Furfuryl Alcohol From the Republic of South Africa; Preliminary Results of Antidumping Duty Administrative Review and Intent To Revoke Order in Part

DEPARTMENT OF COMMERCE

International Trade Administration

[A-791-802]

Furfuryl Alcohol From the Republic of South Africa; Preliminary

Results of Antidumping Duty Administrative Review and Intent To Revoke

Order in Part

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review and intent to revoke order in part.

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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, 1997, through May 31, 1998.

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 Customs Service to assess

no antidumping duties on the subject merchandise exported by Illovo

Sugar Ltd. Furthermore, if these preliminary results are adopted in our

final results of this administrative review, we intend to revoke the

antidumping duty order with respect to Illovo Sugar Ltd., based on

three consecutive review periods of sales at not less than normal

value. See Intent to Revoke section of this notice.

Interested parties are invited to comment on these 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 8, 1999.

FOR FURTHER INFORMATION CONTACT: Charles Riggle or Kris Campbell, AD/

CVD Enforcement Group I, Import Administration, International Trade

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

Constitution Avenue, Washington, DC 20230; telephone: (202) 482-0650 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 codified at 19 CFR

Part 351 (1998).

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 10, 1998, the Department published a

notice of ``Opportunity to Request an Administrative Review'' (63 FR

31717) of this antidumping duty order for the period June 1, 1997,

through May 31, 1998. On June 22, 1998, we received a timely request

for review from Illovo Sugar Ltd. (ISL) and Harborchem, ISL's related

selling agent in the United States. In addition, ISL requested that the

Department revoke the antidumping duty order with respect to ISL. On

July 28, 1998, we published the notice of initiation of this review (63

FR 40258).

We issued a questionnaire to ISL on July 24, 1998, followed by a

supplemental questionnaire on October 27, 1998. Because ISL requested

revocation of the order, the Department verified the company's response

pursuant to section 782(i)(2) of the Act.

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.

Verification

As provided in section 782(i)(2) of the Act, we verified

information provided by ISL and Harborchem. We used

[[Page 10984]]

standard verification procedures, including on-site inspection of the

manufacturer's facilities and examination of relevant sales and

financial records. Our verification results are outlined in the

verification reports placed in the case file.

Comparisons

We compared the constructed export price (CEP) to the normal value,

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 compare 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-than-fair-value (LTFV)

investigation and in the first and second administrative reviews. 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)).

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.

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\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.

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In accordance with section 772(d)(1) of the Act we also deducted

direct selling expenses and indirect selling expenses associated with

commercial activity in the United States. These include credit

expenses, inventory carrying costs, and other indirect selling

expenses.

Finally, in accordance with section 772(d)(3) of the Act, we

deducted an amount for profit allocated to direct, indirect, and

imputed selling expenses associated with commercial activity in the

United States.

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

normal value, 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 5 percent of its aggregate volume of U.S. sales of the

subject merchandise, we determined that the home market was viable.

We based normal value 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 normal value by deducting home market credit expenses.

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\2\ The record evidence before us in this review indicates that

the home market and the CEP levels of trade have not changed from

the 1994-96 Review. See 62 FR 61084, 61089-90 (Comment 7).

Furthermore, in this review, unlike the prior segments of the

proceeding, ISL has not claimed entitlement to a CEP offset.

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No other adjustments to normal value were claimed or allowed.

Intent To Revoke

On June 22, 1998, ISL requested that, pursuant to 19 CFR

351.222(b), ``the Department revoke the antidumping duty finding in the

above-referenced proceeding with respect to Illovo at the conclusion of

this administrative review.'' ISL submitted along with its revocation

request a certification stating that: (1) the company sold subject

merchandise at not less than normal value during the POR, and that in

the future it would not sell such merchandise at less than normal value

(see 19 CFR 351.222(e)(i)); and (2) the company has sold the subject

merchandise to the United States in commercial quantities during each

of the past three years (see 19 CFR 351.222(e)(ii)). ISL further stated

in its revocation request that, because it was the sole producer/

reseller of subject merchandise, it was not required to submit an

additional certification (as set forth at 19 CFR 351.222(b)(iii), and

as referenced at 19 CFR 351.222(e)(iii)) agreeing to its immediate

reinstatement in the order, as long as any exporter or producer is

subject to the order, if the Department concludes that the company,

subsequent to revocation, sold the subject merchandise at less than

normal value. However, because record evidence indicates that a South

African company unrelated to ISL has exported the subject merchandise

to the United States under the order, ISL has now provided this

certification at the Department's request.

Based on the preliminary results in this review and the final

results of the two preceding reviews (see Notice of Final Results of

Antidumping Duty Review: Furfuryl Alcohol from the Republic of South

Africa, 62 FR 61084 (November 14, 1997) and Notice of Final Results of

Antidumping Duty Review: Furfuryl Alcohol from the Republic of South

Africa, 63 FR 30473 (June 4, 1998)), ISL has preliminarily demonstrated

three consecutive years of sales at not less than normal value.

Furthermore, ISL's aggregate sales to the United States have been made

in commercial quantities during all segments of this proceeding. Based

on the above facts and absent any evidence to the contrary, the

Department preliminarily determines that it is not likely in the future

that ISL will sell the subject merchandise in the United States at less

than normal value. Therefore, if these preliminary findings are

affirmed in our final results, we intend to revoke the order with

respect to merchandise produced and exported by ISL. In accordance with

19 CFR 351.222 (f), we will terminate the suspension of liquidation for

any such merchandise entered, or withdrawn from warehouse, for

consumption on or after June 1, 1998, and will instruct Customs to

release any cash deposit.

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

[[Page 10985]]

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, 1997-May 31, 1998:

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

Margin

Manufacturer/exporter (percent)

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Illovo Sugar Ltd............................................ 0.00

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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 five days after the date after the submission of the case briefs.

Any interested party may request a hearing within 30 days of

publication of this notice. Any hearing, if requested, will be held two

days after the submission of rebuttal briefs, or the first workday

thereafter. 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 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 to assess no 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) no cash deposit will

be required for merchandise produced and exported by ISL if we revoke

the order with respect to merchandise produced and exported by ISL; (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 351.402(f)(2) 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

sections 751(a)(1) and 771(i)(1) of the Act.

Dated: March 2, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-5626 Filed 3-5-99; 8:45 am]

BILLING CODE 3510-DS-P