[Federal Register Volume 64, Number 65 (Tuesday, April 6, 1999)]
[Notices]
[Pages 16699-16703]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8486]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-412-810]
Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from
the United Kingdom: Preliminary Results of Antidumping Administrative
Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on certain hot-
rolled lead and bismuth carbon steel products from the United Kingdom
in response to requests by respondent, British Steel Engineering Steels
Limited (BSES), and petitioners, Ispat Inland Inc. and USS/KOBE Steel
Co. This review covers the period March 1, 1997, through February 28,
1998.
We have preliminarily determined that sales have been made below
normal value (NV). Interested parties are invited to comment on these
preliminary results. If these preliminary results are adopted in our
final results of administrative review, we will instruct the Customs
Service to assess antidumping duties on all appropriate entries.
EFFECTIVE DATE: April 6, 1999.
FOR FURTHER INFORMATION CONTACT: Rebecca Trainor or Katherine Johnson,
Office 5, AD/CVD Enforcement Group II, Import Administration, Room
B099, International Trade Administration, U.S. Department of Commerce,
14th Street and Constitution Avenue, N.W., Washington D.C. 20230;
telephone (202) 482-4007, or 482-4929, respectively.
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's regulations are
to the regulations at 19 CFR Part 351 (1998).
SUPPLEMENTARY INFORMATION:
Background
On March 22, 1993, the Department published in the Federal Register
the antidumping duty order on certain hot-rolled lead and bismuth
carbon steel products from the United Kingdom (58 FR 15324).
On March 11, 1998, we published in the Federal Register (62 FR
11868) a notice of opportunity to request an administrative review of
the antidumping duty order on certain hot-rolled lead and bismuth
carbon steel products from the United Kingdom covering the period March
1, 1997, through February 28, 1998.
In accordance with 19 CFR 351.213(b)(1), both BSES and petitioners
requested that we conduct this administrative review. We published a
notice of initiation of this antidumping duty administrative review on
April 24, 1998 (63 FR 20378).
On April 28, 1998, petitioners requested that the Department
determine whether antidumping duties have been absorbed by BSES. On
January 29, 1999, the Department requested proof that unaffiliated
purchasers will ultimately pay the antidumping duties to be assessed on
entries during the review period.
The Department is conducting this administrative review in
accordance with section 751 of the Act.
Scope of the Review
The products covered by this review are hot-rolled bars and rods of
nonalloy or other alloy steel, whether or not descaled, containing by
weight 0.03 percent or more of lead or 0.05 percent or more of bismuth,
in coils or cut lengths, and in numerous shapes and sizes. Excluded
from the scope of this
[[Page 16700]]
review are other alloy steels (as defined by the Harmonized Tariff
Schedule of the United States (HTSUS) Chapter 72, note 1 (f)), except
steels classified as other alloy steels by reason of containing by
weight 0.4 percent or more of lead, or 0.1 percent or more of bismuth,
tellurium, or selenium. Also excluded are semi-finished steels and
flat-rolled products. Most of the products covered in this review are
provided for under subheadings 7213.20.00.00 and 7214.30.00.00 of the
HTSUS. Small quantities of these products may also enter the United
States under the following HTSUS subheadings: 7213.31.30.00;
7213.31.60.00; 7213.39.00.30; 7213.39.00.60; 7213.39.00.90;
7213.91.30.00; 7213.91.45.00; 7213.91.60.00; 7213.99.00; 7214.40.00.10,
7214.40.00.30, 7214.40.00.50; 7214.50.00.10; 7214.50.00.30,
7214.50.00.50; 7214.60.00.10; 7214.60.00.30; 7214.60.00.50; 7214.91.00;
7214.99.00; 7228.30.80.00; and 7228.30.80.50. HTSUS subheadings are
provided for convenience and Customs purposes. The written description
of the scope of this proceeding is dispositive.
Duty Absorption
On April 28, 1998, the petitioners requested that the Department
determine whether antidumping duties had been absorbed during the POR.
