[Federal Register Volume 63, Number 232 (Thursday, December 3, 1998)]
[Notices]
[Pages 66785-66787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32212]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-583-830]
Notice of Amended Preliminary Determination of Sales at Less Than
Fair Value: Stainless Steel Plate in Coils From Taiwan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Amended preliminary determination of antidumping duty
investigation.
-----------------------------------------------------------------------
SUMMARY: On November 4, 1998, the Department of Commerce (``the
Department'') published the preliminary determination of its
antidumping duty investigation of stainless steel plate in coils
(``SSPC'') from Taiwan. This investigation covers two respondents, Yieh
United Steel Corporation (``YUSCO'') and Ta Chen Stainless Steel Pipe,
Ltd. (``Ta Chen'').
YUSCO submitted a ministerial error allegation on November 6, 1998
with respect to the preliminary determination published on November 4,
1998. On November 10, 1998, petitioners (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 Zanesville Armco Independent Organization, Inc.) submitted
ministerial error allegations with respect to the middleman dumping
portion of the preliminary determination. Based on the correction of
certain ministerial errors made in the preliminary determination, we
are amending our preliminary determination. (See 19 CFR 351.224(e).)
EFFECTIVE DATE: December 3, 1998.
FOR FURTHER INFORMATION CONTACT: Joanna Gabryszewski, Rebecca Trainor,
or Maureen Flannery, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-0780, (202) 482-0666 or (202) 482-3020, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
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. In addition, unless otherwise
indicated, all references to the Department's regulations are to the
regulations set forth at 19 CFR part 351.
Significant Ministerial Errors
We are amending the preliminary determination of sales at less than
fair value for SSPC from Taiwan to reflect the correction of
significant ministerial errors made in the margin calculations
regarding both YUSCO and Ta Chen in that determination, pursuant to 19
CFR 224(g)(1) and (2). A significant ministerial error is defined as a
correction which, singly or in combination with other errors, (1) would
result in a change of at least 5 absolute percentage points in, but not
less than 25 percent of, the weighted average dumping margin calculated
in the original (erroneous) preliminary determination; or (2) would
result in a difference between a weighted-average dumping margin of
zero or de minimis and a weighted-average dumping margin of greater
than de minimis or vice versa. We are publishing this amendment to the
preliminary determination pursuant to 19 CFR 351.224(e).
Scope of the 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
[[Page 66786]]
merchandise under investigation is dispositive.
Period of Investigation
The period of investigation (``POI'') is January 1, 1997 through
December 31, 1997.
Background
On November 4, 1998, the Department published in the Federal
Register its notice of preliminary determination of the antidumping
duty investigation of SSPC from Taiwan (Notice of Preliminary
Determination of Sales at Less Than Fair Value: Stainless Steel Plate
in Coils from Taiwan (63 FR 59524 (November 4, 1998)). We preliminarily
calculated a dumping margin of 67.68 percent based on YUSCO's sales. In
addition, after initiating a middleman dumping investigation, we
preliminarily determined that Ta Chen had not engaged in middleman
dumping. (See Memorandum to the File: Analysis for the Preliminary
Determination of SSPC from Taiwan: Middleman Dumping Investigation: Ta
Chen (October 27, 1998).)
YUSCO
On November 6, 1998, YUSCO submitted timely written allegations
that the Department made a ministerial error which resulted in a change
of at least 5 absolute percentage points in, but not less than 25
percent of, the weighted average margin calculated in the preliminary
determination. YUSCO alleged that the Department erred by failing to
convert U.S. movement expenses reported in New Taiwan Dollars (NTD)
into U.S. dollars.
We agree with YUSCO that we inadvertently failed to convert U.S.
movement expenses, reported by YUSCO in NTD, into U.S. dollars. Because
the ministerial error is significant, as defined in 19 CFR 351.224(g),
we are amending our preliminary determination. YUSCO's amended rate is
de minimis. We have set YUSCO's cash deposit rate at zero. (See
``Suspension of Liquidation'' section, below.)
Ta Chen
On August 11, 1998, petitioners alleged that Ta Chen Stainless
Steel Pipe, Ltd. and/or its affiliated U.S. importer, Ta Chen
International (collectively Ta Chen), were reselling subject
merchandise in the United States at prices less than Ta Chen's cost of
acquisition and related selling and movement expenses. In our
preliminary determination, we preliminarily found that Ta Chen had not
engaged in middleman dumping because the portion of below-acquisition-
cost sales was not substantial. (63 FR at 59526)(November 4, 1998).)
