[Federal Register Volume 61, Number 238 (Tuesday, December 10, 1996)]
[Notices]
[Pages 65022-65025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31250]
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DEPARTMENT OF COMMERCE
[A-412-810]
Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From
the United Kingdom; Preliminary Results of Antidumping Administrative
Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review; certain hot-rolled lead and bismuth carbon steel
products from the United Kingdom.
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SUMMARY: The Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on certain hot-
rolled lead and bismuth carbon steel products from the United Kingdom
in response to requests by respondent, British Steel Engineering Steels
Limited (BSES), and petitioner, Inland Steel Bar Company. This review
covers the period March 1, 1995 through February 29, 1996.
We have preliminarily determined that sales have been made below
normal value (NV). Interested parties are invited to comment on these
preliminary results. Parties who submit comments are requested to
submit with each comment (1) a statement of the issue and (2) a brief
summary of the comment.
EFFECTIVE DATE: December 10, 1996.
FOR FURTHER INFORMATION CONTACT:G. Leon McNeill or Maureen Flannery,
AD/CVD Enforcement, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
4733.
SUPPLEMENTARY INFORMATION:
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's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
Background
The Department published in the Federal Register the antidumping
duty order on certain hot-rolled lead and bismuth carbon steel products
from the United Kingdom on March 22, 1993 (58 FR 15324). On March 4,
1996, we published in the Federal Register (61 FR 8238) a notice of
opportunity to request an administrative review of the antidumping duty
order on certain hot-rolled lead and bismuth carbon steel products from
the United Kingdom covering the period March 1, 1995 through February
29, 1996.
In accordance with 19 CFR 353.22(a)(1), BSES and the petitioner,
Inland Steel Bar Company, requested that we conduct an administrative
review of BSES's sales. We published a notice of initiation of this
antidumping duty administrative review on April 25, 1996 (61 FR 18378).
The Department is conducting this administrative review in accordance
with section 751 of the Act.
Scope of the Review
The products covered by this review are hot-rolled bars and rods of
nonalloy or other alloy steel, whether or not descaled, containing by
weight 0.03 percent or more of lead or 0.05 percent or more of bismuth,
in coils or cut lengths, and in numerous shapes and sizes. Excluded
from the scope of this review are other alloy steels (as defined by the
Harmonized Tariff Schedule of the United States (HTSUS) Chapter 72,
[[Page 65023]]
note 1 (f)), except steels classified as other alloy steels by reason
of containing by weight 0.4 percent or more of lead, or 0.1 percent or
more of bismuth, tellurium, or selenium. Also excluded are semi-
finished steels and flat-rolled products. Most of the products covered
in this review are provided for under subheadings 7213.20.00 and
7214.30.00.00 of the HTSUS. Small quantities of these products may also
enter the United States under the following HTSUS subheadings:
7213.31.30.00, 60.00; 7213.39.00.30, 00.60, 00.90; 7214.40.00.10,
00.30, 00.50; 7214.50.00.10, 00.30, 00.50; 7214.60.00.10, 00.30, 00.50;
and 7228.30.80.00. HTSUS subheadings are provided for convenience and
Customs purposes. The written description of the scope of this order
remains dispositive.
This review covers the subject merchandise manufactured by BSES,
and the period March 1, 1995 through February 29, 1996.
Duty Absorption
On May 17, 1996, the petitioner requested that the Department
determine whether antidumping duties had been absorbed by BSES during
the period of review (POR) pursuant to section 751(a)(4) of the Act.
Section 751(a)(4) provides for the Department, if requested, to
determine, during an administrative review initiated two years or four
years after publication of the order, whether antidumping duties have
been absorbed by a foreign producer or exporter subject to the order,
if the subject merchandise is sold in the United States through an
importer who is affiliated with such foreign producer or exporter.
Section 751(a)(4) was added to the Act by the URAA. The Department's
interim regulations do not address this provision of the Act.
