[Federal Register Volume 64, Number 215 (Monday, November 8, 1999)]
[Notices]
[Pages 60788-60791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29205]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-588-833]
Stainless Steel Bar from Japan: Preliminary Results of
Antidumping Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping administrative
review.
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SUMMARY: The Department of Commerce is conducting an administrative
review of the antidumping duty order on stainless steel bar from Japan
in response to a request from a respondent, Aichi Steel Corporation.
This review covers the period February 1, 1998, through January 31,
1999.
We preliminarily determine that sales have been made below normal
value. Interested parties are invited to comment on these preliminary
results. Parties who submit argument are requested to submit with the
argument (1) a statement of the issue and (2) a brief summary of the
argument.
EFFECTIVE DATE: November 8, 1999.
FOR FURTHER INFORMATION CONTACT: Minoo Hatten or Robin Gray, Office of
AD/CVD Enforcement, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-1690
or (202) 482-4023, respectively.
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department of Commerce's (the
Department's) regulations are to 19 CFR Part 351 (1998).
Background
On February 26, 1999, the Department received a request from Aichi
Steel Corporation (Aichi) to conduct an administrative review of the
antidumping duty order on stainless steel bar (SSB) from Japan. On
March 29, 1999, the Department published a notice of initiation of an
administrative review of Aichi, covering the period February 1, 1998,
through January 31, 1999, in the Federal Register (64 FR 14860).
On March 25, 1999, Aichi requested that it be permitted to limit
the scope of products reported to include home-market sales of only
hot-rolled merchandise, as was permitted in the 97/98 review. On March
30, 1999, we granted Aichi's request, given that Aichi confirmed that
the same facts apply in this review that applied in the 97/98 review.
As was the case in that review, Aichi claims that there are a limited
number of home-market sales of stainless steel bar during the period of
review (POR) to which U.S. sales would match when calculating dumping
margins. See Preliminary Results Analysis Memorandum from case analyst
to file, dated October 19, 1999 (98/99 review), in room B-099 of the
main Department building; see also Preliminary Results Analysis
Memorandum from case analyst to file, dated February 22, 1999 (97/98
review), in room B-099 for additional details.
On April 28, 1999, Al Tech Specialty Steel Corp., Dunkirk, N.Y.,
Carpenter Technology Corp., Reading, PA, Republic Engineered Steels,
Inc., Massillon, OH, Slater Steels Corp., Fort Wayne, IN, Talley Metals
Technology, Inc., Hartsville, SC, and the United Steel Workers of
America, AFL-CIO/CLC, collectively the petitioners in the less-than-
fair value (LTFV) investigation (hereafter petitioners), requested that
the Department determine whether antidumping duties have been absorbed
in the event that the subject merchandise was sold during the POR in
the United States through an importer affiliated with the respondent.
As all of Aichi's sales to the United States during the POR were
through an unaffiliated importer, duty absorption was not an issue.
On May 17, 1999, the petitioners requested that the Department
initiate a sales-below-cost investigation of Aichi's home-market sales.
On June 28, 1999, based on section 773(b)(2)(A)(ii) of the Act, since
we disregarded certain home-market sales below the cost of production
(COP) in the 97/98 review, we initiated a cost investigation for this
review. See Stainless Steel Bar From Japan: Final Results of
Antidumping Administrative Review, 64 FR 36333 (July 6, 1999).
Scope of Review
The merchandise covered by this review is stainless steel bar
(SSB). For purposes of this review, the term ``stainless steel bar''
means articles of stainless steel in straight lengths that have been
either hot-rolled, forged, turned, cold-drawn, cold-rolled or otherwise
cold-finished, or ground, having a uniform solid cross section along
their whole length in the shape of circles, segments of circles, ovals,
rectangles (including squares), triangles, hexagons, octagons or other
convex polygons. SSB includes cold-finished SSBs that are turned or
ground in straight lengths, whether produced from hot-rolled bar or
from straightened and cut rod or wire, and reinforcing bars that have
indentations, ribs, grooves, or other deformations produced during the
rolling process.
