[Federal Register Volume 63, Number 43 (Thursday, March 5, 1998)]
[Notices]
[Pages 10836-10841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-5599]
[[Page 10836]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-583-828]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Stainless Steel Wire Rod
from Taiwan
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: March 5, 1998.
FOR FURTHER INFORMATION CONTACT: Laurel LaCivita or Alexander Amdur,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, N.W.,
Washington, D.C. 20230; telephone: (202) 482-4740, or (202) 482-5346,
respectively.
The Applicable Statute
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 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, 62 FR 27296 (May 19, 1997).
Preliminary Determination
We preliminarily determine that stainless steel wire rod (SSWR)
from Taiwan is being, or is likely to be, sold in the United States at
less than fair value (LTFV), as provided in section 733 of the Act. The
estimated margins of sales at LTFV are shown in the ``Suspension of
Liquidation'' section of this notice.
Case History
Since the initiation of this investigation (Notice of Initiation of
Antidumping Investigations: Stainless Steel Wire Rod from Germany,
Italy, Japan, Korea, Spain, Sweden, and Taiwan, 62 FR 45224 (August 26,
1997) (Notice of Initiation)), the following events have occurred:
On August 21, 1997, the Department issued a cable to the American
Institute in Taiwan requesting information identifying potential
Taiwanese producers and/or exporters of the subject merchandise to the
United States. We did not receive a response from the American
Institute in Taiwan. However, on August 29, 1997, and September 18,
1997, we received letters of appearance on behalf of Walsin Cartech
Specialty Steel Corporation (Walsin) and Yieh Hsing Enterprise
Corporation, Ltd. (Yieh Hsing), respectively. Based on these letters of
appearance and information contained in the petition, on September 19,
1997, the Department issued antidumping questionnaires to both Walsin
and Yieh Hsing (hereinafter ``the respondents'').
In September 1997, the United States International Trade Commission
(ITC) issued an affirmative preliminary injury determination in this
case (see ITC Investigation No. 731-TA-775).
On October 10, 1997, the petitioners in this case (i.e., AL Tech
Specialty Steel Corp., Carpenter Technology Corp., Republic Engineered
Steels, Talley Metals Technology, Inc., and United Steelworkers of
America) requested that the Department revise its questionnaire to
obtain information on the actual nickel, chromium, and molybdenum
content for each sale of the SSWR made during the period of
investigation (POI). The Department, upon consideration of the comments
from all parties on this matter, issued a memorandum on December 18,
1997, indicating its decision to make no changes in the model-matching
criteria specified in the September 19, 1997, questionnaire (see
Memorandum from Team to Holly Kuga, Office Director, dated December 18,
1997).
Also in October 1997, the Department received responses to Section
A of the questionnaire from the respondents. The respondents submitted
responses to sections B, C, and D of the questionnaire in November
1997.
On December 11, 1997, pursuant to section 733(c)(1)(A) of the Act,
the petitioners made a timely request to postpone the preliminary
determination. On December 16, 1997, we granted this request and
postponed the preliminary determination until no later than February
25, 1998 (62 FR 66849, December 22, 1997).
We issued supplemental questionnaires to the respondents in
December 1997 and received responses to these questionnaires in January
1998.
On January 26, 1998, the petitioners submitted a ``targeted-
dumping'' allegation with regard to Yieh Hsing's sales in the United
States. The petitioners requested that the Department compare
transaction-specific export prices in the U.S. market to the weighted-
average normal values in calculating the antidumping margin for Yieh
Hsing. Yieh Hsing responded to this allegation on February 6, 1998.
(See the ``Targeted Dumping'' section of this notice, below, for
further discussion.)
We received comments from the petitioners concerning the
information reported in the respondents' questionnaire responses and
issues they considered relevant to the preliminary determination on
February 6, 1998, and February 12, 1998.
