[Federal Register Volume 60, Number 158 (Wednesday, August 16, 1995)]
[Notices]
[Pages 42507-42511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20302]
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DEPARTMENT OF COMMERCE
[A-602-803]
Certain Corrosion-Resistant Carbon Steel Flat Products from
Australia: 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 one respondent, the Department of
Commerce (the Department) is conducting an administrative review of the
antidumping duty order on Certain Corrosion-Resistant Carbon Steel Flat
Products from Australia (A-602-803). This review covers one
manufacturer/exporter of the subject merchandise to the United States
during the period of review (POR) February 4, 1993, through July 31,
1994.
We have preliminarily determined that sales to the United States
have been made below the foreign market value (FMV). If these
preliminary results are adopted in our final results of administrative
review, we will instruct U.S. Customs to assess antidumping duties
equal to the difference between the United States Price (USP) and the
FMV.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: August 16, 1995.
FOR FURTHER INFORMATION CONTACT: Bob Bolling or Sally Gannon, Office of
Agreements Compliance, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230, telephone: (202)
482-3793.
SUPPLEMENTARY INFORMATION:
[[Page 42508]]
Background
On July 9, 1993, the Department published in the Federal Register
(58 FR 37079) the final affirmative antidumping duty determination on
Certain Corrosion-Resistant Carbon Steel Flat Products from Australia,
and published an antidumping duty order on August 19, 1993 (58 FR
44161). On August 3, 1994, the Department published the notice of
``Opportunity to Request an Administrative Review'' of this order for
the period February 4, 1993, through July 31, 1994 (59 FR 39543). The
Department received requests for administrative review from the
Australian National Industries Ltd. (ANI), and the Broken Hill
Proprietary Company Ltd. (BHP). On September 8, 1994 (59 FR 46391), we
initiated the administrative review of ANI, and on September 19, 1994
(59 FR 47842) we amended that initiation notice to include BHP.
Subsequently, on November 3, 1994, ANI timely withdrew its request for
an administrative review pursuant to section 353.22(a)(5) and on April
12, 1995, the Department published a ``Partial Termination of
Antidumping Administrative Review'' (60 FR 18581).
The Department is now conducting this review in accordance with
section 751 of the Tariff Act of 1930, as amended (the Tariff Act).
This review covers sales of certain corrosion-resistant carbon steel
flat products by BHP and its subsidiaries, BHP Trading, Inc.
(``Trading''), BHP Coated Corporation (``Coated''), and BHP Steel
Products USA Inc. (``Building''). The POR is February 4, 1993 through
July 31, 1994.
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute and to the
Department's regulations are references to the provisions as they
existed on December 31, 1994.
Scope of the Review
The products covered by this administrative review constitute one
``class of kind'' of merchandise: certain corrosion-resistant carbon
steel flat products. These products include flat-rolled carbon steel
products, of rectangular shape, either clad, plated, or coated with
corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-,
nickel- or iron-based alloys, whether or not corrugated or painted,
varnished or coated with plastics or other nonmetallic substances in
addition to the metallic coating, in coils (whether or not in
successively superimposed layers) and of a width of 0.5 inch or
greater, or in straight lengths which, if of a thickness less than 4.75
millimeters, are of a width of 0.5 inch or greater and which measures
at least 10 times the thickness or if of a thickness of 4.75
millimeters or more are of a width which exceeds 150 millimeters and
measures at least twice the thickness, as currently classifiable in the
HTS under item numbers 7210.31.0000, 7210.39.0000, 7210.41.0000,
7210.49.0030, 7210.49.0090, 7210.60.0000, 7210.70.6030, 7210.70.6060,
7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.21.0000,
7212.29.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000,
7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000,
7215.90.5000, 7217.12.1000, 7217.13.1000, 7217.19.1000, 7217.19.5000,
7217.22.5000, 7217.23.5000, 7217.29.1000, 7217.29.5000, 7217.32.5000,
7217.33.5000, 7217.39.1000, and 7217.39.5000. Included are flat-rolled
products of nonrectangular cross-section where such-section is achieved
subsequent to the rolling process (i.e., products which have been
``worked after rolling'')--for example, products which have been
bevelled or rounded at the edges. Excluded are flat-rolled steel
products either plated or coated with tin, lead, chromium, chromium
oxides, both tin and lead (``terne plate''), or both chromium and
chromium oxides (``tin-free steel''), whether or not painted, varnished
or coated with plastics or other nonmetallic substances in addition to
the metallic coating. Also excluded are clad products in straight
lengths of 0.1875 inch or more in composite thickness and of a width
which exceeds 150 millimeters and measures at least twice the
thickness. Also excluded are certain clad stainless flat-rolled
products, which are three-layered corrosion-resistant carbon steel
flat-rolled products less than 4.75 millimeters in composite thickness
that consist of a carbon steel flat-rolled product clad on both sides
with stainless steel in a 20%-60%-20% ratio. These HTS item numbers are
provided for convenience and Customs purposes. The written description
remains dispositive.