Except as specified above, the term does not include stainless
steel semi-finished products, cut-length flat-rolled products (i.e.,
cut-length rolled products which if less than 4.75 mm in thickness have
a width measuring at least 10 times the thickness or if 4.75 mm or more
in thickness having a width which exceeds 150 mm and measures at least
twice the thickness), wire (i.e., cold-formed products in coils, of any
uniform solid cross section along their whole length, which do not
conform to the definition of flat-rolled products), and angles, shapes,
and sections.
The SSB subject to this order is currently classifiable under
subheadings 7222.11.0005, 7222.19.0005, 7222.11.0050, 7222.19.0050,
7222.20.0005, 7222.20.0045, 7222.20.0075, and 7222.30.0000 of the
Harmonized Tariff Schedule of the United States (HTSUS). Although the
HTSUS subheadings are provided for convenience and customs purposes,
our written description of the scope of this order is dispositive.
United States Price
In calculating the price to the United States, we used export price
(EP) as defined in section 772(a) of the Act because the subject
merchandise was sold to an unaffiliated U.S. purchaser in the United
States prior to the date of importation into the United States and the
use of constructed export price was not indicated by the facts of
record.
We calculated EP for U.S. sales based on F.O.B. Japan port prices
to the United States. We made adjustments, where appropriate, for
domestic inland freight, warehousing expenses, and brokerage and
handling in accordance with section 772(c)(2)(A) of the Act. We used
the shipment date as the date of
[[Page 60789]]
sale for the U.S. market because this was the point at which the
material terms of sale were determined. See Preliminary Results
Analysis Memorandum from case analyst to file, dated October 19, 1999,
in room B-099.
Aichi claimed that an upward adjustment to EP was appropriate to
account for a ``duty drawback'' program. As stated in Certain Welded
Carbon Standard Steel Pipes and Tubes from India (62 FR 47632, 47635
(September 10, 1997)), ``we determine whether an adjustment to U.S.
price for a respondent's claimed duty drawback is appropriate when the
respondent can demonstrate that it meets both parts of our two-part
test. There must be: (1) a sufficient link between the import duty and
the rebate, and (2) a sufficient amount of raw materials imported and
used in the production of the final exported product.'' As discussed
below, because the respondent met these criteria, we have made an
adjustment to EP.
Aichi participates in Japan's duty-drawback program through its
operation of a ``hozei area,'' which is similar to a bonded warehouse.
Aichi posts a bond on all materials that enter the warehouse. If Aichi
utilizes the imported materials for the production of merchandise that
is exported, Japanese Customs Authority then releases the bond. If the
imported materials are not used in the production of exported
merchandise, Aichi pays import duties on the materials.
We granted an upward adjustment to EP because Aichi was able to
show both (1) a link between the import duty and the rebate, and (2) a
sufficient amount of raw materials imported and used in the production
of the final exported product.
No other adjustments to EP were claimed.
Normal Value
On March 25, 1999, Aichi requested that the Department limit the
product scope of Aichi's reporting requirements as in Preliminary
Results of Antidumping Duty Administrative Review: Stainless Steel Bar
from Japan, 64 FR 10445 (March 4, 1999).
On March 30, 1999, the Department granted Aichi's request to report
only home-market sales of hot-rolled merchandise given that Aichi's
letter confirmed that the same facts apply in this review that applied
in the last review.
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a basis for calculating normal value
(NV), 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) of the Act. Because the
aggregate volume of home-market sales of the foreign like product was
greater than five percent of the aggregate volume of U.S. sales of the
subject merchandise, we determined that the home market provides a
viable basis for calculating NV. Therefore, in accordance with section
773(a)(1)(B)(i) of the Act, we based NV on the price at which the
foreign like product was first sold to unaffiliated customers for
consumption in the exporting country, in the usual commercial
quantities and in the ordinary course of trade. We matched EP sales to
sales at the same level of trade in the home market and made no level-
of-trade adjustment. (See Level of Trade below.)
After disregarding appropriate below-cost sales (see Cost-of-
Production Analysis below), pursuant to section 773(b)(1) of the Act,
we compared the EP sales of individual transactions to the monthly
weighted-average price of sales of the most similar foreign like
product. Where possible, we based NV on delivered prices to
unaffiliated purchasers in the home market. Where applicable, we made
adjustments to home-market price for billing adjustments, inland
freight, warehousing expenses, discounts and rebates. Subject
merchandise sold in the United States was compared to home-market
products by applying the following criteria on a hierarchical basis:
general type of finish, grade, remelting, type of final finishing
operation, shape, and size.
