[Federal Register Volume 61, Number 194 (Friday, October 4, 1996)]
[Notices]
[Pages 51898-51901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25534]
[[Page 51898]]
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DEPARTMENT OF COMMERCE
[A-401-805]
Certain Cut-to-Length Carbon Steel Plate From Sweden: 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: In response to requests from interested parties, the
Department of Commerce (the Department) is conducting an administrative
review of the antidumping duty order on certain cut-to-length carbon
steel plate from Sweden. This review covers one manufacturer/exporter
of the subject merchandise to the United States and the period August
1, 1994 through July 31, 1995.
We have preliminarily determined that sales have been made below
normal value (NV) by the company subject to this review. If these
preliminary results are adopted in our final results of these
administrative review, we will instruct U.S. Customs to assess
antidumping duties equal to the difference between the export price
(EP) or constructed export price (CEP) and the NV.
We invite interested parties to comment on these preliminary
results. Parties who submit comments in this proceeding are requested
to submit with each argument (1) a statement of the issue and (2) a
brief summary of the argument.
EFFECTIVE DATE: October 4, 1996.
FOR FURTHER INFORMATION CONTACT: Elizabeth Patience or Jean Kemp,
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:
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).
Background
On August 19, 1993, the Department published in the Federal
Register (58 FR 44162) the antidumping duty order on certain cut-to-
length carbon steel plate from Sweden. On August 31, 1995, Bethlehem
Steel Corporation, U.S. Steel Group (a Unit of USX Corporation), Inland
Steel Industries Inc., Gulf States Steel Inc. of Alabama, Sharon Steel
Corporation, Geneva Steel, and Lukens Steel Company, petitioners,
requested a review for SSAB Svenskt Stal AB (SSAB). On August 31, 1995,
SSAB also requested a review for its exports of subject merchandise. On
September 9, 1995, in accordance with 19 C.F.R. 353.22(c), we initiated
the administrative review of this order for the period August 1, 1994,
through July 31, 1995 (60 FR 46818). The Department is now conducting
this administrative review in accordance with section 751(a) of the
Act.
SSAB's two affiliated steel producing companies, SSAB Oxelosund AB
(SSOX) and SSAB Tunnplat AB (SSTP), produced the subject merchandise at
three production facilities. The SSOX facility was the source of all
subject merchandise sold in the US and the vast majority of potential
matches.
Scope of Review
Certain cut-to-length plate includes 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
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 non-rectangular
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 period of review (POR) is August 1, 1994, through July 31,
1995.
Verification
As provided in section 782(i) of the Act, we conducted verification
of the information provided by respondent, 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 reports (Memorandum to the File from
Elizabeth Patience and Lisa Raisner, September 25, 1996, the SSAB Sales
Verification Report; Memorandum to the File from Elizabeth Patience and
James Rice, September 25, 1996, the U.S. Sales Verification Report;
Memorandum to the File from Elizabeth Patience and Alex Braier,
September 25, 1996, the Downstream Sales Verification Report;
Memorandum from Theresa Caherty and Elizabeth Patience, September 20,
1996, the Cost Verification Report).
Facts Available
On February 6, 1996, petitioners requested that the Department
initiate a cost investigation of SSAB. The Department initiated a cost
of production (COP) investigation of SSAB on March 15, 1996. In its
initial Section D questionnaire, the Department specified that the COP
and constructed value (CV) figures should be based on the actual costs
incurred by the company during the POR and recorded in the normal
accounting system. The initial questionnaire also specified that the
submitted costs must reconcile to the actual costs reported in the cost
accounting system used by the company to prepare its financial
statements. Moreover, the initial questionnaire specified that if the
company did not intend to use its normal accounting system and cost
allocation methods to compute COP and CV, the company must contact the
Department before preparing the response; SSAB did not contact us
before it submitted the response on April 17, 1996. After reviewing
SSAB's Section D response, we noted that the company did not use its
normal accounting system to calculate COP and CV data. Specifically, we
found that the response was based on a special system (``kalkyl'')
which is not used in the respondent's normal accounting system. The
kalkyl system is, in essence, a sales estimating tool. In
[[Page 51899]]
accordance with Section 782(d), on May 7, 1996 and June 14, 1996, the
Department issued supplemental Section D questionnaires, which
requested that SSAB provide a complete explanation of the kalkyl
system. The supplemental questionnaires also requested worksheets that
reconciled the submitted cost information to the financial accounting
records. The supplemental Section D questionnaires further instructed
the company to contact the Department if there was any uncertainty as
to these instructions. On August 1, 1996, in advance of the scheduled
COP/CV verification, the Department issued an agenda for the COP/CV
verification. The agenda stated that the cost data submitted to the
Department must be reconciled to the company's general ledger, cost
accounting system, and financial statements. Additionally, the agenda
indicated specific steps that would be followed at verification to
reconcile the submitted cost data to the normal accounting books and
records. The agenda also stated that if the company had any questions
or if any of the verification procedures could not be performed, the
officials should contact the Department. The company made minor
inquiries about the supplemental questionnaire but did not discuss with
the Department its use of the kalkyl system or its inability to perform
the necessary reconciliation. In addition, they made no inquiries about
the verification agenda.