For transition orders as defined in section 751(c)(6)(C) of the
Act, i.e., orders in effect as of January 1, 1995, section
351.213(j)(2) of the Department's proposed antidumping regulations
provides that the Department will make a duty absorption determination,
if requested, for any administrative review initiated in 1996 or 1998.
See 61 FR 7308, 7366 (February 27, 1996). The preamble to the proposed
antidumping regulations explains that reviews initiated in 1996 will be
considered initiated in the second year and reviews initiated in 1998
will be considered initiated in the fourth year. Id. at 7317. Although
these proposed antidumping regulations are not yet binding upon the
Department, they do constitute a public statement of how the Department
expects to proceed in construing section 751(a)(4) of the amended
statute. This approach assures that interested parties will have the
opportunity to request a duty absorption determination on entries for
which the second and fourth years following an order have already
passed, prior to the time for sunset review of the order under section
751(c). Because the order on certain hot-rolled lead and bismuth carbon
steel products from the United Kingdom has been in effect since 1993,
this is a transition order. Therefore, based on the policy stated
above, the Department will first consider a request for an absorption
determination during a review initiated in 1996. This being a review
initiated in 1996, we are making a duty-absorption determination as
part of this segment of the proceeding.
The statute provides for a determination on duty absorption if the
subject merchandise is sold in the United States through an affiliated
importer. In this case, BSES is itself the importer of record, i.e.,
the exporter and the importer are the same entity. Therefore, the
importer and the exporter are ``affiliated'' within the meaning of
751(a)(4). Furthermore, we have preliminarily determined that there is
a dumping margin for BSES on 50 percent of its U.S. sales during the
POR. In addition, we cannot conclude from the record that the
unaffiliated purchaser in the United States will pay the ultimately
assessed duty. Under these circumstances, therefore, we preliminarily
find that antidumping duties have been absorbed by BSES on 50 percent
of its U.S. sales.
United States Price
We based United States price on export price (EP), as defined in
section 772(a) of the Act, because the merchandise was sold directly by
the exporter to unaffiliated U.S. purchasers prior to the date of
importation and constructed export price was not indicated by other
facts of record. BSES reported that EP was based on packed, delivered
prices to customers in the United States. We made deductions, where
applicable, for foreign inland freight, FOB charges in the United
Kingdom, ocean freight, marine insurance, U.S. Customs duties,
brokerage and handling charges, merchandising processing fees, and U.S.
inland freight charges, in accordance with 19 CFR 353.41(d). We also
made an adjustment for invoice corrections (billing adjustments) made
after shipment.
BSES's sales in the United Kingdom and to the United States were
made in quantities of less than 25 metric tons and 25 metric tons or
more. As in all prior segments of the proceeding, where possible we
matched U.S. sales to U.K. sales within the same quantity group: 25
tons or more, or less than 25 tons. (See Final Determination of Sales
at Less Than Value; Certain Hot-Rolled Lead and Bismuth Carbon Steel
Products from the United Kingdom, 58 FR 6207, January 27, 1993; and
Preliminary Results of Antidumping Duty Administrative Review; Certain
Hot-Rolled Lead and Bismuth Carbon Steel Products from the United
Kingdom, 50 FR 10063, February 23, 1995.)
No other adjustments to EP were claimed or allowed.
Normal Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared BSES'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)(B) of the Act. Because BSES'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 of the
subject merchandise, we determined that the home market provides a
viable basis for calculating NV for BSES.
Many of BSES's home market sales were made to affiliated original
equipment manufacturers (OEMs). It is the Department's practice, in
situations where home market sales are made to affiliated parties, to
determine whether sales to affiliated parties might be appropriate to
use as the basis of NV by comparing prices of those sales to prices of
sales to unaffiliated parties, on a model-by-model basis. See Final
Results of Antidumping Duty Administrative Reviews, Partial Termination
of Administrative Reviews, and Revocation in Part of Antidumping Duty
Orders; Antifriction Bearings (Other Than Tapered Roller Bearings) and
Parts Thereof from France, et al. 60 FR 10900, February 28, 1995. (See
preliminary notice for discussion.) Because BSES made home market sales
to affiliated OEMs during the POR, we tested these OEM sales to ensure
that, on average, the affiliated-party sales were made at arm's length.
