[Federal Register Volume 61, Number 236 (Friday, December 6, 1996)]
[Notices]
[Pages 64666-64669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31104]
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DEPARTMENT OF COMMERCE
[A-122-601]
Brass Sheet and Strip From Canada; 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 a request from one respondent, Wolverine, the
Department of Commerce (the Department) is conducting an administrative
review of the antidumping duty order on brass sheet and strip from
Canada. The review covers one manufacturer/exporter of the subject
merchandise to the United States for the period January 1, 1995 through
December 31, 1995.
We have preliminarily determined that U.S. sales have not been made
below the normal value (NV). If these preliminary results are adopted
in our final results of administrative review, we will not require cash
deposits. Following our final determination, we will instruct U.S.
Customs to assess antidumping duties on all appropriate entries.
Interested parties who submit arguments in this proceeding are
requested to submit with the argument (1) a statement of the issue, and
(2) a brief summary of the argument.
EFFECTIVE DATE: December 6, 1996.
FOR FURTHER INFORMATION CONTACT: Maureen McPhillips or Linda Ludwig,
Office of AD/CVD Enforcement, Group III, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, D.C. 20230; telephone:
(202) 482-3019 or 482-3833, respectively.
SUPPLEMENTARY INFORMATION:
Background
On January 12, 1987, the Department published in the Federal
Register (52 FR 1217) the antidumping duty order on brass sheet and
strip (BSS) from Canada. On January 26, 1996, the Department published
in the Federal Register a notice of ``Opportunity to Request an
Administrative Review'' of this
[[Page 64667]]
antidumping duty order for the period January 1, 1995 through December
31, 1995 (61 FR 2488). We received a timely request for review from the
respondent, Wolverine Tube (Canada), Inc. (Wolverine). On February 20,
1996, the Department initiated an administrative review of Wolverine
(61 FR 6348). The period of review is January 1, 1995 through December
31, 1995.
The Applicable Statute and Regulations
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Tariff Act), are references to the provisions
effective January 1, 1995, the effective date of the amendments made to
the Tariff Act by the Uruguay Round Agreements Act. 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).
Under the Act, the Department may extend the deadline for
completion of administrative reviews if it determines that it is not
practicable to complete the review within the statutory time limit of
365 days. On October 1, 1996, the Department extended the time limit
for preliminary results in this case. See Brass Sheet and Strip from
Canada; Antidumping Administrative Review; Extension of Time Limit, 61
FR 51261.
Scope of the Review
Imports covered by this review are shipments of BSS, other than
leaded and tin BSS. The chemical composition of the covered products is
currently defined in the Copper Development Association's (C.D.A.) 200
series or the Unified Numbering System (U.N.S.) C2000. Products whose
chemical composition is defined by other C.D.A. or U.N.S. series are
not covered by this order.
The physical dimensions of the products covered by this review are
BSS of solid rectangular cross section over 0.006 inches (0.15
millimeters) in finished thickness or gauge, regardless of width. Coil,
wound-on-reels (traverse wound), and cut-to-length products are
included. These products are currently classifiable under Harmonized
Tariff Schedule (HTS) subheadings 7409.21.00 and 7409.29.00. Although
the HTS subheadings are provided for convenience and for Customs
Service (Customs) purposes, the written description of the scope of
this order remains dispositive.
Pursuant to the final affirmative determination of circumvention of
the antidumping duty order, we determined that brass plate used in the
production of BSS falls within the scope of the antidumping duty order
on BSS from Canada. See Brass Sheet and Strip from Canada: Final
Affirmative Determination of Circumvention of Antidumping Duty Order,
58 FR 33610 (June 18, 1993).
The review covers one Canadian manufacturer/exporter, Wolverine,
and the period January 1, 1995 through December 31, 1995.
United States Price (USP)
In calculating USP for Wolverine, the Department treated
respondent's sales as export price (EP) sales, as defined in section
772(a) of the Tariff Act, because the subject merchandise was sold to
unaffiliated U.S. purchasers prior to the date of importation and the
use of constructed export price was not indicated by the facts of
record.
We calculated EP based on packed, delivered, duty-paid prices to
unaffiliated customers in the United States. We made deductions from
the gross unit price, where appropriate, for inland freight from the
plant/warehouse to the port of exit, brokerage and handling,
international freight, and U.S. customs duty, in accordance with
section 772(c)(2)(A) of the Tariff Act. No other adjustments to USP
were claimed or allowed.