In accordance with Section 782(i), from August 12 through August
16, 1996, the Department conducted a verification of the company's
submitted cost data. SSOX was unable to reconcile its submitted cost
data to its normal accounting books and records. At verification, we
found that the system used to prepare the cost response was a special
version of the kalkyl system. SSOX was unable to reconcile its normal
kalkyl system to this ``modified'' kalkyl system. Further, SSOX was
unable to reconcile its financial accounting system to its ``normal''
kalkyl system. In short, SSOX was unable to reconcile its submitted
cost data to its normal accounting books and records and was thus
unable to demonstrate that the submitted COP and CV data was based on
the company's actual production experience. (For a more detailed
explanation, see the public version of the Cost Verification Report.)
Because the company was unable to reconcile the submitted costs to
its normal accounting books and records, the verification could not
proceed in an orderly and timely manner. Therefore, major areas of the
response and significant items identified in the agenda were not tested
or were incomplete. These areas included materials, labor, variable
overhead, fixed overhead, and transactions with affiliated entities.
Our verification testing and other evidence on the record regarding
SSAB's use of a modified kalkyl system indicate that this system had a
significant distortive impact on SSAB's reported COP and CV data.
SSAB's failure to reconcile its submitted costs to its normal books and
records prevents us from quantifying the magnitude of the distortions
which exist in its submitted data. (For a more detailed explanation,
see the public version of the Cost Verification Report.)
Section 776(a)(2) of the Act provides that if an interested party
or any other person--(A) withholds information that has been requested
by the administering authority, (B) fails to provide such information
by the deadlines for the submission of the information or in the form
and manner requested, subject to subsections (c)(1) and (e) of section
782, (C) significantly impedes a proceeding under this title, or (D)
provides such information but the information cannot be verified as
provided in section 782(i), the administering authority * * * shall,
subject to section 782(d), use the facts otherwise available in
reaching the applicable determination under this title.
Subsection (e) provides that the Department shall not decline to
consider information that is submitted by an interested party and is
necessary to the determination but does not meet all the applicable
requirements established by the Department if--
(1) the information is submitted by the deadline established for
its submission,
(2) the information can be verified,
(3) the information is not so incomplete that it cannot serve as a
reliable basis for reaching the applicable determination,
(4) the interested party has demonstrated that it acted to the best
of its ability in providing the information and meeting the
requirements established by the Department with respect to the
information, and
(5) the information can be used without undue difficulties.
SSAB's failure to reconcile its submitted costs to its financial
accounting system constitutes a verification failure under Section
776(a)(2)(D) of the Act. We must therefore consider whether the
submitted cost data is useable under Section 782(e) of the Act.
When examined in light of the requirements of section 782(e), the
facts in this case indicate that SSAB's reported cost data is so
thoroughly and systematically flawed as to render it unusable. First,
for the reasons detailed above, the accuracy of SSAB's submitted cost
data could not be verified, as required by section (e)(2). Second,
because of the flaws in its cost data, (which are detailed in the Cost
Verification Report) SSAB's submitted cost data ``cannot serve as a
reliable basis for reaching the applicable determination'' under
section (e)(3), nor can it ``be used without undue difficulties'' under
section (e)(5). Third, in its failure to provide cost information that
could be reconciled to its financial statements, and its failure to
give the Department fair notice of this defect, SSAB has not acted to
the ``best of its ability'' in meeting the Department's requirements,
pursuant to section 782(e)(4) of the Act.