To conduct this test, we compared the gross unit prices of sales to
affiliated and unaffiliated customers net of all movement charges,
direct selling expenses, invoice corrections, rebates and packing. As a
result of our arm's-length test, we disregarded sales to the affiliated
OEM customers in the home market because the prices charged to
affiliated customers were less than 99.5 percent of the prices charged
to
[[Page 65024]]
unaffiliated customers. We did not require respondent to provide
downstream sales by these customers because these customers further
manufactured the subject merchandise into merchandise not comparable to
the merchandise covered by the order. BSES also sold through affiliated
resellers to unaffiliated customers and reported these unaffiliated-
customer transactions. We used these unaffiliated transactions in our
determination of NV.
BSES did not report its home market sales of leaded rod produced by
Scunthorpe Rod Mill (SRM), an affiliated party, because it claimed that
such merchandise was not a match to its sales of leaded bar to the
United States. BSES provided a list of all SRM's potential products,
including their product characteristics and product identification
control numbers. In addition, BSES provided a theoretical sales file
that identified every leaded rod product that SRM could possibly have
produced or sold in each of the months of the POR. Upon examination of
this information, we determined that the leaded rod produced by SRM was
never the identical or most similar match to BSES's sales of leaded bar
to the United States during the POR.
Cost of Production Analysis
Pursuant to section 773(b) of the Act, in this review we initiated
a COP investigation of BSES. We did this because, in the administrative
review of BSES for the most recent period (as of the time our decision
to initiate a COP investigation was made), we disregarded from our
calculations BSES's home market sales found to be below the cost of
production (COP). See Final Results of Antidumping Administrative
Review; Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from
the United Kingdom, 60 FR 44009, August 24, 1995. Therefore, in
accordance with section 773(b)(2)(A)(ii) of the Act, the Department had
reasonable grounds to believe or suspect that sales below the COP may
have occurred during this review period.
Before making any NV comparisons, we conducted the COP analysis
described below.
A. Calculation of COP
We calculated the COP based on the sum of BSES's cost of materials
and fabrication employed in producing the foreign like product, plus
amounts for home market selling, general, and administrative expenses
(SG&A) and packing costs in accordance with section 773(b)(3) of the
Act. We relied on the home market sales and COP information provided by
BSES in its questionnaire responses.
B. Test of Home Market Prices
After calculating COP, we tested whether home market sales of lead
and bismuth steel were made at prices below COP within an extended
period of time in substantial quantities, and whether such prices
permitted recovery of all costs within a reasonable period of time. We
compared the model-specific COP to the reported home market prices less
any applicable movement charges, rebates, and direct and indirect
selling expenses.
C. Results of COP Test
Pursuant to section 773(b)(2)(C), where less than 20 percent of
respondent's sales of a given product were at prices less than 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 a respondent's sales of a
given product during the POR were at prices less than the COP, we
disregarded the below-cost sales because we determined that the below-
cost sales were made within an extended period of time in ``substantial
quantities'' in accordance with sections 773(b)(2) (B) and (C) of the
Act, and because, based on our comparisons of prices to weighted-
average COPs for the POR, we determined that the below-cost sales of
the product were at prices which would not permit recovery of all costs
within a reasonable period of time, as defined in section 773(b)(2)(D)
of the Act. Based on this test, we disregarded below-cost sales made by
BSES.
