[Federal Register Volume 59, Number 106 (Friday, June 3, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12798]
[[Page Unknown]]
[Federal Register: June 3, 1994]
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Part IX
Department of Commerce
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International Trade Administration
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Affirmative Preliminary Determination of Circumvention of Antidumping
Duty Order and Correction; Notices
DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-806]
Steel Wire Rope from Mexico; Affirmative Preliminary
Determination of Circumvention of Antidumping Duty Order
AGENCY: Import Administration/International Trade Administration/
Department of Commerce.
ACTION: Notice of affirmative preliminary determination of
circumvention of antidumping duty order.
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SUMMARY: On May 26, 1993, the Department of Commerce received an
allegation of circumvention of the antidumping duty order on steel wire
rope from Mexico. Pursuant to that allegation, the Department of
Commerce initiated a circumvention inquiry on September 17, 1993, which
was published in the Federal Register on September 27, 1993 (58 FR
50349).
The Department of Commerce has conducted that inquiry and
preliminarily determines that imports into the United States of steel
wire strand from Mexico, which are assembled in the United States into
steel wire rope for sale in the United States, are circumventing the
antidumping duty order on steel wire rope from Mexico within the
meaning of section 781(a) of the Tariff Act of 1930, as amended, and 19
CFR 353.29(e). Interested parties are invited to comment on this
preliminary determination.
EFFECTIVE DATE: June 3, 1994.
FOR FURTHER INFORMATION CONTACT: Sandra Yacura or Thomas Prosser at
(202) 482-5253, Office of Antidumping Compliance, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th and Constitution Avenue, NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
Background
On May 26, 1993, the Department of Commerce (the Department)
received a petition filed by the Committee of Domestic Steel Wire Rope
and Specialty Cable Manufacturers (the Committee) requesting an
investigation to determine whether imports of steel wire strand (also
known as stranded wire or strand) are circumventing the antidumping
duty order on steel wire rope from Mexico (58 FR 16173, March 25, 1993)
within the meaning of section 781(a) of the Tariff Act of 1930, as
amended (the Tariff Act). Subsequent submissions from the Committee,
addressing deficiencies in the original request, were received on
August 13, August 18, and August 20, 1993. On April 11, 1994, the
Committee submitted copies of the Census Bureau data that it had
summarized in earlier submissions. On September 27, 1993, the
Department published in the Federal Register a Notice of Initiation of
Anticircumvention Inquiry; Steel Wire Rope from Mexico (58 FR 50349).
The inquiry covers the period from October 1, 1992 to September 30,
1993.
On November 19, 1993, the Department issued a questionnaire to
Grupo Camesa S.A. de C.V. (Grupo Camesa) and its United States
affiliate, Camesa Inc. (collectively, Camesa). Camesa responded to the
questionnaire on December 20, 1993. The Department determined that this
submission was deficient and issued a supplemental questionnaire on
January 31, 1994. The Department received a response to the
supplemental questionnaire on February 16, 1994. On March 15, 1994, the
Committee submitted comments with respect to Camesa's responses.
Scope of Antidumping Duty Order
The product covered by the order is steel wire rope, which is
defined in the Department's antidumping duty order on steel wire rope
from Mexico as: ``ropes, cables, and cordage of iron or carbon steel,
other than stranded wire, not fitted with fittings or made up into
articles, and not made up of plated wire.''
During the period of this inquiry (POI), such merchandise was
classifiable under subheadings 7312.10.9030, 7312.10.9060, and
7312.10.9090 of the Harmonized Tariff Schedule (HTS). HTS subheadings
are provided for convenience and for Customs purposes. The Department's
written description of the scope of the order remains dispositive.
Scope of the Anticircumvention Inquiry
Products subject to the circumvention inquiry are entries of
strand, which are defined as stranded wire having a lay or twist of not
more than 1 revolution for a length equal to the strand diameter
multiplied by 8.5. During the POI, such merchandise was classifiable
under subheading 7312.10.3020 of the HTS. The HTS subheading is
provided for convenience and for Customs purposes. The Department's
written description of the scope of the inquiry remains dispositive.
