[Federal Register Volume 61, Number 19 (Monday, January 29, 1996)]
[Notices]
[Pages 2792-2797]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1456]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-405-802]
Certain Cut-To-Length Carbon Steel Plate From Finland: 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.
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SUMMARY: On July 18, 1995, the Department of Commerce (the Department)
published the preliminary results of the administrative review of the
antidumping duty order on certain cut-to-length carbon steel plate from
Finland. This review covers one manufacturer/exporter of the subject
merchandise to the United States during the period of review (POR),
February 4, 1993, through July 31, 1994. We gave interested parties an
opportunity to comment on our preliminary results. Based on our
analysis of the comments received, we have changed the results from
those presented in the preliminary results of review.
EFFECTIVE DATE: January 29, 1996.
FOR FURTHER INFORMATION CONTACT: Nancy Decker or Robin Gray, Office of
Agreements Compliance, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-3793.
SUPPLEMENTARY INFORMATION:
Background
On July 18, 1995, the Department published in the Federal Register
(60 FR 36776) the preliminary results of the administrative review of
the antidumping duty order on certain cut-to-length carbon steel plate
from Finland (58 FR 44165, August 19, 1993). The Department has now
completed this administrative review in accordance with section 751 of
the Tariff Act of 1930, as amended (the Act).
Applicable Statute and Regulations
Unless otherwise stated, all citations to the statute and to the
Department's regulations are references to the provisions as they
existed on December 31, 1994.
Scope of This Review
The products covered by this administrative review constitute one
``class or kind'' of merchandise: certain cut-to-length carbon steel
plate. These products include hot-rolled carbon steel universal mill
plates (i.e., flat-rolled products rolled on four faces or in a closed
box pass, of a width exceeding 150 millimeters but not exceeding 1,250
millimeters and of a thickness of not less than 4 millimeters, not in
coils and without patterns in relief), of rectangular shape, neither
clad, plated nor coated with metal, whether or not painted, varnished,
or coated with plastics or other nonmetallic substances; and certain
hot-rolled carbon steel flat-rolled products in straight lengths, of
rectangular shape, hot rolled, neither clad, plated, nor coated with
metal, whether or not painted, varnished, or coated with plastics or
other nonmetallic substances, 4.75 millimeters or more in thickness and
of a width which exceeds 150 millimeters and measures at least twice
the thickness, as currently classifiable in the Harmonized Tariff
Schedule (HTS) under item numbers 7208.31.0000, 7208.32.0000,
7208.33.1000, 7208.33.5000, 7208.41.0000, 7208.42.0000, 7208.43.0000,
7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.11.0000, 7211.12.0000,
7211.21.0000, 7211.22.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000,
and 7212.50.0000. Included are flat-rolled products of nonrectangular
cross-section where such cross-section is achieved subsequent to the
rolling process (i.e., products which have been ``worked after
rolling'')--for example, products which have been beveled or rounded at
the edges. Excluded is grade X-70 plate. These HTS item numbers are
provided for convenience and Customs purposes. The written description
remains dispositive.
The POR is February 4, 1993, through July 31, 1994. This review
covers entries
[[Page 2793]]
of certain cut-to-length carbon steel plate by Rautaruukki Oy
(Rautaruukki).
Consumption Tax Methodology
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 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.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the
preliminary results. We received case and rebuttal briefs from
Rautaruukki (the respondent) and petitioners. Petitioners requested a
public hearing but subsequently withdrew their request for a hearing.
Therefore, no hearing was held.
Comment 1: Petitioners argue that best information available (BIA)
must be used for Finnsteel's costs. According to petitioners,
Rautaruukki admitted that Finnsteel, its U.S. selling subsidiary, was
involved in the U.S. sales of subject merchandise. Petitioners claim
that nonetheless Rautaruukki failed to report any of Finnsteel's costs
on sales of subject merchandise. Although Rautaruukki subsequently
claimed that Finnsteel is not actively involved in the sales to the
U.S. of the subject merchandise, petitioners note Rautaruukki could not
substantiate its claim at verification. Petitioners argue that the
Department failed to include Finnsteel's costs in calculating the
preliminary results. Petitioners contend that expenses were incurred by
Finnsteel as a direct result of specific sales. Finnsteel would not
perform such activities absent specific sales of subject merchandise.
