[Federal Register Volume 62, Number 190 (Wednesday, October 1, 1997)]
[Notices]
[Pages 51581-51584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-26042]
[[Page 51581]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-274-802]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Steel Wire Rod From
Trinidad and Tobago
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: October 1, 1997.
FOR FURTHER INFORMATION CONTACT: Abdelali Elouaradia or Alexander
Braier, Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone: (202) 482-2243 or (202) 482-3818,
respectively.
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act (``URAA''). In addition, unless
otherwise indicated, all citations to the Department's regulations are
references to the provisions codified at 19 CFR Part 353 (April 1997).
Although the Department's new regulations, codified at 19 CFR 351 (62
FR 27296, May 19, 1997), do not govern these proceedings, citations to
those regulations are provided, where appropriate, to explain current
departmental practice.
Preliminary Determination
We preliminarily determine that steel wire rod (``SWR'') from
Trinidad & Tobago is being, or is likely to be, sold in the United
States at less than fair value (``LTFV''), as provided in section 733
of the Act. The estimated margins are shown in the ``Suspension of
Liquidation'' section of this notice.
Case History
Since the initiation of this investigation on March 18, 1997 (See
Initiation of Antidumping Duty Investigations: Steel Wire Rod from
Canada, Germany, Trinidad and Tobago, and Venezuela, 62 FR 13854 (March
24, 1997) (``Initiation''), the following events have occurred:
On April 14, 1997, the United States International Trade Commission
(``ITC'') notified the Department of Commerce (``the Department'') of
its affirmative preliminary injury determination in this case.
On April 21, 1997, the Department issued the antidumping duty
questionnaire to counsel for the following producer/exporter of steel
wire rod to the United States: Caribbean Ispat, ltd. (CIL). The
questionnaire is divided into four sections: Section A requests general
information concerning a company's corporate structure and business
practices, the merchandise under investigation that it sells, and the
sales of the merchandise in all of its markets. Sections B and C
request home market sales listings and U.S. sales listings,
respectively. Section D requests information on the cost of production
(``COP'') of the foreign like product and the constructed value
(``CV'') of the subject merchandise.
During April and May 1997, the Department received interested party
comments regarding modifications to the product characteristic
reporting requirements. On May 22, 1997, the Department issued revised
product characteristic reporting instructions.
CIL submitted its questionnaire responses in May and June 1997. The
Department issued supplemental requests for information in June, July,
August and September 1997 and received the supplemental responses to
these requests in June, July, August and September 1997. Petitioners in
this investigation (Connecticut Steel Group, Co-Steel Raritan, GS
Industries, Inc., Keystone Steel & Wire Co., North Star Steel Texas,
Inc., and Northwestern Steel & Wire Co.) filed comments on CIL's
questionnaire responses in June, July, August, and September 1997.
On July 3, 1997, petitioners made a timely request for a
postponement of the preliminary determination in this investigation and
the companion investigations of steel wire rod from Canada, Germany,
and Venezuela to September 24, 1997. On July 14, 1997, the Department
postponed the preliminary determinations in these investigations until
September 24, 1997, in accordance with section 733(c)(1) of the Act
(See Notice of Postponement of Preliminary Antidumping Duty
Determinations: Canada, Germany, Trinidad and Tobago, and Venezuela, 62
FR 38257 (July 17, 1997).
Postponement of Final Determination
On September 22, 1997, CIL, the only respondent participating in
this investigation, requested that, pursuant to section 735(a)(2)(A) of
the Act, in the event of an affirmative preliminary determination in
this investigation, the Department postpone its final determination,
until not later than 135 days after the date of publication of the
affirmative preliminary in the Federal Register. In accordance with
section 735 (a)(2)(A) of the Act and 19 CFR 353.2(b), inasmuch as our
preliminary determination is affirmative, CIL accounts for a
significant proportion of exports of the subject merchandise, and we
have not identified any compelling reasons for denying this request, we
are granting CIL's request and postponing the final determination.
Suspension of liquidation will be extended accordingly. See Final
Determination of Sales at Less Than Fair Value: Certain Pasta From
Italy, 61 FR 30326 (June 14, 1996).
