[Federal Register Volume 61, Number 14 (Monday, January 22, 1996)]
[Notices]
[Pages 1560-1562]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-750]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-122-601]
Brass Sheet and Strip from Canada; Preliminary Results of
Antidumping Duty 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) has conducted an
administrative review of the antidumping duty order on brass sheet, and
strip (BSS) from Canada. The review covers one manufacturer/exporter of
this merchandise to the United States, and the period January 1, 1993
through December 31, 1993. The review indicates the existence of
dumping margins for this period.
We have preliminarily determined that sales have been made below
the foreign market value (FMV). If these preliminary results are
adopted in our final results of administrative review, we will instruct
U.S. Customs to assess antidumping duties equal to the difference
between the United States price (USP) and FMV.
Interested parties are invited to comment on these preliminary
results. Parties who submit argument in this proceeding are requested
to submit with the argument (1) a statement of the issue and (2) a
brief summary of the argument.
EFFECTIVE DATE: January 22, 1996.
FOR FURTHER INFORMATION CONTACT: Arthur N. DuBois, Karen Park, or
Thomas F. Futtner, Office of Antidumping Compliance, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue NW., Washington, D.C.
20230, telephone: (202) 482-5253.
SUPPLEMENTARY INFORMATION:
Background
On January 12, 1987, the Department published in the Federal
Register (52 FR 1217) the antidumping order on BSS from Canada. Based
on timely requests for review, on February 17, 1994, in accordance with
19 CFR 353.22(c), we initiated an administrative review of Wolverine
Tube (Canada) Inc. (Wolverine), for the period January 1, 1993 through
December 31, 1993 (59 FR 7979).
Applicable Statute and Regulations
The Department has conducted this administrative review in
accordance with section 751 of the Tariff Action 1930, as amended (the
Tariff Act). Unless otherwise indicated, all citations to the statute
and to the Department's regulations refer to the provisions as they
existed on December 31, 1994.
Scope of the Review
Imports covered by the review are shipments of brass sheet and
strip, other than leaded and tin brass sheet and strip. The chemical
composition of the covered products is currently defined in the Copper
Development Association (C.D.A.) 200 Series or the Unified Numbering
System (U.N.S.) C2000. Products whose chemical composition is defined
by other C.D.A. or U.N.S. series are not covered by this order.
The physical dimensions of the products covered by this review are
brass sheet and strip of solid rectangular cross section over 0.006
inches (0.15 millimeters) through 0.188 inches (4.8 millimeters) in
finished thickness or gauge, regardless of width. Coil, wound-on-reels
(traverse wound), and cut-to-length products are included. During the
review such merchandise was classifiable under Harmonized Tariff
Schedule (HTS) subheadings 7409.21.00 and 7409.29.00. Although the HTS
subheading is provided for convenience and for Customs purposes, the
written description of the scope of this order remains dispositive.
The review covers one Canadian manufacturer/exporter, Wolverine,
and the period January 1, 1993 through December 31, 1993.
Verification
As provided in section 776(b) of the Tariff Act, we verified
information provided by the respondent by using standard verification
procedures, including on-site inspection of the manufacturer's
facilities, the examination of relevant sales and financial records,
and selection of original documentation containing relevant
information. Our verification results are outlined in the public
versions of the verification report.
United States Price
We based USP on purchase price, in accordance with section 772 of
the Act.
We calculated purchase price based on packed, delivered, duty-paid
prices. In accordance with section 772(d)(2) of the Act, we made
deductions for movement expenses and customs duties. Movement expenses
included fees for brokerage and handling, and U.S. and foreign inland
freight.
In addition, we adjusted USP for taxes in accordance with our
practice outlined in the following section on Value-Added Taxes.
No other adjustments were claimed or allowed.
Value-Added Taxes
In light of the Federal Circuit's decision in Federal Mogul v.
