[Federal Register Volume 64, Number 234 (Tuesday, December 7, 1999)]
[Notices]
[Pages 68316-68320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31674]
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DEPARTMENT OF COMMERCE
International Trade Administration
[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.
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SUMMARY: The Department of Commerce 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 the respondent, British Steel Engineering Steels Limited,
and the petitioners, Ispat Inland Inc. and USS/KOBE Steel Co.
[[Page 68317]]
This review covers the period March 1, 1998, through February 28, 1999.
We have preliminarily determined that sales have been made below
normal value. Interested parties are invited to comment on these
preliminary results. If these preliminary results are adopted in our
final results of administrative review, we will instruct the Customs
Service to assess antidumping duties on all appropriate entries.
EFFECTIVE DATE: December 7, 1999.
FOR FURTHER INFORMATION CONTACT: Rebecca Trainor or David J.
Goldberger, Office 2, AD/CVD Enforcement Group I, Import
Administration, Room B099, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington D.C. 20230; telephone (202) 482-4007, or 482-4136,
respectively.
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 (URAA). In addition, unless
otherwise indicated, all citations to the Department of Commerce's (the
Department's) regulations are to the regulations at 19 CFR Part 351
(1998).
SUPPLEMENTAL INFORMATION:
Background
On March 22, 1993, 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 (58 FR 15324).
On March 9, 1999, we published in the Federal Register (64 FR
11439) 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, 1998, through February 28, 1999.
In accordance with 19 CFR 351.213(b)(1), both British Steel
Engineering Steels Limited (BSES) and the petitioners requested that we
conduct this administrative review. We published a notice of initiation
of this antidumping duty administrative review on April 22, 1999 (64 FR
23269).
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,
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 7213.20.00.00 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; 7213.31.60.00; 7213.39.00.30; 7213.39.00.60;
7213.39.00.90; 7213.91.30.00; 7213.91.45.00; 7213.91.60.00; 7213.99.00;
7214.40.00.10, 7214.40.00.30, 7214.40.00.50; 7214.50.00.10;
7214.50.00.30, 7214.50.00.50; 7214.60.00.10; 7214.60.00.30;
7214.60.00.50; 7214.91.00; 7214.99.00; 7228.30.80.00; and
7228.30.80.50. HTSUS subheadings are provided for convenience and
customs purposes. The written description of the scope of this
proceeding is dispositive.
Normal Value Comparisons
To determine whether sales of the subject merchandise by BSES to
the United States were made at less than normal value (NV), we compared
export price (EP) to the NV, as described in the ``Export Price'' and
``Normal Value'' sections of this notice.
Pursuant to section 777A(d)(2) of the Act, we compared the EPs of
individual U.S. transactions to the monthly weighted-average NV of the
foreign like product where there were sales made at prices above the
cost of production (COP), as discussed in the ``Cost of Production
Analysis'' section, below, and where these sales were otherwise in the
ordinary course of trade.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by BSES covered by the description in the ``Scope of
the Review'' section, above, to be foreign like products for purposes
of determining appropriate product comparisons to U.S. sales. We
compared U.S. sales to sales made in the home market within the
contemporaneous window period, which extends from three months prior to
the U.S. sale until two months after the sale. See 19 CFR
351.414(e)(2). Where there were no sales of identical merchandise in
the home market made in the ordinary course of trade to compare to U.S.
sales, we compared U.S. sales to the most similar foreign like product
sold in the ordinary course of trade. In making the product
comparisons, we matched foreign like products based on the physical
characteristics identified in the June 10, 1999, questionnaire in the
following order: chemical composition, shape, cut (i.e., coil or cut-
to-length), size range, and grade.
We have accepted the additional product characteristic variations
reported by BSES for chemical composition, shape, and cut, as these
characteristics have been used for model matching in previous
administrative reviews of BSES' sales. We have not modified the size
range groups from those specified in the questionnaire, as requested by
BSES in its September 24, 1999, letter, because there is no basis on
the record to support BSES' claim that this modification reflects a
``generally accepted dividing line between rod and bar.''
