[Federal Register Volume 63, Number 213 (Wednesday, November 4, 1998)]
[Notices]
[Pages 59532-59535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29546]
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DEPARTMENT OF COMMERCE
INTERNATIONAL TRADE ADMINISTRATION
[A-423-808]
Notice of Preliminary Determination of Sales at Less Than Fair
Value: Stainless Steel Plate in Coils From Belgium
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 4, 1998.
FOR FURTHER INFORMATION CONTACT: Steve Bezirganian or Abdelali
Elouaradia, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone: (202) 482-0162 or (202) 482-2243,
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 of Commerce
(``Department'') regulations are to the regulations at 19 CFR Part 351,
62 FR 27296 (APRIL 1, 1998).
Preliminary Determination
We preliminarily determine that Stainless Steel Plates in Coils
(``SSPC'') from Belgium are being, or are 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 of sales at LTFV are
shown in the ``Suspension of Liquidation'' section of this notice.
Case History
On April 20, 1998, the Department initiated antidumping duty
investigations of imports of stainless steel plate in coils from
Belgium, Canada, Italy, South Africa, South Korea, and Taiwan (Notice
of Initiation of Antidumping Investigations: Stainless Steel Plate in
Coils From Belgium, Canada, Italy, South Africa, South Korea and Taiwan
(63 FR 20580 (April 27, 1998)). Since the initiation of this
investigation the following events have occurred.
The Department set aside a period for all interested parties to
raise issues regarding product coverage. On May 8, 1998, Armco, Inc.,
J&L Specialty Steel, Inc., Lukens, Inc., North American Stainless, the
United Steelworkers of America, AFL-CIO/CLC , the Butler Armco
Independent Union and the Zanesville Armco Independent Organization,
Inc. (``petitioners'') submitted comments to the Department stating
that, while they believed the scope of the investigations was accurate,
they wished to clarify certain issues concerning product coverage.
During May 1998, the Department requested information from the U.S.
Embassy in Belgium to identify producers/exporters of the subject
merchandise. During May 1998, the Department also requested and
received comments from petitioners and potential respondents regarding
the model matching criteria. Petitioners and ALZ, N.V. (``ALZ'')
submitted comments on our proposed model matching criteria on May 21,
1998.
On May 15, 1998, the United States International Trade Commission
(``ITC'') notified the Department of its affirmative preliminary injury
determination in this case.
On May 27, 1998, the Department issued an antidumping duty
questionnaire to ALZ, Fabrique de Fer, and Cockeril Sambre Group. In
June 24, 1998, the Department received response
[[Page 59533]]
to Section A of the questionnaire from ALZ. In addition, on June 16 and
26, 1998, the Department received letters from Fabrique de Fer, and
Cockeril Sambre Group stating that the companies did not sell the
subject merchandise to the United States during the period of
investigation (``POI''). We received ALZ's responses to Sections B, C
and D of the questionnaire on July 27, 1998. Petitioners filed comments
on ALZ's questionnaire responses in July, August, and September 1998.
We issued supplemental questionnaires for Sections A, B, C and D to ALZ
in July, August, and September, 1998, and received responses to these
questionnaires in August, September and October 1998.
On July 28, 1998, pursuant to section 733(c)(1)(A) of the Act, the
petitioners made a timely request to postpone the preliminary
determination for thirty days. The Department determined that this
investigation is extraordinarily complicated and that additional time
is necessary beyond the thirty days requested by petitioners for the
Department to make its preliminary determination. On August 14, 1998,
we postponed the preliminary determination until no later than October
27, 1998. (See Notice of Postponement of Preliminary Antidumping Duty
Investigations of Stainless Steel Plate in Coils: from Belgium, Canada,
Italy, South Africa , South Korea and Taiwan, 63 FR 44840, August 21,
1998). On August 20, 1998, petitioners amended the antidumping duty
petitions to include Allegheny Ludlum Corporation as an additional
petitioner. On October 19 and 20, 1998, petitioners submitted comments
on ALZ's claim for a CEP adjustment, and on issues for consideration in
this preliminary determination for ALZ. The Department did not address
these comments because they came in too late.
Postponement of Final Determination and Extension of Provisional
Measures
Pursuant to section 735(a)(2) of the Act, on October 19, 1998, ALZ
requested that, 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 the
publication of an affirmative preliminary determination in the Federal
Register. On October 20, 1998, ALZ amended its request to include a
request to extend the provisional measures to not more than six months.
In accordance with 19 CFR 351.210(b), because (1) our preliminary
determination is affirmative, (2) ALZ accounts for a significant
proportion of exports of the subject merchandise, and (3) no compelling
reasons for denial exist, we are granting the respondent's request and
are postponing the final determination until no later than 135 days
after the publication of this notice in the Federal Register.
Suspension of liquidation will be extended accordingly.
