Electrolytic Manganese Dioxide From Greece: Final Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-484-801]

Electrolytic Manganese Dioxide From Greece: 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 May 10, 1999, the Department of Commerce published the

preliminary results of the administrative review of the antidumping

duty order on electrolytic manganese dioxide from Greece. The review

covers one producer/exporter, Tosoh Hellas A.I.C., during the period of

review April 1, 1997, through March 31, 1998.

We gave interested parties an opportunity to comment on the

preliminary results. After our analysis of the comments received, we

made no changes for the final results.

EFFECTIVE DATE: November 16, 1999.

FOR FURTHER INFORMATION CONTACT: Hermes Pinilla or Richard Rimlinger,

Import Administration, International Trade Administration, U.S.

Department of Commerce, Washington, DC 20230; telephone: (202) 482-3477

or (202) 482-4477, respectively.

SUPPLEMENTARY INFORMATION:

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, as amended (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 19 CFR part 351 (1998).

Background

On May 10, 1999, we published in the Federal Register the

preliminary results of the administrative review of the antidumping

duty order on electrolytic manganese dioxide (EMD) from Greece.

Preliminary Results of Antidumping Duty Administrative Review:

Electrolytic Manganese Dioxide from Greece, 64 FR 25008 (preliminary

results). Kerr-McGee Chemical LLC and Chemetals, Inc. (collectively the

petitioners), submitted their case brief on August 10, 1999. Tosoh

Hellas A.I.C. (Tosoh), the sole respondent in this review, did not

submit a case brief. Tosoh submitted its rebuttal brief on August 17,

1999. The Department has conducted this administrative review in

accordance with section 751(a) of the Act.

Scope of Review

Imports covered by this review are shipments of EMD from Greece.

EMD is manganese dioxide (MnO2) that has been refined in an

electrolysis process. The subject merchandise is an intermediate

product used in the production of dry-cell batteries. EMD is sold in

three physical forms, powder, chip, or plate, and two grades, alkaline

and zinc-chloride. EMD in all three forms and both grades is included

in the scope of the order. This merchandise is currently classifiable

under item number 2820.10.0000 of the Harmonized Tariff Schedule (HTS)

of the United States. The HTS number is provided for convenience and

customs purposes. It is not determinative of the products subject to

the order. The written product description remains dispositive.

[[Page 62170]]

Selection of Comparison Market

Prior to the issuance of the preliminary results, the petitioners

alleged that, although viable, Tosoh's home market is not a suitable

market in which to establish normal value. The petitioners also alleged

that the EMD grade Tosoh sold in the home market is not a foreign like

product as set forth in section 771(16)(B) of the Act and that a

particular market situation exists which warrants the rejection of home

market sales for consumption as the basis for normal value.

For our preliminary results we determined that Tosoh's home market

was appropriate to use in the determination of normal value. In the

interest of full consideration, however, we requested additional

information from Tosoh to determine whether the two products in

question are commercially comparable. See preliminary results. Our

analysis and conclusions with regard to these issues have been

addressed below.

Analysis of Comments Received

Issues raised in the briefs by the petitioners and Tosoh are

addressed below.

Comment 1: Foreign Like Product--Like in Component Material

The petitioners argue that the EMD (i.e., zinc-chloride-grade EMD)

Tosoh sold in the home market is not a foreign like product as defined

in section 771(16)(B) of the Act because it is not ``like the exported

product in component material or materials.'' The petitioners assert

that the raw materials used in the manufacture of the home market

product are unlike the raw materials used in the manufacture of the

merchandise sold to the United States. They argue that the difference

arises because Tosoh includes the cost of a certain item (the identity

of which is proprietary information) in its home market variable cost

of manufacture whereas it does not include the cost of a corresponding

item in its U.S. variable cost of manufacture. The petitioners contend

that the Department's 20-percent difference-in-merchandise test will

not address the differences in materials adequately. In sum, they argue

that the difference in component materials is such that the merchandise

is not ``like in component materials'' as required under section

771(16)(B)(ii) of the Act.

Tosoh argues that the two types of EMD are ``like'' in component

materials since they have the same physical structure, are manufactured

using the same component materials, and meet the same minimum chemical-

property specifications. In addition, according to Tosoh, both types of

EMD are produced using the same basic production process on the same

production line. Furthermore, Tosoh contends that the item of concern

to the petitioners is not a component material and has very little

bearing on the cost of production of EMD, as demonstrated by the fact

that the difference in cost of the two EMD types at issue here is well

within the Department's 20-percent difference-in-merchandise standard.

