[Federal Register Volume 61, Number 45 (Wednesday, March 6, 1996)]
[Notices]
[Pages 8914-8918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-5259]
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[[Page 8915]]
DEPARTMENT OF COMMERCE
[A-427-811]
Certain Stainless Steel Wire Rods From France: 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 Imphy S.A., and Ugine-Savoie,
respondents, the Department of Commerce (the Department) is conducting
an administrative review of the antidumping duty order on certain
stainless steel wire rods from France. This review covers the above
manufacturers/exporters of the subject merchandise to the United
States. The period of review (POR) is August 5, 1993 through December
31, 1994.
We have preliminarily determined that respondents sold subject
merchandise at less than normal value (NV) during the POR. Interested
parties are invited to comment on these preliminary results. Parties
who submit argument in this proceeding should also submit with the
argument (1) a statement of the issue, and (2) a brief (no longer than
five pages, including footnotes) summary of the argument.
EFFECTIVE DATE: February 28, 1996.
FOR FURTHER INFORMATION CONTACT: Stephen Jacques or Jean Kemp, Office
of Agreements Compliance, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3434 or (202) 482-4037, respectively.
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act), by the
Uruguay Rounds Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
Background
On December 29, 1993, the Department published in the Federal
Register (58 FR 68865) the final affirmative antidumping duty
determination on certain stainless steel wire rods from France, and
published an amended final determination and antidumping duty order on
January 28, 1994. On January 12, 1995, the Department published the
Opportunity to Request an Administrative Review of this order for the
period August 5, 1993-December 31, 1994 ( 60 FR 2941). The Department
received a request for administrative review from Imphy, S.A.,
(``Imphy'') and Ugine Savoie (``Ugine''), related producers/exporters
of the subject merchandise on January 30, 1995. We initiated the review
on February 15, 1995. On November 7, 1995, the Department published in
the Federal Register its notice extending the deadline in this review
(60 FR 56142).
The Department is now conducting this review in accordance with
section 751 of the Act. The review covers sales of certain stainless
steel wire rods by Imphy, Ugine, and their affiliated companies,
Metalimphy Alloys Corp. (``MAC''), and Techalloy Company, Inc.
(``Techalloy'').
Scope of the Review
The products covered by this administrative review are certain
stainless steel wire rods (SSWR), products which are hot-rolled or hot-
rolled annealed, and/or pickled rounds, squares, octagons, hexagons, or
other shapes, in coils. SSWR are 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 only
manufactured by hot-rolling, 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. The most
common size is 5.5 millimeters in diameter.
The SSWR subject to this review is currently classifiable under
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0020, 7221.00.0030,
7221.00.0040, 7221.00.0045, 7221.00.0060, 7221.00.0075, and
7221.00.0080 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and Customs purposes, our written description of the scope of the order
is dispositive.
Verification
As provided in section 782(i) of the Tariff Act, we verified
information provided by the respondent by using standard verification
procedures, including onsite inspection of the manufacturer's
facilities, the examination of relevant sales and financial records,
and selection of original documentation containing relevant
information. Our verification results are outlined in the public
versions of the verification reports.
Transactions Reviewed
In accordance with Section 751 of the Act, the Department is
required to determine the normal value and export price (EP) or
constructed export price (CEP) of each entry of subject merchandise
during the relevant review period. Because there can be a significant
lag between entry date and sale date for CEP sales, it has been the
Department's practice to examine U.S. CEP sales during the period of
review. Gray Portland Cement and Clinker from Japan; Final Results of
Antidumping Duty Administrative Review, 58 FR 48826 (1993) (Dept. did
not consider ESP (now CEP) entries which were sold after the POR). The
Court of International Trade has upheld the Department's practice in
this regard. See, The Ad Hoc Committee of Southern California Producers
of Gray Portland Cement v. United States, CIT Slip Op. 95-195, December
1, 1995.1
\1\ Although the CIT, in Ad Hoc, accepted that ``consideration
of all sales, rather than entries, made during the period of review
may result in the consideration of entries made prior to the
suspension of liquidation'', Ad Hoc is not a case in which the
respondent linked specific sales during the POR to specific entries
prior to the suspension of liquidation. Ad Hoc, Slip Op. at 19
(emphasis added).
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The Department has adopted an exception to its practice of
examining all U.S. sales during the period of review. That exception
applies when a respondent is able to demonstrate, to the satisfaction
of the Department, that the merchandise covered by a particular sale
entered prior to the suspension of liquidation pursuant to the
Department's preliminary determination in the LTFV investigation. See,
High-Tenacity Rayon Filament Yarn, Preliminary Results of Antidumping
Duty Administrative Review, 59 FR 32181 (1994) (specific sales excluded
when linked to pre-suspension entries); compare, Certain Corrosion-
Resistant Carbon Steel Flat Products from Australia; Preliminary
Results of Antidumping Duty Administrative Review, 60 FR 42507 (1995)
(sales not excluded when respondent unable to link them to specific
pre-suspension entries). Merchandise proven to have entered the U.S.
prior to the suspension of liquidation (and in the absence of an
affirmative critical circumstances finding) is not subject merchandise
within the meaning of section 771(25) of the Act.