Section 751(a)(4) of the Act provides for the Department, if requested,
to determine during an administrative review initiated two or four
years after the publication of the order, whether antidumping duties
have been absorbed by a foreign producer or exporter, if the subject
merchandise is sold in the United States through an affiliated
importer. In this case, BSES sold to the United States through an
importer that is affiliated within the meaning of section 751(a)(4) of
the Act.
Section 351.213(j)(2) of the Department's regulations provides that
for transition orders (i.e., orders in effect on January 1, 1995), the
Department will conduct duty absorption reviews, if requested, for
administrative reviews initiated in 1996 or 1998. Because the order
underlying this review was issued prior to January 1, 1995, and this
review was initiated in 1998, we will make a duty absorption
determination in this segment of the proceeding.
On January 29, 1998, the Department requested proof that
unaffiliated purchasers will ultimately pay the antidumping duties to
be assessed on entries during the review period. BSES did not respond
to the Department's request for information. Based on the record, we
cannot conclude that the unaffiliated purchasers in the United States
will pay the ultimately assessed duty. Furthermore, we have
preliminarily determined that there is a dumping margin on 66 percent
of BSES' U.S. sales during the POR. Therefore, we find that antidumping
duties have been absorbed by BSES on 66 percent of its U.S. sales.
Fair Value Comparisons
To determine whether sales of the subject merchandise by BSES to
the United States were made at less than NV, we compared export price
(EP) to the NV, as described in the ``Export Price'' and ``Normal
Value'' sections of this notice.
Pursuant to section 777(A)(d)(2), we compared the EPs of individual
U.S. transactions to the monthly weighted-average NV of the foreign
like product where there were sales made at prices above the cost of
production (COP), as discussed in the ``Cost of Production Analysis''
section, below, and were otherwise in the ordinary course of trade.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by BSES covered by the description in the ``Scope of
the Review'' section, above, to be foreign like products for purposes
of determining appropriate product comparisons to U.S. sales. We
compared U.S. sales to sales made in the home market within the
contemporaneous window period, which extends from three months prior to
the U.S. sale until two months after the sale. Where there were no
sales of identical merchandise in the home market made in the ordinary
course of trade to compare to U.S. sales, we compared U.S. sales to the
most similar foreign like product made in the ordinary course of trade.
In making the product comparisons, we matched foreign like products
based on the physical characteristics reported by the respondents in
the following order: chemical composition, shape, cut (i.e., coil or
cut-to-length), size, and grade.
Consistent with our practice (see, e.g., Final Results of
Antidumping Duty Administrative Review: Cold-Rolled Carbon Steel Flat
Products from the Netherlands, 61 FR 48465, September 13,1996), we
compared prime quality models sold in the United States to identical
prime quality models sold in the home market. Where no home market
sales of identical prime quality models made in the ordinary course of
trade existed, we compared the U.S. sales of prime quality models to
the most similar prime quality foreign like product made in the
ordinary course of trade, based on the characteristics listed above.
There were no U.S. sales of second quality models during the POR.
Export Price
We based United States price on EP, as defined in section 772(a) of
the Act, because the merchandise was sold directly by the exporter to
unaffiliated U.S. purchasers prior to the date of importation and
constructed export price was not otherwise indicated by the facts of
record. When sales are made prior to importation through an affiliated
or unaffiliated U.S. sales agent to an unaffiliated customer in the
United States, our practice is to examine several criteria in order to
determine whether the sales are EP sales. Those criteria are: (1)
whether the merchandise was shipped directly from the manufacturer to
the unaffiliated U.S. customer; (2) whether this was the customary
commercial channel between the parties involved; and (3) whether the
function of the U.S. selling agent was limited to that of a ``processor
of sales-related documentation'' and a ``communications link'' with the
unaffiliated U.S. buyer. Where all three criteria are met, indicating
that the activities of the U.S. selling agent are ancillary to the
sale, the Department has determined the sales to be EP sales. See,
e.g., Notice of Final Results of Sales at Less Than Fair Value:
Stainless Steel Wire Rod From Italy, 63 FR 40422, 40424-25, July 29,
1998. In the instant review, the role of BSES' U.S. subsidiary was
limited to providing marketing support and referring customer inquiries
to the parent company. Thus, the above-referenced criteria have been
met, and we have treated all U.S. sales as EP sales.
