[Federal Register Volume 60, Number 148 (Wednesday, August 2, 1995)]
[Notices]
[Pages 39354-39358]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-19013]
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[[Page 39355]]
DEPARTMENT OF COMMERCE
International Trade Administration
[A-428-814]
Certain Cold-Rolled Carbon Steel Flat Products 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 by the respondent, the Department of
Commerce (the Department) is conducting an administrative review of the
antidumping duty order on Certain Cold-Rolled Carbon Steel Flat
Products From Germany (A-428-814). The review covers sales from one
manufacturer of the subject merchandise to the United States during the
period August 18, 1993 through July 31, 1994.
We have preliminarily determined that sales have been made below
foreign market value (FMV). If these preliminary results are adopted in
our final results of the administrative review, we will instruct U.S.
Customs to assess antidumping duties equal to the difference between
the United States price (USP) and FMV.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: August 2, 1995.
FOR FURTHER INFORMATION CONTACT: Steve Bezirganian or Robin Gray,
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)
482-1395 or (202) 482-0196, respectively.
SUPPLEMENTARY INFORMATION:
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.
Background
On July 9, 1993 the Department published in the Federal Register
(58 FR 37136) the final affirmative antidumping duty determination on
certain cold-rolled carbon steel flat products from Germany, for which
we published an amendment and an antidumping duty order on August 19,
1993 (58 FR 44170). On August 3, 1994, the Department published the
notice of ``Opportunity to Request an Administrative Review'' of this
order for the period August 18, 1993 through July 31, 1994 (59 FR
39543). C.D. Walzholz, J.N. Eberle & Cie, GmbH, Rochlinger Kaltwalzwerk
and Thyssen Stahl AG (Thyssen) requested an administrative review. We
initiated the administrative review on September 8, 1994 (59 FR 46391).
Subsequently, C.D. Walzholz, J.N. Eberle & Cie, GmbH, and Rochlinger
Kaltwalzwerk requested that they be allowed to withdraw from the
administrative review. On April 12, 1995, we published a ``Notice of
Partial Termination of Administrative Review of Antidumping Order''
with respect to these three respondents (60 FR 18581). The Department
is conducting this review in accordance with section 751 of the Tariff
Act of 1930, as amended (the Tariff Act).
Scope of the Review
The products covered by this review include cold-rolled (cold-
reduced) carbon steel flat-rolled products, of rectangular shape,
neither clad, plated nor coated with metal, whether or not painted,
varnished or coated with plastics or other nonmetallic substances, 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 7209.11.0000, 7209.12.0030,
7209.12.0090, 7209.13.0030, 7209.13.0090, 7209.14.0030, 7209.14.0090,
7209.21.0000, 7209.22.0000, 7209.23.0000, 7209.24.1000, 7209.24.5000,
7209.31.0000, 7209.32.0000, 7209.33.0000, 7209.34.0000, 7209.41.0000,
7209.42.0000, 7209.43.0000, 7209.44.0000, 7209.90.0000, 7210.70.3000,
7210.90.9000, 7211.30.1030, 7211.30.1090, 7211.30.3000, 7211.30.5000,
7211.41.1000, 7211.41.3030, 7211.41.3090, 7211.41.5000, 7211.41.7030,
7211.41.7060, 7211.41.7090, 7211.49.1030, 7211.49.1090, 7211.49.3000,
7211.49.5030, 7211.49.5060, 7211.49.5090, 7211.90.0000, 7212.40.1000,
7212.40.5000, 7212.50.0000, 7217.11.1000, 7217.11.2000, 7217.11.3000,
7217.19.1000, 7217.19.5000, 7217.21.1000, 7217.29.1000, 7217.29.5000,
7217.31.1000, 7217.39.1000, and 7217.39.5000. Included in this review
are flat-rolled products of nonrectangular cross-section where such
cross-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
from this review is certain shadow mask steel, i.e., aluminum-killed,
cold-rolled steel coil that is open-coil annealed, has a carbon content
of less than 0.002 percent, is of 0.003 to 0.012 inch in thickness, 15
to 30 inches in width, and has an ultra flat, isotropic surface. These
HTS item numbers are provided for convenience and Customs purposes. The
written description remains dispositive.
The period of review (POR) is August 18, 1993 through July 31,
1994. This review covers sales of cold-rolled carbon steel by one
manufacturer (Thyssen).
United States Price
The Department used exporter's sales price (ESP) because all sales
to the first unrelated purchaser in the United States, whether before
or after importation, met the requirements set forth by Section 772(c)
of the Tariff Act. ESP was based on the packed prices at which the
merchandise was sold under various terms to unrelated purchasers in the
United States. We made adjustments, where applicable, for foreign
inland freight, plant freight, ocean freight, marine insurance,
brokerage and handling, U.S. inland freight, U.S. duty, U.S. credit,
discounts, inventory carrying costs, technical service expenses,
warranties, warehousing, and indirect selling expenses (which include
interest on fixed assets, other U.S.-incurred selling expenses, and
export selling expenses).
