[Federal Register Volume 64, Number 177 (Tuesday, September 14, 1999)]
[Notices]
[Pages 49771-49773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23954]
[[Page 49771]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-423-602]
Industrial Phosphoric Acid From Belgium; 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 of Industrial Phosphoric Acid from Belgium.
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SUMMARY: On May 7, 1999, the Department of Commerce (``the
Department'') published the preliminary results of its administrative
review of the antidumping order on industrial phosphoric acid (``IPA'')
from Belgium. This review covers imports of IPA from one producer,
Societe Chimique Prayon-Rupel S.A. (``Prayon'') and the period of
review (POR) is August 1, 1997, through July 31, 1998.
We gave interested parties an opportunity to comment on our
preliminary results. Based on our analysis of the comments received, we
have revised the results from those presented in the preliminary
results of review.
EFFECTIVE DATE: September 14, 1999.
FOR FURTHER INFORMATION CONTACT: Frank Thomson or Jim Terpstra, AD/CVD
Enforcement, Office IV, Group II, Import Administration, International
Trade Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
4793, and 482-3965, respectively.
SUPPLEMENTARY INFORMATION:
Background
On August 20, 1987, the Department published in the Federal
Register (52 FR 31439) the antidumping duty order on IPA from Belgium.
On August 11, 1998, the Department published in the Federal Register
(63 FR 42821) a notice of opportunity to request an administrative
review of this antidumping duty order. On August 27, 1998, in
accordance with section 751(a)(1) of the Tariff Act of 1930, as amended
(``the Act'') and 19 CFR 351.213(b), FMC Corporation (``FMC''), and
Albright & Wilson Americas, Inc. (``Wilson''), both domestic producers
of the subject merchandise, requested that the Department conduct an
administrative review of Prayon's exports of subject merchandise to the
United States. We published the notice of initiation of this review on
September 29, 1998 (63 FR 51893). On May 7, 1999, the Department
published the Notice of Preliminary Results of Antidumping Duty
Administrative Review of Industrial Phosphoric Acid from Belgium, 64 FR
24574 (Preliminary Results). On May 12, 1999, Prayon submitted a
response to our supplemental questionnaire of April 21, 1999, in which
we asked for certain additional information regarding Prayon's reported
home market and U.S. market commissions. We gave interested parties an
opportunity to comment on the preliminary results. We received case and
rebuttal briefs from Prayon and the domestic producers on June 9, 1999,
and June 16, 1999, respectively. We did not receive any request from
interested parties for a hearing. The Department has now completed this
review in accordance with section 751 of the Act.
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the Act are references
to the provisions as of 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's regulations refer to the regulations codified at 19 CFR
Part 351 (1998).
Scope of the Review
The products covered by this review include shipments of IPA from
Belgium. This merchandise is currently classifiable under the
Harmonized Tariff Schedule (HTS) item numbers 2809.2000 and 4163.0000.
The HTS item number is provided for convenience and U.S. Customs
Service (Customs Service) purposes. The written description remains
dispositive.
Analysis of Comments Received
Comment 1: Sales commissions Prayon argues that the Department
erroneously treated its home and U.S. market commission payments to
affiliated parties as arm's-length transactions. Prayon claims that the
commission it paid to its affiliated sales agent in the United States,
Quadra Corporation (USA) (``Quadra''), is not comparable to the
commissions it paid to its non-affiliated sales agents in third
countries.
Specifically, Prayon asserts that the commission paid to Quadra was
significantly higher than those paid to non-affiliated sales agents in
all other countries except one. According to Prayon, the only
commission rate comparable to the one it pays Quadra is the rate it
pays to Quadra Chimie Limite (``QCL''), with which Prayon claims to be
affiliated. Prayon asserts that this is not an appropriate comparison,
and thus, the Department does not have an appropriate basis for
concluding that the commission to Quadra was made at arm's-length.
Prayon concludes that the Department should find that its commission
payment to Quadra was not at arm's-length.
Regarding commission payments in the home market, Prayon points out
that its home-market sales agent (Zinchem Benelux) is virtually wholly
owned by Prayon, and that the Department has, in past segments of this
proceeding, treated this commission as not being at arm's-length (see
Industrial Phosphoric Acid from Belgium; Final Results of Antidumping
Duty Administrative Review, 63 FR 55087 (October 14, 1998) (Final
Results 1996-1997); Industrial Phosphoric Acid from Belgium; Final
Results of Antidumping Duty Administrative Review, 62 FR 41359 (August
1, 1997) (Final Results 1995-1996); Industrial Phosphoric Acid from
Belgium; Final Results of Antidumping Duty Administrative Review, 61 FR
51424 (October 2, 1996) (Final Results 1994-1995); Industrial
Phosphoric Acid from Belgium; Final Results of Antidumping Duty
Administrative Review, 61 FR 20227 (May 6, 1996) (Final Results 1993-
1994)). Prayon also points to the original investigation, where the
Department determined that these payments were not made at arm's-length
(see Notice of Final Determination of Sales at Less Than Fair Value:
Industrial Phosphoric Acid from Belgium, 52 FR 25436 (July 7, 1987)
(LTFV)). Prayon asserts that since the completion of those segments,
there has been no change in the circumstances of this commission
arrangement, and thus no reason for the Department's reversal of its
treatment in the current review.