Postponement of Final Determination and Extension of Provisional
Measures
Pursuant to section 735(a)(2) of the Act, on February 6, 1998 and
February 20, 1998, Yieh Hsing and Walsin, respectively, requested that,
in the event of an affirmative preliminary determination in this
investigation, the Department postpone its final determination until
not later than 135 days after the date of the publication of an
affirmative preliminary determination in the Federal Register. On
February 18, 1998, Yieh Hsing amended its request to include a request
to extend the provisional measures from a four-month period to not more
than six months. Walsin included its request to extend the provisional
measures in its February 20, 1998 letter. In accordance with 19 CFR
351.210(b)(2), because (1) our preliminary determination is
affirmative, (2) Yieh Hsing and Walsin account for a significant
proportion of exports of the subject merchandise, and (3) no compelling
reasons for denial exist, we are granting the respondents' request and
are postponing the final determination until no later than 135 days
after the publication of this notice in the Federal Register.
Suspension of liquidation will be extended accordingly.
Scope of Investigation
For purposes of this investigation, SSWR comprises products that
are hot-rolled or hot-rolled annealed and/or pickled and/or descaled
rounds, squares, octagons, hexagons or other shapes, in coils, that may
also be coated with a lubricant containing copper, lime, or oxalate.
SSWR is made of alloy steels containing, by weight, 1.2 percent or less
of carbon and 10.5 percent or more of chromium, with or without other
elements. These products are manufactured only by hot-rolling or hot-
rolling, annealing, and/or pickling and/or descaling, are normally sold
in coiled form, and are of solid cross-section. The majority of SSWR
sold in the United States is round in cross-sectional shape, annealed
and pickled, and later cold-finished into stainless steel wire or
small-diameter bar.
The most common size for such products is 5.5 millimeters or 0.217
inches in diameter, which represents the smallest size that normally is
produced on a rolling mill and is the size that most wire-drawing
machines are set up to draw. The range of SSWR sizes normally sold in
the United States is between 0.20 inches and 1.312 inches
[[Page 10837]]
diameter. Two stainless steel grades, SF20T and K-M35FL, are excluded
from the scope of the investigation. The chemical makeup for the
excluded grades is as follows:
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
SF20T
----------------------------------------------------------------------------------------------------------------
Carbon............................ 0.05 max............. Chromium............. 19.00/21.00.
Manganese......................... 2.00 max............. Molybdenum........... 1.50/2.50.
Phosphorous....................... 0.05 max............. Lead................. Added (0.10/0.30).
Sulfur............................ 0.15 max............. Tellurium............ Added (0.03 min).
Silicon........................... 1.00 max.............
----------------------------------------------------------------------------------------------------------------
K-M35FL
----------------------------------------------------------------------------------------------------------------
Carbon............................ 0.015 max............ Nickel............... 0.30 max.
Silicon........................... 0.70/1.00............ Chromium............. 12.50/14.00.
Manganese......................... 0.40 max............. Lead................. 0.10/0.30.
Phosphorous....................... 0.04 max............. Aluminum............. 0.20/0.35.
Sulfur............................ 0.03 max.............
----------------------------------------------------------------------------------------------------------------
The products under investigation are currently classifiable under
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and
7221.00.0075 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, the written description of the scope of this
investigation is dispositive.
Period of Investigation
The POI is July 1, 1996, through June 30, 1997.
Targeted Dumping
On January 26, 1998, the petitioners requested that, for Yieh
Hsing, the Department compare the transaction-specific export prices in
the United States market to weighted-average normal values, in
accordance with the ``targeted-dumping'' provisions of section
777A(d)(1)(B) of the Act. The petitioners' allegation claimed that Yieh
Hsing's prices for the subject merchandise in the United States vary
significantly on the basis of purchaser and that using a weighted-
average price in the Department's analysis would have the effect of
concealing or minimizing the margin of dumping. On February 6, 1998,
Yieh Hsing submitted comments challenging the petitioners' targeted-
dumping allegation.
The Department has denied the petitioners' request to compare the
transaction-specific prices in the United States market to weighted-
average normal values because the petitioners' analysis failed to meet
the basic requirements of section 777A(d)(1)(B)(i). The petitioners'
statistical analysis goes no further than a simple comparison of
average prices to different customers. Such a comparison, without
further statistical analysis, does not yield meaningful conclusions
about a pattern of export prices differing significantly among
purchasers. See Preliminary Determination of Sales at Less Than Fair
Value: Certain Pasta From Italy, 61 FR 1344 (January 19, 1996). Also
see Concurrence Memorandum dated February 25, 1998 (``Concurrence
Memorandum'') for further discussion of this issue.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determined normal value (NV) based on sales in the
comparison market at the same level of trade (LOT) as the export price
(EP) or constructed export price (CEP). The NV LOT is that of the
starting-price sales in the comparison market or, when NV is based on
constructed value (CV), that of the sales from which we derive selling,
general and administrative (SG&A) expenses and profit. For EP, the U.S.