We also adjusted ESP for value added in further manufacturing,
including an allocation of profit earned on U.S. sales.
We adjusted USP for taxes in accordance with our practice as
outlined in various determinations, including Silicomanganese from
Venezuela; Final Determination of Sales at Less Than Fair Value, 59 FR
55435, 55439 (November 7, 1994).
At the German and U.S. verifications, Thyssen suggested various
corrections to be made to its database. At verification, the Department
accepted the changes because each change was minor and ministerial in
nature. On May 12, 1995, the Department instructed Thyssen to make all
of the changes to its database, excluding the change suggested by
Thyssen for certain discounts, as explained below. On May
[[Page 39356]]
22, 1995, Thyssen submitted a revised tape which incorporated these
corrections. Based on a review of all of Thyssen's submissions and the
Department's findings at verification, the Department determined that
the revised May 22, 1995, tape contains the following problems: (1) the
identification and deletion of what Thyssen characterized as
``duplicate'' invoices in a manner inconsistent with the changes
suggested by Thyssen at verification; (2) unexplained changes to
unshipped balances for one order; (3) changes to quantity of U.S. sales
from Richburg, a division of Thyssen, Inc. (TINC), other than those
suggested by Thyssen at verification, and other inconsistencies in the
changes which Thyssen did suggest; (4) unexplained quantity and price
changes for four observations; and (5) errors in the discount field for
one U.S. customer. Due to these discrepancies we are unable to perform
an accurate calculation for certain sales. Counsel for petitioners has
argued that the Department should use total BIA in this case due to the
deficiencies in Thyssen's response. We have determined, however, that
resorting to total best information available (``BIA'') is not
warranted because Thyssen's U.S. database is not sufficiently flawed
such that the response as a whole is unreliable. See National Steel
Corporation v. United States, 870 F. Supp. 1130, 1135 (CIT 1994); see
also the July 20, 1995, decision memorandum from Richard O. Weible to
Roland L. MacDonald. Instead, we used a margin based upon BIA only for
those sales of U.S. products where we did not have complete and
accurate information.
The adversity of the information used as partial BIA depends upon
the level of sufficiency of the information provided. When partial BIA
is warranted, but the errors in the information submitted constitute a
failure to provide the necessary data, the Department consistently
applies adverse BIA. Id. (citing, inter alia, Certain Corrosion-
Resistant Carbon Steel Flat Products From Finland, 58 Fed. Reg. 37,122,
37,124 (1993)). By contrast, when only a minor adjustment in the data
is involved or there is an inadvertent gap in the record, we apply a
less adverse or neutral surrogate. Nat'l Steel at 1136.
Thyssen's revised database did contain unauthorized changes and
other unexplained problems. However, the sales affected are minimal in
quantity, and the apparent inaccuracies consist mostly of data-entry
problems rather than omissions or insufficiencies in Thyssen's
reporting. For these reasons, we have not applied the most adverse
partial BIA. We have chosen as BIA Thyssen's weighted-average margin
from the original investigation.
We disallowed the exchange rate expense which Thyssen claimed due
to unexplained changes in this expense in the May 22, 1995 submission.
(See Analysis Memorandum to the File, June 16, 1995).
Also, due to inaccurate and deficient information provided during
the verification of product characteristics for one U.S. sale, we are
assigning to that sale a margin based on BIA, as previously described.
Further, Thyssen failed to report contemporaneous home market sales for
1992 requirements contract sales by the Budd Company, a related parts
manufacturer. We have assigned these sales a margin based on BIA, as
previously described (see Analysis Memorandum to the File, June 16,
1995). Finally, Thyssen failed to include in its database a storage/
warehouse expense incurred by TINC on certain U.S. sales. We adjusted
U.S. price to account for this expense, where appropriate (see Analysis
Memorandum to the File, June 16, 1995). Also, due to errors noted at
verification, we adjusted warehousing expense for the automotive
division for both fiscal years.
No other adjustments were claimed or allowed.
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.
Therefore, in accordance with section 773(a)(1)(A) of the Tariff Act,
we based FMV on the packed prices at which the merchandise was sold
under various terms to related and unrelated purchasers in the home
market.
Based on a review of Thyssen's submissions and findings at
verification, the Department determined that Thyssen need not report
the home market sales made by Thyssen's related parties to the first
unrelated party (downstream sales). The vast majority of the products
sold by these related parties in the home market possessed physical
characteristics that made them less similar to those imported into the
United States than those sold directly by Thyssen to its related and
unrelated home market customers in transactions suitable for matching
purposes. The Department determined that only a small portion of the
downstream sales could provide potential matches to the company's U.S.
sales. Considering the burden that would have been required to report
these sales relative to the potential utility of the sales, we
determined that they need not be reported (see Analysis Memorandum to
the File, June 16, 1995).