On November 10, 1998, petitioners alleged that the Department's
computer program, upon which it based its preliminary determination
that Ta Chen was not engaging in middleman dumping during the POI,
contained a number of clerical errors. On November 17, 1998, Ta Chen
filed a response to the petitioners' comments. In accordance with
section 351.224(c)(3) of the Department's regulations, we do not
consider replies to ministerial error comments submitted in connection
with a preliminary determination. Therefore, we have returned Ta Chen's
rebuttal comments and have not considered them for this amended
preliminary determination. (See 19 CFR 351.224(c).)
First, petitioners claim that the Department omitted the following
U.S. selling expenses from the analysis: bank fees incurred in Taiwan
and the United States; imputed credit expenses; and certain indirect
selling expenses. Petitioners argue that these expenses should be
deducted from Ta Chen's U.S. price in accordance with Fuel Ethanol from
Brazil; Final Determination of Sales at Less Than Fair Value, 51 FR
5572, 5573 (February 14, 1986) (Fuel Ethanol). Because these were
actual costs incurred, we intended to deduct these costs. Thus, we
agree that we committed a ministerial error in not deducting bank fees
and indirect selling expenses from U.S. price. We have deducted these
expenses for this amended preliminary determination. There was no
ministerial error in not deducting imputed credit, however, because
only actual selling expenses should be deducted in the middleman
dumping analysis. See Mitsui & Co., Ltd. v. the United States, Slip Op.
97-49 (April 22, 1997) (Mitsui Remand Determination). We stated that:
``[imputed credit expenses and inventory carrying costs]
represent opportunity costs, not actual expenses to the company. In
analyzing whether prices are above or below the cost of production,
it is the Department's practice to base its calculation on actual
costs rather than imputed expenses.'' (Mitsui Remand Determination
at 10.)
Second, petitioners argue that the Department inadvertently based
the middleman dumping analysis on only a portion of Ta Chen's resales
by deleting from the database any resale where the quantity was
reported on a theoretical basis, i.e., for sheet. Petitioners claim
that all reported resales are of subject merchandise regardless of
whether it was resold as a coil or as sheet, because the product
imported was stainless steel sheet in coil, i.e., subject merchandise.
Petitioners argue that, since Ta Chen provided the data for these
sales, converting them from theoretical to actual, it is not necessary
to eliminate any sales from the database.
We agree with petitioners in part. YUSCO reported its sales on an
actual gauge basis, while Ta Chen reported its sales on a nominal
(theoretical) gauge basis. Ta Chen included a variable in its database
that provided the actual gauge of the merchandise it purchased from its
supplier, YUSCO. Ta Chen reported some sales of merchandise for which
no corresponding YUSCO sale was reported, because the actual gauge was
less than 4.75 mm. In the preliminary determination, we intended to
remove only these sales. In doing so, we inadvertently identified these
sales by weight rather than by gauge--that is, we removed from the
database sales that Ta Chen made on a nominal weight basis. For this
amended preliminary determination, we identified these sales by gauge,
and have only removed those sales that have an actual gauge of less
than 4.75 mm.1
---------------------------------------------------------------------------
\1\ We note that we requested that YUSCO report all sales of
merchandise that nominally fit the gauge included in the scope of
the investigation, i.e., with gauge greater than or equal to 4.75
mm. However, YUSCO had reported sales only on an actual basis as of
the time of the preliminary determination, i.e., it reported sales
of merchandise with an actual gauge of greater than or equal to 4.75
mm. We intended to include in our preliminary analysis only Ta
Chen's resales corresponding to merchandise reported by YUSCO. By
letter to YUSCO of November 6, 1998, we have reiterated our request
for data based on the nominal gauge.
---------------------------------------------------------------------------
Third, petitioners claim that the Department made a ministerial
error by converting Ta Chen's acquisition price to U.S. dollars based
on the date of Ta Chen's sale to the first unaffiliated U.S. customer,
instead of the date of YUSCO's invoice to Ta Chen. We disagree that
this was a ministerial error. In accordance with our longstanding
practice, we intentionally based currency conversions on the date of
sale. See 19 CFR 351.415(a) (Currency Conversion).
Fourth, petitioners claim that the Department incorrectly
calculated the percentage of Ta Chen's U.S. sales that are below the
acquisition cost, because we miscalculated the total U.S. sales value
and the total value of sales below acquisition cost.
We agree with petitioners, and have corrected this ministerial
error. In our preliminary calculations, we intended to calculate total
below-acquisition-cost value and total U.S. sales value by multiplying
per unit prices by their corresponding quantities, and then summing
these values. Instead, for both calculations, we first summed per unit
[[Page 66787]]
values and their corresponding quantities, and then we multiplied the
total value by the total quantity. After making the appropriate
correction, we divided the total value of below-acquisition-cost sales
by the total value of all sales, as we did in the Preliminary
Determination, to arrive at the ratio of the below-acquisition-cost-
sales value to the value of all sales to the United States. See the
Analysis Memorandum for the Amended Preliminary Determination (Amended
Preliminary Memo) on file in room B-099 of the Commerce Department.