United States Price
The Department used purchase price and exporter's sales price (ESP)
for Trading, ESP for Coated, and ESP for Building, as defined in
section 772 of the Tariff Act.
A. Trading
Purchase price was based on the packed price, with sales terms ex
dock paid F.O.B., to unrelated purchasers in the United States. We made
deductions from purchase price, where appropriate, for foreign inland
freight, foreign inland insurance, ocean freight, marine insurance,
brokerage and handling, port charges, U.S. duty, wharfage, and U.S.
inland freight. ESP was based on the packed, F.O.B. price to unrelated
purchasers in the United States. We made deductions from ESP, where
applicable, for foreign inland freight, foreign inland insurance, ocean
freight, marine insurance, brokerage and handling, port charges, U.S.
duty, U.S. inland freight, wharfage, credit expenses, warranty
expenses, warehousing expenses, third-party commissions and indirect
selling expenses (which include inventory carrying costs, selling
expenses, unrelated processing expenses, and other U.S. incurred
selling expenses).
B. Coated
ESP was based on the packed price, with various sales terms, to
unrelated purchasers in the United States. We made deductions from ESP,
where applicable, for foreign inland freight, foreign inland insurance,
ocean freight, brokerage and handling, U.S. duty, U.S. inland freight,
credit expenses, and indirect selling expenses (which include inventory
carrying costs and selling expenses).
In addition, where appropriate, we made further deductions from ESP
for all value-added to corrosion-resistant steel in the United States,
pursuant to section 772(e)(3) of the Tariff Act. The value-added
consists of the costs associated with the production of the further-
manufactured products, other than the costs associated with the
imported corrosion-resistant steel, and a proportional amount of any
profit related to the further-manufacture. Profit was calculated by
deducting all applicable expenses from the sales of the corrosion-
resistant steel. The total profit was then allocated proportionally to
all components of cost. Only the profit attributable to the value added
was deducted from ESP. See Color Televisions From Korea, 55 FR 26225
(6/27/90).
In determining the costs incurred to produce the further-
manufactured corrosion-resistant steel the Department included the
appropriate (1) cost of manufacture, (2) movement and packing expenses,
(3) selling, general and administrative expenses (SG&A), and (4)
interest expenses.
[[Page 42509]]
For any further-manufactured sales where we found that the model-
specific home market cost information necessary to build the total
further-manufacturing cost was not provided, we used the costs (total
cost of manufacturing, general and administrative expenses, and
interest expenses) which corresponded to the lowest total cost of
production identified in the home market cost database.
C. Building
ESP was based on the packed price, with various sales terms, to
unrelated purchasers in the United States. We made deductions from ESP,
where applicable, for foreign inland freight, foreign island insurance,
ocean freight, brokerage and handling, U.S. duty, U.S. inland freight,
freight to customer, credit expenses, third-party commissions, warranty
expenses, credit notes, discounts and rebates, and indirect selling
expenses (which include inventory carrying costs, selling expenses, and
pre-sale freight). In addition, we made further deductions from ESP for
all value-added to corrosion-resistant steel in the United States, as
described above.
Where the customer level of trade was missing for certain sales and
we were unable to perform the matching of these sales with the home
market database, we applied to these sales the final weighted-average
margin determined in the less than fair value (LTFV) investigation as
the best information available (BIA) in accordance with our practice
regarding partial BIA (see Antifriction Bearings (Other Than Tapered
Roller Bearings) and Parts Thereof from France, 60 FR 10900, 10907,
February 28, 1995). For any further-manufactured sales where we found
that the model-specific home market cost information necessary to build
the total further manufacturing cost was not provided, we used costs as
described above.
It is the Department's standard practice in ESP cases to conduct
the review on the basis of sales made during the POR. Respondent
claimed that certain merchandise was not subject to review because the
merchandise entered prior to the suspension of liquidation (February 4,
1993). We have included all sales during the POR because there is not
sufficient data to link sales during the POR to entries of subject
merchandise prior to suspension of liquidation. See Industrial Belts
From Italy, 57 FR 8295, 96 March 9, 1992.
