[Federal Register Volume 60, Number 36 (Thursday, February 23, 1995)]
[Notices]
[Pages 10061-10064]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4456]
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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 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 by a manufacturer/exporter, United
Engineering Steels Limited (UES), the Department of Commerce (the
Department) is conducting the first administrative review of the
antidumping duty order on certain hot-rolled lead and bismuth carbon
steel products (lead and bismuth steel) from the United Kingdom (U.K.).
The review covers one manufacturer/exporter, UES, and entries of the
subject merchandise into the United States during the period September
28, 1992 through February 28, 1994. We have preliminarily determined
that sales have been made below the foreign market value (FMV). If
these preliminary results are adopted in our final results of
administrative review, we will instruct U.S. Customs to assess
antidumping duties equal to the difference between the United States
price (USP) and the FMV.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: February 23, 1995.
FOR FURTHER INFORMATION CONTACT:
Nooshen Amiri or Maureen Flannery, Office of Antidumping Compliance,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone: (202) 482-4733.
SUPPLEMENTARY INFORMATION:
Background
On March 4, 1994, the Department published in the Federal Register
(59 FR 10368) a notice of ``Opportunity to Request an Administrative
Review'' of the antidumping duty order on lead and bismuth steel from
the U.K. (58 FR 15324). On March 31, 1994, a manufacturer/exporter,
UES, requested that we conduct an administrative review in accordance
with section 353.22(a) of the Department's regulations (19 CFR
353.22(a)). We published the notice of initiation of the antidumping
duty administrative review on April 15, 1994 (59 FR 18099), covering
the period September 28, 1992 through February 28, 1994. The Department
has now conducted the review in accordance with section 751 of the
Tariff Act of 1930, as amended (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 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 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, 60.00; 7213.39.00.30, 00.60, 00.90; 7214.40.00.10,
00.30, 00.50; 7214.50.00.10, 00.30, 00.50;7214.60.00.10, 00.30, 00.50;
and 7228.30.80.00. HTSUS subheadings are provided for convenience and
Customs purposes. The written product description remains dispositive.
This review covers sales of the subject merchandise manufactured by
UES and entered into the United States during the period September 28,
1992 through February 28, 1994.
United States Price
The Department used purchase price (PP), as defined in section 772
of the Act, in calculating USP for UES because all sales were made
directly to unrelated parties prior to importation into the United
States. USP was based on packed, delivered prices to customers in the
United States. We made deductions, where applicable, for cash
discounts, rebates, foreign inland freight, FOB charges in the U.K.,
ocean freight, marine insurance, U.S. Customs duties and merchandise
processing fees, harbor maintenance fees, brokerage and handling
charges, and U.S. inland freight charges. We also made an adjustment
for invoice corrections (billing adjustments) made after shipment.
While UES's shipments to the Untied States are transported by a related
carrier, British Steel Shipping, [[Page 10062]] UES established that
the related carrier charges UES arm's-length rates. Therefore, we used
actual ocean freight rates reported.
We adjusted USP for value-added taxes (VAT) in accordance with our
practice as outlined in Silicomanganese from Venezuela, Preliminary
Determination of Sales at Less Than Fair Value, 59 FR 31204 (June 17,
1994). No other adjustments were claimed or allowed.
We used the date of shipment as the date of sale for both U.S.
sales and home market sales because a substantial percentage of both
U.S. orders and home market orders were significantly amended
subsequent to the original purchase order, and the price and quantity
were set on the date of shipment.
Foreign Market Value
In calculating FMV for UES, the Department used home market sales
or constructed value (CV), as defined in section 773 of the Act.
To determine whether there were sufficient sales of lead and
bismuth steel in the home market to serve as the basis for calculating
FMV, we compared the volume of home market sales to the volume of third
country sales, in accordance with section 773(a)(1) of the Act. We
found that sales in the home market constituted a sufficient basis for
FMV, in accordance with 19 CFR 353.48(a).
Many of UES's home market sales were made to related customers. In
order to determine whether sales to related parties might be
appropriate to use as the basis of FMV, the Department compares prices
of those sales to prices to unrelated parties, on a model-by-model
basis. When possible, the Department uses unrelated party sales at the
same level of trade as the related party sales for this comparison. UES
did not have sales to unrelated customers in the home market at the
same level of trade and in similar quantities as those to related
customers. In the home market, UES sold to related cold finishers and
unrelated resellers. Home market sales to related cold finishers were
generally large quantity sales, while home market sales to unrelated
resellers were generally small quantity sales. In the U.S. market, UES
sold to unrelated cold finishers in large quantities.