Petitioners argue that the expenses could have been tied to specific
sales--if Rautaruukki and Finnsteel had kept adequate records.
Rautaruukki should have separated and reported Finnsteel's direct
expenses for these services. Since it failed to do so, the Department
cannot determine which of Finnsteel's costs are direct. Since at least
some of Finnsteel's costs were direct selling expenses, the Department
must assign BIA to those unreported expenses. The Department should
follow its standard practice and assume all of Finnsteel's expenses
were direct expenses. Since Finnsteel's selling expenses were either
not reported or not reported separately, the Department should use the
reported indirect selling expense as BIA for direct selling expenses.
Respondent counters that there is no evidence on the record that
Finnsteel is actively involved in the sales of the subject merchandise
in this administrative review. Rautaruukki explained in its response
that its U.S. sales during the POR were made directly from
Rautaruukki's Raahe Steel Works to the unrelated customer. Respondent
notes the verification report states that Rautaruukki reported that it
handled all of the transactions and all activity related to the sale of
subject merchandise from Finland. Respondent also notes that the
Department also found that all documentation examined at verification
only listed Rautaruukki and the U.S. customer. Also, the unrelated U.S.
customer submitted a sworn affidavit confirming that it purchased the
subject merchandise directly from Rautaruukki during the POR.
Respondent notes that although Finnsteel acted as a ``communications
link'' for sales of subject merchandise during the POR, Finnsteel's
role did not rise to the level of active participation in the sales
process to warrant treating the U.S. sales as exporter's sales price
(ESP) transactions. Respondent argues that the record in this
administrative review clearly demonstrates that Finnsteel acted only as
a communications link with the unrelated customer. Therefore, the U.S.
sales in this administrative review were purchase price, and no further
adjustment is warranted.
Department's Position: We agree with respondent. Respondent
reported that normally transactions are handled through Finnsteel;
however, sales of subject merchandise made to the U.S. during the POR
were exclusively handled by Rautaruukki. At verification, we found no
evidence of Finnsteel's involvement in the sales of subject merchandise
during the POR. All documents examined supported the conclusion that
Finnsteel did not participate in these transactions. Sales were made
directly from Rautaruukki to the U.S. customer. Because of the lack of
evidence of Finnsteel's involvement, we cannot assume Finnsteel
incurred costs on the sales of subject merchandise to the United States
during the POR. Therefore, the Department is
[[Page 2794]]
not making a sales adjustment for Finnsteel's costs in these final
results.
Comment 2: Petitioners argue that the Department must correct two
errors in the margin calculation program. Due to one of the errors, the
Department's sales below cost test for the preliminary results used a
cost of manufacture (COM) that was only a fraction of the true COM. One
line read ``TOTCOM2 = FOREX = TOTCOM1'', while it should have read
``TOTCOM2 = FOREX + TOTCOM1''. The second error occurred in the
calculation of home market selling expenses for use in cost (SELLCOP).
Petitioners contend the Department failed to include certain expenses,
which were reported in the other expense field, in the calculation of
SELLCOP.
Respondent argues that the Department's margin calculation program
is correct. The Department gave interested parties a chance to comment
on the proposed programming language in October 1994. Petitioners
submitted comments in that same month. The petitioners' attempt to
present new comments regarding the Department's computer programming
language is untimely and should be rejected on that basis. Moreover,
the Department's margin calculation program is correct and needs no
adjustments.
Department's Position: We agree with the petitioners. The
programming language that was released for comments in October 1994 was
preliminary and was not company specific. Both of the errors that the
petitioners have claimed are related to company specific programming.
