01-30286. Notice of Preliminary Results of Antidumping Duty New Shipper Review: Structural Steel Beams From Japan

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results in the antidumping duty new shipper review of structural steel beams from Japan.

SUMMARY:

In response to a request from Yamato Kogyo Co., Ltd. (“Yamato Kogyo”), the Department of Commerce (“Department”) is conducting an antidumping duty new shipper review of the antidumping duty order on structural steel beams from Japan. This new shipper review covers imports of subject merchandise from Yamato Kogyo. The period of review is February 11, 2000 through November 30, 2000.

The Department preliminarily determines that Yamato Kogyo has not made sales of structural steel beams from Japan at below normal value during the period of review. If these preliminary results are adopted in our final results of this new shipper review, we will instruct the U.S. Customs Service to liquidate entries during the period of review without regard to antidumping duties.

Interested parties are invited to comment on these preliminary results. See “Preliminary Results of the Review” section, infra.

EFFECTIVE DATE:

December 6, 2001.

FOR FURTHER INFORMATION CONTACT:

Juanita H. Chen or James C. Doyle, Import Administration, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or 202-482-0159, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“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's regulations are to the regulations codified at 19 CFR part 351 (2000). See Antidumping Duties; Countervailing Duties; Final rule, 62 FR 27296 (May 19, 1997) (“AD/CVD Final Rule”).

Background

On June 19, 2000, the Department published in the Federal Register a notice of the antidumping duty order on structural steel beams from Japan. See Structural Steel Beams from Japan: Notice of Antidumping Duty Order, 65 FR 37960 (June 19, 2000). On December 27, 2000, Yamato Kogyo, a producer and exporter of subject merchandise during the period of review (“POR”), requested that the Department conduct an antidumping duty new shipper review of the antidumping duty order. On January 24, 2001, the Department requested that Yamato Kogyo provide: (1) Certification that it has never been affiliated with any exporter or producer who exported the subject merchandise to the United States during the period of investigation (“POI”); (2) a list of all of its affiliates during the POI; and (3) clarification on whether there were shipments of subject merchandise during the review period subsequent to the shipment reported. See Letter from James C. Doyle, Program Manager to Thomas Rogers, Capital Trade Incorporated (January 24, 2001). The Department also conducted an automated customs query on January 24, 2001, and found no shipments by Yamato Kogyo during the POI. See Memorandum to the File from Juanita H. Chen (January 25, 2001). On January 29, 2001, Yamato Kogyo submitted the requested certification, listing and clarification. See Letter from Thomas Rogers to Secretary Evans (January 29, 2001). On January 31, 2001, the Department initiated a new shipper review of the antidumping duty order on structural steel beams from Japan. See Initiation of New Shipper Antidumping Duty Review: Structural Steel Beams From Japan, 66 FR 10668 (February 16, 2001).

On February 16, 2001, the Department issued its antidumping duty questionnaire. Subsequently, the Department corrected the period of review from the requested period of June 1, 2000 through November 30, 2000, to the current period of February 11, 2000 through November 30, 2000. See Memorandum to the File from Juanita H. Chen (February 22, 2001). On February 23, 2001, the Department granted Yamato Kogyo's request to limit its reporting period of home market sales to the three months preceding and two months following the months of the first and last U.S. sales in the POR, noting that such reporting is at Yamato Kogyo's own risk. See Memorandum to the file from Juanita H. Chen (February 23, 2001).

On March 21, 2001, the Department received Yamato Kogyo's Section A response to the questionnaire (“Section A response”). On April 13, 2001, the Department received Yamato Kogyo's Sections B and C responses to the questionnaire (“Sections B/C response”). On August 20, 2001, the Department issued a Sections A-C supplemental questionnaire. On September 18, 2001, the Department received Yamato Kogyo's Sections A-C supplemental response (“Supplemental Response”), along with revised data files.

Under section 751(a)(2)(B)(iv) of the Act, the Department may extend the deadline for completion of a new shipper review if it determines that the case is extraordinarily complicated. On June 12, 2001, the Department fully extended the time limit for the preliminary results of this new shipper review by 120 days until November 27, 2001. See Notice of Extension of Time for the Preliminary Results of the Antidumping Duty New Shipper Review: Structural Steel Beams from Japan, 66 FR 32790 (June 18, 2001).

The Department is conducting this new shipper review in accordance with section 751 of the Act.

Period of Review

The POR is February 11, 2000 through November 30, 2000.