LOT is also the level of the starting-price sale, which is usually from
exporter to importer. For CEP, it is the level of the constructed sale
from the exporter to the importer.
To determine whether NV sales are at a different LOT than EP or
CEP, 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 a LOT adjustment under section
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is
more remote from the factory than the CEP level and there is no basis
for determining whether the difference in the levels between NV and CEP
affects price comparability, we adjust NV under section 773(a)(7)(B) of
the Act (the CEP offset provision). See Notice of Final Determination
of Sales at Less Than Fair Value: Certain Cut-to-Length Steel Plate
from South Africa, 62 FR 61731 (November 19, 1997).
Neither respondent claimed a LOT adjustment. Nevertheless, we
evaluated whether such an adjustment was necessary by examining each
respondent's distribution system, including selling functions, classes
of customers, and selling expenses. We found that the selling functions
performed by each respondent, which included sales negotiation and
shipping arrangements, where applicable, are sufficiently similar in
the United States and the home market to consider them as constituting
the same LOT in the two markets. Accordingly, all comparisons are at
the same LOT and an adjustment pursuant to section 773(a)(7)(A) of the
Act is not warranted. See Concurrence Memorandum.
Fair Value Comparisons
To determine whether sales of SSWR from Taiwan to the United States
were made at less than fair value, we compared the EP or the CEP to the
NV, as described in the ``Export Price,'' ``Constructed Export Price''
and ``Normal Value'' sections of this notice, below. In accordance with
section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs
or CEPs for comparison to weighted-average NVs.
We have considered price-averaging groups by customer types, but we
found no basis on which to conclude that we should use price-averaging
groups in our analysis. Accordingly, we have not based price
comparisons on customer types.
On January 8, 1998, the Court of Appeals for the Federal Circuit
issued a decision in CEMEX v. United States,
[[Page 10838]]
1998 WL 3626 (Fed Cir.). In that case, based on the pre-URAA version of
the Act, the Court discussed the appropriateness of using CV as the
basis for foreign market value when the Department finds home market
sales to be outside the ``ordinary course of trade.'' This issue was
not raised by any party in this proceeding. However, the URAA amended
the definition of sales outside the ``ordinary course of trade'' to
include sales below cost. See Section 771(15) of the Act. Consequently,
the Department has reconsidered its practice in accordance with this
court decision and has determined that it would be inappropriate to
resort directly to CV, in lieu of foreign market sales, as the basis
for NV if the Department finds foreign market sales of merchandise
identical or most similar to that sold in the United States to be
outside the ``ordinary course of trade.'' Instead, the Department will
use sales of similar merchandise, if such sales exist. The Department
will use CV as the basis for NV only when there are no above-cost sales
that are otherwise suitable for comparison. Therefore, in this
proceeding, when making comparisons in accordance with section 771(16)
of the Act, we considered all products sold in the home market as
described in the ``Scope of Investigation'' section of this notice,
above, that were in the ordinary course of trade for purposes of
determining appropriate product comparisons to U.S. sales. 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 sales of the most similar foreign like product made in the
ordinary course of trade, based on the characteristics listed in
Sections B and C of our antidumping questionnaire. We have implemented
the Court's decision in this case, to the extent that the data on the
record permitted.
With respect to the characteristics used to make product
comparisons, the Department's questionnaire instructed the respondents
to report the grades of the SSWR products that they sold during the POI
in accordance with AISI standards. In their sales listings, the
respondents reported both AISI and non-AISI (or internal) grades in
accordance with their sales accounting systems. The petitioners argued
that the respondents should not make changes to the product
characteristics once the Department had established such
characteristics because it could (a) seriously jeopardize the accuracy
of the Department's investigations, (b) extraordinarily complicate the
investigations, and (c) permit substantial manipulation of model
matches.
