[Federal Register Volume 63, Number 66 (Tuesday, April 7, 1998)]
[Notices]
[Pages 16963-16966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9095]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-428-602]
Brass Sheet and Strip from Germany: 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 from the petitioners, the Department
of Commerce (the Department) is conducting an administrative review of
the antidumping duty order on brass sheet and strip from Germany. This
review covers one manufacturer and exporter of the subject merchandise,
Wieland-Werke AG (Wieland). The period of review (POR) is March 1,
1996, through February 28, 1997.
We preliminarily determine that sales have been made below normal
value (NV). If these preliminary results are adopted in our final
results of administrative review, we will instruct U.S. Customs to
assess antidumping duties based on to the difference between export
price (EP) and NV.
Interested parties are invited to comment on these preliminary
results. Parties who submit argument in this proceeding are requested
to submit with the argument: (1) a statement of the issue; and (2) a
brief summary of the argument.
EFFECTIVE DATE: April 7, 1998.
FOR FURTHER INFORMATION CONTACT:
Thomas Killiam, Alain Letort, or John Kugelman, Enforcement Group III
Office 8, Import Administration, International Trade Administration,
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW.,
Room 7866, Washington, D.C. 20230; telephone (202) 482-2704 (Killiam),
4243 (Letort), or 0649 (Kugelman).
SUPPLEMENTARY INFORMATION:
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 Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are references
to the provisions codified at 19 CFR Part 353 (April 1997). Although
the Department's new regulations, codified at 19 CFR Part 351 (62 FR
27296, May 19, 1997), do not govern these proceedings, citations to
those regulations are provided, where appropriate, to explain current
departmental practice.
Background
The Department published the antidumping duty order on brass sheet
and strip from Germany on March 6, 1987 (52 FR 6997). The Department
published a notice of Opportunity to Request an Administrative Review
of the antidumping duty order for the 1996/97 review period on March 7,
1997 (62 FR 10521). On March 31, 1997, petitioners Hussey Copper Ltd.,
The Miller Company, Outokumpu American Brass, Revere Copper Products,
Inc., International Association of Machinists and Aerospace Workers,
International Union, Allied Industrial Workers of America (AFL-CIO),
Mechanics Educational Society of America (Local 56) and the United
Steelworkers of America (AFL-CIO/CLC), requested that the Department
conduct an administrative review of the antidumping duty order on brass
sheet and strip from Germany for Wieland. We published a notice of
initiation of
[[Page 16964]]
this review on April 24, 1997 (62 FR 19988).
On May 1, 1997, the petitioners requested, pursuant to section
751(a)(4) of the Act, that the Department determine whether antidumping
duties had been absorbed by the respondent during the POR. Section
751(a)(4) provides for the Department, if requested, to determine,
during an administrative review initiated two years or four years after
publication of the order, whether antidumping duties have been absorbed
by a foreign producer or exporter subject to the order if the subject
merchandise is sold in the United States through an importer who is
affiliated with such foreign producer or exporter. Section 751(a)(4)
was added to the Act by the URAA.
The regulations governing this review do not address this provision
of the Act. However, for transition orders as defined in section
751(c)(6)(C) of the Act, i.e., orders in effect as of January 1, 1995,
section 351.213(j)(2) of the Department's new antidumping regulations
provides that the Department will make a duty-absorption determination,
if requested, in any administrative review initiated in 1996 or 1998.
See 19 CFR Sec. 351.213(j)(2), 62 FR at 27394. As noted above, while
the new regulations do not govern the instant review, they nevertheless
serve as a statement of departmental policy. Because the order on brass
sheet and strip from Germany has been in effect since 1987, it is a
transition order in accordance with section 751(c)(6)(C) of the Act.
However, since this review was initiated in 1997, the Department will
not undertake a duty-absorption inquiry as part of this administrative
review.
Under the Act, the Department may extend the deadline for
completion of an administrative review if it determines that it is not
practicable to complete the review within the statutory time limit of
365 days. On November 10, 1997, the Department extended the time limits
for these preliminary results to March 31, 1998. See Brass Sheet and
Strip from Germany; Extension of Time Limits for Antidumping Duty
Administrative Review (62 FR 60469, November 10, 1997).
The Department is conducting this administrative review in
accordance with section 751 of the Act.