Therefore, according to Tosoh, the Department concluded correctly that

the two EMD types are ``like'' in component materials.

Department's Position: We continue to find, as we stated in our

April 29, 1999, Memorandum (see Memorandum to Richard W. Moreland,

available in our Central Records Unit, Room B-099 (April 29

Memorandum)), that the product sold in the home market is a foreign

like product on which we can base normal value under section 771(16)(B)

of the Act. First of all, the most important component materials (i.e.,

manganese ore, heavy oil, sulfuric acid, etc.) of the U.S. and home

market products are the same.

Further, the difference identified by the petitioners is not a

difference in component materials but rather a difference in the

equipment used in the manufacturing processes. Although Tosoh listed

the equipment as a ``raw material,'' this designation was solely for

accounting purposes because the useful life of the equipment is less

than one year.

Finally, our difference-in-merchandise adjustment is based on

actual physical differences in the products and is calculated on the

basis of variable manufacturing costs. We include the cost of

materials, labor, and variable factory overhead as direct manufacturing

costs in our difference-in-merchandise adjustment, and any distinction

in such costs between the subject merchandise and the foreign like

product will be subject to our 20-percent difference-in-merchandise

test. See Import Administration Policy Bulletin, No. 92.2 (July 29,

1992). The differences in direct manufacturing cost of the two products

at issue here, zinc-chloride-grade and alkaline-grade EMD, meet our 20-

percent guideline.

In conclusion, for these reasons, we find that the subject

merchandise sold in the home market meets the foreign-like-product

criterion at section 771(16)(B)(ii) of the Act.

Comment 2: Foreign Like Product--Purposes for Which Used

The petitioners contend that the home market product is not a

foreign like product as defined in section 771(16)(B) of the Act

because it is not ``like in the purposes for which used.'' According to

the petitioners, the Department made two fundamental errors in

addressing this question in its April 29 Memorandum.

First, the petitioners assert, the Department erred by considering

the relevant use to be the common use of the home market product rather

than the use of particular sales. In this case, the petitioners claim,

the EMD sold in the home market was used as an additive in battery

cells in which natural manganese dioxide (NMD) is the principal cathode

material. According to the petitioners, in this application, the EMD

does not act as the principal cathode material but as an enriching

agent to improve the performance of NMD in these old-fashioned cells.

Therefore, according to the petitioners, the EMD Tosoh sold in the home

market is of a lower quality and sells for a lower price than the EMD

exported by Tosoh to the United States, and was not sold for the same

purposes for which the EMD sold to the United States was used.

The petitioners assert that the Department's second error was in

considering any use as a cathode material in battery applications to be

sufficient to establish that the exported and home market products are

alike in the purposes for which used. The petitioners argue that the

April 29 Memorandum cites no evidential basis or rationale for this

finding. According to the petitioners, it is the difference in the ways

in which the types of EMD are used in battery cathodes that

substantially affects their commercial value.

Tosoh argues that the petitioners' assertion that the home market

EMD type is used as an additive to the cathode material and that the

U.S. EMD type is used unadulterated as the cathode material is

inaccurate and also irrelevant. Tosoh asserts that, in its

questionnaire, the Department describes the product covered simply as

an intermediate product used in the production of dry-cell batteries.

According to Tosoh, this is how customers use the EMD it sells both in

the United States and in the home market. In addition, Tosoh asserts

that, on April 6, 1999, it submitted a letter from its home market

customer confirming that it used the home market EMD type as 100

percent of the cathode material in several types of batteries it

[[Page 62171]]

produces. According to Tosoh, even if EMD sold in the home market were

never used as 100 percent of the cathode material, that would still not

suffice to demonstrate that the two EMD grades are not ``like'' in the

``purposes for which used.'' Citing Koyo Seiko v. United States, 66

F.3d 1204, 1210 (Fed. Cir. 1995), Tosoh asserts that the court held

unequivocally that ``it is not necessary to ensure that home market

models are technically substitutable, purchased by the same type of

customers, or applied to the same end use as the U.S. model.'' In this

case, according to Tosoh, its home market customer uses Tosoh's EMD in

the cathode mixture of dry-cell batteries, either as 100 percent of the

cathode or as a component of the cathode mixture. Tosoh asserts that

the EMD performs essentially the same function in both types of

batteries. In closing, Tosoh contends that the petitioners have offered

nothing to undermine the Department's decision in the preliminary

results that the two types of EMD have like uses.