It is not the Department's normal practice to allow companies to
change the criteria to be used for model-match purposes based on their
own internal product-coding system once such criteria have been
established. Any such deviation leads to the possibility that the
margins calculated for each company under investigation could be based
on completely different product-grouping criteria. In addition,
allowing companies to deviate from the criteria may permit manipulation
of model matches, not only for the investigation, but also in future
reviews, in the event this investigation results in an antidumping duty
order.
Therefore, in instances where the respondent has reported a non-
AISI grade (or an internal grade code) for a product that corresponds
to a single AISI category, we have used the actual AISI grade rather
than the non-AISI grades reported by the respondent for purposes of our
preliminary analysis. However, in instances where the respondents
reported a non-AISI (or an internal grade code) that does not
correspond to an AISI grade, we have preliminarily used the grade code
reported by the respondents for purposes of our analysis. For further
discussion of this issue, see the Concurrence Memorandum dated February
25, 1998. We intend to examine this issue further for the final
determination.
Both Walsin and Yieh Hsing reported that they made sales of non-
prime merchandise in the home market during the POI. However, given the
limited home market sales quantity of non-prime merchandise and the
fact that no such sales were made to the United States during the POI,
where possible, we excluded non-prime sales from our analysis in
accordance with our past practice. See, e.g., Final Determinations of
Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat
Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain
Corrosion-Resistant Carbon Steel Flat Products, and Certain Cut-to-
Length Carbon Steel Plate from Korea, 58 FR 37176, 37180 (July 9,
1993). For similar reasons, where possible, we excluded from our
comparisons all home market sales of defective merchandise. See
Concurrence Memorandum.
Export Price/Constructed Export Price
For both respondents, we based our calculations on EP, in
accordance with section 772(a) of the Act, when the subject merchandise
was sold by the producer or exporter directly to the first unaffiliated
purchaser in the United States prior to importation, and CEP
methodology was not otherwise indicated. In accordance with section
772(b) of the Act, when the subject merchandise was first sold in the
United States by or for the account of the producer or exporter of such
merchandise, or by a seller affiliated with the producer or exporter,
to an unaffiliated purchaser, we used CEP.
Yieh Hsing classified all of its sales of SSWR in the United States
as EP sales in its questionnaire response, including those sales made
prior to importation through a U.S. sales agent. We examined several
factors to determine whether sales made prior to importation through a
U.S. sales agent to an unaffiliated customer in the United States are
EP sales. These factors are (1) whether the merchandise was shipped
directly from the manufacturer to the unaffiliated U.S. customer; (2)
whether the sales follow customary commercial channels between the
parties involved; and (3) whether the function of the U.S. selling
agent is limited to that of a ``processor of sales-related
documentation'' and a ``communication link'' with the unrelated U.S.
buyer. Where the factors indicate that the activities of the U.S.
selling agent are ancillary to the sale (e.g., arranging transportation
or customs clearance), we treat the transactions as EP sales. Where the
U.S. selling agent is substantially involved in the sales process
(e.g., negotiating prices), we treat the transactions as CEP sales. See
Certain Cut-to-Length Carbon Steel Plate from Germany: Final Results of
Antidumping Administrative Review, 62 FR 18389, 18391 (April 15, 1997).
Based on our review of the selling activities of the U.S. selling
agent, we reclassified Yieh Hsing's U.S. sales of SSWR through the
agent as CEP sales because the agent acted as more than a ``processor
of sales-related documentation'' and a ``communication link'' with the
unaffiliated U.S. customer. The U.S. sales agent performed a variety of
selling functions on behalf of Yieh Hsing in connection with Yieh
Hsing's SSWR sales in the United States including identifying U.S.
customers on its own and negotiating the terms of sale with U.S.
customers. Therefore, we preliminarily determine that Yieh Hsing's U.S.
sales of SSWR through its U.S. sales agent are CEP sales. For further
discussion of this issue, see the Concurrence Memorandum.
[[Page 10839]]
A. Export Price
Walsin
We calculated EP based on packed, delivered prices to unaffiliated
purchasers in the United States. We made deductions from the starting
price, where appropriate, for rebates, foreign inland freight, foreign
brokerage and handling expenses, international freight and marine
insurance, pursuant to section 772(c)(2)(A) of the Act.
