[Federal Register: August 22, 1996 (Volume 61, Number 164)]
[Notices]
[Page 43333-43337]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF COMMERCE
[A-560-801]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Melamine Institutional
Dinnerware Products From Indonesia
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: August 22, 1996.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger, Everett Kelly, or
Barbara Wojcik-Betancourt, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
4136, (202) 482-4194, or (202) 482-0629, respectively.
The Applicable Statute
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 Rounds Agreements Act (``URAA'').
Preliminary Determination
We preliminarily determine that melamine institutional dinnerware
products (``MIDPs'') from Indonesia are being, or are likely to be,
sold in the United States at less than fair value (``LTFV''), as
provided in section 733 of the Act. The estimated margins of sales at
LTFV are shown in the ``Suspension of Liquidation'' section of this
notice.
Case History
Since the initiation of this investigation (Notice of Initiation of
Antidumping Duty Investigations: Melamine Institutional Dinnerware
Products from Indonesia, Taiwan and the People's Republic of China (61
FR 8039, March 1, 1996), the following events have occurred:
On March 22, 1996, the United States International Trade Commission
(``ITC'') issued an affirmative preliminary injury determination in
this case (see ITC Investigation Nos. 731-TA-741, -742, and -743).
On April 15, 1996, the Department issued an antidumping duty
questionnaire to the following companies identified by petitioners or
by the U.S. embassy in Indonesia as possible exporters of the subject
merchandise: P.T. Multi Raya Indah Abadi (``Multiraya''), P.T. Meiwa
Indonesia (``Meiwa''), P.T. Mayer Crocodile, and P.T. Impack Pratama.
The questionnaire is divided into four sections. Section A requests
general information concerning a company's corporate structure and
business practices, the merchandise under investigation that it sells,
and the sales of the merchandise in all of its markets. Sections B and
C request home market sales listings and U.S. sales listings,
respectively. Section D requests information on the cost of production
(``COP'') of the foreign like product and constructed value (``CV'') of
the subject merchandise.
On April 24, 1996, Meiwa advised the Department in a fax that it
neither produces nor exports the subject merchandise. In a letter dated
May 23, 1996, Impack Pratama stated it does not manufacture the subject
merchandise. Multiraya filed a timely questionnaire response in this
investigation (see below). P. T. Mayer Crocodile did not respond to the
Department's questionnaire.
On May 30, 1996, petitioner, the American Melamine Institutional
Tableware Association (``AMITA''), alleged that Multiraya had made
sales in the home market at prices that were below COP, pursuant to
section 773(b) of the Act. As a result, the Department began a COP
investigation on June 11, 1996 (see June 11, 1996, memorandum from MIDP
team to Gary Taverman, Acting Office Director, Office of Antidumping
Investigations).
On June 6, 1996, the Department postponed the preliminary
determination of this investigation and the companion investigations on
melamine dinnerware products from the People's Republic of China and
Taiwan until August 14, 1996, in accordance with section 733(c)(1)(B)
of the Act (61 FR 30219, June 14, 1996).
Multiraya submitted its questionnaire responses in May and June
1996. We issued a supplemental request for information in June and
received the response to this request in July 1996. Multiraya submitted
additional information supplementing its response during July 1996.
Petitioner filed comments on Multiraya's questionnaire responses in
June, July and August 1996.
Postponement of Final Determination
On August 5, 1996, Multiraya requested that, pursuant to section
735(a)(2)(A) of the Act, in the event of an affirmative preliminary
[[Page 43334]]
determination in this investigation, the Department postpone its final
determination until not later than 135 days after the publication of
the affirmative preliminary determination in the Federal Register. In
accordance with 19 CFR 353.20(b), inasmuch as our preliminary
determination is affirmative, Multiraya accounts for a significant
proportion of exports of the subject merchandise, and we are not aware
of the existence of any compelling reasons for denying the request, we
are granting Multiraya's request and postponing the final
determination. Suspension of liquidation will be extended accordingly.
See Preliminary Determination of Sales at Less Than Fair Value: Large
Newspaper Printing Presses and Components Thereof, Whether Assembled or
Unassembled, from Japan (61 FR 8029, March 1, 1996).