Department's Position: As we stated in our April 29 Memorandum,

Tosoh's customers use both types of EMD grades as a cathode material,

which provides the electric charge needed for a battery to perform. The

petitioners have not brought forth any substantial evidence to

contradict this fact. Whether Tosoh's home market customer uses its EMD

in the cathode mixture of dry-cell batteries as 100 percent of the

cathode or as a component of the cathode mixture is irrelevant. The

fact still remains that the EMD produced by Tosoh for sale in the home

market is an intermediate product used in the production of dry-cell

batteries. Specifically, both products are used as a cathode material

in dry-cell batteries. See United States International Trade

Commission's Determination of Electrolytic Manganese Dioxide from

Greece and Japan, USITC Pub. 2177 (April 1989) at page 3.

In addition, there is no evidence on the record, nor do the

petitioners cite to any evidence, that suggests that EMD as a cathode

material can only have one particular use in battery applications.

Therefore, our rationale in this regard conforms with the express

language of section 771(16)(B)(ii) of the Act, and we find that, based

on the reasons set forth above, the home market product meets the

foreign-like-product criterion at section 771(16)(B)(ii) of the Act.

Comment 3: Foreign Like Product--Commercial Value Criterion

The petitioners argue that the home market product is not a foreign

like product under section 771(16)(B) of the Act because it is not

``approximately equal in commercial value to'' the exported product.

The petitioners argue first that the Department should find that the

home market product is not approximately equal in commercial value to

the exported product as facts available because Tosoh did not respond

fully to the Department's request for information regarding its sales

of all alkaline-grade and all zinc-chloride-grade EMD in the three

largest markets in which it sold both grades of EMD. According to the

petitioners, Tosoh interpreted the Department's request too narrowly in

its May 5, 1999, submission by not including the three largest third-

country markets to which it sold both any type of zinc-chloride-grade

EMD and any type of alkaline-grade EMD. The petitioners contend that

Tosoh reported only one third-country market in which it sold one

particular type of alkaline-grade EMD and one particular type of zinc-

chloride-grade EMD. According to the petitioners, Tosoh manufactures

several types of both zinc-chloride-grade EMD and alkaline-grade EMD.

The petitioners assert that, in view of the limited number of battery

producers, the chances of there being markets in which Tosoh sold any

one of its alkaline-grade EMD and any one of its zinc-chloride-grade

EMD are much higher than the chances of there being markets in which

Tosoh sold any two specific designations (i.e., EMD sub-grades) of its

EMD. Therefore, according to the petitioners, because Tosoh did not

respond adequately to the Department's request, the Department should

use as facts available the petitioners' information, which, the

petitioners claim, demonstrates that zinc-chloride-grade EMD is not

approximately equal to alkaline-grade EMD in commercial value.

Second, the petitioners contend that, even if the Department

accepts Tosoh's May 5, 1999, response, the record demonstrates that the

two products in question are not ``approximately equal in commercial

value.'' According to the petitioners, the record demonstrates that the

particular type of zinc-chloride-grade EMD Tosoh sold to its third-

country customer is not sold for use as the cathode in dry-cell

batteries. The petitioners contend that this is significant to the

Department's assessment of the evidence of the third-country sales

information Tosoh provided.

Tosoh argues that it has supplied the Department with conclusive

evidence that the two types of EMD at issue here, when sold in a third-

country market, are equal in commercial value. Tosoh argues that the

petitioners' complaint regarding its submission of third-country price

information is unfounded. According to Tosoh, the Department addressed

the petitioners' assertions fully and correctly in its July 27, 1999,

Memorandum, in which the Department reaffirmed its preliminary decision

that the two types of EMD at issue here ``are commercially comparable''

and stated that the information Tosoh submitted on May 5, 1999,

supports the Department's preliminary results.

In addition, Tosoh contends that the petitioners have attempted to

read the Department's third-country sales information request more

broadly than it was written, asserting that the Department's request

should be read to ask for sales data for countries in which any

combination of Tosoh's grades of EMD are sold. According to Tosoh, such

a reading flatly contradicts the Department's and the petitioners' own

stated intention in requesting third-country sales information, which

was to determine the price comparability of the type of EMD sold to the

United States vis-a-vis the home market, which the petitioners were

questioning with respect to the sales in Greece and the United States

during the review period. Tosoh asserts that the Department requested

information regarding ``both types of grades'', which refers to the

types of EMD grades sold in the U.S. and home markets during the review

period. Morever, Tosoh contends that no other types of EMD are really

relevant from the standpoint of testing whether the types of EMD sold

in Greece and to the United States during the review period are

``approximately equal in commercial value.''