The domestic producers agree with the Department's treatment of
these commissions in the preliminary results of review, and assert that
the commission Prayon paid to QCL represents a valid basis for
comparison and, furthermore, is consistent with the commission paid to
Quadra. The domestic producers disagree with Prayon's contention that
these commission payments were not at arm's-length. First, the domestic
producers assert that the Department's comparison of commission
payments using QCL is valid because QCL received them for sales made
directly to specific customers on its own, not for sales jointly made
with Quadra. Second, QCL ran its business operation
[[Page 49772]]
independently from Prayon, also an indication of the arm's-length
nature of the commission payments, according to the domestic producers.
In further support for finding that the commission paid to Quadra
was at arm's-length, the domestic producers point out that Prayon, as a
minority shareholder in Quadra, is not in a position to freely set
commission rates to Quadra, benefit from paying out unduly high
commissions to it, or have negotiating power over Quadra. The domestic
producers conclude that the commission payment in question reflects an
open market rate negotiation.
Finally, the domestic producers assert that, even were the
Department to disregard the commission paid to QCL, the commissions
paid by Prayon to non-affiliated sales agents in other countries are
sufficiently similar to that paid to Quadra to support the Department's
finding of the arm's-length nature of this commission.
Department's position: During the POR, Prayon used an affiliated
sales agent in the home market and a different affiliated sales agent
in the United States. For the preliminary results, we compared the
commission rates Prayon submitted for its affiliated sales agents in
both the home and U.S. market, with the rates paid to unaffiliated
parties in other markets. Since the preliminary results were published,
Prayon submitted additional documentation regarding these commission
rates. As discussed in the preliminary results of review, we have
applied the Department's guidelines for determining whether affiliated
party commissions are paid on an arm's-length basis. See Tapered Roller
Bearings and Parts Thereof, Finished and Unfinished, From Japan and
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and
Components Thereof, From Japan: Final Results of Antidumping Duty
Administrative Reviews and Revocation in Part of an Antidumping
Finding, 61 FR 57629 (November 7, 1996). Accordingly, because Prayon
did not use an unaffiliated sales agent in either the U.S. or home
market, we compared the affiliated commission rates with rates Prayon
paid to unaffiliated parties in other markets. Based on our comparison
of commission rates for affiliated and unaffiliated parties, we find
that Prayon's affiliated commission rates in all markets are reasonably
similar to the range of commission rates Prayon paid to unaffiliated
sales agents, such that we conclude that the affiliated commissions
were arm's-length transactions.
As to Prayon's assertion that the Department, in the four previous
reviews, treated Prayon's commissions to its affiliated sales agent in
the home market as not being at arm's-length, we agree. However, in
those reviews the Department found that Prayon did not use unaffiliated
sales agents. Thus, no information existed that would allow the
Department to establish a benchmark against which to compare the arm's-
length nature of the commission payments from Prayon to its affiliated
home market sales agent. The Department was therefore unable to carry
out an analysis as to the arm's-length nature of Prayon's commission
payments. Accordingly, the Department's treatment of home market
commissions in those reviews is not dispositive of the arm's-length
nature of the transactions. See Final Results 1996-1997; Industrial
Phosphoric Acid From Belgium; Preliminary Results of Antidumping Duty
Administrative Review, 63 FR 25830, 25832 (May 11, 1998); Final Results
1995-1996; Industrial Phosphoric Acid From Belgium; Preliminary Results
of Antidumping Duty Administrative Review, 62 FR 31073, 31074 (June 6,
1997); Final Results 1994-1995; Industrial Phosphoric Acid From
Belgium; Preliminary Results of Antidumping Duty Administrative Review,
61 FR 26160, 26161 (May 24, 1996); Final Results 1993-1994; Industrial
Phosphoric Acid From Belgium; Preliminary Results of Antidumping Duty
Administrative Review, 60 FR 57398 (November 15, 1995). Prayon's
reliance on the previous reviews, therefore, is misplaced.
