

excluded from this investigation. Also specifically excluded from this

investigation are polyester staple fibers of 10 to 18 denier that are

cut to lengths of 6 to 8 inches (fibers used in the manufacture of

carpeting).

The merchandise subject to these investigations is classified in

the HTSUS at subheadings 5503.20.00.40 and 5503.20.00.60. Although the

HTSUS subheadings are provided for convenience and customs purposes,

the written description of the merchandise under investigation is

dispositive.

Scope Comments: As stated in our notice of initiation, we set aside

a period for parties to raise issues regarding product coverage. Stein

Fibers, Ltd. (Stein Fibers), an importer of PSF, requested that the

Department modify the scope of investigation to exclude regenerated

PSF. Far Eastern and Nan Ya requested that the Department exclude low-

melt PSF from the scope of investigation.

Stein Fibers states that under the criteria set forth in the

Department's regulations at 19 CFR 351.225(k)(2) (the ``Diversified

Products criteria''), regenerated fiber does not fall within the scope

of this investigation. First, Stein Fibers asserts that regenerated

fiber is a low quality product that is not comparable to U.S.-produced

high-quality virgin and recycled PSF. Second, Stein Fibers contends

that the quality differences result in different expectations by the

ultimate user and in the product's ultimate use. Third, Stein Fibers

states that regenerated PSF and U.S.-made virgin or recycled PSF do not

compete with each other, and therefore, their channels of trade are

dissimilar. Finally, Stein Fibers claims that regenerated fiber is

never advertised or displayed while particular brands of U.S.-made

virgin or recycled PSF are prominently displayed and advertised in the

bedding departments of many department stores.

Gates Formed-Fibre Products, Inc. (Gates), an importer of PSF and

interested party in the companion antidumping duty investigation of PSF

from the Republic of Korea, stated that the black and colored fiber

extruded from textile fiber waste that it imports for the manufacture

of substrate for automobile trunk liners is a different class or kind

of merchandise than the products covered by the petition. Therefore,

Gates argued, black automotive substrate (BAS) should be excluded from

the scope of the investigation because (1) it cannot be used for the

fill applications described in the petition; (2) it is distinct from

other fiber products; (3) it should be excluded based on consideration

of the ``Diversified Products'' criteria as set forth in the

Department's regulations; (4) the petitioners are considering its

exclusion; and (5) if excluded, there would be no risk of

circumvention.

With respect to the ``Diversified Products'' criteria, Gates

submitted specific comments on each of the criteria. First, Gates

claimed that BAS differs from fiber fill product in all possible model

matching criteria. Second, Gates stated that the ultimate purchaser

would not accept BAS for use in the manufacture of merchandise such as

pillows and ski jackets which require fiber fill. Third, Gates asserted

that fiber fill is distributed by importers to manufacturers of

pillows, comforters, jackets, etc., which then resell their products to

distributors and large retailers. BAS is used in the manufacture of

trunk liners which are then sold to original equipment manufacturers or

their suppliers. Fourth, BAS cannot be used for fill applications.

Fifth, products using fiber fill are advertised directly to consumers

while BAS for trunk liners is not advertised to consumers.

Far Eastern and Nan Ya note that low-melt PSF acts as an adhesive

to hold other fibers together for non-woven batting in high-loft

products. Since low-melt PSF itself is not used as filling and is not

similar in appearance to cotton or wool, Far Eastern and Nan Ya state

that low-melt PSF is clearly outside the scope of investigation.

Moreover, Far Eastern and Nan Ya assert that low-melt PSF is outside

the scope of investigation when considered in light of the

``Diversified Products'' criteria. First, with respect to product

characteristics, low-melt PSF consists of an outer sheath and an inner

core as opposed to single-component PSF, according to Far Eastern and

Nan Ya. Second, with respect to the expectations of the ultimate user

and the ultimate use, Far Eastern and Nan Ya point out that low-melt

PSF is used as a bonding agent, not as a filler or loft material.