Scope of Investigation
For purposes of these investigations, the product covered is
certain stainless steel plate in coils. Stainless steel is an alloy
steel containing, by weight, 1.2 percent or less of carbon and 10.5
percent or more of chromium, with or without other elements. The
subject plate products are flat-rolled products, 254 mm or over in
width and 4.75 mm or more in thickness, in coils, and annealed or
otherwise heat treated and pickled or otherwise descaled. The subject
plate may also be further processed (e.g., cold-rolled, polished, etc.)
provided that it maintains the specified dimensions of plate following
such processing. Excluded from the scope of this investigation are the
following: (1) plate not in coils, (2) plate that is not annealed or
otherwise heat treated and pickled or otherwise descaled, (3) sheet and
strip, and (4) flat bars.
The merchandise subject to this investigation is currently
classifiable in the Harmonized Tariff Schedule of the United States
(HTS) at subheadings: 7219.11.00.30, 7219.11.00.60, 7219.12.00.05,
7219.12.00.20, 7219.12.00.25, 7219.12.00.50, 7219.12.00.55,
7219.12.00.65, 7219.12.00.70, 7219.12.00.80, 7219.31.00.10,
7219.90.00.10, 7219.90.00.20, 7219.90.00.25, 7219.90.00.60,
7219.90.00.80, 7220.11.00.00, 7220.20.10.10, 7220.20.10.15,
7220.20.10.60, 7220.20.10.80, 7220.20.60.05, 7220.20.60.10,
7220.20.60.15, 7220.20.60.60, 7220.20.60.80, 7220.90.00.10,
7220.90.00.15, 7220.90.00.60, and 7220.90.00.80. Although the HTS
subheadings are provided for convenience and Customs purposes, the
written description of the merchandise under investigation is
dispositive.
Period of Investigation
The POI is January 1, 1997, through December 31, 1997.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by ALZ covered by the description in the Scope of
Investigation section, above, and sold in Belgium 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 27, 1998, reporting instructions.
Fair Value Comparisons
To determine whether sales of SSPC from Belgium to the United
States were made at LTFV, we compared constructed export price
(``CEP'') to the Normal Value (``NV''), as described in the
``Constructed Export Price'' and ``Normal Value'' sections of this
notice, below. In accordance with section 777A(d)(1)(A)(i) of the Act,
we calculated weighted-average CEPs for comparison to weighted-average
NVs or CVs.
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 CEP transaction. 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 CEP, it is the level of the constructed sale from the
exporter to the importer.
To determine whether NV sales are at a different level of trade
than CEP, we examined stages in the marketing process and selling
functions along the chain of distribution between the producer and the
unaffiliated customer. If the comparison-market sales are at a
different LOT, and the difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and comparison-market sales at the LOT of
the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is
more remote from the factory than the CEP level and there is no basis
for determining whether the difference in the levels between NV and CEP
affects price comparability, we adjust NV under section 773(a)(7)(B) of
the Act (the CEP-offset provision). See Notice of Final Determination
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel
Plate from South Africa, 62 FR 61731 (November 19, 1997).
[[Page 59534]]
In this case, ALZ requested that the Department adjust NV to
account for different LOTs in the home market and the U.S. market. The
information on the record does not reveal meaningful differences
between selling functions performed in the two markets, and thus no
differences in home market and U.S. LOTs. Therefore, we preliminary do
not grant a CEP offset for those sales by ALZ in Belgium which are
compared with CEP sales in the United States (See Memorandum to Steven
Presing from Steve Bezirganian and Abdelali Elouaradia, dated October
27, 1998).
Constructed Export Price
We calculated CEP in accordance with section 772(b) of the Act
because sales to the first unaffiliated purchaser took place after
importation into the United States.
We based CEP on the packed ex-warehouse or delivered prices to
unaffiliated purchasers in the United States. We made deductions for
billing adjustments (i.e. adjustments for freight and adjustments for
customer claims), where applicable. We also made deductions for the
following movement expenses, where appropriate, in accordance with
section 772(c)(2)(A) of the Act: foreign inland freight, foreign inland
insurance (including marine insurance), international freight
(including foreign brokerage), U.S. inland freight from port to
warehouse, U.S. inland insurance, U.S. brokerage and handling, U.S.
warehouse expenses, U.S. inland freight from warehouse to unaffiliated
customer and U.S. Customs duties. In accordance with section 772(d)(1)
of the Act, we deducted selling expenses associated with economic
activities occurring in the United States, including direct selling
expenses (credit costs), inventory carrying costs, and other indirect
selling expenses. We also deducted the profit allocated to these
expenses, and further manufacturing costs in accordance with sections
772(d)(3) and 772(f) of the Act.
ALZ did not report in its U.S. sales database a small quantity of
TrefilArbed re-sales of cut plate that the original U.S. customer had
processed from SSPC purchased from TrefilArbed. In these few instances,
TrefilArbed had agreed to accept the cut plate from the original U.S.
customer, even though this customer had processed the SSPC into cut
plate, a product not subject to this investigation. We preliminarily
determine that these re-sales are of an insignificant quantity and
value, and are not representative of the overall sales of subject
merchandise. (See Memorandum to Joseph A. Spetrini from Roland
MacDonald, dated October 22, 1998).