Home-market prices were based on delivered prices to affiliated or
unaffiliated purchasers. When applicable, we made adjustments for
differences in packing and for movement expenses in accordance with
sections 773(a)(6)(A) and (B) of the Act. We also made adjustments for
differences in cost attributable to differences in physical
characteristics of the merchandise pursuant to section 773(a)(6)(C)(ii)
of the Act and for differences in circumstances of sale (COS) in
accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410. To make COS adjustments, we reduced home-market price by an
amount for home-market credit and we increased it by an amount for U.S.
credit expenses.
Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Act and in the
Statement of Administrative Action (SAA) accompanying the Uruguay Round
Agreements Act, at 829-831 (see H.R. Doc. No. 103-316, at 829-831
(1994)), to the extent practicable, the Department calculates NV based
on sales at the same level of trade as the U.S. sales (either EP or
constructed export price). When the Department is unable to find
sale(s) in the comparison market at the same level of trade as the U.S.
sale(s), the Department may compare sales in the U.S. and foreign
markets at different levels of trade. The NV level of trade is that of
the starting-price sales in the home market. When NV is based on
constructed value (CV), the level of trade is that of the sales from
which we derive selling, general and administrative expenses (SG&A) and
profit.
To determine whether home-market sales are at a different level of
trade than U.S. 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 level of trade and the differences affect 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 level of trade of the export transaction, we make a
level-of-trade adjustment under section 773(a)(7)(A) of the Act. 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).
In implementing these principles in this review, we examined
information from the respondent regarding the marketing stages involved
in the reported home market and EP sales, including a description of
the selling activities Aichi performed for each channel of
distribution. Aichi reported three channels of distribution in the home
market and claimed five levels of trade for its home-market sales--
consignment sales to trading companies, consignment sales to direct
distributors, non-consignment sales to trading companies, non-
consignment sales to distributors and non-consignment sales to end-
users.
Based on our analysis of information on the record, we determine
that there are no differences with respect to selling functions between
consignment and non-consignment sales. Specifically, there are no
differences between consignment and non-consignment sales with respect
to strategic and economic planning, market research, computer, legal,
accounting, audit, business systems development assistance, personnel
assistance, engineering
[[Page 60790]]
services, research and development technical programs, advertising,
procurement and sourcing, sales calls/assistance and post-sale
warehousing. The distinction between consignment and non-consignment
sales is that, in consignment sales situations, Aichi permits the
customer to take possession of the product without requiring that the
customer pay for the product until the customer sells to its downstream
customer. This distinction, however, does not relate to the nature of
the selling activities provided. See Preliminary Results Analysis
Memorandum from case analyst to file, dated October 19, 1999, in room
B-099. This determination is consistent with the Department's
determination on this issue in the previous administrative review (see
Preliminary Results of Antidumping Duty Administrative Review:
Stainless Steel Bar from Japan, 64 FR 10445 (March 4, 1999)).
Aichi reported sales to three types of customers in the home
market: trading companies, end-users, and distributors. Selling
functions performed with respect to sales to trading companies included
strategic and economic planning, market research, computer, legal and
business-systems development, engineering services and post-sale
warehousing. In addition to these functions, other functions performed
for sales to end-users included R&D technical programs, advertising,
and sales calls/assistance. Distributors also were offered personnel
training and manpower assistance in addition to the services offered to
trading companies and end-users. Based on these differences, we found
that the three types of home-market customers constituted three
different levels of trade.
We found that Aichi made EP sales of various models of merchandise
through unaffiliated trading companies, a channel of distribution
similar to the home-market channel involving sales to trading
companies. As with sales through the trading-company channel of
distribution in the home market, Aichi performed only a few selling
functions when selling merchandise to trading companies that exported
the merchandise to the United States. Thus, we found that the level of
trade for this U.S. channel of distribution was the same as the level
of trade for the home-market trading company channel of distribution.
See Id.