Consistent with our practice (see, e.g., Final Results of
Antidumping Duty Administrative Review: Cold-Rolled Carbon Steel Flat
Products from the Netherlands, 61 FR 48465, 48466, September 13, 1996),
we compared prime quality product sold in the United States to
identical prime quality product sold in the home market. Where there
were no home market sales of identical prime quality product sold in
the ordinary course of trade, we compared the U.S. sales of prime
quality product to the most similar prime quality foreign like product
sold in the ordinary course of trade, based on the characteristics
listed above. There were no U.S. sales of second quality product during
the period of review (POR), March 1, 1998, through February 28, 1999.
Export Price
We based United States price on 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 otherwise indicated by the facts of
record. When sales are made prior to importation through an affiliated
or unaffiliated U.S. sales agent to an unaffiliated customer in the
United States, our practice is to examine several criteria in order to
determine whether the sales are EP sales. Those criteria are: (1)
whether the merchandise was shipped directly from the
[[Page 68318]]
manufacturer to the unaffiliated U.S. customer; (2) whether this was
the customary commercial channel between the parties involved; and (3)
whether the function of the U.S. selling agent was limited to that of a
``processor of sales-related documentation'' and a ``communications
link'' with the unaffiliated U.S. buyer. Where all three criteria are
met, indicating that the activities of the U.S. selling agent are
ancillary to the sale, the Department has determined the sales to be EP
sales (see, e.g., Notice of Final Determination of Sales at Less Than
Fair Value: Stainless Steel Wire Rod from Italy, 63 FR 40422, 40424-25,
July 29, 1998). In the instant review, the merchandise was shipped
directly from the manufacturer to the unaffiliated U.S. customer and
this was the customary channel between the parties involved. The role
of BSES' U.S. subsidiary was limited only to providing marketing
support and referring customer inquiries to the parent company. Thus,
the above-referenced criteria have been met, and we have treated all
U.S. sales as EP sales.
We calculated EP 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,
merchandise processing fees, and U.S. inland freight charges, in
accordance with section 772(c)(2) of the Act. We also made adjustments
for invoice corrections.
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,
the Department compared BSES's volume of home market sales of the
foreign like product to its volume of U.S. sales of the subject
merchandise, in accordance with sections 773(a)(1) (B) and (C) of the
Act. Because BSES' 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. See also 19 CFR
351.404(b).
Many of BSES' home market sales were made to affiliated original
equipment manufacturers (OEMs) and resellers. With respect to
affiliated resellers, BSES reported the sales made by the affiliated
reseller to the unaffiliated customer, in accordance with the
requirements of the Department's questionnaire. It is the Department's
practice, in situations where home market sales are made to affiliated
parties, to determine whether it is appropriate to use such sales as
the basis of NV by comparing the prices of those sales to the prices of
sales to unaffiliated parties, on a model-by-model basis (see, e.g.,
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 10899,
10900, February 28, 1995; and 19 CFR 351.403(c)). With respect to BSES'
home market sales to affiliated OEMs during the POR, we tested these
sales to ensure that, on average, the affiliated-party sales were made
at arm's length. To conduct this test, we compared the weighted-average
gross unit prices of sales to affiliated and unaffiliated customers at
the same level of trade (LOT), where possible, 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 customers in the home market where the prices charged to
an affiliated customer were on average less than 99.5 percent of the
prices charged to unaffiliated customers (see, e.g., Final Results of
Antidumping Duty Administrative Review; Certain Welded Carbon Steel
Pipes and Tubes from Thailand 62 FR 53809, 53817, October 16, 1997).
We did not require BSES to provide downstream sales by the
affiliated OEM customers because these customers further manufactured
the subject merchandise into merchandise not covered by the order. With
respect to downstream sales by the affiliated resellers, we used them
in our determination of NV, where appropriate, because BSES' sales to
its affiliated customers accounted for more than five percent of BSES'
total sales in its home market (see 19 CFR 351.403(d)).