Yieh Hsing
We calculated EP based on packed, delivered prices to unaffiliated
purchasers in the United States. We made deductions from the starting
price, where appropriate, for foreign inland freight, foreign brokerage
and handling, ocean freight, and marine insurance, pursuant to section
772(c)(2)(A) of the Act.
B. Constructed Export Price
Walsin
We calculated CEP based on the packed, delivered price to the first
unaffiliated customer in the United States in accordance with section
772(b) of the Act. We made deductions from the starting price for
rebates, foreign inland freight, foreign brokerage and handling, ocean
freight, marine insurance, U.S. duty and U.S. brokerage as appropriate,
in accordance with section 772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act, we made additional
adjustments to the starting price by deducting direct and indirect
selling expenses associated with economic activities occurring in the
United States, including credit expenses and unaffiliated-party
commissions. Finally, we made an adjustment for CEP profit in
accordance with sections 772(d)(3) and 772(f) of the Act.
Yieh Hsing
We calculated CEP based on packed, delivered prices to unaffiliated
purchasers in the United States in accordance with section 772(b) of
the Act. We made deductions from the starting price, where appropriate,
for discounts, foreign inland freight, foreign brokerage and handling,
U.S. customs duties and harbor maintenance and merchandise processing
fees (which are included in U.S. duties), international freight and
marine insurance, pursuant to section 772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act, we made additional
adjustments to the starting price by deducting selling expenses
associated with economic activities occurring in the United States,
including credit expenses and commissions. However, because the
deduction of this commission results in a price corresponding as
closely as possible to an export price, we have not made any additional
deduction of CEP profit. See Concurrence Memorandum of February 25,
1998.
Normal Value
After testing home market viability, whether sales to affiliates
were at arm's-length prices, and whether home market sales were at
below-cost prices, we calculated NV as noted in the ``Price-to-Price
Comparisons'' and ``Price-to-CV Comparisons'' sections of this notice.
1. Home Market Viability
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV, we
compared each respondent's volume of home market sales of the foreign
like product to the volume of U.S. sales of the subject merchandise, in
accordance with section 773(a)(1)(C) of the Act. Because each
respondent'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 for each respondent.
2. Affiliated-Party Transactions and Arm's-Length Test
We excluded sales to affiliated customers in the home market not
made at arm's-length prices from our analysis because we considered
them to be outside the ordinary course of trade. See 19 CFR 351.102. To
test whether these sales were made at arm's-length prices, we compared,
on a model-specific basis, starting prices of sales to affiliated and
unaffiliated customers net of all movement charges, direct selling
expenses, and packing. Where, for the tested models of subject
merchandise, prices to the affiliated parties were on average 99.5
percent or more of the price to the unaffiliated parties, we determined
that sales made to the affiliated parties were at arm's length. See 19
CFR 351.403(c) and 62 FR at 27355 (preamble to the Department's
regulations). In instances where no affiliated-customer price ratio
could be constructed for an affiliated customer because identical
merchandise was not sold to unaffiliated customers, we were unable to
determine that these sales were made at arm's-length prices and,
therefore, excluded them from our LTFV analysis. See 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). Where the exclusion of such sales eliminated all sales of the
most appropriate comparison product, we made a comparison to the next
most similar model.
3. Cost-of-Production Analysis
Based on the cost allegation submitted by the petitioners in the
petition, the Department found reasonable grounds to believe or suspect
that Walsin and Yieh Hsing had made sales in the home market at prices
below the cost of producing the merchandise, in accordance with section
773(b)(1) of the Act. As a result, the Department initiated an
investigation to determine whether the respondents made home market
sales during the POI at prices below their respective COPs within the
meaning of section 773(b) of the Act. See Notice of Initiation. We
conducted the COP analysis described below.
A. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated the
COP for each company based on the sum of the cost of materials and
fabrication for the foreign like product, plus amounts for home market
SG&A and packing costs. We made company-specific adjustments to the
reported COP as follows:
Walsin. We adjusted the cost of copper that Walsin obtained from an
affiliate to reflect the market value paid to unaffiliated suppliers.