Price-to-Price Comparisons
Pursuant to section 777A(d)(2), we compared the EPs of individual
transactions to the monthly weighted-average price of sales of the
foreign like product where there were sales at prices above COP, as
discussed above. We based NV on packed, delivered prices to
unaffiliated purchasers in the home market. We made adjustments, where
applicable, in accordance with section 773(a)(6) of the Act. Where
applicable, we made adjustments to home market price for invoice
corrections, rebates, and inland freight. We also made a circumstance-
of-sale adjustment for differences in credit insurance and product
liability insurance expenses pursuant to section 773(a)(6)(C)(iii) of
the Act. Respondent claimed home market credit insurance expenses and
product liability insurance expenses as direct adjustments to NV. Since
such expenses are on a sale-by-sale basis and directly related to sales
of the foreign like product, we have treated these home market expenses
as direct selling expenses. U.S. credit insurance and product liability
insurance are U.S. direct selling expenses. Accordingly, we made the
circumstance-of-sale adjustments by adding the amounts of U.S. credit
insurance and product liability insurance for each U.S. sale to the NV,
and subtracting the home market amounts from NV. We also added U.S.
commissions for each U.S. sale to the NV. In order to adjust for
differences in packing between the two markets, we increased home
market price by U.S. packing costs and reduced it by home market
packing costs. Prices were reported net of value added taxes (VAT) and,
therefore, no deduction for VAT was necessary. We made adjustments,
where appropriate, for physical differences in merchandise in
accordance with section 773(a)(6)(C)(ii) of the Act.
Constructed Value
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of BSES's cost of materials and fabrication employed
in producing the subject merchandise, SG&A and profit incurred and
realized in connection with production and sale of the foreign like
product, and U.S. packing costs. In accordance with section
773(e)(2)(A), we based SG&A and profit on the amounts incurred and
realized by BSES in connection with the production and sale of the
foreign like product in the ordinary course of trade, for consumption
in the foreign country. We used the costs of materials, fabrication,
and general and administrative expenses as reported in the CV portion
of BSES's questionnaire response. We used the U.S. packing costs as
reported in the U.S. sales portion of BSES's questionnaire response. We
based selling expenses and profit on the information reported in the
home market sales portion of BSES's questionnaire response. For selling
expenses, we used the average per-unit home market selling expenses of
home market sales of the foreign like product, exclusive of sales
disregarded under the cost test, weighted by the total quantity sold
for these sales. For actual profit, we first calculated the difference
between the home market sales value and home market COP, for all above-
cost home market sales of the foreign like product, exclusive of sales
disregarded under the cost test, and divided the sum of these
differences by the total home market COP for these sales. We then
multiplied this percentage by the COP for each U.S. model to derive an
actual profit.
[[Page 65025]]
Commission Offset
Because there are commissions on U.S. sales and not on home market
sales, we made an adjustment for indirect selling expenses in the home
market to offset the U.S. commissions, in accordance with 19 CFR
353.56(b)(1).
We based the commission offset amount on the amount of the home
market indirect selling expenses. We limited the home market indirect
selling expense deduction by the amount of the commissions incurred on
sales to the United States.
Preliminary Results of the Review
As a result of our comparison of EP and NV, we preliminarily
determine that the following weighted-average dumping margin exists:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Period (percent)
------------------------------------------------------------------------
British Steel Engineering Steels Limited
(BSES) (formerly United Engineering
Steels Limited)........................ 3/1/95-2/29/96 2.84
------------------------------------------------------------------------
Parties to the 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 publication. Any hearing, if
requested, will be held 44 days after the publication of this notice,
or the first workday thereafter. 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 37 days after the date of
publication. 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.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between EP and NV may vary from the percentage stated
above. 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 certain hot-rolled lead and bismuth carbon steel products
from the United Kingdom 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 the
reviewed company will be the rate established in the final results of
this review; (2) for merchandise exported by manufacturers or exporters
not covered in this review but covered in the original less-than-fair-
value (LTFV) investigation or a previous review, the cash deposit will
continue to be the company-specific rate published for the most recent
period; (3) if the exporter is not a firm covered in this or a previous
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 25.82 percent, the ``all others'' rate established in the LTFV
investigation (58 FR 6207, January 27, 1993).
These deposit rates, 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)) and 19 CFR 353.22.
Dated: December 2, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-31250 Filed 12-9-96; 8:45 am]
BILLING CODE 3510-DS-P