Normal Value
After testing home market viability, as discussed below, we
calculated NV as noted in the ``Price-to-CV Comparisons'' and ``Price-
to-Price Comparisons'' sections of this notice.
1. Home Market Viability
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.,
the aggregate volume of home market sales of the foreign like product
is equal to or greater than five percent of the aggregate volume of
U.S. sales), we compared 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.
Because ALZ'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.
2. Cost of Production Analysis
Based on a cost allegation filed by the petitioners, the Department
found reasonable grounds to believe or suspect that sales by ALZ in its
home market were made at prices below the costs of production (COP),
pursuant to section 773(b)(1). As a result, the Department has
initiated an investigation to determine whether the respondent made
home market sales during the POI at prices below their respective COPs,
within the meaning of section 773(b) of the Act.
A. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated a
weighted-average COP based on the sum of ALZ's cost of materials and
fabrication for the foreign like product, plus amounts for general
expenses and packing costs. We relied on the COP data submitted by ALZ
in its supplemental cost questionnaire response, except as discussed
below, where the submitted costs were not appropriately quantified or
valued.
1. We increased ALZ's reported cost of hot rolling services
purchased from affiliated parties to reflect the difference between
transfer prices and market prices, since the transfer prices were below
market prices.
2. We revised ALZ's general and administrative (G&A) expenses to
exclude an offset for net exchange gains. We also included exchange
gains and losses related to purchases and accounts payable, consistent
with our general practice in the calculation of G&A expenses.
3. We recalculated ALZ's financial expense ratio using their parent
company's, ARBED Group, consolidated financial statements.
B. Test of Home Market Prices
We compared the weighted-average COP for ALZ, adjusted where
appropriate (see above), to home market sales of the foreign like
product, as required under section 773(b) of the Act, in order to
determine whether these sales had been made at prices below the COP. In
determining whether to disregard home market sales made at prices below
the COP, we examined whether such sales were made (1) within an
extended period of time and in substantial quantities, and (2) at
prices which permitted the recovery of all costs within a reasonable
period of time in the normal course of trade, in accordance with
section 773(b)(1)(A) and (B) of the Act. On a product-specific basis,
we compared the COP to home market prices, less any applicable billing
adjustments (i.e. invoice correction and alloy surcharge), movement
charges, discounts, and direct and indirect selling expenses.
C. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of ALZ'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 ALZ's sales of a given
product during the POI were at prices less than the COP, we determined
that such sales 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.
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.
D. Calculation of CV
In accordance with section 773(e)(1) of the Act, we calculated CV
based on the sum of ALZ's cost of materials, fabrication, G&A, U.S.
packing costs, direct and indirect selling expenses, interest expenses
and profit. As noted above, we made adjustments to ALZ's reported cost
of hot rolling services and G&A. In accordance with section
[[Page 59535]]
773(e)(2)(A) of the Act, we based SG&A expenses and profit on the
amounts incurred and realized by ALZ in connection with the production
and sale of the foreign like product in the ordinary course of trade,
for consumption in the foreign country. For selling expenses, we used
the actual weighted-average home market direct and indirect selling
expenses.
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 billing adjustments (i.e. adjustment
for transportation, when customer picks up the merchandise, invoice
correction and alloy surcharge), early payment discounts, inland
freight, and inland insurance. In addition, we made circumstance-of-
sale adjustments or deductions for credit, where appropriate. In
accordance with section 773(a)(6), we deducted home market packing
costs and added U.S. packing costs.
Price-to-CV Comparisons
For price-to-CV comparisons, we made adjustments to CV in
accordance with section 773(a)(8) of the Act. We deducted from CV the
amount of indirect selling expenses capped by the amount of the U.S.
commissions.
Currency Conversion
We made currency conversions into U.S. dollars based on the
exchange rates in effect on the dates of the U.S. sales as certified by
the Federal Reserve Bank, in accordance with section 773A of the Act.
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 imports of subject
merchandise that are entered, or withdrawn from warehouse, for
consumption on or after the date of publication of this notice in the
Federal Register. We will instruct the Customs Service to require a
cash deposit or the posting of a bond equal to the weighted-average
amount by which the NV exceeds the CEP, as indicated in the chart
below. These suspension-of-liquidation instructions will remain in
effect until further notice. The weighted-average dumping margins are
as follows:
------------------------------------------------------------------------
Weighted-
average
Exporter/Manufacturer margin
percentage
------------------------------------------------------------------------
ALZ, N.V................................................... 3.44
All Others................................................. 3.44
------------------------------------------------------------------------
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 may be submitted to the
Assistant Secretary for Import Administration no later than fifty days
after the date of publication of this notice, and rebuttal briefs,
limited to issues raised in case briefs, no later than fifty-five days
after publication of this notice. 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 fifty-seven days after
publication of this notice, time and room to be determined, at the U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230. Parties should 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 30 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 no later than one hundred and thirty-five days after
publication of this notice.
This determination is issued and published in accordance with
sections 733(d) and 777(i)(1) of the Act.
Dated: October 27, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-29546 Filed 11-3-98; 8:45 am]
BILLING CODE 3510-DS-P