Scope of Investigation
This investigation covers all items of dinnerware (e.g., plates,
cups, saucers, bowls, creamers, gravy boats, serving dishes, platters,
and trays) that contain at least 50 percent melamine by weight and have
a minimum wall thickness of 0.08 inch. This merchandise is classifiable
under subheadings 3924.10.20, 3924.10.30, and 3924.10.50 of the
Harmonized Tariff Schedule of the United States (``HTSUS''). Excluded
from the scope of investigation are flatware products (e.g., knives,
forks, and spoons).
Although the HTSUS subheadings are provided for convenience and
customs purposes, our written description of the scope of this
investigation is dispositive.
Period of Investigation
The period of investigation (``POI'') is January 1, 1995, through
December 31, 1995.
Fair Value Comparisons
A. P.T. Mayer Crocodile
We did not receive a response to our questionnaire from P.T. Mayer
Crocodile. Section 776(a)(2) of the Act provides that if an interested
party withholds information that has been requested by the Department,
fails to provide such information in a timely manner and in the form
requested, significantly impedes a proceeding, or provides such
information but the information cannot be verified, the Department
shall use the facts otherwise available in reaching the applicable
determination. Because P.T. Mayer Crocodile failed to submit the
information that the Department specifically requested, we must base
our determination for that company on the facts available.
Section 776(b) of the Act provides that adverse inferences may be
used against a party that has failed to cooperate by not acting to the
best of its ability to comply with a request for information. The
Department has determined that, in selecting from among the facts
otherwise available, an adverse inference is warranted.
Section 776(c) of the Act provides that where the Department
selects from among the facts otherwise available and relies on
``secondary information,'' the Department shall, to the extent
practicable, corroborate that information from independent sources
reasonably at the Department's disposal. The Statement of
Administrative Action accompanying the URAA, H.R. Doc. No. 316, 103d
Cong., 2d Sess. (1994) (hereinafter, the ``SAA''), states that the
petition is ``secondary information'' and that ``corroborate'' means to
determine that the information used has probative value. See SAA at
870.
In this proceeding, we considered the petition as the most
appropriate information on the record to form the basis for a dumping
calculation for this uncoorperative respondent. In accordance with
section 776(c) of the Act, we attempted to corroborate the data
contained in the petition. Specifically, the petitioner based both the
export price and normal value in the petition on Multiraya's ex-factory
prices for nine-inch plates obtained from a market research report. We
compared the petitioner's submitted price data to actual prices
reported in Multiraya's questionnaire response for products of the same
size and shape. We found the Multiraya normal value data from the
market research report to be consistent with normal value data in
Multiraya's questionnaire response. Thus, we consider the normal value
data in the petition to have been corroborated and will therefore
utilize such data in our margin calculation for P.T. Mayer Crocodile.
We did not, however, consider the export price from the petition to be
corroborated because the Multiraya export price data in the market
research report was substantially different that the actual data
reported by Multiraya in its questionnaire response. Therefore, we have
not used the export price in the petition.
In selecting from among the facts otherwise available with regard
to export price, we have used the lowest ex-factory export price
reported by Multiraya for a nine-inch plate. We found this information
to be sufficiently adverse to effectuate the purpose of the statute,
and we also note that the number of EP sales to select from was small.
We compared that export price to the ex-factory normal value used in
the petition in order to calculate a margin for P. T. Mayer Crocodile.
This methodology is, of course, subject to Multiraya's verification
results.
B. Multiraya
To determine whether Multiraya's sales of the subject merchandise
to the United States were made 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), we compared POI-wide
weighted-average EPs to weighted-average NVs. In determining averaging
groups for comparison purposes, we considered the appropriateness of
such factors as physical characteristics and level of trade.
(i) Physical Characteristics
In accordance with section 771(16) of the Act, we considered all
products covered by the description in the ``Scope of Investigation''
section of this notice, above, produced in Indonesia by Multiraya and
sold in the home market during the POI, to be foreign like products for
purposes of determining appropriate product comparisons to U.S. sales.
