[Federal Register Volume 59, Number 29 (Friday, February 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-3182]
[[Page Unknown]]
[Federal Register: February 11, 1994]
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DEPARTMENT OF COMMERCE
[A-201-504]
Porcelain-on-Steel Cooking Ware From Mexico; Preliminary Results
of Antidumping Duty Administrative Review
AGENCY: International Trade Administration/Import Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: In response to a request by petitioner, the Department of
Commerce is conducting an administrative review of the antidumping duty
order on porcelain-on-steel cooking ware from Mexico. The review covers
shipments of this merchandise to the United States during the period
December 1, 1990 through November 30, 1991. The review indicates the
existence of dumping margins during the review period. We invite
interested parties to comment on these preliminary results.
EFFECTIVE DATE: February 11, 1994.
FOR FURTHER INFORMATION CONTACT:
Lorenza Olivas or Richard Herring, Office of Countervailing Compliance,
International Trade Administration, U.S. Department of Commerce,
Washington, DC 20230; telephone: (202) 482-2786.
SUPPLEMENTARY INFORMATION:
Background
On December 2, 1991, the Department of Commerce (the Department)
published in the Federal Register a notice of ``Opportunity to Request
Administrative Review'' (56 FR 61228) of the antidumping duty order on
porcelain-on-steel cooking ware from Mexico for the period December 1,
1990 through November 30, 1991. On December 12, 1991, petitioner
General Housewares Corporation requested an administrative review. We
initiated the review on January 23, 1992 (57 FR 2704). The Department
is conducting the administrative review in accordance with section 751
of the Tariff Act of 1930, as amended (the Tariff Act).
Scope of Review
Imports covered by this review are shipments of porcelain-on-steel
cooking ware, including tea kettles, which do not have self-contained
electric heating elements. All of the foregoing are constructed of
steel and are enameled or glazed with vitreous glasses. This
merchandise is currently classifiable under Harmonized Tariff Schedule
(HTS) item number 7323.94.00. Kitchenware currently entering under HTS
item number 7323.94.00.30 is not subject to the order. The HTS item
numbers are provided for convenience and Customs purposes. The written
description remains dispositive.
The review covers two manufacturers/exporters, APSA and CINSA, of
Mexican porcelain-on-steel cooking ware.
United States Price
In calculating U.S. price, the Department used purchase price and
exporter's sales price, as defined in section 772 of the Tariff Act.
For those sales made directly to unrelated parties prior to importation
into the United States, we based the United States price on purchase
price, in accordance with section 772(b) of the Act. In those cases
where sales were made through a related sales agent in the United
States to an unrelated purchaser prior to the date of importation, we
also used purchase price as the basis for determining U.S. price. For
the latter sales, the Department determined that purchase price was the
appropriate determinant of United States price because the merchandise
was shipped directly from the manufacturer to the unrelated buyers,
without being introduced into the inventory of the related selling
agent. Moreover, direct shipment from the manufacturers to the
unrelated buyers was the customary commercial channel for sales of this
merchandise between the parties involved. Finally, the related selling
agent located in the United States acted only as a processor of sales-
related documentation and a communication link with the unrelated U.S.
buyers.
Where all the above elements are met, we regard, the routine
selling functions of the exporter as merely having been relocated
geographically from the country of exportation to the United States,
where the sales agent performs them. Whether these functions take place
in the United States or abroad does not change the substance of the
transactions or the functions themselves.
Where sales to the first unrelated purchaser occurred after
importation into the United States, we based U.S. price on exporter's
sales price, in accordance with section 772(c) of the Tariff Act.
Purchase price and exporter's sales price (ESP) were based on the
packed, f.o.b. price to unrelated purchasers in the United States. We
made deductions from purchase price and ESP, where applicable, for
brokerage, foreign inland freight and insurance and U.S. import duties,
in accordance with section 772(d)(2) of the Act. We also made
deductions for discounts and rebates. We made further deductions from
ESP, where applicable, for commissions, credit expenses and indirect
selling expenses, pursuant to sections 772(e)(1) and (2) of the Act.