Third, Far Eastern and Nan Ya state that while the channels of trade

may be similar, this single criterion is not dispositive. Finally, Far

Eastern and Nan Ya note that they supply the U.S. market with a

particular specification of low-melt PSF suitable for furniture and

bedding manufacturing that is not available domestically in the United

States.

Saehan Industries Inc. and Samyang Corporation (Saehan/Samyang),

respondents in the companion antidumping duty investigation of PSF from

the Republic of Korea, stated that conjugate polyester staple fiber

(conjugate PSF) and low-melt polyester staple fiber (low-melt PSF) do

not fall under the scope of this investigation. Saehan/Samyang argued

that conjugate PSF should be excluded from the scope because there is

no U.S. industry producing this product. Saehan/Samyang stated that

low-melt PSF is not ``fiber for fill'' and is, thus, not the product

targeted by the petitioners. Moreover, Saehan/Samyang claimed that

under the ``Diversified Products'' criteria, conjugate PSF and low-melt

PSF are outside the scope of this investigation. First, Saehan/Samyang

noted that the manufacturing process for conjugate fiber creates a

natural curl or spiral, resulting in greater ``fluff.'' ``Regular''

fibers, produced by the petitioners, are straight or mechanically

crimped and lack the loft of conjugate fiber.

[[Page 60773]]

Second, Saehan/Samyang cited testimony given before the ITC

asserting that end-users expect greater loft and a down-like quality

from conjugate fibers which is not characteristic of the mechanically-

crimped fibers produced by DuPont, one of the petitioners. Third,

Saehan/Samyang stated that ``regular'' PSF and conjugate PSF are both

used in the production of furniture and home furnishings and,

therefore, they are not sold in different channels of trade. However,

Saehan/Samyang argued that channels of trade is less significant as a

criterion in this case because there are no different channels of trade

for any products used in this industry. Fourth, the ultimate use of

conjugate PSF is to create a certain level of loft. In the United

States, it is either used to provide high-loft characteristics, or it

is mixed with ``regular'' fiber to achieve different levels of loft,

and these two fibers are not interchangeable. Fifth, Saehan/Samyang

stated that although these products are not advertised or displayed in

the same way as products sold directly in the retail market,

manufacturers and customers treat the two products very differently.

The petitioners objected to the interested parties' requests that

regenerated, low-melt, BAS, and conjugate PSF be excluded from the

scope of the investigation. According to the petitioners, these

products are all PSF, meet the definition of the scope, and are

captured within the scope intended by the petitioners. Furthermore, the

petitioners claimed that all of these imported products are

domestically available. The petitioners added that there is no basis

for creating a separate class or kind of merchandise relating to the

PSF under consideration.

For purposes of this preliminary determination and in consideration

of comments by interested parties, the Department has not modified the

scope of this investigation because the current language reflects the

product coverage requested by the petitioners, and we have determined

that regenerated, low-melt, BAS, and conjugate PSF fall within that

scope. On the issue of whether BAS is a separate class or kind of

merchandise under the ``Diversified Products'' criteria, we will make a

determination in the final determination of this investigation.

Critical Circumstances

On July 30, 1999, as amended on August 19, 1999, the petitioners

alleged that critical circumstances exist with respect to imports of

PSF from Taiwan. In accordance with 19 CFR 351.351(c)(2)(i), since this

allegation was filed at least 20 days prior to our preliminary

determination, we must issue our preliminary critical circumstances

determination not later than the preliminary determination.

Section 733(e)(1) of the Act provides that, if a petitioner alleges

critical circumstances, the Department will determine whether there is

a reasonable basis to believe or suspect that: (A)(i) There is a

history of dumping and material injury by reason of dumped imports in

the United States or elsewhere of the subject merchandise, or (ii) the

person by whom, or for whose account, the merchandise was imported knew

or should have known that the exporter was selling the subject

merchandise at less than its fair value and that there was likely to be

material injury by reason of such sales, and (B) there have been

massive imports of the subject merchandise over a relatively short

period.