We recalculated Walsin's general and administrative (G&A) expense
factor to include certain miscellaneous income and expense items that
relate to the general production activity of the company as a whole.
See Memorandum to Christian Marsh from Stan Bowen and Laurens van
Houten dated February 25, 1998 (``Cost Memo'').
Yieh Hsing. Yieh Hsing failed to report a unique COP for each of
the product categories it reported on its computer sales listing.
Therefore, we calculated a unique cost for each missing product
category based on the grade of billet used in that category's
manufacturing process. We adjusted the cost of billets that Yieh Hsing
obtained from an affiliated supplier to reflect the market value paid
to unaffiliated suppliers. In addition, we increased Yieh Hsing's
reported billet cost to account for grinding loss. We adjusted the
pickling stage direct labor costs reported in the COP and CV databases
to reconcile with amounts reported in the Section D supplemental
response. We adjusted Yieh Hsing's submitted G&A expenses to exclude
miscellaneous income and expense items, which do not relate to the
general production
[[Page 10840]]
activities of the company as a whole. See Cost Memo.
B. Test of Home Market Sales Prices
We used each respondent's submitted POI weighted-average COPs, as
adjusted (see above). 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 order to determine whether these sales had been
made at prices below COP. 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) whether 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 (net of selling
expenses and packing) to the home market prices, less applicable
quantity discounts, rebates, movement charges, direct and indirect
selling expenses, and packing.
C. Results of the COP Test
Pursuant to section 773(b)(2)(C), where less than 20 percent of a
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 POI were at prices less than the COP, we
determined such sales to have been made in ``substantial quantities''
within an extended period of time in accordance with section
773(b)(2)(B) of the Act. In such cases, we also determined that such
sales were not made 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. Therefore, we disregarded the below-cost
sales. Where all sales of a specific product were at prices below the
COP, we disregarded all sales of that product.
We found that, for certain models of SSWR, more than 20 percent of
Walsin's and Yieh Hsing's home market sales within an extended period
of time were at prices less than COP. Further, the prices did not
provide for the recovery of costs within a reasonable period of time.
We therefore disregarded the below-cost sales and used the remaining
above-cost sales as the basis for determining NV, in accordance with
section 773(b)(1). For those U.S. sales of SSWR for which there were no
comparable home market sales in the ordinary course of trade, we
compared EPs or CEPs to CV in accordance with section 773(a)(4) of the
Act.
D. Calculation of CV
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of the respondents' cost of materials, fabrication,
SG&A, profit, and U.S. packing costs. We adjusted the COP included in
the calculation of CV as noted, above, in the ``Calculation of COP''
section of the notice. In accordance with section 773(e)(2)(A) of the
Act, we based SG&A and profit on the amounts incurred and realized by
each respondent in connection with the production and sale of the
foreign like product in the ordinary course of trade for consumption in
Taiwan.
Price-to-Price Comparisons
Walsin
We calculated NV based on packed, delivered prices to unaffiliated
home market customers. We made deductions for foreign inland freight,
bank charges and discounts and rebates where appropriate, pursuant to
section 773(a)(6)(B) of the Act. Pursuant to section 773(a)(6)(C)(iii)
of the Act and 19 CFR 351.410(c), we made circumstance-of-sale
adjustments, where appropriate, for differences in royalty expenses,
credit expenses and interest revenue. Because Walsin paid commissions
on U.S. sales, in calculating NV, we offset these commissions using the
weighted-average amount of indirect selling expenses and inventory
carrying costs incurred on the home market sales for the comparison
product, up to the amount of the U.S. commissions. See 19 CFR
351.410(e).
We deducted home market packing costs and added U.S. packing costs,
in accordance with section 773(a)(6) of the Act. Where appropriate, we
made adjustments to NV to account for differences in physical
characteristics of the merchandise, in accordance with section
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.
Yieh Hsing
We calculated NV based on packed, delivered prices to home market
unaffiliated customers and prices to affiliated customers that we
determined to be at arm's length. We made deductions for early payment
discounts and foreign inland freight, where appropriate, pursuant to
section 773(a)(6)(B) of the Act. Pursuant to section 773(a)(6)(C)(iii)
of the Act and 19 CFR 351.410(c), we made circumstance-of-sale
adjustments, where appropriate, for differences in credit expenses and
interest revenue. Because Yieh Hsing paid commissions on U.S. sales, in
calculating NV, we offset these commissions using the weighted-average
amount of indirect selling expenses incurred on the home market sales
for the comparison product, up to the amount of the U.S. commissions.