In addition, we made adjustments for the value added tax. On
October 7, 1993, the United States Court of International Trade (CIT),
in Federal-Mogul Corp. and the Torrington Co. v. United States, Slip
Op. 93-194 (CIT, October 7, 1993), rejected the Department's
methodology for calculating an addition to USP under section
772(d)(1)(C) of the Tariff Act to account for taxes that the exporting
country would have assessed on the merchandise had it been sold in the
home market. The CIT held that the addition to USP under section
772(d)(1)(C) of the Tariff Act should be the result of applying the
foreign market tax rate to the price of the United States merchandise
at the same point in the chain of commerce that the foreign market tax
was applied to foreign market sales. Federal-Mogul, Slip Op. 93-194 at
12.
The Department has changed its methodology in accordance with the
Federal-Mogul decisions. The Department added to USP the result of
multiplying the foreign market tax rate by the price of the United
States merchandise at the same point in the chain of commerce that the
foreign market tax was applied to foreign market sales. The Department
also adjusted the USP tax adjustment and the amount of tax included in
FMV. These adjustments deduct the portions of the foreign market tax
and the USP tax adjustment that are the result of expenses that are
included in the foreign market price used to calculate foreign market
tax and are included in the United States merchandise price used to
calculate the USP tax adjustment and that are later deducted to
calculate FMV and USP. These adjustments to the amount of the foreign
market tax and the USP tax adjustment are necessary to prevent our new
methodology for calculating the USP tax adjustment from creating
antidumping duty margins where no margins would exist if no taxes were
levied upon foreign market sales.
This margin creation effect is due to the fact that the bases for
calculating both the amount of tax included in the price of the foreign
market merchandise and the amount of the USP tax adjustment include
many expenses that are later deducted when calculating USP and FMV.
After these deductions are made, the amount of tax included in FMV and
the USP tax adjustment still reflects the amounts of these expenses.
Thus, a margin may be created that is not dependent upon a difference
between USP and FMV, but is the result of the price of the United
States merchandise containing more expenses than the price of the
foreign market merchandise. The Department's policy to avoid the margin
creation effect is in accordance with the United States court of
Appeals' holding that the application of the USP tax adjustment under
section 772(d)(c) of the Tariff Act should not create an antidumping
duty margin if pre-tax FMV does not exceed USP. Zenith Electronics
Corp. v. United States, 988 F.2d 1573, 1581 (Fed. Cir. 1993). In
addition, the CIT has specifically held that an adjustment should be
made to mitigate the impact of expenses that are deducted form FMV and
USP upon the USP tax adjustment and the amount of tax included in FMV.
Daewoo Electronics Co., Ltd. v. United States (Daewoo), 760 F. Supp.
200, 208 (CIT, 1991). However, the mechanics of the Department's
adjustments to the USP tax adjustment and the foreign market tax amount
as described above are not identical to those suggested in Daewoo.
Sales or merchandise manufactured by APSA which entered the United
States between December 1, 1990 and December 31, 1991, have been
assessed countervailing duties; therefore, they are entitled to an
upward adjustment to the U.S. price pursuant to section 772(d)(1)(D) of
the Tariff Act. As a result, we have increased APSA's U.S. price by the
amount of the export subsidies found in the countervailing duty order
on porcelain-on-steel cooking ware from Mexico.
Foreign Market Value
In calculating foreign market value, the Department used home
market price, as defined in section 773 of the Tariff Act, for APSA. We
also used home market price for CINSA, when sufficient quantities of
such or similar merchandise were sold in the home market, at or above
the cost of production, to provide a basis for comparison. Home market
price was based on the packed, ex-factory or delivered price to related
and unrelated purchasers in the home market. In our margin
calculations, we used related and unrelated party sales because we
found that the prices were comparable. Where applicable, we made
deductions from the home market price for inland freight and insurance,
discounts, rebates and home market packaging. We made an adjustment to
home market price, where appropriate, for physical differences in the
merchandise, in accordance with 19 CFR 353.57.
For comparisons involving both purchase price and exporter's sales
price, we included in the foreign market value, the amount of value
added tax collected in the home market. We also calculated the amount
of the tax that was due solely to the inclusion of price deductions in
the original tax base (i.e., the tax rate times the sum of any
adjustments, expenses, charges, and offsets that were deducted from the
tax base). This amount was deducted from the amount of value added tax
collected in the home market. By making this additional tax adjustment,
we avoid a distortion that would cause the creation of a dumping margin
even when pre-tax dumping is zero.