Where there were no sales of identical merchandise in the home market
to compare to U.S. sales, we compared U.S. sales to the next most
similar foreign like product on the basis of the characteristics listed
in the Department's antidumping questionnaire. In making the product
comparisons, we relied on the following criteria (listed in order of
preference): shape type (i.e., flat, e.g., plates, trays, saucers,
etc.; or container, e.g., bowls, cups, etc.), specific shape, diameter
(where applicable), length (where applicable), capacity (where
applicable), thickness, design (i.e., whether or not a design is
stamped into the piece), and glazing (i.e., where a design is present,
whether or not it is also glazed). See also Model Match Methodology for
the Preliminary Determinations memorandum from MIDP team to Louis
Apple, Acting Office Director, dated August 12, 1996.
(ii) Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA
at 829-831, to the extent practicable, the Department will calculate
normal values based on sales at the same level of trade as the U.S.
sales. When the Department is unable to find sales in the comparison
market at the same level of trade as the
[[Page 43335]]
U.S. sale(s), the Department may compare sales in the U.S. and foreign
markets at different levels of trade. See, also, Final Determination of
Sales at Less Than Fair Value: Certain Pasta from Italy (61 FR 30326,
June 14, 1996) (``Pasta from Italy'').
In accordance with section 773(a)(7)(A), if sales at different
levels of trade are compared, the Department will adjust the normal
value to account for the difference in level of trade if two conditions
are met. First, there must be differences between the actual selling
functions performed by the seller at the level of trade of the U.S.
sale and the level of trade of the normal value sale. Second, the
difference must affect price comparability as evidenced by a pattern of
consistent price differences between sales at the different levels of
trade in the market in which normal value is determined.
In its questionnaire responses, Multiraya did not specifically
identify levels of trade based on its selling activities by customer
categories within each market. In order to independently confirm the
absence of separate levels of trade within or between the U.S. and home
markets, we examined Multiraya's questionnaire responses for
indications that Multiraya's function as a seller differed among
customer categories. Pursuant to section 773(a)(1)(B)(i) of the Act,
and the SAA at 827, in identifying levels of trade for directly
observed (i.e., not constructed) export price and normal values sales,
we considered the selling functions reflected in the starting price,
before any adjustments. Where possible, we further examined whether
each selling function was performed on a substantial portion of sales.
(See Notice of Proposed Rulemaking and Request for Public Comments, (61
FR 7303, 7348, February 27, 1996)) (``Proposed Regulations'').
Multiraya sold to a single customer in the U.S. market. In the home
market, Multiraya sold only to one category of customer and performed
the same selling functions between sales to the home market customers.
Thus, our analysis of the questionnaire response leads us to conclude
that sales within each market are not made at different levels of
trade. Accordingly, we preliminarily find that no level of trade
differences exist between any sales in either the home market or the
U.S. market. Therefore, all price comparisons are at the same level of
trade and an adjustment pursuant to section 773(a)(7)(A) is
unwarranted.
Export Price
We calculated EP, in accordance with subsections 772 (a) and (c) of
the Act, where the subject merchandise was sold directly to the first
unaffiliated purchaser in the United States prior to importation and
use of constructed export price (``CEP'') was not otherwise warranted
based on the facts of record.
We have preliminarily rejected petitioner's request that CEP be
used because we do not find the record to indicate that the sole U.S.
importer and Multiraya are affiliated parties. Section 771(33)(G) of
the Act provides, inter alia, that parties will be considered
affiliated when one controls the other. A person controls another
person ``if the person is legally or operationally in a position to
exercise restraint or direction over the other person.'' The SAA
further states that a company may be in a position to exercise
restraint or direction through, among other things, ``close supplier
relationships in which the supplier or buyer becomes reliant upon the
other.''
Pursuant to section 771(33) of the Act, we reviewed Multiraya's
relationship with its U.S. importer and have determined, subject to
verification, that petitioner's claim is unwarranted. The evidence
indicates that there is no corporate or familial relationship between
the two companies. Multiraya reported in its questionnaire response
that it negotiated prices with the importer, that the importer is free
to purchase MIDP from sources other than Multiraya (and has done so),
and that Multiraya is free to sell to any customer in the United
States. Therefore, we have preliminarily determined that Multiraya and
the U.S. importer are not affiliated.