In this review, respondent claimed that certain merchandise was not
[[Page 8916]]
subject to review because it entered prior to the period of review for
sale by an affiliated U.S. company during the period of review. The
Department verified that respondent was able to link certain sales
during the period to entries of merchandise prior to the suspension of
liquidation. Because respondent has demonstrated that certain
merchandise entered prior to the suspension of liquidation, we excluded
sales of that merchandise from our analysis.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by the respondent, covered by the description in the
Scope of the Review section, above, and sold in the home market during
the POR, to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. Where there were no
sales of identical merchandise in the home market to compare to U.S.
sales, we compared U.S. sales to the next most similar foreign like
product on the basis of the characteristics listed in Appendix III of
the Department's June 20, 1995 antidumping questionnaire and additional
specifications listed in our December 1, 1995 supplemental
questionnaire. In making the product comparisons, we matched foreign
like products based on the physical characteristics reported by the
respondents and verified by the Department.
Level of Trade
As set forth in section 773(a)(2)(B)(i) of the Act and in the
Statement of Administrative Action (SAA) accompanying the Uruguay Round
Agreements Act, at 829-831, to the extent practicable, the Department
will calculate normal value based on sales at the same level of trade
as the U.S. sale. When the Department is unable to find sale(s) in the
comparison market at the same level of trade as the U.S. sale(s), the
Department may compare sales in the U.S. and foreign markets at a
different level of trade.
In accordance with section 773(a)(7)(A) of the Act, if we compare a
U.S. sale at one level of trade to normal value sales at a different
level of trade, the Department will adjust the normal value to account
for the difference in level of trade if two conditions are met. First,
there must be differences between the actual selling functions
performed by the seller at the level of trade of the U.S. sale and at
the level of trade of the NV sale. Second, the differences must affect
price comparability as evidenced by a pattern of consistent price
differences between sales at the different levels of trade in the
market in which normal value is determined. When constructed export
price is applicable, section 773(a)(7)(B) of the Act establishes the
procedures for making a constructed export price offset when: (1)
normal value is at a different level of trade, and (2) the data
available do not provide an appropriate basis for a level of trade
adjustment from the U.S. sale. Also, in accordance with section
773(a)(7)(B), to qualify for a CEP offset, the level of trade in the
home market must also constitute a more advanced stage of distribution
than the level or trade of the CEP.
In order to identify levels of trade, the Department must review
information concerning selling functions of the exporter. Therefore, in
addition to the questions related to the level of trade in our June 20,
1995, questionnaire, on December 13, 1995, we sent respondents
supplemental questions related to level of trade comparisons and
adjustments. We asked respondents to establish any claimed levels of
trade based on selling functions performed and services offered to each
customer or customer class, and to document and explain any claims for
a level of trade adjustment.
Respondents' reported one level of trade in the home market (to end
users) and two channels of distribution: 1) direct to end users; and 2)
through Ugine Service, a joint-venture between Imphy and Ugine which
acts as a selling arm. We examined and verified the selling functions
performed in each channel and found that the two sales channels
provided many of the same or similar selling functions including:
strategic planning, order evaluation, warranty claims, technical
services, inventory maintenance, packing and freight and delivery. We
found some differences between the two channels of trade in
advertising, customer contacts, computer systems (order input/invoice
system), and administrative functions. Overall, we determine that the
selling functions between the two sales channels are sufficiently
similar to consider them as one level of trade in the home market.
For the U.S. market, respondents claimed that they sold to two
levels of trade: 1) end users through MAC (EP sales); and 2)
distributors, e.g., MAC, Techalloy and US&A (CEP sales). We examined
and verified the selling functions performed for U.S. sales to end
users through MAC and determined that they are at the same level of
trade as home market sales. We then examined and verified that
different (fewer) selling functions were performed for U.S. sales to
distributors than for home market sales. Specifically, we found the
selling functions were sufficiently different in customer sales
contacts, technical services, inventory maintenance, computer systems
and administrative functions to warrant treating U.S. sales to
distributors and the home market sales as different levels of trade.
To the extent practicable, we compared normal value at the same
level of trade as the U.S. sale. Because we compared these CEP sales to
home market sales at a different level of trade, we examined whether a
level of trade adjustment may be appropriate. In this case, respondent
only sold at one level of trade in the home market; therefore, there is
no basis upon which respondent can demonstrate a consistent pattern of
price differences between levels of trade. Further, we do not have
information which would allow us to examine pricing patterns based on
respondent's sales of other products and there are no other respondents
or other record information on which such an analysis could be based.