We calculated EP based on packed, delivered prices to customers in
the United States. We made deductions, where applicable, for foreign
inland freight, FOB charges in the United Kingdom, ocean freight,
marine insurance, U.S. Customs duties, brokerage and handling charges,
merchandise processing fees, and U.S. inland freight charges, in
accordance with 19 CFR 351.402(a). We also made adjustments for invoice
corrections.
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 NV,
the Department compared BSES's volume of home market sales of the
foreign like product to its volume of U.S. sales of the subject
merchandise, in accordance with
[[Page 16701]]
sections 773(a)(1) (B) and (C) of the Act. Because BSES' aggregate
volume of home market sales of the foreign like product was greater
than five percent of its aggregate volume of U.S. sales of the subject
merchandise, we determined that the home market provides a viable basis
for calculating NV, in accordance with 19 CFR 351.404(b).
Many of BSES' home market sales were made to affiliated original
equipment manufacturers (OEMs). It is the Department's practice, in
situations where home market sales are made to affiliated parties, to
determine whether it is appropriate to use such sales as the basis of
NV by comparing the prices of those sales to the prices of sales to
unaffiliated parties, on a model-by-model basis. See Final Results of
Antidumping Duty Administrative Reviews, Partial Termination of
Administrative Reviews, and Revocation in Part of Antidumping Duty
Orders; Antifriction Bearings (Other Than Tapered Roller Bearings) and
Parts Thereof from France, et al., 60 FR 10899, 10900, February 28,
1995; and 19 CFR 351.403(c). Because BSES made home market sales to
affiliated OEMs during the period of review (POR), we tested these
sales to ensure that, on average, the affiliated-party sales were made
at arm's length. To conduct this test, we compared the weighted-average
gross unit prices of sales to affiliated and unaffiliated customers net
of all movement charges, direct selling expenses, invoice corrections,
rebates, and packing. As a result of our arm's-length test, we
disregarded sales to the affiliated OEM customers in the home market
where the prices charged to an affiliated customer were on average less
than 99.5 percent of the prices charged to unaffiliated customers. See
Final Results of Antidumping Duty Administrative Review; Certain Welded
Carbon Steel Pipes and Tubes From Thailand 62 FR 53809, 53817, October
16, 1997. We did not require BSES to provide downstream sales by the
affiliated OEM customers because these customers further manufactured
the subject merchandise into merchandise not covered by the order. BSES
also sold through affiliated resellers to unaffiliated customers during
the POR. BSES reported these unaffiliated-customer transactions, and we
used them in our determination of NV. See 19 CFR 351.403(d).
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we based NV on sales at the same level of trade
(LOT) as the EP sale. If NV was calculated at a different LOT, we made
an adjustment, if appropriate and if possible, in accordance with
section 773(a)(7) of the Act. (See ``Level of Trade'' section below.)
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same LOT as the EP transaction. The NV LOT is that of the starting-
price sales in the comparison market or, when NV is based on CV, that
of the sales from which we derive selling, general and administrative
(SG&A) expenses and profit. For EP, the LOT is also the level of the
starting-price sale, which is usually from the exporter to an
unaffiliated U.S. customer. To determine whether NV sales are at a
different LOT than EP sales, we examined stages in the marketing
process and selling functions along the chain of distribution between
the producer and the unaffiliated customer. If the comparison-market
sales are at a different LOT and the difference affects price
comparability, as manifested in a pattern of consistent price
differences between the sales on which NV is based and comparison-
market sales at the LOT of the export transaction, we make an LOT
adjustment under section 773(a)(7)(A) of the Act.