As to Prayon's assertion that the Department, in the original
investigation, determined that Prayon's commissions to its affiliated
sales agent in the home market were not at arm's-length, our analysis
indicates otherwise. At the time of the investigation, the Department
considered Prayon's commission payments to be ``part of the general
expenses of the company, and [thus] not costs directly related to
particular sales.'' See LTFV at 25439. In addition, at the time of the
LTFV investigation, the Department did not have a practice or policy
with respect to considering commissions paid to unaffiliated sales
agents in other (i.e., third country) markets in determining whether a
respondent's affiliated commission rates were at arm's-length, since we
considered such transactions to be intracompany transfers of funds. Id.
Consequently, Prayon's argument is not supported by the LTFV.
Since the time of the investigation, the Department has changed its
practice regarding the arm's-length nature of commissions paid to
affiliated selling agents. Under guidelines the Department subsequently
developed, the Department compares the commission paid to affiliated
selling agents with the commission paid by the respondent to any
unaffiliated selling agents in the same market, (i.e., home or U.S.) or
in any third country market to determine the arm's-length nature of the
affiliated commissions. See Final Determination of Sales at Less Than
Fair Value: Coated Groundwood Paper from the United Kingdom, 56 FR
56403, 56405-06 (November 4, 1991) (Paper from United Kingdom); see
also Final Determination of Sales at Less Than Fair Value: Coated
Groundwood Paper from Finland, 56 FR 56363, 56371-72 (November 4, 1991)
(Paper from Finland); Final Determination of Sales at Less Than Fair
Value: Coated Groundwood Paper from Germany, 56 FR 56385, 56389
(November 4, 1991) (Paper from Germany). Pursuant to the current
practice, the Department will make an adjustment for commissions
between affiliated parties where we find the commissions paid to such
parties to be at arm's-length. See Paper from United Kingdom, 56 FR at
56406; Paper from Finland, 56 FR at 56372; Paper from Germany, 56 FR at
56389.
In the present review, Prayon used the services of unaffiliated
agents and provided detailed information on the record regarding the
commission rates it paid to these unaffiliated sales agents, (see
``Background'' section, above). Consequently, in this review, the
Department does have information appropriate for use as a benchmark in
establishing the arm's-length nature of Prayon's affiliated commission
rates.
Since the Department has determined that the commissions paid to
affiliated selling agents are comparable to the commissions paid by the
respondent to unaffiliated selling agents in third country markets, for
purposes of these final results we continue to find that the affiliated
commissions in both the home and U.S. market are made at arm's-length
and, for these final results, we are accepting Prayon's reported home
and U.S. market commissions. Accordingly, we have continued to make a
circumstance of sale adjustment for commissions in both markets.
Comment 2: Prayon argues that, even were the Department to continue
to treat its U.S. market commission payments as having been made at
arm's-length, the Department committed a clerical error
[[Page 49773]]
in deducting U.S. commission expense from U.S. price, instead of adding
it to normal value (NV).
The domestic producers disagree with Prayon and assert that in
conducting an administrative review, the Department considers
individual U.S. sales, and thus it is proper that the commission
expense associated with each U.S. sale be deducted from U.S. price.
Department's position: We agree with Prayon that this was a
clerical error. For the final results we have added U.S. commissions to
NV as is our normal practice in the treatment of circumstances of sale
adjustments for export price (EP) transactions.
Final Results of Review
As a result of our review, we have determined that the following
weighted-average dumping margin exists for the period August 1, 1997
through July 31, 1998:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
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Prayon..................................................... 3.92
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The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. We have
calculated an importer-specific duty assessment rate based on the ratio
of the total amount of antidumping duties calculated for the importer-
specific sales to the total entered value of the same sales. The rate
will be assessed uniformly on all entries by that particular importer
made during the POR. The Department will issue appraisement
instructions directly to the Customs Service.
Further, the following deposit requirements will be effective upon
publication of this notice of final results of review for all shipments
of IPA from Belgium entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided for by
section 751(a) of the Act: (1) for the company named above, the cash
deposit rate will be the rate listed above; (2) for merchandise
exported by manufacturers or exporters not covered in this review but
covered in a previous segment of this proceeding, the cash deposit rate
will continue to be the company-specific rate published in the most
recent final results which covered that manufacturer or exporter; (3)
if the exporter is not a firm covered in this review or in any previous
segment of this proceeding, but the manufacturer is, the cash deposit
rate will be that established for the manufacturer of the merchandise
in these final results of review or in the most recent final results
which covered that manufacturer; and (4) if neither the exporter nor
the manufacturer is a firm covered in this review or in any previous
segment of this proceeding, the cash deposit rate will be 14.67
percent, the ``all others'' rate established in the LTFV.
These 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 doubled antidumping
duties.
This notice also serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with section 351.306 of the Department's regulations.
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.
This administrative review and notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: September 1, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-23954 Filed 9-13-99; 8:45 am]
BILLING CODE 3510-DS-P