Cost of Production Analysis
Based on the fact that the Department disregarded sales below the
cost of production (COP) in the 1992 administrative review of Wolverine
(the most recently completed review at the time of initiation in this
review), the Department found reasonable grounds, in this review, in
accordance with section 773(b)(2)(A)(ii) of the Tariff Act, to believe
or suspect that respondent made sales in the home market at prices
below the cost of producing the merchandise. See Brass Sheet and Strip
from Canada; Final Results of Antidumping Administrative Review, 60 FR
49582 (September 26, 1995). Therefore, pursuant to section 773(b)(1) of
the Tariff Act, the Department initiated an investigation to determine
whether Wolverine made home market sales during the POR at prices below
their cost of production.
A. Calculation of COP
In accordance with section 773(b)(3) of the Tariff Act, we
calculated the COP based on the sum of the costs of materials and
fabrication employed in producing the foreign like product, plus
amounts for home market selling, general and administrative expenses
(SG&A) and the cost of all expenses incidental to placing the foreign
like product in condition packed ready for shipment. We relied on the
home market sales and COP information provided by Wolverine in its
questionnaire responses.
B. Test of Home Market Prices
We used the respondent's weighted-average COP, as adjusted (see
above), for the period January 1995 to December 1995. We compared the
weighted-average COP figures to home market sales of the foreign like
product as required under section 773(b) of the Act. In determining
whether to disregard home-market sales made at prices below the COP, we
examined whether (1) within an extended period of time, such sales were
made in substantial quantities, and (2), such sales were made at prices
which permitted the recovery of all costs within a reasonable period of
time. On a product-specific basis, we compared the COP to the home
market prices, less any applicable movement charges, rebates,
discounts, 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 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 a respondent's sales of a
given product during the POR were at prices less than the COP, we found
that the below-cost sales of that model were made in ``substantial
quantities,'' in accordance with section 773(b)(2)(B) of the Act, and
were not 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. When we found that below-cost sales had been made in
``substantial quantities'' and were not at prices which would permit
recovery of all costs within a reasonable period of time, we
disregarded the below-cost sales in accordance with section 773(b)(1)
of the Act. In this review we disregarded those home market sales below
cost.
Level of Trade
As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA
accompanying the URAA at 829-831, to the extent practicable, the
Department will calculate NV based on sales at the same level of trade
as the U.S. sale. 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 a
[[Page 64668]]
different level of trade. See Final Determination of Sales at Less than
Fair Value; Certain Pasta from Italy, 61 FR 30326 (June 14, 1996).
In accordance with section 773(a)(7)(A) of the Act, if we compare
U.S. sales at one level of trade to NV sales at a different level of
trade, the Department will adjust the NV to account for the difference
in level of trade if two conditions are met. First, there must be
differences between the actual selling functions performed by the
seller at the level of trade of the U.S. sale and the level of trade of
the normal value sale. Second, the difference must affect price
comparability as evidenced by a pattern of consistent price differences
between sales at the different levels of trade in the market in which
NV is determined.
In order to determine that there is a difference in level of trade,
the Department must find that two sales have been made at different
phases of marketing, or the equivalent. Different phases of marketing
necessarily involve differences in selling functions, but differences
in selling functions (even substantial ones) are not alone sufficient
to establish a difference in the level of trade. Similarly, seller and
customer descriptions (such as ``distributor'' and ``wholesaler'') are
useful in identifying different levels of trade, but are insufficient
to establish that there is a difference in the level of trade.
In implementing this principle in the Department's reviews, we
obtain information about the selling activities of the producers/
exporters associated with each phase of marketing, or the equivalent.
We ask each respondent to establish any claimed LOTs based on these
marketing activities and selling functions.
In reviewing the selling functions reported by the respondents, we
consider all types of selling activities performed on both a
qualitative and quantitative basis. In analyzing whether separate LOTs
existed in this review, we found that no single selling activity in the
brass sheet and strip industry was sufficient to warrant a separate LOT
(see Proposed Regulations, 61 FR, at 7348).
In determining whether separate LOTs exist in the home market, the
Department considers the level-of-trade claims of each respondent after
all adjustments. To test the claimed LOTs, we analyze the selling
activities associated with the classes of customers and marketing
phases respondents report. In applying this test, we expect that, if
claimed LOTs are the same, the functions and activities of the seller
should be similar. Conversely, if a party claims that LOTs are
different for different groups of sales, the functions and activities
of the seller should be dissimilar. The Department does not only count
activities, but weighs the overall function performed by each claimed
level of trade.
In its initial questionnaire response and in response to the
Department's supplemental questionnaire for this administrative review,
Wolverine maintains that it sells to three distinct levels of trade
(LOT) in the home market: Original equipment manufacturers (OEMs),
general jobber distributors, and processing distributors. Wolverine
sells only to processing distributors in the United States market.