In these final results, we have changed the program to read ``TOTCOM2 =
FOREX + TOTCOM1''. This error resulted in incorrect cost test results.
However, the Department's May 18, 1995, analysis memo and the Federal
Register notice of the preliminary results in this administrative
review did not reflect the incorrect cost results. After correcting the
errors, the Department did in fact find sales below cost for
Rautaruukki in this administrative review. Therefore, the discussion of
sales below cost found in the preliminary notice and the May 18, 1995
analysis memo is consistent with the corrected, final cost test
results. Finally, while we have not allowed a direct sales adjustment
for the other expense field as discussed in the preliminary results, we
have included this other expense field in the calculation of SELLCOP
for these final results because these are costs incurred.
Comment 3: Petitioners argue that Rautaruukki incorrectly reported
its general and administrative expenses (G&A). The Department has a
long-standing practice of requiring G&A expenses to be reported as a
percentage of cost of sales. Also, the G&A factor is normally
calculated using G&A recorded in the company's audited financial
statements for the year that most closely corresponds to the POR (see
Furfuryl Alcohol from Thailand, 60 FR 22557, 22560-61 (May 8, 1995)).
Petitioners argue that Rautaruukki did not use the regular methodology
accepted by the Department. It based G&A on 1993 data and data from
eight months of 1994, and it calculated a per ton G&A amount.
Petitioners maintain this is erroneous in two respects. First, it did
not use data from the audited financial statements (the 1994 data was
from an interim financial statement which was not audited). The 1994
data constitutes the type of part-year data the Department does not use
because G&A expenses are incurred sporadically throughout the fiscal
year or are based on estimates that are adjusted to actual at year-end.
Second, the calculation is a per ton G&A amount, rather than a factor
that is a percentage of cost, as required by the questionnaire and
Department practice. The Department should recalculate the G&A expense
using Rautaruukki's 1993 audited financial statements and other
verified 1993 information.
Respondent argues that it correctly reported G&A expenses and that
the cost verification report states that the Department verified all
appropriate expenses for Raahe were included in G&A and that the
appropriate methodologies were applied. Furthermore, respondent claims
the Department found no discrepancies between the Group profit and loss
report and the reported consolidated financial statements. Respondent
notes in support of its argument for using an annual G&A factor,
petitioners reference cases which are antidumping investigations and
not administrative reviews. Respondent contends that petitioners
reliance on these investigations is misplaced when applied to this
administrative review. In an investigation where sales span a six-month
period, the Department generally looks to a full-year period in
computing G&A, because such a period encompasses operating results over
a longer time span than the period of investigation and typically
reports the results of at least one business cycle. In this
administrative review, the POR covers an eighteen month period, and
Rautaruukki provided annual and interim financial reports which are
prepared in the ordinary course of business. Respondent claims these
reports cover the entirety of the POR; therefore, they represent the
most complete and accurate information available, and they exceed the
standard of Furfuryl Alcohol from Thailand.
Department's Position: We agree with petitioners. It is our
standard practice to base G&A on an amount derived from annual audited
financial statements and to calculate it as a percentage of cost rather
than a per ton amount. See Final Determination of LTFV: Certain Hot-
Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel
Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products,
and Certain Cut-to-Length Carbon Steel Plate From Canada, 58 FR 37099
(July 9, 1993)(Comment #43). The fact that this is an administrative
review, rather than an investigation, has no relevance. The 1994 data
used by Rautaruukki is still partial year data based on unaudited
financial statements. We do not use partial year data because G&A
expenses are often incurred sporadically throughout the year and are
often accrued based on estimates until they are adjusted to actual at
year-end. It is also our standard practice to calculate G&A based on a
percentage of cost, rather than a per ton amount because G&A expenses
are more closely associated with costs than with weight. Id. Therefore,
we have recalculated G&A for Rautaruukki as a percentage of cost using
only 1993 data from Rautaruukki's audited financial statements.