Scope of the Review
This review covers shipments of brass sheet and strip, other than
leaded and tinned, from Germany. The chemical composition of the
covered products is currently defined in the Copper Development
Association (C.D.A.) 200 Series or the Unified Numbering System
(U.N.S.) C2000; this review does not cover products the chemical
compositions of which are defined by other C.D.A. or U.N.S. series. In
physical dimensions, the products covered by this review have a solid
rectangular cross section over 0.006 inches (0.15 millimeters) through
0.188 inches (4.8 millimeters) in finished thickness or gauge,
regardless of width. Coiled, wound-on-reels (traverse wound), and cut-
to-length products are included. The merchandise is currently
classified under Harmonized Tariff Schedule (HTS) item numbers
7409.21.00 and 7409.29.00. The HTS item numbers are provided for
convenience and Customs purposes; the written description of the scope
of this order remains dispositive.
The POR is March 1, 1996 through February 28, 1997. This review
covers sales of brass sheet and strip from Germany by Wieland.
Transactions Reviewed
In accordance with section 751 of the Act, the Department is
required to determine the EP (or CEP) and NV of each entry of subject
merchandise.
As in past reviews, we are treating Wieland, Metallwerke
Schwarzwald GmbH (MSV), and Langenberg Kupfer-und Messingwerke GmbH
(LKM) as affiliated parties, identified in the questionnaire response
of June 16, 1997, and have collapsed them as a single producer of brass
sheet and strip in order to analyze the universe of home market
affiliated sales.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
brass sheet and strip, covered by the descriptions in the Scope of the
Review section of this notice, supra, and sold in the home market
during the POR, to be foreign like products for the purpose of
determining appropriate product comparisons to U.S. sales of brass
sheet and strip. 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 V of the Department's September 19,
1996 antidumping questionnaire. In making the product comparisons, we
matched foreign like products based on the physical characteristics
reported by the respondent.
Fair Value Comparisons
To determine whether sales of brass sheet and strip by the
respondent to the United States were made at less than fair value, we
compared EP to NV, as described in the Export Price and Normal Value
sections of this notice. In accordance with section 777A(d)(2) of the
Act, we calculated monthly weighted-average prices for NV and compared
these to individual U.S. transactions.
Export Price
We calculated the price of United States sales based on EP, in
accordance with section 772(a) of the Act, because the subject
merchandise was sold by the producer or exporter outside the United
States to unaffiliated purchasers in the United States prior to the
date of importation.
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, marine insurance, U.S. inland
freight, U.S. brokerage and handling, and U.S. Customs duties.
Normal Value
Based on a comparison of the aggregate quantity of home-market and
U.S. sales, we determined that the quantity of the foreign like product
sold in the exporting country was sufficient to permit a proper
comparison with the sales of the subject merchandise to the United
States, pursuant to section 773(a) of the Act. Therefore, in accordance
with section 773(a)(1)(B)(i) of the Act, we based NV on the price at
which the foreign like product was first sold for consumption in the
home market, in the usual commercial quantities and in the ordinary
course of trade.
Where appropriate, we deducted rebates, discounts, post-sale
warehousing, inland freight, inland insurance, and packing. We made
adjustments to NV, where appropriate, for differences in credit
expenses.
We increased NV by U.S. packing costs in accordance with section
773(a)(6)(A) of the Act. For comparison of U.S. merchandise to home-
market merchandise which was not identical but similar, we made
adjustments to NV for differences in cost attributable to differences
in physical characteristics of the merchandise, pursuant to section
773(a)(6)(C)(ii) of the Act. '
Differences in Levels of Trade
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (``LOT'') as the EP or
[[Page 16965]]
CEP transaction. 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 an 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 Carbon Steel
Plate from South Africa, 62 FR 61731 (November 19, 1997).
In its questionnaire responses Wieland stated that there were no
differences in its selling activities by customer categories within
each market. In order independently to confirm the absence of separate
levels of trade within or between the U.S. and home markets, we
examined Wieland's questionnaire responses for indications that its
functions as a seller differed qualitatively and quantitatively among
customer categories. See commentary to section 351.412 of the
Department's new regulations (62 FR at 27371).