Tosoh asserts further that, because it has provided complete and

accurate information in response to the Department's requests regarding

the sole market in which both types of EMD grades were sold during the

review period, there is no basis for the application of facts available

in this case. Furthermore, Tosoh contends that, because it has

cooperated fully with the Department's information requests, there is

also no basis for the application of an adverse inference in this case.

Department's Position: We continue to find, as we stated in our

July 27, 1999, Memorandum (see Memorandum to Richard W. Moreland,

available in our Central Records Unit, Room B-099 (July 27

Memorandum)), that the two EMD grades (i.e., alkaline and zinc-

chloride) are ``approximately equal in commercial value'' as set forth

in section 771(16)(B)(iii) of the Act. We find that Tosoh responded

appropriately

[[Page 62172]]

to our April 28, 1999, request concerning whether the two products

(i.e., alkaline-grade and zinc-chloride-grade EMD) are commercially

comparable. Per our request, Tosoh provided us with information

concerning the quantity and value of two specific EMD grade types sold

in one third-country market. The two specific EMD grade types are

identical to the EMD grade types sold in the U.S. and home markets

during the review period. Therefore, since the two EMD grades types

reported by Tosoh are relevant for our purpose in considering whether

the two products in question are commercially comparable, we did not

request additional information. See July 27 Memorandum. Moreover, given

the fact that, in this review, we were addressing the issue of whether

these two specific EMD grades were commercially comparable, we find

that Tosoh's response to our request was reasonable. Thus, we find that

Tosoh complied fully with our request for third-country information. In

addition, since Tosoh complied with our request, we find no reason to

apply facts available in this regard.

Moreover, we are not persuaded by the petitioners' assertion and

evidence that Tosoh's zinc-chloride-grade EMD sales to its third-

country customer were not used as a cathode mixture in the production

of dry-cell batteries. As we stated in our July 27 Memorandum, Tosoh

provided an affidavit from its Director of Sales in which he states

that, during the review period, Tosoh's third-country customer

purchased EMD from Tosoh for use as a cathode mixture in the

manufacture of primary (i.e., non-rechargeable) dry-cell batteries.

In addition, the information Tosoh submitted on May 5, 1999, in

response to our questions indicates that the prices of the two products

are comparable and therefore are approximately equal in commercial

value. See July 27 Memorandum. For these reasons, we find that the home

market product meets the foreign-like-product criterion at section

771(16)(B)(iii) of the Act.

Comment 4: Home Market Viability/Particular Market Situation

The petitioners argue that the five-percent viability test should

not be regarded as conclusive of home market viability in this case

because of the very small volume of U.S. sales in the review period.

The petitioners assert that, in reflexively applying the five-percent

test without further analysis in these circumstances, the Department

ignored its own regulations and the Statement of Administrative Action

(SAA), H. Doc. 103-316, vol. 1, 103d Cong., 2d sess., 822 (1994), both

of which state that the five-percent test is not conclusive in every

case. According to the petitioners, the SAA states that use of the

five-percent viability test is particularly inappropriate where there

are ``thin'' home market sales. The petitioners argue that, for the

final results, the Department must address the following

considerations: the Department cannot apply the difference-in-

merchandise test as contemplated by the statute to adjust for

differences in the physical characteristics of the product sold in

Greece; the home market sales involve sales of EMD for an unusual use;

Tosoh's home market is so small that sales in the market can have no

material effect on the company's profitability and therefore are

incidental to Tosoh. These facts, according to the petitioners, coupled

with the export orientation of Tosoh, provide another basis for finding

a particular market situation and relying on third-country sales in the

determination of normal value.

Citing the Department's decision to use third-country sales in the

Final Determination of Sales at Less Than Fair Value; Fresh Salmon From

Chile, 63 FR 31418 (June 9, 1998) (Salmon from Chile), the petitioners

contend that, like the Chilean salmon producers, Tosoh was established

to make export sales and, as the Department found of the Chilean salmon

industry, Tosoh's growth has been almost entirely export driven.

According to the petitioners, the Department did not address this

consideration in its April 29 Memorandum. Furthermore, the petitioners

contend that the record demonstrates that the home market sales are in

fact not representative and not an appropriate basis for determining

normal value because they consist of a very small percentage of Tosoh's

reported production volume and sales volume. According to the

petitioners, this sales base is too small to constitute a viable home

market.

Finally, according to the petitioners, the SAA notes that the

change in the viability test from a comparison between home market

sales volume and third-country sales volume to a comparison between

home market sales volume and the U.S. sales volume was made to prevent

the use of ``thin'' home markets as the basis for identifying dumping.