Because the data available do not provide an appropriate basis for
making a level of trade adjustment but the level of trade in the HM is
a more advanced stage of distribution than the LOT of the CEP sale, a
CEP offset is appropriate. Respondents claimed a CEP offset for those
U.S. CEP and CEP/FM (CEP/Further Manufactured) sales compared to sales
in France through Ugine Service. We included a CEP offset for all sales
in France which are compared with CEP and CEP/FM sales in the United
States since the comparison of home market sales to CEP sales is at a
different level of trade. We applied the CEP offset to normal value or
constructed value, as appropriate (See Fair Value Comparisons Section,
below). The level of trade methodology employed by the Department in
these preliminary results of review is based on the facts particular to
this review. The Department will continue to examine its policy for
making level of trade comparisons and adjustments for its final results
of review.
Fair Value Comparisons
To determine whether sales of SSWR by respondents to the United
States were made at less than fair value, we compared the EP or CEP to
the normal value (NV), as described in the ``Export Price and
Constructed Export Price'' and ``Normal Value'' sections of this
notice. In accordance with section 777A(d)(2), we calculated monthly
weighted-average prices for NV and compared these to individual U.S.
transactions. Where possible, in calculating a monthly weighted average
normal
[[Page 8917]]
value, we averaged home market sales across the channel of distribution
most comparable to that in which the U.S. transaction was made. Where
there were no home market sales through that channel of distribution,
we averaged home market sales through the other channel of
distribution.
Export Price and Constructed Export Price
We used EP, in accordance with subsections 772(a) and (c) of the
Act, where the subject merchandise was sold directly or indirectly to
the first unaffiliated purchaser in the United States prior to
importation and CEP was not otherwise warranted based on the facts of
record. In addition, we used CEP in accordance with subsections 772(b),
(c) and (d) of the Act, for those sales to the first unaffiliated
purchaser that took place after importation into the United States.
We made adjustments as follows:
We calculated EP based on packed prices to unaffiliated customers
in the United States. Where appropriate, we made deductions from the
starting price for discounts, foreign inland freight, foreign brokerage
and handling, international freight, U.S. inland freight, U.S.
brokerage and handling, and U.S. Customs duties. We also adjusted the
starting price for billing adjustments to the invoice price.
We calculated CEP sales based on packed prices to unaffiliated
customers. Where appropriate, we made deductions for early payment
discounts, credit expenses, warranty expenses, other direct selling
expenses and commissions. We deducted those indirect selling expenses,
including inventory carrying costs and product liability premiums, that
related to commercial activity in the United States. We also made
deductions for foreign brokerage and handling, foreign inland freight,
international freight, U.S. inland freight, U.S. brokerage and
handling, and U.S. duty and harbor fees. We also adjusted the starting
price for billing adjustments to the invoice price and for interest
revenue. Finally, we made an adjustment for CEP profit in accordance
with section 772(d)(3) of the Act.
Further Manufacturing
For product that was further manufactured after importation, we
adjusted for all value added in the United States, including the
proportional amount of profit attributable to the value added. We
computed profit based on total revenues realized on sales in both the
U.S. and home markets, less all expenses associated with those sales.
We then allocated profit to expenses incurred with respect to U.S.
economic activity (including further manufacturing costs), based on the
ratio of total U.S. expenses to total expenses for both the U.S. and
home market.
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,
we compared respondents' 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. Since respondents'
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.
Therefore, we have based NV on home market sales.
Where appropriate, we deducted discounts, credit expenses, warranty
expenses, inland freight, inland insurance and packing. We also
adjusted the starting price for billing adjustments to the invoice
price and interest revenue. We did not adjust the starting price for
commissions in the home market (please see the Concurrence Memo for a
discussion of this issue).
To calculate the CEP offset, we took the home market indirect
selling expenses and deducted this amount from normal value, on home
market sales which were compared to U.S. CEP sales. We limited the home
market indirect selling expense deduction by the amount of the indirect
selling expenses incurred in the United States.
We made adjustments, where appropriate, for physical differences in
the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act.
In accordance with the Department's practice, where the difference in
merchandise adjustment for any product comparison exceeded 20 percent,
we based normal value on CV. In addition, in accordance with section
773(a)(6), we deducted home market packing costs and added U.S. packing
costs.
Further, because we disallowed all home market commissions, we
deducted from normal value the lesser of either (1) the amount of
commission paid on a U.S. sale for a particular product, or (2) the
amount of indirect selling expenses incurred on the home market sales
for a particular product.
Price to CV Comparisons
Where we compared CV 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.