Wieland sold to original equipment manufacturers in both the U.S.
and home markets. Wieland performed the same selling and marketing
functions for its home-market and U.S. customers. Pursuant to section
773(a)(1)(B)(i) of the Act, we consider the selling functions reflected
in the starting price of home-market sales before any adjustments. Our
analysis of the questionnaire response leads us to conclude that sales
within or between each market are not made at different levels of
trade. Accordingly, we preliminarily find that all sales in the home
market and the U.S. market were made at the same level of trade.
Therefore, all price comparisons are at the same level of trade and an
adjustment pursuant to section 773(a)(7)(A) of the Act is unwarranted.
Cost-of-Production Analysis
Petitoners alleged on July 16, 1997, that Wieland sold brass sheet
and strip in the home market at prices below cost of production (COP).
Based on these allegations, the Department determined, on August 4,
1997, that it had reasonable grounds to believe or suspect that Wieland
had sold the subject merchandise in the home market at prices below the
COP. We therefore initiated a cost investigation in order to determine
whether the respondent 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 used the COP based on the sum of the respondent's 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.
B. Test Home-Market Prices
We used the respondent's weighted-average COP for the period July
1995 to June 1996. 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 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) 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 to the home-market prices (not
including VAT), less any applicable movement charges, discounts, and
rebates.
C. Results of COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of 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 respondent's sales
of a given product during the POR were at prices less than the COP, we
found that sales of that model were made in substantial quantities
within an extended period of time, in accordance with sections
773(b)(2) (B) and (C) of the Act, and were not at prices which would
permit recovery of all costs within an extended period of time, in
accordance with section 773(b)(2)(D) of the Act. When we found that
below-costs sales had been made in substantial quantities and were not
at prices which would permit recovery of all costs within a reasonable
period of time, we disregarded the below-cost sales in accordance with
section 773(b)(1) of the Act.
On January 8, 1998 the U.S. Court of Appeals for the Federal
Circuit issued a decision in Cemex v. United States, WL 3626 (Fed.
Cir). In that case, based on the pre-URAA version of the Act, the Court
discussed the appropriateness of using constructed value (CV) as the
basis for foreign market value when the Department finds foreign 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 information provided by SKC in response to our antidumping
questionnaire. We have implemented the Court's decision in this case to
the extent that the data on the record
[[Page 16966]]
permitted. Since there were sufficient sales above cost, it was not
necessary to calculate constructed value in this case.
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.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
following weighted-average dumping margin exists:
Brass Sheet and Strip from Germany
------------------------------------------------------------------------
Weighted-
average
Producer/manufacturer/exporter margin
(percent)
------------------------------------------------------------------------
Wieland.................................................... 0.85
------------------------------------------------------------------------
Parties to this proceeding may request disclosure within five days
of publication of this notice and 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 working day
thereafter. Interested parties may submit case briefs and/or written
comments no later than 30 days after the date of publication. Rebuttal
briefs and rebuttals to written comments, limited to issues raised in
such briefs or comments, may be filed no later than 37 days after the
date of publication of this notice. The Department will publish a
notice of the final results of the administrative review, including its
analysis of issues raised in any written comments or at a hearing, not
later than 120 days after the date of publication of this notice.
Cash Deposit
The following cash 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 for by section 751(a)(1) of the Act: (1) the cash deposit rate
for Wieland will be the rate established in the final results of this
administrative review (no deposit will be required for a zero or de
minimis margin, i.e., margin lower than 0.5 percent); (2) for
merchandise exported by manufacturers or exporters not covered in these
reviews but covered in a previous segment of these proceedings, the
cash deposit rate will be the company specific rate published for the
most recent segment; (3) if the exporter is not a firm covered in this
review, a prior review, or the original less-than-fair-value (LTFV)
investigation, but the manufacturer is, the cash deposit rate will be
the rate established for the most recent period for the manufacturer of
the merchandise; and (4) if neither the exporter nor the manufacturer
is a firm covered in these or any prior review, the cash deposit rate
will be 8.87 percent, the all others rate established in the LTFV
investigation. These deposit requirements, when imposed, shall remain
in effect until publication of the final results of the next
administrative review.
This notice also 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 issued and published in accordance with sections 751(a)(1)
and 777(i)(1) of the Act and 19 CFR 353.22.
Dated: March 31, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-9095 Filed 4-6-98; 8:45 am]
BILLING CODE 3510-DS-M