As a result of the correction of these ministerial errors, we have
determined that Ta Chen sold subject merchandise at a loss because Ta
Chen's prices were, after the deduction of all costs incurred in
selling the merchandise in the United States, lower than its costs of
acquisition from YUSCO, an unaffiliated producer during the POI. See
Amended Preliminary Memo.
In accordance with the methodology we used in Mitsui Remand
Determination, we determined whether a substantial portion of Ta Chen's
U.S. sales were below acquisition costs by comparing the total value of
stainless steel plate sold below acquisition cost to the total value of
all stainless steel plate sales made by Ta Chen during the POI. We
first identified sales below acquisition cost by comparing Ta Chen's
resale price for stainless steel plate sold during the POI to its
acquisition cost for this merchandise. We used YUSCO's invoice price to
Ta Chen as the acquisition cost. We based the U.S. resale prices on Ta
Chen's sales to unaffiliated customers in the United States. From that
starting price we deducted discounts, movement expenses (freight,
insurance, U.S. duties, and brokerage and handling fees), and the
actual selling expenses incurred by Ta Chen (commissions, warehousing
charges, bank charges, and indirect selling expenses), where
applicable. We then compared that price, after deductions, to the
acquisition cost.
Based on these amended findings, we preliminarily determine that Ta
Chen made a substantial portion of its sales below acquisition cost,
because 34.7 percent of Ta Chen's resales to the United States were at
prices below its acquisition cost. As a result of this finding, we have
examined whether Ta Chen's U.S. prices were substantially below its
acquisition costs from YUSCO to determine whether Ta Chen engaged in
middleman dumping during the POI.
As we stated in the Preliminary Determination, Congress has left to
the Department the discretion to devise a methodology which would
accurately capture middleman dumping. See S. Rep. No. 249, 96th Cong.,
1st Sess. at 94 (1979). We have considered the methodology used in Fuel
Ethanol, and have concluded that, given the facts before us for this
amended preliminary determination, the methodology described below is
the appropriate one for purposes of this amended preliminary
determination. To determine the magnitude of the losses incurred by Ta
Chen in selling YUSCO's subject merchandise to the United States during
the POI, we divided the amount of losses by the total sales value of
all sales. By ``amount of losses'' we mean the sum of the cost less the
adjusted sales price of each below-acquisition-cost sale, multiplied by
the respective quantity of each sale. By ``total sales value'' we mean
the sum of the sales price of each sale (whether or not below
acquisition cost) multiplied by its respective quantity. Based upon
this calculation, we have determined that Ta Chen's losses on U.S.
sales of subject merchandise during the POI are 3.00 percent, which we
deem to be substantial. Therefore, we preliminarily find that Ta Chen
engaged in middleman dumping during the POI.
Where a producer sells through an unaffiliated trading company and
has knowledge of the ultimate destination of its merchandise, we
normally focus only on the producer's sales to determine the margin of
dumping. However, as we stated in our Preliminary Determination, very
infrequently, a producer may sell to an unaffiliated trading company
which, in turn, sells the producer's merchandise at prices below the
trading company's acquisition costs, thereby engaging in middleman
dumping. Where we find middleman dumping in an investigation, as here,
we must calculate a cash deposit rate that reflects that middleman
dumping. Additionally, any dumping which occurs from the producer to
the trading company must be included in the margin calculation to
capture the full amount of the dumping. Therefore, we have assigned a
cash deposit rate of 3.08 percent to sales produced by YUSCO and sold
to the United States through Ta Chen. This reflects YUSCO's margin on
U.S. sales to Ta Chen as well as Ta Chen's losses on sales to the
United States.
Amended Preliminary Determination
As a result of our corrections of ministerial errors, we have
determined the following amended weighted-average dumping margins
apply.
------------------------------------------------------------------------
Margin
Manufacturer/exporter percentage
------------------------------------------------------------------------
YUSCO/Ta Chen.............................................. 3.08
All Others................................................. 3.08
------------------------------------------------------------------------
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 normal value exceeds the U.S. price, as indicated
in the chart above. These suspension-of-liquidation instructions will
remain in effect until further notice.
This amended preliminary determination and notice are in accordance
with section 703(d)(2) of the Act (19 CFR 351.224).
Dated: November 27, 1998.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-32212 Filed 12-2-98; 8:45 am]
BILLING CODE 3510-DS-P