History of Dumping

The petitioners submitted information indicating that the European

Union (EU) imposed antidumping duties on synthetic fibers of polyester

(PSF) from Taiwan in 1992; the EU continues to impose antidumping

duties on PSF from Taiwan. Based on the foregoing, we preliminarily

determine that there is a history of dumping and material injury with

respect to PSF from Taiwan. Therefore, we find that the first criterion

has been satisfied. We must now examine whether or not respondents had

massive imports.

Massive Imports

Far Eastern and Nan Ya submitted data on shipments of subject

merchandise to the United States for the eight-month period beginning

with December 1998 and ending with July 1999. 19 CFR 351(h) states

that, unless the imports during a ``relatively short period'' have

increased by at least 15 percent over the imports during a period

immediately preceding the filing of the petition, the Secretary will

not consider the imports massive. Furthermore, pursuant to 19 CFR

351(i), the Secretary will normally consider a ``relatively short

period'' the period beginning on the date the proceeding begins and

ending at least three months later. We compared Far Eastern's and Nan

Ya's exports in the four-month pre-petition period, December 1998

through March 1999, to their exports in the four months after the

filing of the petition, April through July 1999. These comparisons

indicate that exports by Far Eastern and Nan Ya did not increase by 15

percent respectively from one period to the next.

Based on these facts, we determine that the second criterion for

finding that critical circumstances exist is not satisfied. Therefore,

we preliminarily determine that critical circumstances do not exist

with respect to exports of PSF from Taiwan by Far Eastern and Nan Ya.

We will make a final determination concerning critical circumstances

when we make our final determination in this investigation.

Product Comparisons

All products produced and sold by the respondents in the home

market that fit the definition contained in the Scope of the

Investigation section of this notice comprise the foreign like product.

(See section 771(16) of the Act.) For purposes of this preliminary

determination, we have relied on the following criteria, in order, to

match U.S. sales of PSF to home market sales of the foreign like

product: (1) Fiber composition (conjugate; single component, crimped;

low melt; etc.); (2) fiber type (virgin; recycled; blended;

regenerated); (3) cross section; (4) finish; and (5) denier. Also,

because Nan Ya reported that its sales of PSF in both the home market

and in the United States were differentiated by grade of product and

Far Eastern reported that its sales were differentiated by color, we

compared Nan Ya's sales by grade and Far Eastern's by color.

We first attempted to compare sales of products sold in the U.S.

and the home market that were identical with respect to the product

matching criteria above. Where we did not find any home market sales of

merchandise that were identical in these respects to the merchandise

sold in the United States, we compared U.S. products with the most

similar merchandise sold in the home market. Where there were no

appropriate comparison market sales of comparable merchandise, we

compared the merchandise sold in the United States to constructed value

(CV), in accordance with section 773 (a)(4) of the Act.

Fair Value Comparisons

To determine whether sales of certain polyester staple fiber from

Taiwan were made in the United States at less than fair value, we

compared the export price (EP) to the normal value (NV), as described

in the Export Price and Normal Value sections of this notice. In

accordance with section 777A(d)(1)(A)(i) of the Act, we calculated POI

weighted-average EPs for comparison to POI weighted-average normal

values.

Date of Sale

We have preliminarily determined that the date of sale for home

market and U.S. sales of both Nan Ya and Far

[[Page 60774]]

Eastern is the purchase order date/order acceptance memo date.

According to the respondents, the material terms of sale rarely changed

after this date and any quantity changes made to the sale before

shipment were within the industry accepted tolerances.

For some sales by Far Eastern, reported purchase order dates

occurred after the date of shipment. For these sales, we have relied on

the date of shipment as the date of sale since it is the Department's

practice not to rely on a date later than the date of shipment as the

date of sale (see Notice of Final Determination of Sales at Less Than

Fair Value: Stainless Steel Sheet and Strip in Coils From the Republic

of Korea, 64 FR 30664, 30666 (July 8, 1999)).