Foreign Market Value
Based on a comparison of the volume of home market and third
country sales, we determined that the home market was viable. Further,
BHP had sales both to related and unrelated parties in the home market
during the POR. After reviewing and verifying BHP's U.S. and home
market sales to both unrelated and related purchasers and their ability
to obtain downstream sales information, the Department determined that
BHP need not report its home market sales made by its related
distributors to the first unrelated party (downstream sales) because
BHP's home market sales to the related distributors were made on an
arm's length basis (see the Department's June 9, 1995, letter to BHP
available in the public file). In addition, for sales to certain
related parties that failed the arm's-length test, the Department did
not require BHP to report the downstream sales made by these related
parties because the related parties further-manufactured the products
into merchandise outside the scope of this review. For a full
discussion of how we treated BHP's sales to related parties in this
review, see the Analysis Memorandum for this review, which is on file
in room B-099 of the main building of the commerce Department.
BHP had sales of secondary merchandise (non-prime) in the home
market; however, there were no sales of secondary merchandise in the
U.S. market during the POR. Therefore, as per our established model
match criteria, the Department only compared prime merchandise sold in
the United States to prime merchandise sold in the home market.
Petitioners submitted an allegation of sales-below-cost on January
20, 1995, and supplemented the allegation on January 30, 1995. We
reviewed petitioners' methodology and found that petitioners calculated
the cost of production (COP) in accordance with 19 C.F.R. 353.51 and
based their calculations on data submitted on the record by the
respondents. We determined that petitioner's sales-below-cost
methodology was reasonable, indicating that there were reasonable
grounds to believe or suspect that, during this POR, BHP made sales of
subject merchandise in the home market at prices less than the COP.
Thus, in accordance with section 773(b) of the Tariff Act, the
Department initiated an investigation on February 3, 1995, to determine
whether BHP made home market sales of corrosion-resistant steel at
prices less than the COP during the POR.
In accordance with section 773(b) of the Tariff Act, in determining
whether to disregard home market sales made at prices below the COP, we
examined whether such sales were made in substantial quantities over an
extended period of time, and whether such sales were made at prices
which permitted recovery of all costs within a reasonable period of
time in the normal course of trade. We calculated COP for BHP as the
sum of reported materials, labor, factory overhead, and general
expenses, and compared the COP to home market prices, net price
adjustments, discounts, rebates, movement expenses, and pre-packing and
packing expenses in accordance with 19 CFR 353.51(c).
Pursuant to the Department's practice, for each model for which
less than 10 percent, by quantity, of the home market sales during the
POR were made at prices below the COP, we included all sales of that
model in the computation of FMV. For each model for which 10 percent or
more, but less than 90 percent, of the home market sales during the POR
were priced below the merchandise's COP, we excluded from the
calculation of FMV those home market sales which were priced below the
merchandise's COP, provided that they were made over an extended period
of time. For each model for which 90 percent or more of the home market
sales during the POR were priced below the COP and were made over an
extended period of time, we disregarded all sales of that model in our
calculation and, in accordance with section 773(b) of the Tariff Act,
we used the constructed value (CV) of those models, as described below.
See e.g., Mechanical Transfer Presses from Japan, Final Results of
Antidumping Duty Administrative Review, 59 FR 9958 (March 2, 1994).
In accordance with section 773(b)(1) of the Tariff Act, to
determine whether sales below cost had been made over an extended
period of time, we compared the number of months in which sales below
cost occurred for a particular model to the number of months in which
that model was sold. If the model was sold in fewer than three months,
we did not disregard below-cost sales unless there were below-cost
sales of that model in each month sold. If a model was sold in three or
more months, we did not disregard below-cost sales unless there were
sales below cost in at least three of the months in which the model was
sold. See Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From Japan and Tapered Roller Bearings, Four Inches or Less
in Outside Diameter, and Components Thereof, From Japan: Final Results
of Antidumping Duty Administrative Reviews, 58 FR 64720, 64729
(December 8, 1993).
BHP provided insufficient evidence that its below-cost sales of
models were
[[Page 42510]]
at prices that would permit recovery of all costs within a reasonable
period of time and in the normal course of trade. Thus, we disregarded
those sales which were made below cost over an extended period of time
pursuant to the methodology described above. For a full discussion of
how we treated BHP's claim of cost recovery in this review, see the
Analysis Memorandum for this review, which is on file in room B-099 of
the main building of the Commerce Department.
We used CV as FMV for those U.S. models for which we were unable to
find a home market match and calculated CV in accordance with section
773(e) of the Tariff Act. In our calculations, we included the cost of
materials, labor, and factory overhead. Where the general expenses were
less than the statutory minimum of 10 percent of the cost of
manufacture (COM), we calculated general expenses as 10 percent of COM.
Where the actual profits were less than the statutory minimum of 8
percent of the COM plus general expenses, we calculated profit as 8
percent of the sum of COM plus general expenses.