The use of facts available is also subject to section 782(d) of the
Act. Subsection 782(d) provides that if the Department ``determines
that a response to a request for information * * * does not comply with
the request, {the Department} shall promptly inform the person
submitting the response of the nature of the deficiency and shall, to
the extent practicable, provide that person with an opportunity to
remedy or explain the deficiency in light of the time limits
established for completion of investigations or reviews under this
title.'' SSAB had ample opportunity to correct the defects in its
submitted cost data. As indicated above, the deficiency in SSAB's
submissions in reconciling its submitted costs to its accounting
records was brought to its attention in a supplemental questionnaire
and again during verification. SSAB, however, failed to modify its
methodology to comply with the Department's instructions.
For the foregoing reasons, the Department has determined that,
insofar as SSAB's cost data could not be verified, section 776(a) of
the Act requires the Department to use the facts available with respect
to this data. However, the Department must also determine whether (1)
the use of facts available for SSAB's cost data renders the rest of
SSAB's submitted information (i.e., the sales data) unusable, and (2)
whether the use of adverse information as facts available is warranted.
First, we have determined that the required use of facts available
for SSAB's cost data renders its sales data unusable. Because of the
flawed nature of the cost data, home market sales
[[Page 51900]]
cannot be tested to determine whether they were made at prices above
production cost. Insofar as the Department can only make price-to-price
comparisons (normal value to export price) on those home market sales
that are made above cost, the systematically flawed nature of the cost
data makes these comparisons impossible. A second problem with using
the home market sales data is the absence of reliable difference in
merchandise figures (DIFMERs). Under section 773(a)(6)(C), when
comparing normal value to export price or constructed export price, the
Department is required to account for the effect of physical
differences between the merchandise sold in each market. In this case,
DIFMERs were required for substantially all United States and home
market matches. Because DIFMER data is based on cost information from
the section D response (which as discussed above could not be
verified), the effect of physical differences could not be determined
by the Department.
In the absence of home market sales data (i.e., when the home
market is viable but there are insufficient sales above COP to compare
with U.S. sales), the Department would normally resort to the use of
constructed value as normal value. However, the constructed value
information reported by SSAB includes the discredited cost data.
Therefore, the use of facts available for cost of production data
precludes the use of the submitted constructed value information.
Ranged public data submitted by other respondents was not an
available alternative basis of normal value, nor was the petitioners'
own cost data. The petitioners' cost data is not on the record in this
review because their allegation of sales below cost of production was
based on SSAB's data. Moreover, because SSAB is the only participant in
this proceeding, we do not have ranged public data submitted by other
respondents to use as facts available.
The Department's prior practice has been to reject a respondent's
submitted information in toto when flawed and unreliable cost data
renders any price-to-price comparison impossible. The rationale for
this policy is contained in Notice of Final Determination of Sales at
Less than Fair Value: Grain-Oriented Electrical Steel From Italy, 59 FR
33952, 33953-54 (July 1, 1994), (Electrical Steel From Italy), where
the respondent failed the cost verification. The Department explained
that the rejection of a respondent's questionnaire response in toto is
appropriate and consistent with past practice in instances where a
respondent failed to provide verifiable COP information:
If the Department were to accept verified sales information when a
respondent's cost information (a substantial part of the response) does
not verify, respondents would be in a position to manipulate margin
calculations by permitting the Department to verify only that
information which the respondent wishes the Department to use in its
margin calculation.
That is the situation with SSAB, which has provided, in proper
form, sales information which could be verified, but has not provided
cost data which could be verified (see detailed discussion of
verification testing in the Cost Verification Report). Although
Electrical Steel from Italy was a case involving the Best Information
Available (BIA) under the ``old'' statute, it is evidence of the
Department's practice of regarding verified sales information as
unusable when the corresponding cost data is so flawed that price-to-
price comparisons are rendered impossible. Cf. Certain Corrosion-
Resistant Carbon Steel Flat Products from Korea: Final Results of
Antidumping Duty Administrative Review, 61 FR 18547, 18559 (April 26,
1996) (the use of total BIA warranted where reliable price-to-price
comparisons are not possible).
Accordingly, we find that there is no reasonable basis for
determining normal value for SSAB in this review. As a result, we could
not use SSAB's U.S. sales data in determining an antidumping margin.
The Department, therefore, had no choice but to resort to a total facts
available methodology.
With regard to which total facts available are appropriate, section
776(b) provides that adverse inferences may be used against a party
that has failed to cooperate by not acting to the best of its ability
to comply with requests for information. See also SAA at 870.