Verification

Pursuant to section 782(i)(3) of the Act, the Department verified the information provided by Yamato Kogyo for use in our preliminary results. We used standard verification procedures, including on-site inspection of Yamato Kogyo's facilities, as well as of relevant sales and financial records. From October 3, 2001 through October 5, 2001, we conducted verification of sales information submitted by Yamato Kogyo. Our verification results are outlined in the public version of the verification report and are on file in the central records unit located in room B-099 of the main Department of Commerce Building, 1401 Constitution Avenue, NW., Washington, DC. See Report on the Sales Verification of Yamato Kogyo Co. Ltd. (November 14, 2001) (“Verification Report”).

Scope of the Review

For purposes of this investigation, the products covered are doubly-symmetric shapes, whether hot- or cold-rolled, drawn, extruded, formed or finished, having at least one dimension of at least 80 mm (3.2 inches or more), whether of carbon or alloy (other than stainless) steel, and whether or not drilled, punched, notched, painted, coated, or clad. These products (“Structural Steel Beams”) include, but are not limited to, wide-flange beams (“W” shapes), bearing piles (“HP” shapes), standard beams (“S” or “I” shapes), and M-shapes.

All products that meet the physical and metallurgical descriptions provided above are within the scope of this investigation unless otherwise excluded. The following products, are outside and/or specifically excluded from the scope of this investigation:

• Structural steel beams greater than 400 pounds per linear foot or with a web or section height (also known as depth) over 40 inches.

The merchandise subject to this investigation is classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheadings: 7216.32.0000, 7216.33.0030, 7216.33.0060, 7216.33.0090, 7216.50.0000, 7216.61.0000, 7216.69.0000, 7216.91.0000, 7216.99.0000, 7228.70.3040, 7228.70.6000. Although the HTSUS subheadings are provided for convenience and Customs purposes, the written description of the merchandise under investigation is dispositive.

Facts Available

Section 776(a) of the Act provides that, if an interested party withholds information that has been requested by the Department, fails to provide such information in a timely manner or in the form or manner requested, significantly impedes a proceeding under the antidumping statute, or provides information which cannot be verified, the Department shall use, subject to sections 782(d) and (e) of the Act, facts otherwise available in reaching the applicable determination. Pursuant to section 782(e), the Department shall not decline to consider submitted information if all of the following requirements are met: (1) The information is submitted by the established deadline; (2) the information can be verified; (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination; (4) the interested party has demonstrated that it acted to the best of its ability; and (5) the information can be used without undue difficulties. We have applied facts available for the reported payment date pursuant to section 776(a) of the Act because Yamato Kogyo did not report payment date, as requested by the Department. When asked for an explanation, it stated that it “cannot readily {report} the specific payment date for each transaction” and instead reported the payment due date based on the payment terms. See Sections B/C response at B-14. At verification, we noted the actual payment date appears on the receipt of payment. See Verification Report at 12. These receipts of payments show that payment on the invoice is made well in advance of the actual due date. Accordingly, we have used facts available for payment date, in order to calculate a more accurate credit expense by taking the simple average of the number of days between the shipment date and actual payment date, from those home market sales reviewed at verification for which actual payment date information is available. Additionally, for those home market sales for which we have actual payment date information, we have used the actual payment date to calculate the credit expense.

Product Comparisons

In accordance with section 771(16) of the Act, we considered all structural steel beam products covered by the “Scope of the Review” section of this notice, supra, which were produced and sold by Yamato Kogyo in the home market during the POR, to be foreign like products for the purpose of determining appropriate product comparisons to U.S. sales of structural steel beam products. We have relied on four characteristics to match U.S. sales of subject merchandise to comparison sales of the foreign like product: hot/cold formed, shape/size, strength/grade, and coating (listed in order of preference).

Export Price/Constructed Export Price

In accordance with section 772(a) of the Act, export price (“EP”) is the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States. In accordance with section 772(b) of the Act, constructed export price (“CEP”) is the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. For purposes of this review, Yamato Kogyo has classified its sale(s) as EP sales. See Sections B/C response, at C-11. Yamato Kogyo identified one channel of distribution (sales to distributors in the U.S. market) for its U.S. sale(s) during the POR. Id. at C-13. Based on Yamato Kogyo's description of its U.S. sales process, that it sells the merchandise directly to unaffiliated distributors in the U.S. market, and did not sell in the U.S. through an affiliated U.S. importer, we preliminarily determine that Yamato Kogyo's sale(s) were EP sales. See Section A response, at A-8. We calculated EP in accordance with section 772(a) of the Act. We based EP on packed prices for export to distributors in the U.S. market. We made deductions for foreign inland freight, foreign brokerage and handling, foreign inland and marine insurance, and credit expenses in accordance with section 772(c) of the Act.