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we based NV on sales at the same LOT as the EP
sale. If NV was calculated at a different LOT, we made an adjustment,
in accordance with section 773(a)(7) of the Act (see ``Level of Trade''
section below).
Level of Trade
In accordance with section 773(a)(1)(B)(i) of the Act, to the
extent practicable, we determine NV based on sales in the comparison
market at the same LOT as the EP transaction. 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 selling, general and
administrative (SG&A) expenses and profit. For EP, the LOT is also the
level of the starting-price sale, which is usually from the exporter to
an unaffiliated U.S. customer. To determine whether NV sales are at a
different LOT than EP sales, we examined 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 a LOT
adjustment under section 773(a)(7)(A) of the Act.
To determine whether different LOTs exist, we examined the
respondent's distribution systems, including selling functions, classes
of customers, and selling expenses. BSES reported two channels of
distribution in the home market: (1) sales produced to order and
shipped from the mill directly to unaffiliated OEMs (Channel 1 sales);
and (2) sales by affiliated resellers to unaffiliated OEMs (Channel 2
sales). In analyzing the information submitted, we found that the two
home market channels differ with respect to selling activities. Channel
2 sales involved additional selling activities including: maintenance
of inventory; small lot sales; cutting into short lengths; and
rebundling into smaller weight bundles. None of these activities is
typical of mill direct sales to Channel 1 customers. Further, we found
that these channels constitute different stages in the marketing
process. Based on this analysis, we find that the two home market
channels of distribution comprise two LOTs.
BSES reported EP sales in the U.S. market, which were made to order
by BSES, and shipped directly to unaffiliated OEMs in the United
States. We found that EP sales involved the same selling functions and
therefore were sold at the same marketing stage as BSES' home market
Channel 1 sales, described above. Therefore, we have determined that
the LOT for all EP sales is the same as Channel 1 in the home market.
Accordingly, we have compared the U.S. sales to sales at the same LOT
in the home market when possible. If we found no contemporaneous home
market Channel 1 sales of the identical or most similar product, we
matched the
[[Page 68319]]
EP sale to home market Channel 2 sales of that product. Because we
compared sales at different LOTs in some instances, we examined whether
a LOT adjustment was appropriate. Based on our analysis, we determined
that there was a pattern of consistent price differences between the
Channel 1 and Channel 2 LOTs in the home market. Therefore, when we
compared sales at different LOTs, we made an adjustment in accordance
with section 773(a)(7)(A) of the Act. (See Memorandum to the File from
The Team dated December 1, 1999, for further explanation.)
Cost of Production Analysis
Pursuant to section 773(b) of the Act, for this POR, we initiated
an investigation of sales at less than the COP. We did so because, in
the final results of the most recent administrative review of BSES, we
determined that BSES made home market sales that were below the COP and
were consequently disregarded (see Final Results of Antidumping Duty
Administrative Review; Certain Hot-Rolled Lead and Bismuth Carbon Steel
Products from the United Kingdom, 64 FR 43673, August 11, 1999).
Therefore, in accordance with section 773(b)(2)(A)(ii) of the Act, we
had reasonable grounds to believe or suspect that BSES made sales at
less than the COP during this review period. Before making any NV
comparisons, we conducted the COP analysis described below.
A. Calculation of COP
Pursuant to section 773(b)(3) of the Act, we calculated the COP
based on the sum of BSES' cost of materials and fabrication employed in
producing the foreign like product, plus amounts for home market
general and administrative expenses. We relied on the home market sales
and COP information provided by BSES in its questionnaire response.
B. Test of Home Market Prices
After calculating COP, we tested whether home market sales of hot-
rolled lead and bismuth carbon steel were made at prices below the 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 invoice corrections, movement
charges, rebates, direct and indirect selling expenses, and packing
costs.
C. Results of COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of the respondent's sales of a specific model 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 the
respondent's sales of a specific model 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 certain below-cost home market sales made by BSES.