See 19 CFR 351.410(e). We did not include inventory carrying costs in
the weighted-average amount of home market indirect selling expenses
because Yieh Hsing did not calculate this expense in either its
original or supplemental responses properly. See Concurrence
Memorandum.
We deducted home market packing costs and added U.S. packing costs,
in accordance with section 773(a)(6) of the Act. Where appropriate, we
made adjustments to NV to account for differences in physical
characteristics of the merchandise, in accordance with section
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.
Price-to-CV Comparisons
For price-to-CV comparisons, we made adjustments to CV in
accordance with section 773(a)(8) of the Act. Where CV was compared to
EP, we deducted from CV the weighted-average home market direct selling
expenses and added the weighted-average U.S. product-specific direct
selling expenses in accordance with section 773(a)(6)(C)(iii) of the
Act. Where CV was compared to CEP, we deducted from CV the weighted-
average home market direct selling expenses (which included credit
expenses).
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.
Section 773A(a) directs the Department to use a daily exchange rate
in order to convert foreign currencies into U.S. dollars unless the
daily rate involves a fluctuation. It is the Department's practice to
find that a fluctuation exists when the daily exchange rate differs
from the benchmark rate by 2.25 percent. The benchmark is defined as
the moving average of rates for the past 40 business days. When we
determine a fluctuation to have existed, we substitute the benchmark
rate for the daily rate, in accordance with established practice.
Further, section 773A(b) directs the Department to allow a 60-day
adjustment period when a currency has undergone a sustained movement. A
sustained movement has occurred when the weekly average of actual daily
rates exceeds the weekly average of
[[Page 10841]]
benchmark rates by more than five percent for eight consecutive weeks.
(For an explanation of this method, see Policy Bulletin 96-1: Currency
Conversions, 61 FR 9434 (March 8, 1996).) Such an adjustment period is
required only when a foreign currency is appreciating against the U.S.
dollar. The use of an adjustment period was not warranted in this case
because the New Taiwan dollar did not undergo a sustained movement
during the POI.
Verification
As provided in section 782(i) of the Act, we will verify all
information determined to be acceptable for use in making our final
determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing the
Customs Service to suspend liquidation of all imports of subject
merchandise that are entered, or withdrawn from warehouse, for
consumption on or after the date of publication of this notice in the
Federal Register. We will instruct the Customs Service to require a
cash deposit or the posting of a bond equal to the weighted-average
amount by which the NV exceeds the U.S. price, as indicated in the
chart below. These suspension-of-liquidation instructions will remain
in effect until further notice. The weighted-average dumping margins
are as follows:
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer margin
Percentage
------------------------------------------------------------------------
Walsin Cartech Specialty Steel Corporation................. 27.81
Yieh Hsing Enterprise Corporation, Ltd..................... 10.50
All Others................................................. 17.09
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
Case briefs or other written comments in at least ten copies must
be submitted to the Assistant Secretary for Import Administration no
later than May 22, 1998, and rebuttal briefs no later than May 29,
1998. A list of authorities used and an executive summary of issues
must accompany any briefs submitted to the Department. Such summary
should be limited to five pages total, including footnotes. In
accordance with section 774 of the Act, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs. Tentatively, the hearing
will be held on June 2, 1998, time and room to be determined, at the
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW,
Washington, DC 20230. Parties should confirm by telephone the time,
date, and place of the hearing 48 hours before the scheduled time.
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, U.S. Department of Commerce, Room
1870, within thirty days of the 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 the issues to be
discussed. Oral presentations will be limited to issues raised in the
briefs. If this investigation proceeds normally, we will make our final
determination by no later than 135 days after the publication of this
notice in the Federal Register.
This determination is published pursuant to section 777(i) of the
Act.
Dated: February 25, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-5599 Filed 3-4-98; 8:45 am]
BILLING CODE 3510-DS-P