According to the petitioners, such a ``thin'' home market clearly

exists in this case and it should not be used as the basis for

determining normal value. Therefore, the petitioners request that the

Department find that Tosoh's home market sales in the review period are

not viable, in spite of meeting the five-percent test.

Tosoh asserts that the petitioners' argument that the Department

should depart from its statutory test and instead judge the viability

of the home market based on the size of the Greek market relative to

sales to third countries is incorrect under current law. Tosoh argues

that the petitioners' citation of the SAA at 821 is misplaced.

According to Tosoh, contrary to the petitioners' assertion, the SAA

makes clear that it is precisely the new law's requirement of using

U.S. sales as the viability benchmark that will prevent the use of

``thin'' home markets as the basis for identifying dumping. Moreover,

Tosoh contends that the ``thinness'' discussed in the SAA refers to a

situation where a high volume or value of home market sales compared to

third-country sales would, under the old law, lead to a finding of

viability even though home market sales were very small relative to

U.S. sales and thus could interfere with a reasonable comparison of

U.S. prices to home market prices. Thus, according to Tosoh, the SAA

makes clear that the shift to U.S. sales as the viability benchmark

solves the ``thinness'' problem the petitioners suggest in this case.

According to Tosoh, contrary to the petitioners' assertions, no

such unusual situation is present in this case. In addition, Tosoh

argues that the vast number of cases in which a single U.S. sale forms

the basis for an administrative review indicates that there is nothing

unusual about the size of the U.S. sale here that would justify a

departure from the normal statutory test. Tosoh contends that the

petitioners have not cited a single case in which the Department

determined that a small volume of U.S. sales warranted rejection of an

otherwise viable home market.

In addition, Tosoh argues that there is nothing unusual or

extraordinary about the Greek market that does not permit a proper

price comparison. Tosoh asserts that the petitioners have not provided

any evidence that a particular market situation exists in this case to

warrant rejecting its viable home market. Tosoh argues further that the

petitioners raise no concerns regarding the difference-in-merchandise

adjustment, the home market uses of EMD, or the size and nature of home

market sales that establish a particular market situation in this case.

For these reasons, Tosoh requests that the Department disregard the

petitioners' request that the five-percent home market viability test

be abandoned in this administrative review.

Department's Position: We continue to find, as we stated in our

preliminary results, that there is no particular

[[Page 62173]]

market situation within the meaning of section 773(a)(1)(C)(iii) of the

Act which would prevent a proper price comparison nor is there any

situation which warrants a departure from the normal statutory five-

percent viability test. The petitioners have conflated two separate

issues: (1) Whether the normal five-percent threshold is the proper

test in this case, and (2) whether there is a particular market

situation that justifies rejecting the home market even though it meets

the five-percent threshold. Under section 773(a)(1)(C)(ii) of the Act,

the five-percent benchmark shall be applied in ``normal'' situations.

As noted in the SAA, ``(i)n unusual situations, however, home market

sales constituting less than five-percent of sales to the United States

could be considered viable and home market sales constituting more than

five-percent of sales to the United States could be considered not

viable.'' SAA at 821. While we agree with the petitioners' assertion

that our five-percent viability test is not conclusive in every case,

we find that in this case there is no unusual situation which makes

application of our normal statutory five-percent viability test

inappropriate. See SAA at 821. Nor have we found any evidence of a

particular market situation that would prevent a proper comparison with

export price or constructed export price. See section 773(a)(1)(C)(iii)

of the Act. As we stated in our April 29 Memorandum, pursuant to

section 773(a) of the Act, we will use sales in the home market as the

basis for calculating normal value unless one of the conditions in

section 773(a)(1)(C) of the Act applies, in which case we may use

third-country sales as a basis for normal value. We have not found that

any one of the conditions stipulated in section 773(a)(1)(C) of the Act

applies in this case.

In addition, we are not persuaded by the petitioners' argument that

Tosoh's home market consists of a very small percentage of the total

volume and value of Tosoh's sales. The petitioners' argument relies on

the old statutory viability test, comparing home market to third-

country sales, despite the fact that Congress eliminated this language

from the new statute. Under the new statute, for viability purposes,

the relevant comparison is between home market and U.S. sales. Because

Congress removed the old test, it would make no sense to allow the

petitioners to revive it merely by using the language of ``particular

market situation.'' Such a reading would be inconsistent with the

express language of the SAA and the statute. See SAA at 821 and section

773(a)(1)(C) of the Act.