Export Price

In accordance with section 772 of the Act, we based U.S. price on

EP. Section 772(a) of the Act defines EP as the price at which the

subject merchandise is first sold before the date of importation by the

exporter or producer outside the United States to an unaffiliated

purchaser in the United States, or to an unaffiliated purchaser for

exportation to the United States. Consistent with this definition, we

found that the respondents made EP sales during the POI. For both

respondents, we calculated EP based on prices charged to the first

unaffiliated customer in the United States.

As the starting U.S. price, we used reported gross unit prices on

CIF and FOB bases. In accordance with section 772(c)(2) of the Act, we

reduced the EP by export taxes, duties and movement expenses, where

appropriate. Movement expenses included foreign inland freight,

international freight, brokerage and handling, and marine insurance.

Normal Value

A. Selection of Comparison Markets

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 each respondent's volume of home market sales of the

foreign like product to the volume of their U.S. sales of the subject

merchandise. Pursuant to sections 773(a)(1)(B) and (C) of the Act,

because each respondent'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 for both producers.

B. Sales to Affiliated Customers

Nan Ya made sales in the home market to affiliated customers. To

test whether these sales were made at arm's length, we compared the

starting prices of sales to affiliated and unaffiliated customers, net

of all movement charges, direct and indirect selling expenses,

discounts and packing. Where the price to Nan Ya's affiliated customer

was on average 99.5 percent or more of the price to its unaffiliated

customers, we determined that the sales made to the affiliated customer

were at arm's length and included those sales in our calculation of NV

pursuant to 19 CFR 351.403(c). The prices to some of Nan Ya's

affiliated customers were, on average, less than 99.5 percent of the

price to unaffiliated customers and were excluded from the calculation

of NV because they were determined not to be at arm's length.

C. Cost of Production Analysis

Based on allegations contained in the petition, and in accordance

with section 773(b)(2)(A)(i) of the Act, we found reasonable grounds to

believe or suspect that sales of PSF in Taiwan were made at prices

below the cost of production (COP). See Initiation Notice, 64 FR at

23055. As a result, the Department has conducted investigations to

determine whether the respondents made sales in their home market at

prices below their respective COPs during the POI within the meaning of

section 773(b)(1) of the Act. We conducted the COP analysis described

below.

1. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated a

weighted-average COP for PSF based on the sum of the cost of materials

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

and administrative (G&A) expenses and packing. We relied on the COP

data submitted by each respondent in its cost questionnaire responses

with the following exceptions for Nan Ya: (1) We have disallowed the

scrap credit for regenerated products because information on the record

indicates that Nan Ya has inappropriately allocated the scrap credit to

regenerated products and (2) we adjusted Nan Ya's G&A expense rate for

other operating costs (see the memorandum to the file on the COP and CV

adjustments for Nan Ya dated October 29, 1999).

2. Test of Home Market Sales Prices

We compared the adjusted, weighted-average COP to the home market

sales of the foreign like product by each respondent. The home market

prices were computed net of any applicable discounts, movement charges,

taxes, and other direct and indirect selling expenses. We made this

comparison in accordance with section 773(b)(1) of the Act, in order to

determine whether these sales had been made at prices below the COP

within an extended period of time (i.e., a period of one year) in

substantial quantities 1 and whether such prices were

sufficient to permit the recovery of all costs within a reasonable

period of time.

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\1\ In accordance with section 773(b)(2)(C)(i) of the Act, we

determined that sales made below the COP were made in substantial

quantities if the volume of such sales represented 20 percent or

more of the volume of sales under consideration for the

determination of normal value.

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3. Results of the COP Test

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

percent of a respondent's sales of a given product were at prices less

than the COP, we did not disregard any below-cost sales of that product

because we determined that the below-cost sales were not made in

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

sales of a given product during the POI were at prices less than the

COP, we determined such sales to have been made in ``substantial

quantities'' within an extended period of time in accordance with

section 773(b)(2)(B) or the Act. Because we compared prices to the

average COP calculated over the POI, we also determined that such sales

were not made at prices which would permit recovery of all costs within

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

the Act.