Regarding Rautaruukki's argument that the Department verified their G&A
expense, the Department's verification confirmed that all appropriate
expenses were included in the reported G&A. The verification report
statements that the allocation methodology was verified only indicated
that the figures and methodology reported by Rautaruukki accurately
traced to their books and records. This allocation methodology is not
that traditionally utilized by the Department in allocating G&A.
Comment 4: Petitioners argue that the interest expense factor was
calculated using the same methodology used for the G&A factor, and thus
suffers from the same flaws as the G&A factor. Additionally the
unaudited 1994 amount used in the interest expense calculation suffers
from an additional flaw--it is incorrect because Rautaruukki
erroneously deducted short-term interest that it paid. Instead,
petitioners argue the Department should take Rautaruukki's 1993
consolidated interest expense less dividend income, divided by total
cost of goods sold less selling expenses. Petitioners claim this is a
conservative interest expense factor highly favorable to Rautaruukki
because it assumes all interest income is short-
[[Page 2795]]
term, which the Department did not verify, and only Rautaruukki's G&A
(rather than consolidated G&A, which is not on the record) is deducted,
which results in a larger denominator and thus a lower factor.
Respondent argues that it correctly reported its interest expenses.
For the reasons stated in Comment three above, Rautaruukki correctly
reported its interest expenses by providing the Department with the
most complete and accurate information available. Additionally,
petitioners' interest expense factor calculation is flawed. The net
financial expense figure is grossly overstated because petitioners'
figure includes currency exchange differences as interest expenses.
Department's Position: We agree with petitioners in part. As with
G&A expenses, it is our standard practice to base interest expense on
an amount derived from audited consolidated annual financial statements
and to calculate interest expense as a percentage of cost See e.g.
Preliminary Determination of Sales at LTFV: Grain-Oriented Electrical
Steel from Italy, 59 FR 5991 (1994). Furthermore, the choice of
allocation methodologies is left to the Department's discretion. See
PPG Industries v. United States 746 F. Supp. 119 (CIT 1990). The 1994
data used by Rautaruukki is partial year data based on unaudited
financial statements. Therefore, we have recalculated interest expense
for Rautaruukki using only 1993 data.
We also agree with respondent in part that the petitioners' figure
is overstated because it contains currency exchange differences as
interest expense. To calculate interest expense for the final results,
we have used the interest expense examined at verification, which is
based on the consolidated financial statements, divided by consolidated
cost of sales taken directly from the consolidated financial statements
in the annual report.
Comment 5: Respondent argues that the Department erred in
collapsing home market control numbers (CONNUMHs) IO6X and TA6X and
thereby made incorrect product matches. The questionnaire established a
hierarchy of product characteristics that the Department would use in
identifying individual plate products. Each unique combination of these
characteristics is treated as a distinct product. The Department
discovered instances where multiple control numbers were being assigned
to the same set of product characteristics. The Department collapsed
CONNUMHs IO6X and TA6X, which it understood had identical product
characteristics. These were matched to the U.S. sales of CONNUMU IO6X.
In doing so, the Department mistakenly matched sales of beveled plate
to sales of plate which had not undergone the further manufacturing
process required to produce beveled plate. In terms of quality, the two
product control numbers are identical. CONNUMs starting with IO through
LL represent basic cut-to-length plates which are not painted, and
CONNUMs starting with RA through UX represent plates with a beveled
edge. Beveled plate is produced only after an additional manufacturing
process, which is performed on a separate production line. It incurs
additional costs which must be taken into consideration in
Rautaruukki's pricing decisions. These additional costs are reflected
in Rautaruukki's home market database. In collapsing these control
numbers, respondent argues the Department incorrectly collapsed two
products with different product characteristics. In so doing,
respondent claims the Department incorrectly compared sales of beveled
plate in the home market with sales of normal plate in the U.S. market.