While BSES did not claim a LOT adjustment, we have, nonetheless,
undertaken an evaluation to determine whether such an adjustment was
necessary. In so doing, we examined respondent's distribution systems,
including selling functions, classes of customers, and selling
expenses. BSES reported two channels of distribution in the home
market: (1) sales produced to order and shipped from the mill directly
to unaffiliated OEMs (Channel 1 sales); and (2) sales by affiliated
resellers to unaffiliated OEMs (Channel 2 sales). In analyzing the
information submitted, we found that the two home market channels
differ with respect to selling activities. Channel 2 sales involved
additional selling activities including: ordering by the reseller for
its own account in anticipation of future customer orders; maintenance
of inventory; small lot sales; cutting into short lengths; and
rebundling into smaller weight bundles. None of these activities are
typical of mill direct sales to Channel 1 customers. Further, we found
that these channels constitute different stages in the marketing
process. Based on this analysis, we find that the two home market
channels of distribution comprise two LOTs.
BSES reported EP sales in the U.S. market, which were made to order
by BSES, and shipped directly to OEMs in the United States. We found
that EP sales involved the same selling functions and therefore were
sold at the same marketing stage as BSES' home market Channel 1 sales,
described above. Therefore, we have determined that the LOT for all EP
sales is the same as Channel 1 in the home market. Accordingly, we have
compared the U.S. sales to sales at the same LOT in the home market
when possible. If we found no contemporaneous home market Channel 1
sales of the identical or most similar product, we matched the EP sale
to home market Channel 2 sales of that product. Because we compared
sales at different LOTs in some instances, we examined whether a LOT
adjustment was appropriate. Based on our analysis, we determined that
there was a pattern of consistent price differences between the Channel
1 and Channel 2 LOTs in the home market. Therefore, when we compared
sales at different LOTs, we made an adjustment in accordance with
section 773(a)(7)(A) of the Act. (See Memorandum to the File from The
Team dated March 31, 1999, for further explanation.)
Cost of Production Analysis
Pursuant to section 773(b) of the Act, for this POR, we initiated
an investigation of sales at less than the COP. We performed this
analysis because, in the final results of the most recent
administrative review of BSES, we disregarded BSES' home market sales
that were below the COP. See Final Results of Antidumping Duty
Administrative Review; Certain Hot-Rolled Lead and Bismuth Carbon Steel
Products From the United Kingdom, 62 FR 18744, April 17, 1997.
Therefore, in accordance with section 773(b)(2)(A)(ii) of the Act, we
had reasonable grounds to believe or suspect that BSES made sales at
less than the COP during this review period. Before making any NV
comparisons, we conducted the COP analysis described below.
A. Calculation of COP
We calculated the COP based on the sum of BSES' cost of materials
and fabrication employed in producing the foreign like product, plus
amounts for home market general and administrative expenses. We relied
on the home market sales and COP information provided by BSES in its
questionnaire responses.
B. Test of Home Market Prices
After calculating COP, we tested whether home market sales of hot-
rolled lead and bismuth carbon steel were made at prices below the COP
within an extended period of time in substantial quantities, and
whether such prices permitted recovery of all costs within a
[[Page 16702]]
reasonable period of time. We compared the model-specific COP to the
reported home market prices less any applicable invoice corrections,
movement charges, rebates, direct and indirect selling expenses, and
packing costs.
C. Results of COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of the respondent's sales of a specific model were at prices
less than the COP, we did not disregard any below-cost sales of that
product because we determined that the below-cost sales were not made
in ``substantial quantities.'' Where 20 percent or more of the
respondent's sales of a specific model during the POR were at prices
less than the COP, we disregarded the below-cost sales because we
determined that the below-cost sales were made within an extended
period of time in ``substantial quantities'' in accordance with
sections 773(b)(2)(B) and (C) of the Act, and because, based on our
comparisons of prices to weighted-average COPs for the POR, we
determined that the below-cost sales of the product were at prices
which would not permit recovery of all costs within a reasonable period
of time, as defined in section 773(b)(2)(D) of the Act. Based on this
test, we disregarded certain below-cost home market sales made by BSES.