Petitioners alleged that Thyssen sold cold-rolled carbon steel in
the home market at prices below their cost of production (COP). Based
on this allegation, the Department determined that it had reasonable
grounds to believe or suspect that Thyssen had sold steel flat products
in the home market at below cost prices. A cost investigation was
therefore initiated in accordance with section 773(b) of the Tariff
Act. As a result, we investigated whether Thyssen sold such or similar
merchandise in the home market at prices below the COP. In accordance
with 19 CFR 353.51(c), we calculated COP for Thyssen as the sum of
reported materials, labor, factory overhead, and general expenses. We
compared COP to home market prices, discounts, and movement expenses.
Based on our verification of Thyssen's cost response, we made the
following adjustments to its COP data:
1. We recalculated the allocation of the thirteenth month
adjustment on the basis of costs reported in the unconsolidated Thyssen
Stahl income statements for the respective fiscal years.
2. We reduced the claimed interest income offset by eliminating
dividend income.
3. We recalculated net financing expense on a model-specific basis
by applying the net financing expense ratio to the COM of each unique
product.
After computing COP, we compared the VAT-neutral product-specific
COP to the VAT-neutral reported prices net of movement charges and
discounts. 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.
To satisfy the requirement of Section 773(b)(1) that below cost
sales be disregarded only if made in substantial quantities, we applied
the following methodology. For each model for which less than 10
percent, by quantity, of the home market sales during the POR were made
at prices below COP, we included all sales of that model in the
computation of FMV. For each model for which 10 percent or more, but
less that 90 percent, of the home market sales during the POR were
priced below COP, we excluded those sales priced
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below 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 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).
Because Thyssen provided no indication that its below-cost sales of
models within the ``greater than 90 percent'' and the ``between 10 and
90 percent'' categories were at prices that would permit recovery of
all costs within a reasonable period of time and in the normal course
of trade, we disregarded those sales of models within the ``10 to 90
percent'' category which were made below cost over an extended period
of time. In addition, as a result of our COP test for home market sales
of models within the ``greater than 90 percent'' category, we based FMV
on CV for all U.S. sales for which there were insufficient sales of the
comparison home market model at or above COP. Finally, where we found,
for certain of Thyssen's models, home market sales for which less than
10 percent were made below COP, we used all home market sales of these
models in our comparisons.
We also used CV as FMV for those U.S. sales for which there was no
contemporaneous sale of such or similar merchandise in the home market.
We calculated CV in accordance with section 773(e) of the Tariff Act.
We included the cost of materials, labor, factory overhead, and U.S.
packing in our calculations. 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 the 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. Based on our verification of Thyssen's
cost response, we made the same adjustments to respondent's CV data as
we made to its COP data, as discussed above.
In accordance with section 773 of the Tariff Act, for those U.S.
models for which we were able to find a home market such or similar
match that had sufficient above-cost sales, we calculated FMV based on
the packed prices at which the merchandise was sold under various terms
to unrelated purchasers or to related purchasers (where an arm's-length
relationship was demonstrated) in the home market. We made adjustments,
where applicable, for freight, inland insurance, discounts, credit and
warehousing in accordance with 19 CFR 353.56(a)(1). We adjusted FMV for
indirect selling expenses in the home market, which include plant
freight, warranty, technical services, inventory carrying costs and
other indirect selling expenses. We limited the home market indirect
selling expense deductions by the amount of indirect selling expenses
incurred in the United States, in accordance with 19 CFR 353.56(b)(2).
FMV was also adjusted for differences in physical characteristics.
After deducting home market packing, we added packing expenses incurred
in Germany for U.S. sales to FMV. We adjusted for the German value
added tax. No other adjustments were claimed or allowed.
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 August 18,
1993 through July 31, 1994:
------------------------------------------------------------------------
Margin
Manufacturer/reseller/exporter (percent)
------------------------------------------------------------------------
Thyssen...................................................... 4.80
------------------------------------------------------------------------
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 these administrative reviews 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 these administrative reviews, 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 cold-
rolled carbon steel flat products from Germany 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 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 cash deposit rate will be 19.02
percent. This is the ``all others'' rate from the LTFV investigation.
See Antidumping Duty Order and Amendment to Final Determination of
Sales at Less Than Fair Value: Certain Cold-Rolled Carbon Steel Flat
Products From Germany, 58 FR 44170 (August 19, 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
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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: July 26, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-19013 Filed 8-1-95; 8:45 am]
BILLING CODE 3510-DS-P