Furthermore, as we stated in our April 29 Memorandum, unlike our

findings in Salmon from Chile, the record in this case does not

demonstrate that the EMD which Tosoh sold in its home market has severe

defects or is of poor quality. In addition, in Salmon from Chile, the

Department found that the home market producers sold the salmon

directly from the factory on an ``as available'' basis; in other words,

there was not a regular market for the ``off-quality'' salmon in Chile.

See Salmon From Chile, 63 FR 31418 (June 9, 1998). That situation

simply does not exist in this case, where both zinc-chloride-grade and

alkaline-grade EMD are sold through similar channels of distribution

and are used exclusively in dry-cell batteries. Moreover, Tosoh

guarantees the quality of its products, regardless of EMD grade, and

EMD grades meet the general specifications customers require.

Therefore, we continue to find no evidence to suggest that the home

market sales are incidental to Tosoh.

Regarding the petitioners' assertion that we are unable to rely on

our difference-in-merchandise adjustment because of differences between

the products, see our response to comment 1. With respect to the

petitioners' assertion that the home market product has an unusual use,

see our response to comment 2.

In conclusion, based on the reasons set forth above, we find that

the market for EMD in Greece is viable within the meaning of section

773(a)(1)(C)(ii) of the Act. In addition, we find that there is no

particular market situation within the meaning of section

773(a)(1)(C)(iii) of the Act which warrants a departure from our normal

statutory five-percent viability test.

Comment 6: U.S. Price

The petitioners assert that Tosoh has not provided the amount of a

post-sale rebate contemplated by the sales contract with the

unaffiliated U.S. purchaser. According to the petitioners, the amount

the Department deducted as a price adjustment in its preliminary

calculation is not an amount provided by Tosoh and it assumes that no

change in the dumping margin will be made in the final results or as a

result of any court's review of the final results. Moreover, the

petitioners argue that the Department cannot base its determination on

such an assumption, which pre-judges the results of the Department's

proceedings and the court's review. According to the petitioners,

Tosoh's pricing provision is designed to allow a subsequent price

change that would not be considered in the calculation of the dumping

margin and therefore is designed to subvert the antidumping law. The

petitioners contend that the Department must find that the U.S. price

in the review period is indeterminate and that it therefore must use

facts available to determine the dumping margin. The petitioners

suggest that the Department use the margin it established in the

underlying antidumping investigation as facts available for this

review.

Tosoh argues that the petitioners' assertion that the U.S. sales

price is ``indeterminate'' and that the Department should therefore use

facts available to determine the dumping margin is erroneous. Tosoh

contends that it has submitted all the information necessary for the

Department to calculate the U.S. sales price. Tosoh argues further that

the petitioners have distorted the clear meaning of the express terms

of the U.S. sale in this case. According to Tosoh, under those terms,

the U.S. customer retains the right to a refund of the antidumping duty

deposit up to the amount by which the net U.S. price is determined in

this review to exceed normal value but in no event in an amount greater

than the deposit itself. According to Tosoh, the contract provision

ensures that, after any refund is paid, the transaction will be

completed at a non-dumped price.

Tosoh asserts that, in reaching the preliminary results, the

Department simply reduced the U.S. sales price by the maximum possible

antidumping duty deposit refund amount, treating the reduction as a

price adjustment. Thus, according to Tosoh, the U.S. sales price is

final and determinate and there is no basis for resorting to facts

available as the petitioners suggest.

Department's Position: Using the information Tosoh submitted on

July 7, 1998, and on September 14, 1998, we established Tosoh's U.S.

price to the unaffiliated U.S. purchaser. In addition, since we also

identified the maximum antidumping duty amount Tosoh agreed to refund

the U.S. purchaser, we reduced Tosoh's U.S. price by this amount in our

calculations to arrive at a U.S. price net of any adjustments. Since we

deducted the maximum possible refundable antidumping duty amount

stipulated in the contract from the U.S. gross unit price, our

calculation reflects the most conservative approach in deriving U.S.

price. Therefore, we find that the U.S. price is not an

``indeterminate'' price as the petitioners contend.

In addition, since Tosoh has reported all the necessary information

needed to calculate U.S. price accurately and

[[Page 62174]]

cooperated fully with our requests for information, we find no reason

to apply facts available in this regard.

Comment 8: Sample U.S. Transaction

The petitioners claim that Tosoh did not provide the Department

with information regarding the consideration paid with respect to a

U.S. sample transaction. According to the petitioners, the record

demonstrates that the purchaser made payments to Tosoh or its related

trading company in connection with a sample transaction. The

petitioners assert that, because Tosoh did not provide information

regarding the payments made in connection with this transaction, the

Department should use the margin found in the original investigation as

facts available to establish the dumping margin on this shipment.