Scope of Investigation
The products covered by this investigation are certain hot-rolled
carbon steel and alloy steel products, in coils, of approximately round
cross section, between 5.00 mm (0.20 inch) and 19.0 mm (0.75 inch),
inclusive, in solid cross-sectional diameter. Specifically excluded are
steel products possessing the above noted physical characteristics and
meeting the Harmonized Tariff Schedule of the United States (HTSUS)
definitions for (a) stainless steel; (b) tool steel; (c) high nickel
steel; (d) ball bearing steel; (e) free machining steel that contains
by weight 0.03 percent or more of lead, 0.05 percent or more of
bismuth, 0.08 percent or more of sulfur, more than 0.4 percent of
phosphorus, more than 0.05 percent of selenium, and/or more than 0.01
percent of tellurium; or (f) concrete reinforcing bars and rods.
The following products are also excluded from the scope of this
investigation:
Coiled products 5.50 mm or less in true diameter with an average
partial decarburization per coil of no more than 70 microns in depth,
no inclusions greater than 20 microns, containing by weight the
following: carbon greater than or equal to 0.68 percent; aluminum less
than or equal to 0.005 percent; phosphorous plus sulfur less than or
equal to 0.040 percent; maximum combined copper, nickel and chromium
content of 0.13 percent; and nitrogen less than or equal to 0.006
percent. This product is commonly referred to as ``Tire Cord Wire
Rod.''
Coiled products 7.9 to 18 mm in diameter, with a partial
decarburization of 75 microns or less in depth and seams no more than
75 microns in depth; containing 0.48 to 0.73 percent carbon by weight.
This product is commonly referred to as ``Valve Spring Quality Wire
Rod.''
The products under investigation are currently classifiable under
subheadings
[[Page 51582]]
7213.91.3000, 7213.91.4500, 7213.91.6000, 7213.99.0030, 7213.99.0090,
7227.20.0000, and 7227.90.6050 of the HTSUS. Although the HTSUS
subheadings are provided for convenience and customs purposes, our
written description of the scope of this investigation is dispositive.
North American Wire Products Corporation (NAW), an importer of the
subject merchandise from Germany, has requested that the Department
exclude steel wire rod used to manufacture pipe wrapping wire from the
scope of the antidumping and countervailing duty investigations.
Petitioners have not agreed to this scope exclusion. For purposes of
the preliminary determination, we have not excluded steel wire rod for
manufacturing pipe wrapping wire from the scope.
Period of Investigation
The period of investigation (``POI'') is January 1, 1996 through
December 31, 1996.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by the respondent, covered by the description in the
Scope of Investigation section, above, and sold in the home market
during the POI, to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. Where there were no
sales of identical merchandise in the home market to compare to U.S.
sales, we compared U.S. sales to the next most similar foreign like
product on the basis of the characteristics listed in the antidumping
duty questionnaire and the May 22, 1997, reporting instructions.
Consistent with our practice, we compared prime merchandise sold in
the United States to prime merchandise sold in the home market, and
secondary merchandise to secondary merchandise. See, e.g., Ceratin
Cold-rolled Carbon Steel Flat Products from the Netherlands; Final
Results of Antidumping Duty Administrative Review, 61 FR 48465
(September 13, 1996).
Fair Value Comparisons
To determine whether sales of steel wire rod sold by CIL to the
United States were made at less than fair value, we compared the Export
Price (``EP'') to the normal value (``NV''), as described in the ``EP''
and ``Normal Value'' sections of this notice below. In accordance with
section 777A(d)(1)(A)(i), we calculated weighted-average EPs for
comparisons to weighted-average NVs.
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 level of trade (LOT) as the EP. The NV LOT is that of the
starting-price sales in the comparison market or, when NV is based on
constructed value (CV), that of the sales from which we derive selling,
general and administrative (SG&A) expenses and profit. For EP, the U.S.
LOT is also the level of the starting-price sale, which is usually the
sale from the exporter to the importer. For CEP, it is the level of the
constructed sale from the exporter to the importer.
To determine whether NV sales are at a different LOT than the EP
sales, we examine 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. See Certain Welded Carbon Steel Standard Pipes
and Tubes From India: Preliminary Results of New Shipper Antidumping
Duty Administrative Review, 62 FR 23760, 23761 (May 1, 1997).