For comparisons to purchase price, pursuant to section 773(a)(4)(B)
and 19 CFR 353.56(a)(2), we made a circumstances-of-sale adjustment,
where appropriate, for differences in credit expenses.
For comparisons involving ESP transactions, we made further
deductions from home market price, where appropriate, for credit
expenses and commissions, and we made an adjustment to home market
price for indirect selling expenses, in accordance with 19 CFR
353.56(b). In addition, we calculated a re-adjustment of the amount of
tax on the U.S. direct selling expenses added to foreign market value
by applying the tax rate to those expenses. This re-adjustment amount
was also added to foreign market value.
For CINSA's home market models for which there were insufficient
sales at or above the cost of production (COP), we used constructed
value. (See, Office of Accounting COP analysis memorandum dated
November 5, 1993 (OA memorandum)). Constructed value consists of the
sum of materials, fabrication, overhead, general expenses, profit, and
U.S. packing. In accordance with section 773(e)(1)(B) (i) and (ii), we
used: (1) The actual amount of general expenses because those amounts
were more than the statutory minimum of ten percent and (2) the actual
amount of profit where it exceeded the statutory minimum of eight
percent.
In our COP analysis, we have relied on COP information submitted by
CINSA, except in instances where it was not appropriately quantified or
valued. More notable, we recalculated direct labor expenses to account
for expenses related to employee profit sharing. Also, because CINSA
failed to provide requested information on depreciation based upon the
revaluation of assets in accordance with the Department's normal
practice (See, e.g., Gray Portland Cement and Cylinder from Mexico;
Final Results of Antidumping Administrative Review (58 FR 25803; April
28, 1993) and Final Results of Antidumping Administrative Review;
Porcelain on Steel Cooking Ware from Mexico (58 FR 43327; August 16,
1993)), we have recalculated depreciation expenses using best
information available (BIA) based on information submitted in CINSA's
response to the Department's supplemental questionnaire. Accordingly,
we increased the reported fixed overhead expenses (which includes
depreciation expenses). See OA memorandum of November 5, 1993.
Preliminary Results of the Review
As a result of our review, we preliminarily determine that the
following margins exist for the period December 1, 1990 through
November 30, 1991:
As a result of our review, we determine the margins to be:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
APSA....................................................... 8.71
CINSA...................................................... 45.59
All others................................................. 29.52
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Parties to the proceeding may request disclosure within 5 days of
the date of publication of this notice. Representatives of parties to
the proceeding may request disclosure of proprietary information under
administrative protective order no later than 10 days after the
representative's client or employer becomes a party to the proceeding,
but in no event later than the date the case briefs are due. Any
interested party may request a hearing not later than 10 days after
publication of this notice. Any hearing, if requested, will be held no
later than seven days after the scheduled date for submission of
rebuttal briefs. Persons interested in attending the hearing should
ascertain with the Department the date and time of the hearing. Copies
of case briefs and rebuttal briefs must be served on interested parties
in accordance with 19 CFR 353.38(e). Interested parties may submit
written arguments in case briefs within 30 days of the date of
publication. Rebuttal briefs, limited to arguments raised in case
briefs, may be submitted seven days after the time limit for filing the
case brief.
The Department will publish the final results of the administrative
review, including the results of its analysis of issues raised in any
case or rebuttal brief or at a hearing.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between United States price and foreign market value may
vary from the percentages stated above. The Department will issue
appraisement instructions directly to the Customs Service.
Further, the following deposit requirements will be effective upon
publication of the final results of this administrative review for all
shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a)(1) of the Tariff Act: (1) The cash deposit
rates for the reviewed companies will be those rates established in the
final results of this administrative review; (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
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 be the ``all others'' rate established
in the final notice of the less-than-fair value investigation in this
case (51 FR 36435 October 10, 1986), in accordance with the Court of
International Trade's decision in Floral Trade Council v. United
States, Slip Op. 93-79, and Federal Mogul Corporation v. United States,
Slip Op. 93-83. The ``all others'' rate is 29.52 percent.
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
This notice serves as a preliminary reminder to importers of their
responsibility under 190 CFR 353.26 to file a certificate regarding the
reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review. Failure to comply with this
requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and 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: February 4, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-3182 Filed 2-10-94; 8:45 am]
BILLING CODE 3510-DS-P-M