Petitioners counter that the Department correctly collapsed
CONNUMHs IO6X and TA6X. Nowhere in its brief does Rautaruukki identify
the product characteristics which it believes are different for the two
CONNUMHs. This is because there are no product characteristics that are
different. According to petitioners a review of the products in IO6X
and TA6X shows that they are identical for the eight physical
characteristics identified by the questionnaire. By separating the
products in CONNUMHs IO6X and TA6X, Rautaruukki introduced into a
primary place in the hierarchy a product characteristic--beveling--that
was not selected by the Department. Petitioners argue such unilateral
modification of the Department's hierarchy should not be permitted.
When the Department gave interested parties an opportunity to comment
on the model match hierarchy in August 1994, Rautaruukki submitted
comments. Those comments did not contain a single reference to
beveling. In fact, no interested parties identified beveling as a
physical characteristic that ought to be included in the plate
hierarchy. Petitioners contend Rautaruukki had ample opportunity to
suggest any modifications it believed to be necessary and suggest
Rautaruukki simply ignored the Department's hierarchy and created its
own. In doing so, petitioners argue Rautaruukki attempted to usurp the
Department's statutory duty to determine what constitutes identical
merchandise.
Department's Position: We agree with petitioners. On August 12,
1994, the Department solicited comments on the proposed model matching
criteria. On August 26, 1994, Rautaruukki filed comments. However,
Rautaruukki's comments did not propose beveling as a relevant
characteristic to use in product matching. Furthermore, in its
questionnaire response and supplemental response Rautaruukki failed to
establish the relevance of beveling as a product matching criteria.
Therefore, the Department has no basis upon which to differentiate
beveled plate from non-beveled plate for matching and price comparison
purposes. The Department has broad discretion to devise the methodology
for determining the model match methodology as confirmed by the Courts
in Torrington Co. v. United States, 881 F. Supp. 622, 635 (CIT 1995)
and Smith-Corona Group v. United States, 713 F.2d 1568 (Fed. Cir.
1983), cert. denied, 465 U.S. 1022 (1984). Furthermore, beveled plate
does not possess physical characteristics which make it unique from
non-beveled plate with regard to applications and uses. We have
therefore continued to collapse IO6X and TA6X.
Comment 6: Respondent argues the Department should compare U.S.
sales to a trading company to home market sales to end-users. In its
preliminary results, the Department reclassified the levels of trade in
the home market database by collapsing sales to and sales through
wholesalers into a single lot. It matched this collapsed level of trade
with the level of trade reported in the U.S. market (sales to a trading
company). Respondent claims the Department should have compared U.S.
sales to home market sales to end-users for the following reasons:
Rautaruukki has a closer relationship with the wholesalers/distributors
in the home market; the home market wholesalers/distributors have a
common inventory system whereas for U.S. sales, Rautaruukki does not
know the ultimate customer in the United States, and therefore no
common inventory system can exist; the home market wholesalers/
distributors hold and fill orders from inventory unlike either the U.S.
customer or the home market end-user; home market wholesalers/
distributors are eligible for certain rebates, for which the U.S.
customer and home market end-users are not; respondent argues the sales
verification report states that since there is no inventory for
purchase price sales to the U.S., the customer level of trade for the
two markets should be
[[Page 2796]]
different; since respondent claims it does not know the ultimate
customer, it considers its U.S. customer as an end-user; and plate with
identical CONNUMs were sold both to the U.S. customer and to end-users
in the home market.
The respondent further argues that in an antidumping investigation,
the Department normally calculates foreign market value (FMV) and U.S.