In the final results of the previous administrative review, 61 FR
46618 (September 4, 1996), we agreed with petitioners' contention that
Wolverine did not adequately identify the differences among the selling
functions corresponding to what it claimed to be three different home
market levels of trade. For these preliminary results we requested and
received further information from Wolverine. In its response Wolverine
distinguished between two levels of trade; sales to OEMS and sales to
distributors. To test Wolverine's claimed LOTs, we analyzed home market
selling activities associated with each class of customer and marketing
phase reported by Wolverine (see discussion above). We analyzed the
evidence on the record for this administrative review and concluded
that Wolverine had sufficiently documented and justified its claimed
differences in level of trade between sales to OEMs and sales to
distributors in the home market. For example, the selling functions in
the areas of technical and product support, customer service, freight
and delivery, administrative resources expended, procurement and
resourcing services, and packing requirements are significantly
different between the two levels of trade. In addition, since the vast
majority of the home market sales of the subject merchandise was to
distributors and not to OEMs, a pattern of ``consistent'' price
differences between the two levels of trade could not be established.
However, the relatively few sales made to OEMs were at prices
considerably higher than the prices charged to distributors for the
same merchandise.
The evidence on record in this period of review indicates that the
home market data base has sales of the identical subject merchandise
within the same month to the same level of trade (i.e., processing
distributors) as Wolverine's U.S. sales. Therefore, the Department
compared Wolverine's U.S. sales only to those home market sales at the
same level of trade. No LOT adjustment was, therefore, necessary.
Normal Value
Based on the comparison of the aggregate quantity of home market
and U.S. sales, and absent any information that a particular market
situation in the exporting country does not permit a proper comparison,
we determined that the quantity of the foreign like products sold in
the exporting country was sufficient to permit a proper comparison with
the sales of the subject merchandise to the United States, pursuant to
section 773(a) of the Tariff Act. Therefore, in accordance with section
773(a)(1)(B)(i) of the Tariff Act, we based NV on the prices at which
the foreign like products were first sold for consumption in the
exporting country.
Pursuant to section 777A(d)(2) of the Tariff Act, we compared the
EPs of individual transactions to the monthly weighted-average price of
sales of the foreign like product. We compared EP sales to sales in the
home market of identical merchandise.
We based NV on the price at which the foreign like product is first
sold for consumption in the exporting country, in the usual commercial
quantities, and in the ordinary course of trade and, to the extent
practicable, at the same level of trade as the EP sale, in accordance
with section 773(a)(1)(B)(i) of the Tariff Act. We adjusted for
movement expenses in accordance with section 773(a)(6)(B)(ii) of the
Tariff Act. We made circumstance-of-sale (COS) adjustments pursuant to
section 773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 353.56 by
deducting home market credit expenses and adding U.S. credit expenses.
We increased home market price by U.S. packing costs in accordance with
section 773(a)(6)(A) of the Tariff Act and reduced it by home market
packing costs in accordance with section 773(a)(6)(B) of the Tariff
Act. Prices were reported net of value-added taxes (VAT) and,
therefore, no adjustment for VAT was necessary. No other adjustments
were claimed or allowed.
Preliminary Results of Review
As a result of this review, we preliminarily determine that the
following weighted-average dumping margin exists:
[[Page 64669]]
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Margin
Manufacturer/exporter Period (percent)
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Wolverine Tube (Canada), Inc.... 01/01/95-12/31/95.......... 0.20
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Parties to the proceeding may request disclosure within five 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 date of publication, or the
first workday thereafter. Case briefs and/or 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 the case briefs and comments, may be filed
not later than 37 days after the date of publication. Parties who
submit argument in this proceeding are requested to submit with the
argument (1) a statement of the issue and (2) a brief summary of the
argument. The Department will issue the final results of this
administrative review, including the results of its analysis of issues
raised in any such written comments or at a hearing, within 120 days of
publication of these preliminary results.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between USP and NV may vary from the percentage stated
above. The Department will issue appraisement instructions directly to
the Customs Service. The final results of this review shall be the
basis for assessment of antidumping duties, if any, on entries of
merchandise covered by the determination and for future deposits of
estimated duties, if any.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of this administrative review for
all shipments of BSS from Canada entered, or withdrawn from warehouse,
for consumption on or after the publication date of the final results
of this administrative review, as provided by section 751(a)(1) of the
Tariff Act: (1) The cash deposit rate for Wolverine will be the rate
established in the final results of this administrative review (except
that if the weighted-average margin is less than 0.5 percent, i.e., is
de minimis, no cash deposit will be required); (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 most recent
rate published in the final determination or final results for which
the manufacturer or exporter received a company-specific rate; (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 will be 8.10 percent, the rate
established in the LTFV investigation, 52 FR 1217 (January 12, 1987).
This notice serves as a preliminary reminder to parties subject to
administrative protective orders (APOs) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d). Timely written notification of
the return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and terms of an APO is a sanctionable violation.
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 Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: December 2, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-31104 Filed 12-5-96; 8:45 am]
BILLING CODE 3510-DS-P