United States, CAFC No. 94-1097, the Department has changed its
treatment of home market consumption taxes. Where merchandise exported
to the United States is exempt from the consumption tax, the Department
will add to the U.S. price the absolute amount of such taxes charged on
the comparison sales in the home market. This is the same methodology
that the Department adopted following the decision of the Federal
Circuit in Zenith v. United States, 988 F.2d 1573, 1582 (1993), and
which was suggested by that court in footnote 4 of its decision. The
Court of International Trade (CIT) overturned this methodology in
Federal Mogul v. United States, 834 F. Supp. 1391 (1993), and the
Department acquiesced in the CIT's decision. The Department then
followed the CIT's preferred methodology, which was to calculate the
tax to be added to U.S. price by multiplying the adjusted U.S. price by
the foreign market tax rate; the Department made adjustments to this
amount so that the tax adjustment would not alter a ``zero'' pre-tax
dumping assessment.
The foreign exporters in the Federal Mogul case, however, appealed
that decision to the Federal Circuit, which reversed the CIT and held
that the statute did not preclude Commerce from using the ``Zenith
footnote 4'' methodology to calculate tax-neutral dumping assessments
(i.e., assessments that are unaffected by the existence or amount of
home market consumption taxes). Moreover, the Federal Circuit
recognized that certain international agreements of the United States,
in particular the General Agreement on Tariffs and Trade (GATT) and the
Tokyo Round Antidumping Code, required the calculation of tax-neutral
dumping assessments. The Federal Circuit remanded the case to the CIT
with instructions to direct Commerce to determine which tax methodology
it will employ.
The Department has determined that the ``Zenith footnote 4''
methodology
[[Page 1561]]
should be used. First, as the Department has explained in numerous
administrative determinations and court filings over the past decade,
and as the Federal Circuit has now recognized, Article VI of the GATT
and Article 2 of the Tokyo Round Antidumping Code required that dumping
assessments be tax-neutral. This requirement continues under the new
Agreement on Implementation of Article VI of the General Agreement on
Tariffs and Trade. Second, the URAA explicitly amended the antidumping
law to remove consumption taxes from the home market price and to
eliminate the addition of taxes to U.S. price, so that no consumption
tax is included in the price in either market. The Statement of
Administrative Action (p. 159) explicitly states that this change was
intended to result in tax neutrality.
While the ``Zenith footnote 4'' methodology is slightly different
from the URAA methodology, in that section 772(d)(1)(C) of the pre-URAA
law required that the tax be added to United States price rather than
subtracted from home market price, it does result in tax-neutral duty
assessments. In sum, the Department has elected to treat consumption
taxes in a manner consistent with its longstanding policy of tax-
neutrality and with the GATT.
Cost of Production Analysis
Due to the existence of sales below the cost of production (COP) in
the last completed review of Wolverine, the Department has reasonable
grounds to believe or suspect that sales below the COP may have
occurred during this review. See Carbon Steel Butt Weld Pipe Fittings
from Taiwan; Preliminary Results of Administrative Review, 59 FR 66001
(December 22, 1994). Therefore, pursuant to section 773(b) of the Act,
in this review we initiated a cost of production (COP) investigation of
Wolverine.
In accordance with 19 CFR 353.51(c) we calculated COP based on the
cost of materials, fabrication, and general expense, but excluding
profit, incurred in producing such or similar merchandise. The
Department relied on submitted COP and constructed value (CV)
information except in the following instances where the costs were not
appropriately quantified or valued:
1. We added the cost of subcontracted labor to the total direct
labor pool to reflect the total labor costs associated with the
production of the subject merchandise.
2. We reclassified certain general and administrative (G&A)
expenses to fixed overhead cost to allocate the appropriate G&A
expenses incurred for the production of subject merchandise.
After computing COP, we compared it to the reported home market
prices net of movement charges and discounts. In accordance with
section 773(b) of the Tariff Act and 19 CFR 353.51(a), in determining
whether to disregard home market sales made at prices below the COP, we
examined whether such sales were made in substantial quantities over an
extended period of time, and whether such sales were made at prices
which permitted recovery of all costs within a reasonable period of
time in the normal course of trade.