Tosoh argues that, to the best of its knowledge, the merchandise

involved in the sample shipment was destroyed in its entirety during

testing by the customer and, as reported in Tosoh's July 7, 1998,

questionnaire response, the gross unit price for this transaction was

zero. Citing NSK, Ltd. v. United States, 115 F. 3d 965 (Fed. Cir.

1997), Tosoh argues that such a transaction is considered a sample sale

under existing law and therefore is not included in the calculation of

U.S. price. Tosoh argues further that it has provided the Department

with full, accurate, and certified information regarding these

transactions, including a description of the transaction process and

documentation of the terms of the transaction. Therefore, according to

Tosoh, there is no basis for the Department to apply facts available or

make any adverse inference in its final results of review with regard

to this transaction.

Department's Position: Based on the information Tosoh provided in

its responses, we have determined that no consideration was provided

for Tosoh's reported U.S. zero-priced transaction. Although the

customer was required to pay the cost of certain services related to

the sample transaction in question (the nature of these services is

proprietary information), this does not constitute consideration with

respect to the subject merchandise itself. In addition, the small

quantity involved and the fact that Tosoh's sample transaction was used

for testing purposes and destroyed in the process supports Tosoh's

claim that this was a sample transaction. Therefore, because Tosoh

responded fully to our supplemental questions regarding a zero-priced

sample transaction and we find no reason to apply facts available to

this shipment, we did not calculate a margin on the U.S. sale which

Tosoh designated as a zero-priced sample.

Comment 9: Credit Expense

The petitioners argue that Tosoh did not provide a credit expense

calculation using the number of days between date of shipment to the

customer and date of payment as directed by the Department in its

questionnaire. According to the petitioners, the calculation Tosoh

provided takes into account only the number of days from the date of

entry into the United States to the date of payment. Therefore,

according to the petitioners, the Department should recalculate the

reported credit expense, adding to the reported credit days the number

of days from shipment from Greece to date of entry.

Tosoh argues that the petitioners' proposed methodology for

calculating credit expenses should be rejected because it would count

certain imputed expenses that are not associated with commercial

activity in the United States (i.e., the expense associated with the

time between date of shipment from Greece and the date of entry into

the United States) and, therefore, result in an improper calculation.

Department's Position: In this case, the record indicates that the

invoice date postdates the date of shipment of the merchandise from

Greece to the unaffiliated U.S. customer. Consistent with our decision

in Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat

Products from Korea; Final Results of Antidumping Duty Administrative

Reviews, 64 FR 12927, 12935, March 16, 1999 (Steel from Korea), we have

used the date of shipment as the date of sale. Furthermore, we have

calculated credit expense based on the time between date of shipment

and payment by the unaffiliated U.S. customer (see Steel from Korea).

Comment 10: Inventory Carrying Costs

The petitioners argue that, in its preliminary results, the

Department accounted for Tosoh's inventory carrying costs in

calculating normal value but disregarded those same costs in

calculating CEP. According to the petitioners, the result of this

disparate treatment is an unbalanced comparison and they request that

the Department treat inventory carrying costs the same in both markets

for the final results of this review.

Tosoh responds that the petitioners' assertion that the Department

should deduct from the U.S. price the inventory carrying costs incurred

in Greece is incorrect as a matter of law since the regulations state

that only those expenses associated with commercial activities

occurring in the United States are deducted from the U.S. price. Tosoh

argues that the expenses to which the petitioners refer (i.e.,

inventory carrying costs incurred in Greece) were not associated with

economic activities occurring in the United States and thus the

Department determined properly not to deduct such expenses from the

U.S. price. Tosoh argues further that all indirect selling expenses

associated with home market sales, including inventory carrying costs,

were deducted from normal value correctly as part of the CEP offset.

Department's Position: As we stated in our response to comment 9,

section 351.402(b) of the regulations directs us to make adjustments to

CEP for expenses associated with commercial activities in the United

States that relate to the sale to an unaffiliated purchaser, no matter

where or when paid. It also states that we will not make an adjustment

for any expense that is related solely to the sale to an affiliated

importer in the United States. Therefore, since this expense (i.e.,

inventory carrying costs incurred in Greece) was not associated with

commercial activities in the United States, we did not deduct it from

U.S. price.

Comment 11: Level of Trade

The petitioners argue that no level-of-trade adjustment is

appropriate in this case because the CEP deductions do not remove all

the selling functions related to the sale in the U.S. market. The

petitioners assert that, because Tosoh did not report selling functions

provided by its parent company in Japan, the Department cannot make a

level-of-trade adjustment in this case.