Price-to-Price Comparisons
Pursuant to section 777A(d)(2) of the Act, we compared the EPs of
individual transactions to the monthly weighted-average price of sales
of the foreign like product where there were sales at prices above COP,
as discussed above. We based NV on packed, delivered prices to
unaffiliated purchasers in the home market, and to affiliated
purchasers in the home market to the extent that prices were at arm's
length. We made adjustments to home market price, where applicable, in
accordance with section 773(a)(6) of the Act, for invoice corrections,
rebates, and inland freight. We also made a circumstance-of-sale
adjustment for differences in credit, credit insurance and warranty
expenses pursuant to section 773(a)(6)(C)(iii) of the Act. In order to
adjust for differences in packing between the two markets, we increased
home market price by the amount of U.S. packing costs and reduced it by
the amount of home market packing costs. We made adjustments, where
appropriate, for physical differences in merchandise, in accordance
with section 773(a)(6)(C)(ii) of the Act, and for differences in LOT,
in accordance with section 773(a)(7)(A) of the Act.
Preliminary Results of the Review
As a result of our comparison of EP and NV, we preliminarily
determine that the following weighted-average dumping margin exists:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Period (percent)
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British Steel Engineering Steels Limited 3/1/97-2/28/98 12.55
(BSES) (formerly United Engineering
Steels Limited)........................
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 30 days of publication. Any hearing, if
requested, will be held 80 days after the date of publication or the
first business day thereafter.
Issues raised in the hearing will be limited to those raised in the
respective case briefs and rebuttal briefs. Case briefs from interested
parties and rebuttal briefs, limited to the issues raised in the
respective case briefs, may be submitted not later than 70 days and 77
days, respectively, from the date of publication of these preliminary
results. See 19 CFR 351.309(c) and (d). Parties who submit case briefs
or rebuttal briefs in this proceeding are requested to submit with each
argument (1) a statement of the issue and (2) a brief summary of the
argument. Parties are also encouraged to provide a summary of the
arguments not to exceed five pages and a table of statutes, regulations
and cases cited.
The Department will subsequently issue the final results of this
administrative review, including the results of its analysis of issues
raised in any such written briefs or at the hearing, if held, not later
than 120 days after the date of publication of this notice.
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, Room B-099, within 30 days of the
date of 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 issues to be discussed. See 19 CFR
351.310(c).
Assessment Rates
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. The Department
will issue appropriate appraisement instructions directly to the
Customs Service upon completion of this review. The final results of
this review shall be the basis for the assessment of antidumping duties
on entries of merchandise covered by this review and for future
deposits of estimated duties. We will instruct the Customs Service to
assess antidumping duties on all appropriate entries covered by this
review if any importer-specific assessment rate calculated in the final
results of this review is above de minimis. For assessment purposes, we
intend to calculate importer-specific assessment rates for the subject
merchandise by aggregating the dumping margins calculated for all U.S.
sales examined and dividing this amount by the total quantity sold.
This notice serves as a preliminary 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.
Cash Deposit Requirements
The following cash deposit requirements will be effective for all
shipments of the subject merchandise 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)(1) of the Act: (1) The cash deposit rate for the reviewed
company will be that established in the final results of this review,
except if the rate is less than 0.50 percent, and therefore, de minimis
within the meaning of 351.106(d)(1), in which case the cash deposit
rate will be zero; (2) for previously reviewed or investigated
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 review, a prior review, or
the original less than fair value (LTFV) investigation, but the
manufacturer is, the cash deposit rate
[[Page 16703]]
will be the rate established for the most recent period for the
manufacturer of the merchandise; and (4) the cash deposit rate for all
other manufacturers or exporters will continue to be 25.82 percent, the
``All Others'' rate made effective by the LTFV investigation. These
requirements, when imposed, shall remain in effect until publication of
the final results of the next administrative review.
This administrative review and notice are published in accordance
with section 751(a)(1) of the Act and 19 CFR 351.221.
Dated: March 31, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-8486 Filed 4-5-99; 8:45 am]
BILLING CODE 3510-DS-P