In accordance with Section 773(b)(1) of the Tariff Act, to
determine whether sales below cost had been made in substantial
quantities, we applied the following methodology. For each model for
which less than 10 percent, by quantity, of the home market sales
during the POR that were made at prices below COP, we included all
sales of that model in the computation of FMV. For each model for which
10 percent or more, but less than 90 percent, of the home market sales
during the POR were priced below the merchandise's COP, we excluded
from the calculation of FMV those home market sales priced below the
merchandise's COP, provided that they were made over an extended period
of time. For each model for which 90 percent or more of the home market
sales during the POR were priced below COP and made over an extended
period of time, we disregarded all sales of that model in our
calculation and, in accordance with 773(b) of the Tariff Act, we used
the constructed value (CV) of those models, as described below. See
Final Results of Antidumping Duty Administrative Review; Tapered Roller
Bearings Four Inches or Less in Outside Diameter, and Certain
Components Thereof, 56 FR 26054, 26060 (June 6, 1991).
In accordance with section 773(b)(1) of the Tariff Act, to
determine whether sales below cost had been made over an extended
period of time, we compared the number of months in which sales below
cost occurred for a particular model to the number of months during the
POR in which that model was sold. If a model was sold in fewer than
three months during the POR, we did not exclude the below cost sale
unless there were below cost sales in each month of sale. If a model
was sold in three or more months during the POR, we did not exclude
below-cost sales unless there were sales below cost in at least three
of the months in which the model was sold. See Notice of Final
Determination of Sales at Less Than Fair Value: Certain Carbon Steel
Butt Weld Pipe Fitting from Thailand, 60 FR 10552, 10554 (February 27,
1995).
The Department determined that Wolverine provided no evidence that
its below COP prices would permit recovery of all costs within a
reasonable period time in the normal course of trade. Therefore, in
accordance with Section 773(b) we disregarded these below cost sales in
our FMV calculations.
Foreign Market Value
The Department used home market price to calculate FMV, as defined
in section 773 of the Act. Because the home market was viable as
defined by 19 CFR 353.48(a), we compared U.S. sales with sales of such
or similar merchandise sold in the home market.
FMV was based on packed, delivered prices to unrelated home market
purchasers. In accordance with 19 CFR 353.56 we made adjustments for
bona fide difference in the circumstances of the sales compared, where
applicable, for home market credit, post-sale inland freight, and U.S.
credit cost. We made no adjustment for differences in packing costs.
We calculated FMV using monthly weighted-average prices of brass
sheet and strip having the same characteristics with respect to alloy,
gauge, width, temper and form.
We adjusted for Canadian consumption tax as mentioned above.
No other adjustments were claimed or allowed.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following margin exists for the period January 1, 1993, through
December 31, 1993:
------------------------------------------------------------------------
Margin
Manufacturer/producer/exporter percent
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Wolverine................................................... 1.39
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Interested parties may request disclosure within 5 days of the date
of publication of this notice and may request a hearing within 10 days
of publication, Any hearing, if requested, will be held as early as
convenient for the parties but not later than 44 days after the date of
publication or the first business day thereafter. Case briefs and/or
written comments from interested parties may be submitted no later than
30 days after the date of publication of this notice. Rebuttal briefs
and rebuttal comments, limited to issues raised in the case briefs, may
be filed not later
[[Page 1562]]
than 37 days after the date of publication of this notice. The
Department will publish the final results of this administrative
review, including the results of its analysis of issues raised in any
such written comments or at a hearing.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between USP and FMV may vary from the percentages stated
above. Upon completion of the final results in this review the
Department will issue appropriate appraisement instructions directly to
the U.S. Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of our final results of review 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 the rate
established in the final results of this review;
(2) for previously reviewed or investigated companies not listed
above, the cash deposit rate will continue to be the company-specific
rate published in 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 will be the rate established
in 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 or any previous review conducted by the Department, the cash
deposit rate will be 8.10 percent, the all others rate established in
the LTFV investigation (51 FR 44319).
These deposit requirements shall remain in effect until publication
of the final results of the next administrative review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 353.26 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
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: December 14, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-750 Filed 1-19-96; 8:45 am]
BILLING CODE 3510-DS-P