price (USP) based on the same commercial level of trade. The Department
normally asks if the levels of trade reported by the respondent are in
fact distinct and discernable, based on the respondent's explanation of
their functions. Respondent notes that while the Department often
matches according to customer type (see Stainless Steel Hollow Products
from Sweden, 58 FR 69,332), this is not always the case (see
Antifriction Bearings from France, 58 FR 39,768). In the instant case,
the respondent argues that the U.S. customer is the functional
equivalent to an end-user in the home market because: (1) Rautaruukki
does not know the ultimate customer in the U.S. market; (2) the same
product is sold to home market end-users and to the U.S. customer; (3)
neither the home market end-users nor the U.S. customer qualify for the
rebate; and (4) the home market end-users and the U.S. customer do not
hold inventory or share a common inventory system. In Stainless Steel
Bar from Spain (59 FR 66931), the Department accepted level of trade
classifications based upon when the customer wanted delivery. These
were distinguished by which party bore the costs and risks of
maintaining a finished goods inventory. In the instant administrative
review, respondent argues that sales to the United States should be
compared with sales to home market end-users because, unlike
wholesales/distributors in the home market, neither bears the cost of
maintaining inventory.
Petitioners argue that Rautaruukki's complaints are without merit.
The criteria for determining level of trade comparability are the
extent to which the customers: (1) perform equivalent functions in
their respective markets, and/or (2) are positioned in equivalent
positions in the chain of distribution from the manufacturer to the
ultimate customer (see Disposable Pocket Lighters from Thailand, 60 FR
14263, 14264 (March 16, 1995)). By these criteria, petitioners maintain
there is clearly a close correspondence between the U.S. trading
company and the home market wholesalers/distributors--both are
Rautaruukki's first unrelated customer in a particular market, and both
sell directly to the ultimate customer. In both cases, petitioners note
that Rautaruukki invoices the distributor, which then in turn
separately invoices its own customer (the end-user). The nearly
congruent function and position of the U.S. trading company and the
home market wholesalers/distributors are illustrated in Rautaruukki's
own distribution channel flow charts for the two markets. They are
virtually carbon copies of each other, and at one point, the U.S.
trading company is referred to as a distributor. Given the verified
facts, petitioners maintain the Department was correct in its decision,
which was in accordance with its long-standing practice and regulations
that require the FMV/USP comparisons to be made at the same or most
comparable level of trade.
Petitioners further argue that it is the respondent's burden to
show there are discernable functions that would make its proposed
matching level a better choice than the Department's choice. Of the
four points raised by the respondent in making their argument, the
first three do not relate in any way to the functions performed by the
buyer and, therefore are irrelevant to the determination of level of
trade. The fact that Rautaruukki does not know its distributor's end-
user customers in the United States says nothing about the
distributor's functions, or those of home market end-users. Even if the
point were relevant, Rautaruukki also does not know the end-user
purchaser on many of its sales to home market distributors. There is no
precedent for the payment of rebates being relevant to the functions of
a customer or its position in the chain of distribution. The fact that
plate with the same CONNUMs was sold to both the U.S. customer and to
end-users in the home market is in no way indicative of the functions
performed by any customer. Moreover, sales of identical merchandise
were also made to distributors in the home market.
Petitioners continue that this reduces Rautaruukki's argument to
the claim that home market end-users and the U.S. customer do not hold
inventory or share a common inventory system. Even if true, this claim
alone would not be a basis to reverse the Department's decision. In any
event, the facts on the record do not support Rautaruukki's assertion
that the U.S. buyer does not hold inventory. There is no reason for the
Department to reverse its decision.
Department's Position: We agree with the petitioners. The
Department's practice in finding similar levels of trade in each market
requires a comparison of customers in each of the markets to determine
whether they perform equivalent functions in their respective markets,
and/or are in equivalent positions in the chain of distribution from
the manufacturer to the ultimate customer. See Antifriction Bearings
(Other Than Tapered Roller Bearings) and Parts Thereof From France, et
al.; Final Results of Antidumping Duty Administrative Reviews, Partial
Termination of Administrative Review, and Revocation in Part of
Antidumping Duty Orders, 60 FR 10900, 10940-41 (February 28, 1995)
(Issue 9, Comment 3). For Rautaruukki, the U.S. trading company and the
home market wholesalers/distributors function at similar levels of
trade. They are the first unrelated customer and both sell directly to
the ultimate customer. For both markets, Rautaruukki's distributor
invoices the end-user, while Rautaruukki invoices the distributor. The
respondent did not demonstrate any functions, which differentiate the
level of trade for wholesalers/distributors in the home market and the
trading company in the U.S., to illustrate an alternate level of trade
is necessary. The first three factors cited by the respondent are not
elements normally considered by the Department in determining level of
trade. Nor does the respondent provide any compelling reason why the
Department should consider those factors in this instance. The
respondent's first issue, that Rautaruukki does not know the U.S.