Cost of Production Analysis
Based on the fact that the Department had disregarded sales in the
LTFV investigation because they were made below the cost of production
(COP), the Department found reasonable grounds in this review, in
accordance with section 773(b)(2)(A)(ii) of the Act, to believe or
suspect that respondents made sales in the home market at prices below
the cost of producing the merchandise. As a result, the Department
initiated an investigation to determine whether the respondents made
home market sales during the POR at prices below their COP within the
meaning of section 773(b) of the Act.
Before making any fair value comparisons, we conducted the COP
analysis described below.
A. Calculation of COP
We calculated the COP based on the sum of respondents' cost of
materials and fabrication for the foreign like product, plus amounts
for home market selling, general, and administrative expenses (SG&A)
and packing costs in accordance with section 773(b)(3) of the Act. We
relied on the respondents' reported COP amounts.
B. Test of Home Market Prices
We used the respondents' weighted-average COP for the POR. 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 below-cost
prices within an extended period of time in substantial quantities, and
whether they were at prices which permit recovery of all costs within a
reasonable period of time. On a product-specific basis, we compared the
COP to the home market prices, less any applicable movement charges,
rebates, and direct and indirect selling expenses.
C. Results of COP Test
Pursuant to section 773(b)(2)(c), where less than 20 percent of
respondents' 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 were at prices less than the COP, we disregarded the
[[Page 8918]]
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 section 773(b)(2)(B) of the Act, and because 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, in accordance with section 773(b)(2)(D) of the Act. Where all
sales of a specific product were at prices below the COP, we
disregarded all sales of that product, and calculated NV based on CV,
in accordance with section 773(b)(1) of the Act.
D. Calculation of CV
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of respondents' cost of materials, fabrication, SG&A ,
U.S. packing costs, interest expenses and profit as reported in the
U.S. sales databases. In accordance with sections 773(e)(2)(A), we
based SG&A and profit on the amounts incurred and realized by the
respondent in connection with the production and sale of the foreign
like product in the ordinary course of trade, for consumption in the
foreign country. We relied on the respondents' reported CV amounts. For
selling expenses, we used the weighted-average home market selling
expenses.
Arm's-Length Sales
Sales to affiliated customers in the home market not made at arm's
length were excluded from our analysis. To test whether these sales
were made at arm's length, we compared the starting prices of sales to
affiliated and unaffiliated customers net of all movement charges,
direct and indirect selling expenses, discounts and packing. Where the
price to the related party was 99.5 percent or more of the price to the
unrelated party, we determined that the sale made to the related party
was at arm's-length. Where no related customer ratio could be
constructed because identical merchandise was not sold to unrelated
customers, we were unable to determine that these sales were made at
arm's length and, therefore, excluded them from our 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 comparison to the next
most similar model.
Currency Conversion
For purposes of the preliminary results, 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.
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.'' For these preliminary results of
review, we have determined that a fluctuation exists when the daily
exchange rate differs from a benchmark by 2.25 percent. The benchmark
is defined as the rolling average of rates for the past 40 business
days. Therefore, when we determined a fluctuation existed, we
substituted the benchmark for the daily rate.
Preliminary Results of the Review
As a result of our comparison of USP and NV, we preliminarily
determine that the following weighted-average dumping margin exists:
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Manufacturer/exporter Period Margin
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Imphy/Ugine-Savoie........................... 8/5/93-12/31/94 5.01
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Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 10 days of publication. Any hearing, if
requested, will be held 44 days after the date of publication or the
first business day thereafter. Case briefs and/or other written
comments from interested parties may be submitted not later than 30
days after the date of publication. Rebuttal briefs and rebuttals to
written comments, limited to issues raised in those comments, may be
filed not later than 37 days after the date of publication of this
notice. The Department will publish the final results of this
administrative review, including its analysis of issues raised in any
written comments or at a hearing, not later than 180 days after the
date of publication of this notice.
Upon completion of this review, the following deposit requirements
will be effective upon publication of the final results of this
antidumping duty review for all shipments of SSWR from France, entered,
or withdrawn from warehouse, for consumption on or after the
publication date, as provided by section 751(a) of the Tariff Act: (1)
the cash deposit rate for the reviewed companies will be that
established in the final results of review; (2) for exporters not
covered in this review, but covered in the LTFV investigation, the cash
deposit rate will continue to be the company-specific rate from the
LTFV investigation; (3) if the exporter is not a firm covered in this
review, or the original LTFV investigation, but the manufacturer is,
the cash deposit rate will be the rate established for the most recent
period for the manufacturer of the merchandise; (4) the cash deposit
rate for all other manufacturers or exporters will continue to be 24.51
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.
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 could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
These preliminary results of review are published pursuant to
section 751(a)(1) of the Act and 19 CFR 353.22.
Dated: February 28, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-5259 Filed 3-5-96; 8:45 am]
BILLING CODE 3510-25-P