For Multiraya, we calculated EP based on packed, ex-works, FOB
(``free on board'') port to an unaffiliated customer in the United
States. Where appropriate, we made deductions from the starting price
(gross unit price) for foreign inland freight expenses, which include
foreign brokerage and handling. In accordance with section
772(c)(1)(B), we added amounts for import duties imposed on imported
materials and rebated upon export of the subject merchandise (``duty
drawback'').
Multiraya reported that it did not borrow in U.S. dollars during
the POI. In accordance with the Department's questionnaire instructions
and practice (see, e.g., Pasta from Italy), Multiraya calculated its
reported U.S. imputed credit expense using the average short-term
interest rate (i.e., ``prime rate'') in the United States during the
POI, as published by the International Monetary Fund in International
Financial Statistics, for purposes of making circumstance of sale
adjustment for this expense.
Multiraya reported that it pays an excise tax on imported melamine
powder--a material that Multiraya reports is not produced in
Indonesia--and then receives a corporate income tax credit equal to the
amount of the excise tax paid on the imported melamine powder content
of the exported subject merchandise. As such, Multiraya claims that
this tax credit constitutes a duty drawback under section 772(c)(1)(B).
The information currently on the record supports Multiraya's claim and
we have included this adjustment in our EP calculation. We will,
however, examine this claim further at verification.
Normal Value
Cost of Production Analysis
As noted in the ``Case History'' section of this notice above,
based on the petitioner's allegations, the Department found reasonable
grounds to believe or suspect that Multiraya made sales in the home
market at prices below the cost of producing the merchandise. As a
result, the Department initiated an investigation to determine whether
Multiraya made home market sales during the POI at prices below the COP
within the meaning of section 773(b) of the Act.
Before making any fair value comparisons, we conducted the COP
analysis described below.
A. Calculation of COP
We calculated the COP based on the sum of Multiraya's reported cost
of materials and fabrication for the foreign like product, plus amounts
for home market general and administrative expenses (``G&A'') and
packing costs in accordance with section 773(b)(3) of the Act.
B. Test of Home Market Prices
We used the respondent's adjusted weighted-average COP for the POI.
We compared the weighted-average COP figures to home market sales of
the foreign like product as required under section 773(b) of the Act,
in order to determine whether these sales had been made at below-cost
prices within an extended period of time in substantial quantities, and
were not at prices which permit recovery of all costs within a
reasonable period of time. On a product-specific basis, we compared the
COP to the home market prices, less any applicable movement charges and
direct selling expenses. We did not deduct indirect selling expenses
from the home market price because these expenses were included in the
G&A portion of COP.
[[Page 43336]]
C. Results of COP Test
In determining whether to disregard home-market sales made at
prices below COP, we examine (1) whether, within an extended period of
time, such sales were made in substantial quantities and (2) whether
such sales were made at prices which permitted the recovery of all
costs within a reasonable period of time in the normal course of trade.
Where less than 20 percent (by quantity) of a respondent's sales of a
given product were at prices less than the COP, we do not disregard any
below-cost sales of that product. Where 20 percent (by quantity) or
more of a respondent's sales of a given product during the POI were at
prices less than the COP, we determine such sales to have been made in
substantial quantities within an extended period; where we determine
that such sales were also not made at prices that permit recovery of
cost within a reasonable period, we disregard the below-cost sales.
In this case, we found that some products had no above-cost sales
available for matching purposes. Accordingly, export prices that would
have been compared to home market prices for these models were instead
compared to CV.
D. Calculation of CV
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of Multiraya's cost of materials, fabrication,
selling, general, and administrative expenses (``SG&A''), and profit,
plus U.S. packing costs as reported in the U.S. sales database. In
accordance with section 773(e)(2)(A) of the Act, we based SG&A and
profit on the amounts 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 foreign country.
We calculated Multiraya's CV based on the methodology described above
for the calculation of COP. For selling expenses, we used the weighted-
average home market selling expenses.