Normal Value

In accordance with section 773(a)(1)(C) of the Act, to determine whether there was 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 greater than or equal to five percent of the aggregate volume of U.S. sales), we compared Yamato Kogyo's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise. Because Yamato Kogyo'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. We therefore based NV on home market sales to unaffiliated purchasers and to those affiliated customer sales which passed the arm's length test, as discussed, infra, made in the usual commercial quantities and in the ordinary course of trade. We made adjustments, where applicable, for movement expenses (i.e., inland freight, warehousing expense, and inland insurance) in accordance with section 773(a)(6)(B) of the Act. We recalculated credit expenses, where appropriate, using actual payment dates or the average of actual payment dates reported. See Facts Available section of this notice, supra; Verification Report, at 12; Analysis Memorandum for Yamato Kogyo Co., Ltd. (November 27, 2001) at 3. Additionally, in accordance with section 773(a)(6), we deducted home market packing costs and added U.S. packing costs.

Arm's Length Sales

Yamato Kogyo reported that it made home market sales of subject merchandise to affiliates, and also reported that it did not make sales of subject merchandise to affiliated parties for consumption. See Section A response, at A-3; see also Yamato Kogyo's Supplemental Response, at 11-12.

If any sales to affiliated customers in the home market are not made at arm's length prices, we exclude them from our analysis because we consider them to be outside the ordinary course of trade. To test whether sales were made at arm's length prices, we compare, on a model-specific basis, the starting prices of sales to affiliated and unaffiliated customers, net of all movement charges, direct selling expenses, and packing. Where prices to the affiliated party were on average 99.5 percent or more of the price to the unaffiliated parties, we determine that sales made to the affiliated party were at arms's length. See 19 CFR 351.403(c). In instances where no price ratio can be constructed for an affiliated customer because identical merchandise was not sold to unaffiliated customers, we are unable to determine that these sales were made at arm's length prices and, therefore, exclude them from our analysis. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat Products from Argentina, 58 FR 37062, 37077 (July 9, 1993). In our home market NV calculation, we have included Yamato Kogyo's sales to its affiliated customers because those sales pass the Department's arm's length test.

Date of Sale

Yamato Kogyo stated that it reported its home market sales based on the shipment date of such sales. See Verification Report at Exhibit 1. Yamato Kogyo explained that “the terms of the sale may change up to the date of shipment.” See Sections B/C response, at B-13. Yamato Kogyo stated that, for the U.S. market, it issues the invoice when it ships the merchandise, and for the home market, it issues the invoice either: (1) the day of shipment, when the merchandise is loaded onto the barge (for sales shipped by barge); or (2) the day following shipment, when the merchandise is received by the customer (for sales shipped by truck). See Section A response, at 13. Section 351.401(i) of the Department's regulations states that the Department will normally use the date of invoice, as recorded in the exporter's or producer's records kept in the ordinary course of business, as the date of sale, but may use a date other than the date of invoice if it better reflects the date on which the material terms of sale are established. The preamble to these regulations provides an explanation of this policy, as well as examples of when the Department may choose to base the date of sale on a date other than the date of invoice. See AD/CVD Final Rule, 62 FR at 27348-49. From Yamato Kogyo's response, it appears that the material terms of sale are established by the date of shipment. Accordingly, for these preliminary results, in accordance with 19 CFR 351.401(i), we based date of sale on the shipment date.

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 EP transactions. As noted in the “Export Price/Constructed Export Price” section, supra, we preliminarily determine that Yamato Kogyo's U.S. sale(s) were EP sales. The NV LOT is that of the starting-price sales in the comparison market or, when NV is based on CV, that of the sales from which we derive SG&A expenses and profit. For EP sales, the LOT is also the level of the starting-price sale, which is usually from the exporter to the unaffiliated U.S. customer.

To determine whether NV sales are at a different LOT than EP 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 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 an LOT adjustment under section 773(a)(7)(A) of the Act.

In the present review, Yamato Kogyo stated that it is not claiming a LOT adjustment. However, to determine whether an adjustment is nevertheless necessary, in accordance with the principles discussed above, we examined information regarding the distribution systems and selling functions in both the United States and Japanese markets.

For the LOT in the home market, Yamato Kogyo stated that all sales were shipped directly to the final customer, either to trading companies or general contractors, and for the LOT in the U.S. market, stated that all sales were made to distributors. Yamato Kogyo reported two channels of distribution in the home market: (1) sales to trading companies; and (2) direct sales to general contractors. Yamato Kogyo reported one channel of distribution in the U.S. market: sales to unaffiliated distributors.