In accordance with section 773(a)(1)(A) of the Tariff Act, for
those U.S. models for which we were able to find a home market such or
similar match, we calculated FMV based on the packed, F.I.S. (``free
into store'') home market sales price to unrelated purchasers or
related purchasers which met the Department's arms-length test as
described above. We made deductions from FMV, where applicable, for
inland freight, inland insurance, credit expenses, warranty expenses,
advertising expenses, discounts and rebates.
For home market sales with missing payment dates, we denied BHP's
claim for a cash (settlement) discount. For sales with missing payment
and shipment dates, we used the average inventory and credit periods of
the remaining home market sales in order to calculate the inventory
carrying cost and credit expense, respectively, for these sales. We
will request the updated information from BHP after the preliminary
results are issued. Additionally, we denied BHP's claim under section
353.55 that it had provided discounts of at least the same magnitude on
20 percent or more of its sales, and that it was therefore entitled to
an adjustment for discounts on sales that had not actually received a
discount. Using discounts of different magnitudes, respondent
calculated average discounts for painted and updated products.
Respondent then applied to each sale that received less than the
average discount, or no discount, the amount necessary to bring the
discount up to the full amount of the appropriate average discount.
While BHP supported its claim that discounts were granted on more than
20 percent of sales, we denied the adjustment because respondent failed
to demonstrate that the discounts actually granted were of at least the
same magnitude, as required under 353.55(b)(1). For a full discussion
of how we treated these claims and the missing data, see the Analysis
Memorandum for this review, which is on file in room B-099 of the main
building of the Commerce Department.
For purchase price comparisons, pursuant to section 773(a)(4)(B) of
the Tariff Act and 19 CFR 353.56(a)(2), we made circumstance of sale
adjustments to FMV, where appropriate, for differences in warranty,
credit, and warehousing expenses. We deducted from FMV home market pre-
packing and packing costs and added to FMV packing expenses incurred in
Australia for U.S. sales. Where appropriate, we added U.S. third-party
commissions to FMV and deducted from FMV the weighted-average home
market indirect selling expenses (which included inventory carrying
costs, indirect selling expenses, technical service expenses, and pre-
sale freight expenses) up to the amount of the third-party commissions
incurred on U.S. sales, in accordance with 19 CFR 353.56(b)(1). We also
adjusted FMV, where appropriate, for physical differences in the
merchandise, in accordance with 19 CFR 353.57.
For ESP comparisons, we deducted from FMV the weighted-average home
market indirect selling expenses (which include inventory carrying
costs, indirect selling expenses, technical service expenses, and pre-
sale freight expenses), limiting the home market indirect selling
expense deduction by the amount of indirect selling expenses incurred
in the United States, in accordance with section 353.56(b)(2) of the
Department's regulations. In cases where a third-party commission was
granted on the U.S. sale only, we increased the amount classified as
U.S. indirect selling expenses by the amount of the U.S. third-party
commission for comparison to home market indirect selling expenses.
Also, after deducting from FMV home market pre-packing and packing
expenses, we added to FMV packing expenses incurred in Australia for
U.S. sales. We also adjusted FMV, where appropriate, for physical
differences in the merchandise, in accordance with 19 CFR 353.57.
Preliminary Results of Review
As a result of our comparison of USP to FMV, we preliminarily
determine that the following margin exists for the period February 4,
1993, through July 31, 1994;
------------------------------------------------------------------------
Manufacturer Margin(percent)
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BHP.................................................... 20.10
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Interested parties may request disclosure within 5 days of the date
of publication of this notice and 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 written comments from interested parties may be submitted
no 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 the results of its
analysis of issues raised in any such written comments or at a hearing.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Individual
differences between the USP and FMV may vary from the percentages
stated above.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided for by section
751(a)(1) of the Tariff Act. A cash deposit of estimated antidumping
duties shall be required on shipments of Certain Corrosion-Resistant
Carbon Steel Flat Products from Australia as follows: (1) The cash
deposit rate for the reviewed company will be the rate established in
the final results of this review; (2) for previously reviewed or
investigated companies not listed above, the cash deposit rate will
continue to be the company-specific rate published for the most recent
period; (3) if the exporter is not a firm covered in this review, 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; and (4) if neither the
exporter nor the manufacturer is a firm covered in this review, the
case deposit rate will be 24.96 percent. This is the
[[Page 42511]]
``all others'' rate from the LTFV investigation. See Final
Determination of Sales at Less Than Fair Value: Certain Corrosion-
Resistant Carbon Steel Flat Products from Australia. (58 FR 37079, July
9, 1993).
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 Department's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and this notice are in accordance with
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22.
Dated: August 8, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-20302 Filed 8-5-95; 8:45 am]
BILLING CODE 3510-DS-M