UES claimed that its home market sales to related finishers were
made at arm's-length prices, and that any price differences among
customers reflect market factors and the fact that high-volume, long-
term customers are able to negotiate lower prices than smaller
customers, related or not. In support of its argument, UES submitted a
comparison of related prices with unrelated prices, allegedly showing
that UES's related-party prices satisfy the Department's customary
arm's-length test. UES also submitted an analysis of prices to a party
that was acquired by UES during the period of review, in support of its
contention that relationship does not determine price levels. Finally,
UES submitted a number of sample invoices it issued to an unrelated
third-country customer, which it claimed was comparable in size and
purchase volume with UES's major related home market customers, to show
that its related-party prices were market-based.
Petitioner, Inland Steel Bar Company, asserted that home market
sales to related parties were not made on an arm's-length basis and
that UES's analysis did not take into account all customer rebates and
discounts. Petitioner further asserted that UES failed to perform its
arm's-length test on a model-specific basis. Regarding the comparison
of prices paid by a party before it was acquired by UES with the prices
paid after it was acquired, petitioner claimed that the comparison was
inapposite, as market pricing conditions changed significantly since
the company was acquired, and home market prices increased for all
customers. Regarding UES's comparison of prices in a third-country
market with prices to related customers in the home market, petitioner
claimed that prices charged by UES in third countries have no bearing
on this review because market conditions in third countries vary from
those in the home market.
We agree with petitioner that differences in market conditions
across countries or time periods could invalidate certain of UES's
analyses. We further agree with petitioner that UES's analysis of data
from this review fails to provide an accurate assessment of whether its
related-party sales were made at arm's length because it did not
account for certain rebates and it did not perform its arm's-length
test on a model group-by-model group basis.
For these reasons, we used the only information that was available
in the record, we compared related-customer sales with unrelated-
customer sales on a model group-by-model group basis regardless of
level of trade. When sales to related customers were made at arm's-
length prices, we included them in the calculation of FMV. UES made no
claim for an adjustment due to differences in quantities. We invite
comments on the issue of how to perform an arm's-length test in cases
such as this, where home market sales to related and unrelated
customers are made at different levels of trade and in different
quantities.
In accordance with 19 CFR 353.58 and 353.55, we compared U.S. sales
to home market sales made at the same level of trade, and in similar
commercial quantities, where possible. That is, we compared U.S. sales
of 25 metric tons (MT) or more with home market sales of 25 MT or more,
and U.S. sales of less than 25 MT with home market sales of less than
25 MT, because surcharges apply to home market sales of less than 25
MT, but not to home market sales of 25 MT or more. Quantity surcharges
do not apply to any U.S. sales.
Because the Department found sales at less than their cost of
production (COP) during the less-than-fair-value (LTFV) investigation,
in accordance with our standard practice, we found reasonable grounds
to believe or suspect that UES had made sales at prices below its COP
in the home market during the period of review (POR). Thus, in
accordance with section 773(b) of the Act, we investigated whether UES
had home market sales that were made at less than their COP over an
extended period of time, and in substantial quantities during this POR.
To determine whether home market prices were below the COP, we
calculated the COP based on the sum of UES's cost of materials,
fabrication, general expenses, and packing, in accordance with 19 CFR
353.51(c). We made the following adjustments to UES's reported costs:
(1) we increased cost of manufacturing for labor-related expenses; and
(2) we increased general and administrative expenses for costs
attributed to discontinued operations. The latter were part of UES's
general and administrative expenses that UES had failed to include in
its reported costs. We compared home market selling prices, net of
movement charges, rebates, and invoice corrections, to each product's
COP. We found that certain sales were made at prices below the COP.
To determine whether the below-cost sales were made in substantial
quantities over an extended period of time, we applied our following
standard practice. If over 90 percent of a UES's sales of a given model
were at prices above the COP, we did not disregard any below-cost sales
because we determined that the below-cost sales were not made in
substantial quantities over an extended period of time. If between 10
and 90 percent of UES's sales of a given model were at prices above the
COP, we disregarded only the below-cost sales, if we found that these
[[Page 10063]] had been made over an extended period of time. Where we
found that more than 90 percent of a UES's sales were at prices below
the COP over an extended period of time, we disregarded all sales for
that model and calculated FMV based on CV.
To determine if sales below cost were made over an extended period
of time, we compared the number of months in which sales below cost had
occurred for a particular model to the number of months in which the
model was sold. If the model was sold in three or fewer months, we did
not find that below-cost sales were made over an extended period of
time unless there were sales below cost of that model in each month. If
a model was sold in more than three months, we did not find that below-
cost sales were made over an extended period of time unless there were
sales below cost in at least three of the months in which the model was
sole. See, e.g., Tapered Roller Bearings from Japan, Final Results of
Antidumping Duty Administrative Review, 58 FR 64720 (Dec. 9, 1993). See
also Antifriction Bearings from France, et al., Preliminary Results of
Antidumping Duty Administrative Review, 59 FR 9463 (Feb. 28, 1994).