Respondent claimed one LOT in the NV market and one LOT in the U.S.
market. CIL did not claim an LOT adjustment. To examine whether such an
adjustment was necessary, we examined CIL's distribution system,
including selling functions, classes of customers, and selling
expenses. We noted that CIL's selling expenses for the POI were the
same for all customers. We found that the selling functions, which
included sales administration, billing, maintaining inventory, and in
some cases arranging freight services, are sufficiently similar in the
U.S. and the home market to consider them as one level of trade. Based
on the findings noted above, we conclude that for these preliminary
results, CIL's U.S. and home market sales were made at the same LOT.
Export Price
We based price in the United States on EP, in accordance with
subsections 772 (a) and (c) of the Act because the subject merchandise
was sold directly to the first unaffiliated purchaser in the United
States prior to importation and CEP was not otherwise warranted based
on the facts on the record.
We calculated EP based on packed prices to the first unaffiliated
customer in the United States. We made adjustments, where appropriate,
for international ocean freight, marine insurance, U.S. brokerage and
handling, U.S. Customs duties and user fee, U.S. inland freight from
port to unaffiliated customer, U.S. inland insurance and survey fee in
both the United States and Trinidad in accordance with section
772(c)(2) of the Act.
Normal Value
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV (i.e.,
if the aggregate volume of home market sales of the foreign like
product is greater than five percent of the aggregate volume of U.S.
sales), we compare the respondent's volume of home market sales of the
foreign like product to the volume of U.S. sales of the subject
merchandise, in accordance with section 773(a)(1)(C) of the Act. Since
CIL's aggregate volume of home market sales of the foreign like product
was greater than five percent of its aggregate volume of U.S. sales for
the subject merchandise, we determined that the home market was viable.
Therefore, we have based NV on home market sales.
Cost of Production Analysis
Pursuant to an allegation made by petitioners, we initiated a cost
of production investigation in our notice of initiation. See Notice of
Initiation, 62 FR 13854 (March 24, 1997). Before making any fair value
comparisons, we conducted the COP analysis described below.
A. Calculation of COP
We calculated the COP based on the sum of respondent's cost of
materials and fabrication for the foreign like product, plus amounts
for home market general expenses and packing costs in accordance with
section 773(b)(3) of the Act. We have recalculated CIL's general and
administrative amounts to include only net foreign exchange losses
related to accounts payable . See Memorandum to Chris Marsh From Taija
Slaughter, September 12, 1997.
B. Test of Home Market Prices
We used the respondent's submitted POI weighted-average COPs, as
adjusted (see above). We compared the weighted-average COP figures to
home market sales of the foreign like product as required under section
773(b) of the Act. In determining whether to disregard home-market
sales made at prices below the COP, we examined whether (1)
[[Page 51583]]
within an extended period of time, such sales were made in substantial
quantities, and (2) whether such sales were made at prices which
permitted the recovery of all costs within a reasonable period of time.
On a product-specific basis, we compared the COP to the home market
prices, less any applicable movement charges, rebates, discounts, and
direct and indirect selling expenses.
C. Results of COP Test
Pursuant to section 773(b)(2)(C), where less than 20 percent of the
respondent's sales of a given product 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
given product during the POI were at prices less than the COP, we
determined such sales to have been made in ``substantial quantities''
within an extended period of time in accordance with section
773(b)(2)(B) of the Act. In such cases, we also determined that such
sales were not made at prices which would permit recovery of all costs
within a reasonable period of time, in accordance with section
773(b)(2)(D) of the Act and, therefore, we disregarded the below-cost
sales. Where all sales of a specific product were at prices below the
COP, we disregarded all sales of that product, and calculated NV based
on CV, in accordance with section 773(a)(4) of the Act.
D. Calculation of CV
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of respondent's cost of materials, fabrication, SG&A,
interest expenses and profit. As noted above, we recalculated CIL's
general and administrative amounts. In accordance with section
773(e)(2)(A) of the Act, we based SG&A and profit on the amounts
incurred and realized by the respondent in connection with the
production and sale of the foreign like product in the ordinary course
of trade, for consumption in the foreign country.
Price-to-Price Comparisons
For those product comparisons for which there were sales at prices
above the COP, we based NV on prices to home market customers. We made
adjustments, where appropriate, for physical differences in the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act.