Nature of the Circumvention Inquiry
Section 781(a)(1) of the Tariff Act provides that if:
(A) A product sold in the United States is of the same class or
kind as merchandise that is the subject of an order, and
(B) Such product sold in the United States is completed or
assembled in the United States from parts or components produced in the
foreign country with respect to which such order applies, and
(C) The difference between the value of such product sold in the
United States and the value of the imported parts and components
referred to in (B) above is small, the Department, after taking into
account any advice provided by the U.S. International Trade Commission
(ITC), may include within the scope of such order the imported parts or
components referred to in paragraph (B) above that are used in the
completion or assembly of the merchandise in the United States at any
time such order is in effect. Section 781(a)(2) of the Tariff Act
further provides that, in determining whether to include parts or
components in an antidumping duty order, the Department shall take into
account such factors as (A) pattern of trade; (B) whether the
manufacturer or exporter of the parts or components is related to the
person who assembles or completes the merchandise sold in the United
States from the parts or components produced in the foreign country
with respect to which the order applies, and (C) whether imports into
the United States of the parts or components produced in such foreign
country have increased after the issuance of such order.
I. Statutory Criteria
(A) Class or Kind of Merchandise
In this inquiry, the merchandise completed at Camesa Inc.'s
Rosenberg, Texas, facility and sold in the United States is steel wire
rope. As the antidumping duty order encompasses ``ropes, cables, and
cordage of iron or carbon steel, other than stranded wire, not fitted
with fittings or made up into articles, and not made up of plated
wire,'' the steel wire rope sold in the United States is of the same
class or kind of merchandise as that subject to the antidumping duty
order on steel wire rope from Mexico.
(B) Parts/Components Produced in the Country to Which the Order Applies
The component of wire rope being imported is defined as stranded
wire having a lay or twist of not more than 1 revolution for a length
equal to the strand diameter multiplied by 8.5. This strand is produced
by Grupo Camesa in Mexico, imported into the United States for closure
into steel wire rope at the Camesa Inc. facility at Rosenberg, Texas,
and subsequently sold in the United States by Camesa Inc.
(C) Difference in Value
In this anticircumvention inquiry, we attempted to base our
analysis of the difference in value on both a quantitative analysis of
the value of the finishing process in the United States, and a
qualitative analysis of the nature of the processing performed in the
United States. This approach is consistent with our analysis in
previous anti-circumvention inquiries. See, e.g., Certain Carbon Steel
Butt-Weld Pipe Fittings from the People's Republic of China;
Affirmative Final Determination of Circumvention of Antidumping Duty
Order, 59 FR 15155 (March 31, 1994).
Generally, in an anticircumvention inquiry, a quantitative analysis
is based on a comparison of the value between the finished product sold
in the United States and the value of the component imported from the
country to which the order applies. See, e.g., Granular
Polytetrafluoroethylene Resin from Italy, Preliminary Affirmative
Determination of Circumvention of Antidumping Duty Order, 57 FR 43218
(September 18, 1992). However, in order to make an effective
comparison, the Department must ascertain that it is using the
appropriate value for the imported component. To that end, we provided
the respondent with three options for demonstrating that the price of
the wire strand imported by Camesa Inc. from Grupo Camesa represented a
valid market price for use in our difference-in-value calculation. The
options were as follows: (1) Sales prices for strand sold to unrelated
parties in the home market and largest third country market; (2)
purchase prices paid to unrelated suppliers in Mexico by Grupo Camesa
for strand; or (3) monthly weighted-average manufacturing costs for
strand sold to Camesa Inc. during the POI. In order for us to ascertain
the value of the completed merchandise sold in the United States, we
also requested that Camesa provide cost data relevant to the production
of steel wire rope in the United States.
Camesa, however, failed to provide any of the requested
information. Instead, Camesa provided a single price quotation from a
supplier in a third country. Camesa's failure to provide the requested
information prevented the Department from determining whether the
difference between the value of the steel wire rope sold in the United
States and the value of the strand produced in Mexico is small.
Accordingly, the Department is required to rely on the best information
available (BIA), pursuant to section 776(c) of the Tariff Act, to make
the determination.
In deciding what to use as BIA, the Department's regulations at 19
CFR 353.37(b) state that the Department may take into account whether a
party refuses to provide requested information. Thus, the Department
may determine, on a case-by-case basis, what constitutes BIA.
Because Camesa refused to provide the requested information, as
BIA, we preliminarily determine that the quantitative difference
between the value of the finished steel wire rope sold in the United
States and the value of the strand produced in Mexico is small. This
eliminates the need for the Department's qualitative analysis of the
nature of the processing Camesa Inc. performed in the United States.
However, we note that the result of a qualitative analysis supports the
BIA assumption that the difference between the value of the imported
strand and the value of the finished rope is small, as discussed below.