For sales in the home market, Yamato Kogyo asserts the sales are “effectively” through a single sales channel, i.e. from Yamato Kogyo to the customer. For sales to trading companies in the home market, Yamato Kogyo reported that the trading company issues the purchase order and makes payment, however Yamato Kogyo makes shipments directly to the trading company's customer (either a distributor or a general contractor/construction company). For sales to general contractors in the home market, Yamato Kogyo deals directly with the general contractor. For sales shipped by barge, Yamato Kogyo issues the invoice when the merchandise is loaded, and for sales shipped by truck, Yamato Kogyo issues the invoice the day the merchandise is received by the customer (usually the day following shipment). In some cases, Yamato Shoji issues the invoice to the customer. Yamato Kogyo (and in some cases, Yamato Shoji) makes the freight and delivery arrangements, provides technical information, and performs sales promotion activities such as sales calls. Based on our review of the selling functions performed in the channels of distribution in the home market, there do not appear to be any substantial differences in selling activity when the customer is a trading company versus a general contractor. Accordingly, we preliminarily determine that there is one LOT in the home market.

For sales to the U.S. market, Yamato Kogyo sold and shipped directly to an unaffiliated distributor. Yamato Kogyo issues the invoice when it ships the merchandise. For sales to the U.S. market, Yamato Kogyo makes the freight arrangements but stated that it performs little other selling activities or services. We preliminarily determine there is one LOT in the U.S. market.

Based on our analysis of the selling functions performed for sales in the home market and EP sales in the U.S. market, we preliminarily determine that Yamato Kogyo performs significantly more selling functions in the home market than for the U.S. market; thus, these sales are made at different LOTs. However, because there is only one LOT in the home market, we cannot determine if there is a pattern of consistent price differences between the sales on which NV is based and the comparison market sales at the LOT of the export transaction, and do not have the means to calculate a LOT adjustment. Accordingly, we have not made a LOT adjustment.

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(a) of the Act.

Preliminary Results of Review

As a result of our review, we preliminarily determine that the following weighted-average dumping margin exists for the period February 11, 2000 through November 30, 2000:

Producer/Manufacturer/Exporter	Weighted-average margin (percent)
Yamato Kogyo, Co. Ltd	0.00

In accordance with 19 CFR 351.224(b), the Department will disclose to parties to this proceeding the calculations performed in connection with these preliminary results within five days of the date of publication of this notice.

Pursuant to 19 CFR 351.309, interested parties may submit written comments on these preliminary results. Case briefs must be submitted no later than 30 days after the date of publication of this notice. Rebuttal briefs, which must be limited to issues raised in the case briefs, must be submitted no later than five days after the time limit for filing case briefs. Parties submitting 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. Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f). Also, within 30 days of the date of publication of this notice, an interested party may request a public hearing on arguments to be raised in the case and rebuttal briefs. See 19 CFR 351.310(c). Unless the Secretary specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs, or the first working day thereafter. The Department will issue the final results of this new shipper review, including the results of its analysis of issues raised in any case or rebuttal brief, within 120 days of publication of these preliminary results.

Assessment

The Department shall determine, and the U.S. Customs Service (“Customs”) shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b), we have calculated exporter/importer-specific assessment rates. We calculated importer-specific duty assessment rates on a unit value per metric ton basis by summing the dumping margins on U.S. sales, and then dividing this sum by the total metric tons of all U.S. sales examined. If these preliminary results are adopted in our final results, we will instruct Customs not to assess antidumping duties on the merchandise subject to review. Upon completion of this review, the Department will issue appraisement instructions directly to Customs.

Cash Deposit

The following cash deposit requirements will be effective upon publication of the final results of this new shipper review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this new shipper review, as provided by section 751(a)(1) of the Act: (1) The cash deposit rate for the reviewed company will be the rate established in the final results of this new shipper review (except that no deposit will be required if the rate is zero or de minimis, i.e., less than 0.5 percent); (2) for previously investigated companies not listed above, the cash deposit rate 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 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) if neither the exporter nor the manufacturer is a firm covered in this review or the original LTFV investigation, the cash deposit rate will continue to be the “all others” rate of 37.13 percent established in the LTFV investigation. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next review.

Notification to Interested Parties

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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 new shipper review and notice are issued and published in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.

Dated: November 27, 2001.

Richard W. Moreland,

Acting Assistant Secretary for Import Administration.