Comparisons
Pursuant to section 777A(d)(2) of the Act, 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, and to affiliated
purchasers in the home market to the extent that prices were at arm's
length. We made adjustments to home market price, where applicable, in
accordance with section 773(a)(6) of the Act, for invoice corrections,
rebates, and inland freight. We also made circumstance-of-sale
adjustments for differences in credit, credit insurance and warranty
expenses pursuant to section 773(a)(6)(C)(iii) of the Act. In order to
adjust for differences in packing between the two markets, we increased
home market price by the amount of U.S. packing costs and reduced it by
the amount of home market packing costs, pursuant to 773(a)(6)(A) and
(B) of the Act. We made adjustments, where appropriate, for physical
differences in merchandise, in accordance with section 773(a)(6)(C)(ii)
of the Act, and for differences in LOT, in accordance with section
773(a)(7)(A) of the Act.
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 3/1/98-2/28/99 3.01
(BSES) (formerly United Engineering
Steels Limited)........................
------------------------------------------------------------------------
We will disclose the calculations used in our analysis to parties
to this proceeding within five days of the publication date of this
notice. See 19 CFR 351.224(b). Any interested party may request a
hearing within 30 days of publication. See 19 CFR 351.310(c). Any
hearing, if requested, will be held 44 days after the date of
publication or the first business day thereafter.
Issues raised in the hearing will be limited to those raised in the
respective case briefs and rebuttal briefs. Case briefs from interested
parties and rebuttal briefs, limited to the issues raised in the
respective case briefs, may be submitted not later than 30 days and 35
days, respectively, from the date of publication of these preliminary
results (see 19 CFR 351.309(c) and (d)). Parties who submit case briefs
or rebuttal briefs in this proceeding are requested to submit with each
argument (1) a statement of the issue and (2) a brief summary of the
argument. Parties are also encouraged to provide a summary of the
arguments not to exceed five pages and a table of statutes, regulations
and cases cited.
The Department will subsequently issue the final results of this
administrative review, including the results of its analysis of issues
raised in any such written briefs or at the hearing, if held, not later
than 120 days after the date of publication of this notice.
Interested parties who wish to request a hearing or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, Room B-099, within 30 days of the
date of publication of this notice. Requests should contain: (1) The
party's name, address and telephone number; (2) the number of
participants; and (3) a list of issues to be discussed (see 19 CFR
351.310(c)).
Assessment Rates
The Department shall determine, and the Customs Service shall
assess,
[[Page 68320]]
antidumping duties on all appropriate entries. The Department will
issue appropriate appraisement instructions directly to the Customs
Service upon completion of this review. The final results of this
review shall be the basis for the assessment of antidumping duties on
entries of merchandise covered by this review and for future deposits
of estimated duties. We will instruct the Customs Service to assess
antidumping duties on all appropriate entries covered by this review if
any importer-specific assessment rate calculated in the final results
of this review is above de minimis. For assessment purposes, we intend
to calculate importer-specific assessment rates for the subject
merchandise by aggregating the dumping margins calculated for all U.S.
sales examined and dividing this amount by the total quantity sold.
Cash Deposit Requirements
The following cash deposit requirements will be effective 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 administrative review, as provided by section
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed
company will be that established in the final results of this review,
except if the rate is less than 0.50 percent, and therefore, de minimis
within the meaning of 351.106(c)(1), in which case the cash deposit
rate will be zero; (2) for previously reviewed or 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, a prior review, or
the original less-than-fair-value (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)
the cash deposit rate for all other manufacturers or exporters will
continue to be 25.82 percent, the ``All Others'' rate made effective by
the LTFV investigation. These requirements, when imposed, shall remain
in effect until publication of the final results of the next
administrative review.
Notification to Importers
This notice 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.
This administrative review and notice are published in accordance
with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: December 1, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-31674 Filed 12-6-99; 8:45 am]
BILLING CODE 3510-DS-P