According to the description of the manufacturing process provided
by the ITC in its final affirmative determination of injury (as
discussed in the following paragraphs) concerning imports of steel wire
rope from Argentina and Mexico (see Steel Wire Rope from Argentina and
Mexico, Determinations of the Commission in Investigations Nos. 731-TA-
457 and 479 (Final) Under the Tariff Act of 1930, Together With the
Information Obtained in the Investigations, August 1991, pages A17-
A21), the manufacturing process for steel wire rope consists of three
major steps: (1) Drawing rod into wire, (2) stranding wire, and (3)
closing strands into rope. Camesa Inc. performs only the closing
process in the United States.
In the first step, steel wire rod is heat treated (called
patenting), coated, cleaned, and reduced to a smaller diameter through
a series of dies to wire. Depending on the amount of reduction during
drawing (called the draft), the wire may also undergo patenting and re-
drawing to a smaller diameter.
In the second step, strands are formed in a single operation from
individual wires laid about a core so that all wires in a strand can
move in unison to distribute load and bending stresses equally. This is
achieved with ``tubular'' or ``planetary'' stranding machines. Strand
used for making wire rope is generally lubricated as the wires move
into the stranding die. After emerging from the stranding die, the
strand is frequently ``postformed,'' a process that involves passing
the strand through a series of straightening rollers in order to remove
excessive twist. The strand may be die-formed or flattened, or coated
at this point.
The third step, the finishing operation, is called ``closing'' and
is accomplished on a tubular or planetary closer, operating in a manner
similar to tubular or planetary stranders. Spools or bobbins of strand
are placed in cradles in the closer to dispense simultaneously all
strands of a sufficient length needed to make a single rope without a
splice. The closing die presses the strands together, forming the rope.
Based on the above description of the manufacturing process for
steel wire rope, we preliminarily determine that the finishing
operation performed by Camesa Inc. in the United States represents a
minor portion of the manufacturing process of steel wire rope, and adds
minor value when compared to the production of the wire strand, as
alleged by the petitioner in its anticircumvention inquiry request.
The Department has determined, based on BIA, that the quantitative
difference between the value of the steel wire rope sold in the United
States and the value of the wire strand produced in Mexico is small.
Though not necessary for this conclusion, the Department further notes
that a qualitative analysis of the manufacturing process for steel wire
rope demonstrates that the finishing operation performed by Camesa Inc.
represents a minor portion of the manufacturing process of steel wire
rope. Therefore, we preliminarily determine that the difference between
the value of the strand produced in Mexico and the value of the wire
rope sold in the United States is small within the meaning of section
781(a) of the Tariff Act.
II. Factors
In accordance with section 781(a)(2) of the Tariff Act, the
Department considered the following factors in determining whether to
include strand within the order: (A) The pattern of trade, (B) whether
the manufacturer or exporter of the parts or components is related to
the person who assembles or completes the merchandise sold in the
United States from the parts or components produced in the foreign
country with respect to which the order applies, and (C) whether
imports into the United States of the parts or components produced in
such foreign country have increased after the issuance of such order.
(A) Pattern of Trade
Generally, the Department considers circumvention to be more likely
when the imports of the merchandise subject to the order have
decreased. To evaluate the pattern of trade in this case, we examined
the timing and quantities of exports of steel wire rope from Mexico to
the United States during the POI. We also examined the timing and
quantities of Camesa's imports into the United States of steel wire
rope produced by Grupo Camesa in Mexico.
U.S. Census Bureau (Census Bureau) statistics indicate that, during
the nine months prior to the POI, steel wire rope imports from Mexico
to the United States averaged 316.44 net tons per month. However,
during the first half of the POI, imports of steel wire rope from
Mexico dropped to an average of ten net tons per month. Census Bureau
statistics for the second half of the POI were not available.
Although Camesa imported steel wire rope from Mexico to the United
States prior to the POI, Camesa had no such imports of steel wire rope
during the POI. Thus, the pattern of trade of imports of merchandise
subject to the order indicates that circumvention may have occurred
during the POI.
(B) Relationship
Generally, the Department considers circumvention to be more likely
when the manufacturer/exporter of the parts or components is related to
the party completing or assembling merchandise in the United States
using such imported parts or components. See, e.g., Granular
Polytetrafluoroethylene Resin from Italy, Final Affirmative
Determination of Circumvention of Antidumping Duty Order, 58 FR 26100
(April 30, 1993).