We found that, for certain models of PSF, more than 20 percent of

the home market sales of both respondents were made within an extended

period of time at prices less than the COP. Further, the prices did not

provide for the recovery of costs within a reasonable period of time.

Therefore, we disregarded the below-cost sales and used the remaining

sales as the basis for determining normal value, in accordance with

section 773(b)(1) of the Act.

For those U.S. sales of PSF for which there were no comparable home

market sales in the ordinary course of trade, we compared EP to the

constructed value in accordance with section 773(a)(4) of the Act. See

Calculation of Normal Value Based on Constructed Value section, below.

D. Calculation of Normal Value Based on Home Market Prices

We performed price-to-price comparisons where there were sales of

comparable merchandise in the home

[[Page 60775]]

market that did not fail the cost test. We calculated NV based on ex-

works or delivered prices to home market customers. We made deductions

from the starting price, where appropriate, for movement expenses and

discounts, pursuant to section 773(a)(6)(B). In accordance with section

773(a)(6)(A) and (B) of the Act, we deducted home market packing costs

and added U.S. packing costs. In addition, we made circumstance of sale

(COS) adjustments for direct expenses (i.e., credit expenses,

commissions and bank charges), where appropriate, in accordance with

section 773(a)(6)(C)(iii) of the Act.

When comparing U.S. sales with home market sales of similar, but

not identical, merchandise, we also made adjustments to normal value

for physical differences in the merchandise in accordance with section

773(a)(6)(C)(ii) of the Act. We based this adjustment on the difference

in the variable costs of manufacturing for the foreign like product and

subject merchandise, using POI-average costs.

We also made adjustments, in accordance with 19 CFR 351.410(e), for

indirect selling expenses incurred on home market or U.S. sales where

commissions were granted on sales in one market but not in the other

(the ``commission offset''). Specifically, where commissions were

granted in the U.S. market but not in the home market, we made a

downward adjustment to normal value for the lesser of (1) the amount of

the commission paid in the U.S. market, or (2) the amount of indirect

selling expenses incurred in the home market.

E. Calculation of Normal Value Based on Constructed Value

Section 773(a)(4) of the Act provides that where normal value

cannot be based on home market sales, normal value may be based on the

constructed value (CV). Accordingly, for those models of PSF for which

we could not determine the normal value based on home market sales,

either because (1) there were no sales of a comparable product or (2)

all sales of comparison products failed the COP test, we based normal

value on the CV.

Sections 773(e)(1) and (2)(A) of the Act provides that the CV shall

be based on the sum of the cost of materials and fabrication for the

foreign like product, plus amounts for selling, general, and

administrative expenses (SG&A), profit, and U.S. packing costs. For

each respondent, we calculated the cost of materials and fabrication

based on the methodology described in the Calculation of COP section,

above. We relied on the CV data submitted by each respondent in its

questionnaire responses with the exception for Nan Ya of disallowing

the scrap credit for regenerated products because information on the

record indicates that Nan Ya has inappropriately allocated the scrap

credit to regenerated products. As a result, we added the scrap credit

back to the regenerated PSF material costs for Nan Ya. (See the

memorandum to the file on the COP and CV adjustments for Nan Ya dated

October 29, 1999.) We based SG&A and profit for each respondent on the

actual amounts reported as incurred and realized by the respondent in

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

the ordinary course of trade for consumption in the home market, in

accordance with section 773(e)(2)(A) of the Act. For Nan Ya, this

entailed reclassifying certain operating expenses pertaining to

calculation of the G&A percentage.

We made adjustments to CV for differences in COS in accordance with

section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons to EP,

we made COS adjustments by deducting direct selling expenses incurred

on home market sales from, and adding U.S. direct selling expenses to,

CV.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent

practicable, we determine normal value based on sales in the home

market at the same level of trade as the EP. The normal value level of

trade is that of the starting-price sales in the home market or, when

normal value is based on CV, that of the sales from which we derive

SG&A expenses and profit. For EP, the U.S. level of trade is also the

level of the starting-price sale, which is usually from exporter to

importer.