trading company's end-user customers, does not illustrate the functions
of the U.S. trading company or the home market end-users. In fact,
Rautaruukki also claims it does not know the end-user purchasers on
many of its sales to home market distributors yet Rautaruukki argues
that these sales would be at a different level of trade. With regard to
the third point, the Department does not consider either rebates or the
fact that the same products are sold to home market end-users and to
the U.S. customer as relevant to the functions of a customer or its
position in the chain of distribution. As for the fourth point, while
the U.S. customer may not have a common inventory system, there is
nothing on the record to indicate that the U.S. customer does not hold
any inventory. Therefore, we are continuing to match U.S. sales to the
trading company with home market sales to/through wholesalers/
distributors.
Comment 7: The respondent argues that it correctly reported rebates
which were successfully verified by the Department. However, in the
preliminary results, the Department denied Rautaruukki's reported
rebate to
[[Page 2797]]
certain home market wholesalers/distributors because Rautaruukki's
computer tape reported these rebates to a different number of home
market wholesalers/distributors than were identified in the narrative
response. Respondent argues that part of this discrepancy is explained
by the fact that certain companies merged. Respondent also argues that
although certain home market wholesalers/distributors were not
specifically identified in the narrative response, Rautaruukki did
submit the relevant information in the home market sales database.
Accordingly respondent argues the Department should allow the
adjustment.
The petitioners argue that the denial of these rebates was correct.
Petitioners note that the Department verified the number of companies
that received this rebate as reported in the narrative response, not as
reported in the home market sales tape. Accordingly, petitioners
maintain Rautaruukki's argument adds nothing new to this issue--their
brief cites to no evidence on the record that one of the companies
received the rebate, and Rautaruukki admits that it never specifically
identified another company in its narrative response. Therefore,
petitioners argue the Department should continue to exclude the rebate
amounts on sales to certain companies in the final results.
Department's Position: We agree with respondent that the Department
should allow all rebates. Although Rautaruukki did not specifically
address all rebates in its narrative, they did report all the rebates
in their database. After further examination of the verification
exhibits, we have determined that all rebates were accurately reported
and verified by the Department and that all these parties did receive
the rebates as reported.
Final Results of Review
As a result of our review, we have determined that no margin exists
for Rautaruukki Oy for the period February 4, 1993, through July 31,
1994.
The Department shall determine, and the Customs service shall
assess, antidumping duties on all appropriate entries. Individual
differences between United States price and foreign market value may
vary from the percentages stated above. The Department will issue
appraisement instructions directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of this notice of final results of review for all
shipments of plate from Finland entered, or withdrawn from warehouse,
for consumption on or after the publication date, as provided for by
section 751(a)(1) of the Act: (1) The cash deposit rates for the
reviewed company will be the rate for that firm as stated above; (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, 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 (4)
if neither the exporter nor the manufacturer is a firm covered in this
review, the cash rate will be 32.25 percent. This is the ``all others''
rate from the LTFV investigation. See Final Determination of Sales at
Less Than Fair Value: Certain Cut-To-Length Carbon Steel Plate from
Finland, 58 FR 37122 (July 9, 1993). These deposit requirements, when
imposed, 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 section 353.26 of the Department's regulations 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 notice also serves as a 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 353.34(d) 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 this notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22
of the Department's regulations.
Dated: January 19, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-1456 Filed 1-26-96; 8:45 am]
BILLING CODE 3510-DS-P