Specifically, section 776(b) of the Act provides that, where the
Department ``finds that an interested party has failed to cooperate by
not acting to the best of its ability to comply with a request for
information from [the Department] * * * [the Department] may use an
inference that is adverse to the interests of that party in selecting
from among the facts otherwise available.''
As discussed above, SSAB failed to reconcile the reported costs to
its financial accounting records. Moreover, SSAB made no effort to
provide the Department with notice of this defect. We have thus
determined that SSAB has not acted to the best of its ability to comply
with our requests for information. Accordingly, consistent with section
776(b) of the Act, we have applied total adverse facts available.
Section 776(b) authorizes the Department to use as adverse facts
available information derived from the petition, the final
determination, a previous administrative review, or other information
placed on the record. Section 776(c) provides that the Department
shall, to the extent practicable, corroborate ``secondary information''
by reviewing independent sources reasonably at its disposal. The SAA,
at 870, makes it clear that ``secondary information'' includes
information from the petition in the less-than-fair-value (LTFV)
investigation and information from a previous Section 751 review of the
subject merchandise. The SAA also provides that ``corroborate''' means
simply that the Department will satisfy itself that the secondary
information to be used has probative value. Id.
For our total adverse FA margin, we considered both the highest
transaction margin from the first administrative review, a review which
included only SSAB, and the BIA rate from the LTFV investigation, which
was based on an average of petition rates. We chose the latter because,
while SSAB did not act to the best of its ability in responding to our
cost information requests, it did cooperate with respect to certain
aspects of this review.
To corroborate the LTFV BIA rate of 24.23 percent, we examined the
basis of the rates contained in the petition. The US price in the
petition was based on actual prices from invoices, quotes to U.S.
customers, and IM-145 import statistics. Additionally, the foreign
market value was based on actual price quotations to home market
customers, home market price lists and published reports of domestic
prices. Home market price quotations were obtained through a market
research report. See, Initiation of Antidumping Duty Investigations and
Postponement of Preliminary Determinations: 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 Various Countries, 57 FR 33488
(July 29, 1992). As we stated in the Final Determination of Sales at
LTFV: Certain Pasta From Turkey, 61 FR 30309 (June 14, 1996), export
prices which are based on U.S. import statistics are considered
corroborated. In addition, price lists and published reports of
domestic prices which support the petition margin are independent
sources. With regard to
[[Page 51901]]
market research reports, we have accepted these as corroborative in
light of the Department's practice of confirming the accuracy of such
reports prior to initiation. See Pasta From Turkey at 30312. Thus, the
LTFV BIA rate is corroborated.
Preliminary Results of Review
As a result of our review, we preliminarily determine the dumping
margin (in percent) for the period August 1, 1994, through July 31,
1995 to be as follows:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
SSAB......................................................... 24.23
------------------------------------------------------------------------
Parties to this proceeding may request disclosure within 5 days of
the date of publication of this notice. Any interested party may
request a hearing within 10 days of the date of publication of this
notice. Any hearing, if requested, will be held 44 days after the date
of publication or the first business day thereafter. Case briefs and/or
other written comments from interested parties may be submitted not
later than 30 days after the date of publication. Rebuttal briefs and
rebuttals to written comments, limited to issues raised in those
comments, may be filed not later than 37 days after the date of
publication of this notice. The Department will publish the final
results of this administrative review, including its analysis of issues
raised in any written comments or at a hearing, not later than 180 days
after the date of publication of this notice.
Upon issuance of the final results of review, the Department shall
determine, and the U.S. Customs Service shall assess, antidumping
duties on all appropriate entries.
Furthermore, the following 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 these administrative review, as provided by section
751(a)(1) of the Act: (1) the cash deposit rates for the reviewed
company will be the rate established in the final results of this
review; (2) 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 for the most recent period for the manufacturer of
the merchandise; and (3) the cash deposit rate for all other
manufacturers or exporters will continue to be the ``all others'' rate
made effective by the final results of the 1993-1994 administrative
review of this order. (See, Certain Cut-to-Length Carbon Steel Plate
From Sweden; Final Results of Antidumping Duty Administrative Review,
61 FR 15772 (April 9, 1996).) As noted in these final results, this
rate is the ``all others'' rate from the relevant LTFV investigation.
(See, Final Determination, 58 FR 37213 (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 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(c)(5).
Dated: September 25, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-25534 Filed 10-3-96; 8:45 am]
BILLING CODE 3510-DS-P