For those models for which there was an adequate number of sales at
prices above the COP, we based FMV on home market prices to related and
unrelated purchasers, in accordance with 19 CFR 353.45(a). We used
prices to related purchasers only if such prices were made at arm's
length (see arm's-length discussion above). We calculated FMV based on
packed, delivered prices. We made deductions, where appropriate, for
rebates and invoice corrections. Pursuant to section 773(a)(4)(B) of
the Act, and 19 CFR 353.56(a)(2), we made circumstance-of-sale
adjustments, where appropriate, for differences in credit expenses,
warranty expenses, warehousing expenses, inland freight, and
commissions. We also made a circumstance-of-sale adjustment for
differences in credit insurance expenses. Credit insurance charges for
U.S. sales were assessed on a sale-by-sale basis, while in the home
market, a single amount was charged for insurance, regardless of the
level of sales. We therefore preliminarily determine as we determined
in the final determination of sales at LTFV for this case, that credit
insurance is a direct expense in the U.S. market, and an indirect
expense in the home market. Accordingly, we made this adjustment by
adding the amount of credit insurance assessed on each U.S. sale to the
FMV. When commissions were paid on the U.S. sale and not on the home
market sale, we made an adjustment for indirect selling expenses in the
home market to offset the commissions in the U.S. market.
Because the home market prices were reported net of VAT, we added
to the home market price the amount of VAT incurred on each individual
home market sale.
Where appropriate, we made further adjustments to FMV to account
for differences in physical characteristics of the merchandise, in
accordance with 19 CFR 353.57.
Petitioner argued against using differences in ``residuals,'' or
trace elements, as a criterion in determining whether home market
merchandise was most similar to merchandise sold to the United States.
However, product differences due to residuals are commercially
significant and not incidental, as they are designed into the product.
Therefore, we continued to consider residuals in model matching, as we
did in the LTFV investigation of this case.
For those models without an adequate number of sales made at prices
above the COP, in accordance with section 773(b) of the Act, we based
FMV on CV. We calculated the CV based on the sum of the cost of
materials, fabrication, general expenses, U.S. packing cost, and
profit, in accordance with section 773(e) of the Act. We adjusted UES's
CV data in the same manner as we adjusted its COP data as discussed
above. In accordance with section 773(e)(1)(B)(i) of the Act, we
included in CV the greater of the company's reported general expenses
or the statutory minimum of ten percent of the cost of manufacture
(COM). For profit we used the actual profit earned by UES where the
actual figure was higher than the statutory minimum of eight percent of
the sum of COM and general expenses, or the statutory minimum of eight
percent where the actual profit was lower, in accordance with section
773(e)(1)(B)(ii) of the Act. We made circumstance-of-sale adjustments,
where appropriate, for differences in direct selling expenses,
including credit, credit insurance, warranty, inland freight, and
policy stock warehousing.
No other adjustments were claimed or allowed.
Currency Conversion
We made currency conversions based on the official exchange rates
in effect on the dates of the U.S. sales as certified by the Federal
Reserve Bank of New York.
Verification
As provided in section 776(b) of the Act, we verified information
provided by respondent by using standard verification procedures,
including the examination of relevant sales and financial records, and
selection of original source documentation containing relevant
information.
Preliminary Results of Review
As a result of our review, we preliminarily determine that the
following dumping margin exists for the period September 28, 1992
through February 28, 1994.
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Manufacturing/exporter Period of review Margin
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United Engineering Steels Ltd. (UES)....... 9/28/92-2/28/94 4.03
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Any interested party may request a hearing within 10 days of
publication of this notice. Any hearing will be held 44 days after the
date of publication of this notice, or the first workday thereafter.
Interested parties may submit case briefs within 30 days of the
publication date of this notice. Rebuttal briefs, limited to issues
raised in the case briefs, may be filed not later than 37 days after
the date of publication of this notice. The Department will publish a
notice of the final results of this administrative review, which will
include the result of its analysis of issues raised in any such case
briefs.
The following deposit requirements shall be effective for all
shipments of the subject merchandise that are 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 rates for the reviewed
company shall be those rates established in the final results of this
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
LTFV investigation, but the manufacturer is, the cash deposit rate
shall 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 or any previous review, the
cash deposit rate will be 25.82 percent, the all others rate
established in the LTFV investigation. [[Page 10064]]
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 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 will 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 Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: February 15, 1995.
Paul L. Joffe,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 95-4456 Filed 2-22-95; 8:45 am]
BILLING CODE 3510-DS-P