Camesa Inc., which imports the strand at issue and finishes it into
steel wire rope in the United States, is a wholly-owned subsidiary of
Grupo Camesa, the Mexican manufacturer and exporter of the strand (see
Camesa submission of December 20, 1993, page one). Since all of Camesa
Inc.'s purchases of strand during the POI were from Grupo Camesa, these
purchases are from a related party within the meaning of section
773(e)(4) of the Tariff Act. Accordingly, the relationship between
Grupo Camesa and Camesa Inc. would make it more likely that
circumvention of the antidumping duty order may have occurred during
the POI.
(C) Increase in Imports of Components
Generally, the Department considers circumvention to be more likely
when imports of parts and components which are used in the production
of merchandise subject to the order have increased after issuance of
the antidumping duty order. The Department reviewed Camesa's imports of
strand after the issuance of the order, and compared these imports to
those prior to the order.
We note that Camesa's imports steadily increased after issuance of
the order through the end of the POI (see Camesa submission of December
20, 1993, Attachment Five). This pattern of imports of strand from
Mexico indicates that circumvention of the order on steel wire rope may
have occurred during the POI.
Affirmative Preliminary Determination of Circumvention
After consideration of all the factors discussed above, the
Department preliminarily determines that circumvention of the
antidumping duty order on steel wire rope from Mexico has occurred
within the meaning of section 781(a) of the Tariff Act.
We base this determination on the following: First, the merchandise
finished at Camesa Inc. and sold in the United States is of the same
class or kind of merchandise as that covered by the order and is
completed from merchandise produced in the order country. Second, on
the basis of BIA, the Department preliminarily determines that the
difference between the value of the steel wire rope sold in the United
States and the value of the strand used in the production of steel wire
rope is small within the meaning of section 781(a) of the Tariff Act.
Third, Camesa's imports into the United States of strand from Mexico
increased during the POI, while Camesa's imports into the United States
of wire rope from Mexico ceased after the Department issued the
affirmative preliminary determination of sales at less than fair value
of steel wire rope from Mexico. Finally, Camesa Inc. is a wholly-owned
subsidiary of Grupo Camesa. Thus, the pattern of trade, relationship
between Grupo Camesa and Camesa Inc., and level of imports into the
United States support a finding of circumvention of the antidumping
duty order.
Based on this affirmative preliminary determination of
circumvention, we have preliminarily determined that strand, as defined
above, falls within the scope of the antidumping duty order on steel
wire rope from Mexico, pursuant to section 781(a)(1) of the Tariff Act.
Suspension of Liquidation
In accordance with section 773(d) of Tariff Act, the Department is
directing the U.S. Customs Service to suspend liquidation of all
entries of stranded wire from Mexico having a lay or twist of not more
than 1 revolution for a length equal to the strand diameter multiplied
by 8.5, that are entered, or withdrawn from warehouse, for consumption
on or after the date of publication of this notice in the Federal
Register.
The merchandise subject to suspension of liquidation is wire strand
of the kind used in the production of steel wire rope, as defined in
the ``Scope of the Anticircumvention Inquiry'' section of this notice.
The U.S. Customs Service shall require a cash deposit or posting of
bond in the amount of 111.68 percent. This suspension of liquidation
will remain in effect until further notice.
Notification of the International Trade Commission
The Department, consistent with section 781(e) of the Tariff Act,
will notify the ITC of this preliminary determination to include the
merchandise subject to this inquiry within the antidumping duty order
on steel wire rope from Mexico. Pursuant to section 781(e) of the
Tariff Act, the ITC may request consultations concerning the
Department's proposed inclusion of the subject merchandise. If, after
consultations, the ITC believes that a significant injury issue is
presented by the proposed inclusion, the ITC may provide written advice
to the Department. In such a case, the ITC will have 60 days to provide
written advice to the Department.
Public Comment
Interested parties may request disclosure within 5 days of the date
of publication of this determination, and may request a hearing within
10 days of publication. Case briefs and/or written comments from
interested parties may be submitted no later than 30 days after the
date of publication of this notice. Rebuttal briefs and rebuttals to
comments, limited to issues raised in those briefs or comments, may be
filed no later than 37 days after publication of this notice. Any
hearing, if requested, will be held 44 days after publication of this
notice. The Department will publish the final determination with
respect to the circumvention inquiry, including the results of its
analysis of any written comments.
This preliminary affirmative circumvention determination is in
accordance with section 781(a) of the Tariff Act and 19 CFR 353.29(e).
Dated: May 19, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-12798 Filed 5-24-94; 8:45 am]
BILLING CODE 3510-DS-P