Tosoh argues that it reported all appropriate selling expenses.

According to Tosoh, its parent company in Japan did not incur any

direct selling expenses associated with Tosoh's sale of EMD in the

United States during the review period.

Tosoh argues further that any involvement by its parent company in

Japan in price discussions would be reported as indirect selling

expenses, which the Department would disregard in the margin

calculation. For these reasons, according to Tosoh, the Department

should disregard the petitioners' assertions regarding level of trade.

Department's Position: We find no indication that Tosoh did not

report all the selling expenses it incurred during the review period

properly. Any selling functions which Tosoh's parent company in Japan

may have provided

[[Page 62175]]

were reported as indirect selling expenses incurred in the country of

manufacture and not related to commercial activities for sales made in

the United States. In addition, we did not make a level-of-trade

adjustment in our calculations as the petitioners contend. As we stated

in our analysis memorandum for the preliminary results, since Tosoh's

CEP sales constitute a different level of trade from its home market

level of trade, we could not match Tosoh's CEP sales to the same level

of trade in the home market nor could we determine a level-of-trade

adjustment based on Tosoh's home market sales of merchandise under

review. Furthermore, since we have no other information that provides

an appropriate basis for determining a level-of-trade adjustment, we

made a CEP offset adjustment to normal value. The CEP offset was the

sum of indirect selling expenses incurred on the home market sales up

to the amount of indirect selling expenses deducted from the U.S. sale

under section 772(a)(1)(D) of the Act. See Analysis Memorandum dated

April 29, 1999.

Comment 12: Direct Selling Expenses

The petitioners contend that Tosoh has not reported all the direct

selling expenses related to the U.S. sale. According to the

petitioners, the Department has not made the necessary inquiries to

determine all the direct selling expenses that relate to the sale

concerned.

Tosoh argues that the petitioners' speculation that it has not

reported all selling activities is without merit. Tosoh contends that

it has reported all applicable expenses to the best of its ability.

Therefore, according to Tosoh, no further inquiry by the Department is

necessary.

Department's Position: We find no indication to suggest that Tosoh

did not report all the direct selling expenses it incurred during the

review period properly. In addition, the petitioners have not provided

any evidence to suggest otherwise. Therefore, we have accepted Tosoh's

reported direct selling expenses.

Comment 13: Indirect Selling Expenses

The petitioners argue that the Department should make deductions

from U.S. price for expenses incurred by Tosoh's affiliated parties in

Japan that are not deductible as direct selling expenses.

Tosoh argues that the petitioners' assertion that the Department

should deduct indirect selling expenses from CEP is incorrect.

According to Tosoh, the petitioners' suggested methodology would

require the deduction of indirect expenses not associated with

commercial activity in the United States and, therefore, is

impermissible under the Department's practice.

Department's Position: As we stated in our response to comment 9,

section 351.402(b) of the regulations directs us to make adjustments

for expenses associated with commercial activities in the United States

that relate to the sale to an unaffiliated purchaser, no matter where

or when paid. It also states that we will not make an adjustment for

any expense that is related solely to the sale to an affiliated

importer in the United States. Therefore, since this expense (i.e.,

indirect selling expenses incurred by affiliated parties in Japan) was

not associated with commercial activities in the United States, we did

not deduct it from U.S. price under section 772(a)(1) of the Act.

Final Results of Review

As a result of our analysis of the comments received, we determine

a weighted-average margin of 0.00 percent for Tosoh for the period

April 1, 1997, through March 31, 1998. 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 review for all

shipments of EMD from Greece, entered, or withdrawn from warehouse, for

consumption on or after the publication date, as provided for by

section 751(a)(1) of the Act: (1) The cash-deposit rate for Tosoh will

be 0.00 percent; (2) for previously investigated or reviewed 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 or any previous reviews or the

original less-than-fair value (LTFV) investigation, but the

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

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

if neither the exporter nor the manufacturer is a firm covered in this

review, the cash-deposit rate will continue to be 36.72 percent, the

``all-others'' rate established in the LTFV investigation (54 FR 15243,

April 17, 1989).

The deposit requirements 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 351.402(f) 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 also serves as a 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 351.305. Timely notification of return/

destruction of APO materials or conversion to judicial protective order

is hereby requested. Failure to comply with the regulations and the

terms of an APO is a sanctionable violation.

We are issuing and publishing this determination in accordance with

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

Dated: November 8, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-29905 Filed 11-15-99; 8:45 am]

BILLING CODE 3510-DS-P