Cost-of-Production Analysis
As stated in the Background section of this notice, the Department
initiated a COP investigation for Aichi to determine whether Aichi made
home-market sales during the POR at prices below their respective COPs
(as defined by section 773(b) of the Act). In accordance with section
773(b)(3) of the Act, we calculated the COP based on the sum of the
costs of materials and fabrication employed in producing the foreign
like product, plus SG&A expenses and all costs and expenses incidental
to packing the merchandise. In our COP analysis, we used the home-
market sales and COP information Aichi provided in its questionnaire
responses.
After calculating the COP, in accordance with section 773(b)(1) of
the Act, we tested whether home-market sales of SSB were made at prices
below the COP within an extended period of time in substantial
quantities and whether such prices permitted the recovery of all costs
within a reasonable period of time. We compared model-specific COPs to
the reported home-market prices less any applicable movement charges,
discounts, and rebates.
Pursuant to section 773(b)(2)(C) of the Act, when less than 20
percent of Aichi's sales of a given product were at prices below the
COP, we did not disregard any below-cost sales of that product because
the below-cost sales were not made in substantial quantities within an
extended period of time. When 20 percent or more of Aichi's sales of a
given product during the POR were at prices less than the COP, we
determined that the below-cost sales were made in substantial
quantities within an extended period of time. See sections 773(b)(2)(B)
and (C) of the Act. Additionally, based on comparisons of prices to
weighted-average COPs for the POR, we determined that the sales were at
prices which would not permit recovery of all costs within a reasonable
period of time, as defined by section 773(b)(2)(D) of the Act.
Therefore, we disregarded the below-cost sales.
Constructed Value
In accordance with section 773(a)(4) of the Act, we used
constructed value (CV) as the basis for NV when there were no usable
sales of the foreign like product in the comparison market. We
calculated CV in accordance with section 773(e) of the Act. We included
the cost of materials and fabrication, SG&A expenses, and profit in the
calculation of CV. In accordance with section 773(e)(2)(A) of the Act,
we based SG&A expenses and profit on the amounts incurred and realized
by Aichi in connection with the production and sale of the foreign like
product in the ordinary course of trade for consumption in the home
market.
When appropriate, we make adjustments to CV in accordance with
section 773(a)(8) of the Act and 19 CFR 351.410 for COS differences and
level-of-trade differences. For comparisons to EP, we make COS
adjustments by deducting home market direct selling expenses from and
adding U.S. direct selling expenses to NV.
We calculated CV at the same level of trade as the EP. Therefore we
made no level-of-trade adjustment.
Preliminary Results of Review
As a result of our comparison of EP and NV, we preliminarily
determine a weighted-average dumping margin of 1.72 percent for Aichi
for the period February 1, 1998, through January 31, 1999.
Any interested party may request a hearing within 30 days of
publication of this notice. Any hearing, if requested, will be held 37
days after the date of publication of this notice, or the first workday
thereafter. Issues raised in hearings will be limited to those raised
in the respective case and rebuttal briefs. Interested parties may
submit case briefs within 30 days of the date of publication of this
notice. Rebuttal briefs, which must be limited to issues raised in the
case briefs, may be filed not later than 35 days after the date of
publication.
Parties who submit argument are requested to submit with the
argument (1) a statement of the issue, and (2) a brief summary of the
argument. The Department will publish a notice of final results of this
administrative review, which will include the results of its analysis
of issues raised in any such comments or at a hearing.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. In accordance
with 19 CFR 351.212(b)(1), we have calculated an exporter/customer-
specific assessment value for subject merchandise. Upon completion of
this review, the Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of the final results of this administrative review for all
shipments of SSB from Japan entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided for by
section 751(a)(2)(c) of the Act: (1) The cash deposit rate for Aichi
will be the rate established in the final results of this review; (2)
for previously reviewed or investigated companies not listed above, the
cash-deposit rate will continue to be the company-specific rate
[[Page 60791]]
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)
for all other producers and/or exporters of this merchandise, the cash
deposit rate shall be 61.47 percent, the all-others rate established in
the LTFV investigation (59 FR 66930 (December 28, 1994)).
The deposit rate, 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 351.402(f) 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.
We are issuing and publishing this determination in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: November 1, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-29205 Filed 11-5-99; 8:45 am]
BILLING CODE 3510-DS-P