To determine whether normal value sales are at a different level of

trade than EP, we examine stages in the marketing process and selling

functions along the chain of distribution between the producer and the

unaffiliated (or arm's length) customer. If the home 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 normal value is based and home

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.

In implementing these principles in this investigation, we obtained

information from each respondent about the marketing stages involved in

the reported U.S. and home market sales, including a description of the

selling activities performed by the respondents for each channel of

distribution. In identifying levels of trade for EP and home market

sales we considered the selling functions reflected in the starting

price before any adjustments.

In this investigation, we found that the respondents perform

minimal selling functions in the United States and home markets. With

respect to each respondent's EP sales, we found a single level of trade

in the United States, and a single, identical level of trade in the

home market. It was, thus, unnecessary to make any level-of-trade

adjustment for comparison of EP and home market prices.

Currency Conversions

We made currency conversions in accordance with section 773A of the

Act. The Department's preferred source for daily exchange rates is the

Federal Reserve Bank. 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. It is

the Department's practice to find that a fluctuation exists when the

daily exchange rate differs from the benchmark rate by 2.25 percent

(see Extruded Rubber Thread From Malaysia; Final results of Antidumping

duty Administrative Review, 64 FR 12967, 12970 (March 16, 1999)). The

benchmark is defined as the moving average of rates for the past 40

business days. When we determine a fluctuation to have existed, we

substitute the benchmark rate for the daily rate, in accordance with

established practice.

Verification

In accordance with section 782(i) of the Act, we intend to verify

information to be used in making our final determination. At

verification, we will closely examine changes between the most recently

submitted data sets and prior data sets including, but not limited to:

cost allocations, materials usage, unit prices, and expenses. We will

also thoroughly check the completeness of respondents' sales reporting.

Suspension of Liquidation

Since the estimated weighted-average dumping margins for all

examined companies (i.e., both Far Eastern and Nan Ya) are de minimis,

we are directing the Customs Service not to suspend liquidation of

entries of certain polyester staple fiber from Taiwan. These

instructions not suspending liquidation will remain in effect until

further notice.

[[Page 60776]]

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of our negative preliminary determination. If our final antidumping

determination is affirmative, the ITC will determine whether these

imports are materially injuring, or threaten material injury to, the

U.S. industry. The deadline for that ITC determination would be the

later of 120 days after the date of this preliminary determination or

45 days after the date of our final determination.

Disclosure

We will disclose the calculations used in our analysis to parties

to this proceeding within five days of the publication date of this

notice. See 19 CFR 351.224(b).

Public Comment

For this investigation, case briefs must be submitted no later than

November 22, 1999. Rebuttal briefs must be filed no later than November

29, 1999. A list of authorities used, a table of contents, and an

executive summary of issues should accompany any briefs submitted to

the Department. Executive summaries should be limited to five pages

total, including footnotes.

Section 774 of the Act provides that the Department will hold a

hearing to afford interested parties an opportunity to comment on

arguments raised in case or rebuttal briefs, provided that such a

hearing is requested by any interested party. If a hearing is

requested, it will be held on December 3, 1999, at the U.S. Department

of Commerce, 14th Street and Constitution Avenue, NW., Washington, D.C.

20230. Parties should confirm by telephone the time, date, and place of

the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing, or to participate

if one is requested, must submit a written request within 30 days of

the publication of this notice. Requests should specify the number of

participants and provide a list of the issues to be discussed. Oral

presentations will be limited to issues raised in the briefs.

If this investigation proceeds normally, we will make our final

determination no later than 135 days after the date of publication of

this notice.

This determination is published pursuant to sections 733(d) and

777(i)(1) of the Act.

Dated: October 29, 1999.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-29207 Filed 11-5-99; 8:45 am]

BILLING CODE 3510-DS-P