We calculated NV based on prices to unaffiliated home market
customers. We made deductions for discounts, rebates, and inland
freight. In addition, we made circumstance-of-sale adjustments or
deductions for credit and warranty, where appropriate. In accordance
with section 773(a)(6), we deducted home market packing costs and added
U.S. packing costs.
Currency Conversions
In accordance with section 773(A) of the Act, we made currency
conversions based on the official exchange rates in effect on the dates
of the U.S. sales as certified by the Federal Reserve Bank.
Verification
As provided in section 782(i) of the Act, we will verify all
information relied upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all entries of steel wire rod
from Trinidad and Tobago, that are entered, or withdrawn from
warehouse, for consumption on or after the date of publication of this
notice in the Federal Register. Normally, we would instruct the Customs
Service to require a cash deposit or the posting of a bond equal to the
weighted-average amount by which the normal value exceeds the export
price, as indicated in the chart below. However, the product under
investigation is also subject to a concurrent countervailing duty
investigation. Article VI.5 of the General Agreement on Tariffs and
Trade (GATT) provides that ``[n]o product * * * shall be subject to
both antidumping and countervailing duties to compensate for the same
situation of dumping or export subsidization.'' This provision is
implemented by section 772(c)(1)(C) of the Act. Since antidumping
duties cannot be assessed on the portion of the margin attributed to
export subsidies, there is no reason to require a cash deposit or bond
for that amount.
The Department has determined in Preliminary Affirmative
Countervailing Duty Determination: Steel Wire Rod from Trinidad and
Tobago, 62 FR 41927 (August 4, 1997), that the product under
investigation benefitted from an export subsidy. To obtain the most
accurate estimate of the antidumping duty, and to fulfill our
international obligations arising under the GATT, we are subtracting,
for deposit purposes, the cash deposit rate attributable to the export
subsidies found in the countervailing duty investigation. For Caribbean
Ispat, Ltd., the attributable rate is 3.45 percent. We are also
subtracting from the ``All Others'' rate the cash deposit rate
attributable to the export subsidy included in the countervailing duty
investigation for the All Others rate, 3.45 percent. Pursuant to
Article of 17.4 of the WTO Agreement on Subsidies and Countervailing
Measures, in the absence of an affirmative final determination the
Department will terminate the suspension of liquidation in the
companion countervailing duty investigation of steel wire rod from
Trinidad and Tobago, effective December 2, 1997, which is 120 days
after the date of publication of that preliminary determination.
Accordingly, on December 2, 1997, if the ITC has not yet made an
affirmative injury determination in the countervailing duty
investigation, the antidumping deposit rate will revert to the full
amount calculated in this preliminary determination. These suspension
of liquidation instructions will remain in effect until further notice.
------------------------------------------------------------------------
Weighted-
Exporter/manufacturer average margin Bonding
percentage percentage
------------------------------------------------------------------------
Caribbean Ispat Limited.................... 13.00 9.55
All Others................................. 13.00 9.55
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine, before the later of 120 days after the date of
this preliminary determination or 45 days after our final
determination, whether these imports are materially injuring, or
threaten material injury to, the U.S. industry.
Public Comment
Case briefs or other written comments in at least six copies must
be submitted to the Assistant Secretary for Import Administration no
later than December 22, 1997, and rebuttal briefs, no later than
January 5, 1998. A list of authorities used and an executive summary of
issues should accompany any briefs submitted to the Department. Such
summary should be limited to five pages total, including footnotes. In
accordance with section 774 of the Act, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs. Tentatively, the hearing
will be held on January 9, 1998, at the U.S. Department of Commerce,
14th Street and Constitution Avenue, N.W., Washington, D.C. 20230.
Parties should
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confirm by telephone the time, date, and place of the hearing 48 hours
before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, within ten days of the publication of this notice. Requests
should contain: (1) The party's name, address, and telephone number;
(2) the number of participants; and (3) a list of the issues to be
discussed. Oral presentations will be limited to issues raised in the
briefs. If this investigation proceeds normally, we will make our final
determination by 135 days after the publication of this notice in the
Federal Register.
This determination is published pursuant to section 733(d) of the
Act.
Dated: September 24, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-26042 Filed 9-30-97; 8:45 am]
BILLING CODE 3510-DS-P