Adjustments to Prices
We calculated NV based on packed, delivered prices to unaffiliated
customers. Where appropriate, we made deductions from the starting
price (gross unit price) for discounts and inland freight. In addition,
where appropriate, we adjusted for differences in circumstances of sale
for imputed credit expenses, bank charges (U.S. market), and warranty
expenses (home market).
We made adjustments, where appropriate, for physical differences in
the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act.
Where the difference in merchandise adjustment for every comparison
product exceeded 20 percent, we based NV on CV. In addition, in
accordance with section 773(a)(6)(B), we deducted home market packing
costs and added U.S. packing costs.
Price to CV Comparisons
Where we compared CV to export prices, we deducted from CV the
weighted-average home market direct selling expenses and added the
weighted-average U.S. product-specific direct selling expenses (where
appropriate) in accordance with section 773(a)(8) of the Act.
Currency Conversion
We made currency conversions into U.S. dollars based on the
official exchange rates in effect on the dates of the U.S. sales as
certified by the Federal Reserve Bank.
Section 773A(a) of the Act directs the Department to convert
foreign currencies based on the dollar exchange rate in effect on the
date of sale of the subject merchandise, except if it is established
that a currency transaction on forward markets is directly linked to an
export sale. When a company demonstrates that a sale on forward markets
is directly linked to a particular export sale in order to minimize its
exposure to exchange rate losses, the Department will use the rate of
exchange in the forward currency sale agreement.
Section 773A(a) also 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. The benchmark is defined as
the moving average of rates for the past 40 business days. When we
determine a fluctuation exists, we substitute the benchmark rate for
the daily rate, in accordance with established practice. Further,
section 773A(b) directs the Department to allow a 60-day adjustment
period when a currency has undergone a sustained movement. A sustained
movement has occurred when the weekly average of actual daily rates
exceeds the weekly average of benchmark rates by more than five percent
for eight consecutive weeks. (For an explanation of this method, see
Policy Bulletin 96-1: Currency Conversions (61 FR 9434, March 8,
1996)). Such an adjustment period is required only when a foreign
currency is appreciating against the U.S. dollar. The use of an
adjustment period was not warranted in this case because the Indonesian
rupiah did not undergo a sustained movement, nor were there currency
fluctuations during the POI.
Verification
As provided in section 782(i) of the Act, we will verify all
information determined to be acceptable for use in making our final
determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all imports of subject
merchandise that are entered, or withdrawn from warehouse, for
consumption on or after the date of publication of this notice in the
Federal Register. We will instruct the Customs Service to require a
cash deposit or the posting of a bond equal to the weighted-average
amount by which the NV exceeds the export price, as indicated in the
chart below. These suspension of liquidation instructions will remain
in effect until further notice.
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer margin
percentage
------------------------------------------------------------------------
P. T. Mayer Crocodile....................................... 12.90
P. T. Multi Raya Indah Abadi................................ 5.24
All others.................................................. 5.24
------------------------------------------------------------------------
Pursuant to section 733(d)(1)(A) and section 735(c)(5) of the Act,
the Department has not included zero and de minimis weighted-average
dumping margins and margins determined entirely under section 776 of
the Act, in the calculation of the ``all others'' deposit rate.
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
Case briefs or other written comments in at least ten copies must
be submitted to the Assistant Secretary for Import Administration no
later than November 13, 1996, and rebuttal briefs, no later than
November 20, 1996. A list of authorities used and an executive summary
of issues should accompany any briefs submitted to the Department.
[[Page 43337]]
Such summary should be limited to five pages total, including
footnotes. In accordance with section 774 of the Act, we will hold a
public hearing, if requested, to afford interested parties an
opportunity to comment on arguments raised in case or rebuttal briefs.
Tentatively, the hearing will be held on November 26, 1996, at 10:00
a.m. in Room 1414 at the U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 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 to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
B-099, within ten days of the publication of this notice. Requests
should contain: (1) the party's name, address, and telephone number;
(2) the number of participants; and (3) 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 by 135 days after the publication of this notice in the
Federal Register.
This determination is published pursuant to section 733(d) of the
Act.
Dated: August 14, 1996.
Jeffrey P. Bialos,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-21463 Filed 8-21-96; 8:45 am]
BILLING CODE 3510-DS-P