[Federal Register Volume 60, Number 164 (Thursday, August 24, 1995)]
[Notices]
[Pages 44006-44009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-21067]
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DEPARTMENT OF COMMERCE
[A-580-816]
Certain Corrosion-Resistant Carbon Steel Flat Products From
Korea: 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 requests by two respondents, 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 Korea. The review covers two manufacturers/exporters
of the subject merchandise to the United States during the period of
review (``POR'') from February 4, 1993, through July 31, 1994.
We have preliminarily determined that sales 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 24, 1995.
FOR FURTHER INFORMATION CONTACT:
Alain Letort or Linda Ludwig, 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 or fax (202) 482-1388.
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 Commerce Department published in the Federal
Register (58 FR 37176) the final affirmative antidumping duty
determination on certain corrosion-resistant carbon steel flat products
from Korea, for which we published an antidumping duty order on August
19, 1993 (58 FR 44159). On August 3, 1994, the Department published the
``Notice of Opportunity to Request an Administrative Review'' of this
order the period February 4, 1993 through July 31, 1994 (59 FR 39543).
We receive a request for an administrative review from Dongbu Steel
Co., Ltd (``Dongbu''), Union Steel Manufacturing Co., Ltd. (``Union''),
Pohang Coated Steel Co., Ltd (``PCS'') and Dongkuk International
(``Dongkuk''). We initiated the administrative review on September 8,
1994 (59 FR 46391). Subsequently, PCS and Dongkuk made timely requests
that they be allowed to withdraw from the administrative review
pursuant to 19 CFR 353.22(a)(5). On April 12, 1995, we published a
``Notice of Partial Termination of Administrative Review of Antidumping
Order'' with respect to these respondents (60 FR 18581). The Department
is conducting this review in accordance with section 751 of the Tariff
Act of 1930, as amended (``the Act'').
[[Page 44007]]
Scope of the Review
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 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 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.
The POR is February 4, 1993 through July 31, 1994. This review
covers sales of certain corrosion-resistant carbon steel flat products
by Dongbu and Union.
United States Price
The Department used purchase price, in accordance with section
772(b) of the Act, when the subject merchandise was sold to unrelated
purchasers in the United States. For Union, however, the Department
determined, in certain instances, that exporter's sales price
(``ESP''), as defined in section 772(c) of the Act, was a more
appropriate basis for calculating USP (see below).
We adjusted USP for the Korean value-added tax 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 (November 7, 1994).
Dongbu
All of Dongbu's U.S. sales were based on the price to the first
unrelated purchaser in the United States. The Department determined
that purchase price, as defined in section 772 of the Act, was the
appropriate basis for calculating USP. Depending on the channel of
trade, we treated the date of either the purchase order, the internal
confirmation or the date of the production order as date of sale. We
made adjustments to purchase price, where appropriate, for foreign
inland freight, foreign brokerage, ocean freight, containerization,
U.S. duty and U.S. brokerage and handling.
No other adjustments were claimed or allowed.
Union
All of Union's U.S. sales were based on the price to the first
unrelated purchaser in the United States. The Department determined
that, in most instances, purchase price, as defined in section 772(b)
of the Act, was the appropriate basis for calculating USP. In a very
few instances, however, the Department determined that exporter's sales
price (``ESP''), as defined in section 772(c) of the Act, was a more
appropriate basis for calculating USP. These instances involved either
(a) sales where the merchandise was resold after entry into the United
States, or (b) sales made prior to importation where the merchandise
was further processed by an outside contractor in the United States on
a fee-for-service basis. In the latter case, the Department's
determination was based on the following facts: (a) Union America
(``UA''), Union's sales office in the United States, was the importer
of record and took title to the merchandise; (b) UA financed the
relevant sales transactions; (c) UA arranged and paid for the further
processing; and (d) UA assumed the seller's risk. See the Department's
analysis memorandum (for Union) dated August 10, 1995, copies of which,
as well as copies of other memoranda referred to in this notice, are
available in Room B-099 of the Department's Central Records Unit.
Because quantities were not finalized until the merchandise was
actually shipped to the United States, we treated the date of shipment
as date of sale (see the Department's analysis memorandum referred to
above). We made adjustments to purchase price, where appropriate, for
cash discounts and rebates, foreign inland freight, foreign brokerage
and handling, ocean freight, marine insurance, U.S. duty, U.S.
brokerage and handling, U.S. inland freight, and duty drawback. We made
adjustments to ESP, where appropriate, for cash discounts and rebates,
foreign inland freight, foreign brokerage and handling, ocean freight,
marine insurance, U.S. duty, U.S. brokerage and handling, U.S. inland
freight, commissions, credit expenses, warranty expenses, indirect
selling expenses, further processing in the United States, and duty
drawback. Because Union had understated its U.S. credit expenses by not
including bank charges therein, we increased Union's U.S. credit
expense by the amount of those charges, which we obtained from UA's
audited financial statement.
No other adjustments were claimed or allowed.
Foreign Market Value
Based on a comparison of the volume of home-market sales and third-
country sales, we determined that Dongbu's and Union's home markets
were viable. Therefore, in accordance with section 773(a)(1)(A) of the
Act, we based FMV on the packed, delivered price to unrelated
purchasers in the home market, using the date of the invoice as the
date of sale.
Based on a review of Dongbu's and Union's submissions, the
Department determined that only a small percentage of those companies'
home-market sales were made to related parties who, in turn, resold the
merchandise (``downstream sales''). The Department determined that
Dongbu and Union need not report their home-market
[[Page 44008]]
downstream sales because of their low volume.
Petitioners alleged that Dongbu and Union sold corrosion-resistant
carbon steel flat products 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
Dongbu and Union had sold the subject merchandise in the home market at
prices below the COP. We therefore initiated a cost investigation, in
accordance with section 773(b) of the Act. As a result, we investigated
whether Dongbu and Union 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 Dongbu and Union as the sum of reported materials,
labor, factory overhead, and general expenses, and compared COP to
home-market prices, net of price adjustments, discounts and movement
expenses.
In accordance with section 773(b) of the 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 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 COP of the merchandise, we excluded from the
calculation of FMV those home-market sales which were priced below the
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 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 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. We
used CV as the basis for FMV when an insufficient number of home-market
sales were made at prices above COP. 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 Dongbu and Union provided no indication that their 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 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 Dongbu's and Union's models, home-market
sales for which less than 10 percent were made below COP, we used all
home-market sales of those 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 Act. We
included the cost of materials, labor, and factory overhead 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 Dongbu's and
Union's cost response, we adjusted Dongbu's reported COP and CV to
reflect certain adjustments to general and administrative expenses and
interest expenses. See the Department's separate cost calculation
memoranda for Dongbu and Union, both dated August 10, 1995.
Dongbu
In accordance with section 773 of the 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,
f.o.b., ex-factory, or delivered prices to unrelated purchasers in the
home market. We made adjustments, where applicable, for certain rebates
tied to specific sales, post-sale inland freight, home-market direct
selling expenses, i.e., credit and warranty expenses, and for the
Korean value-added tax. We also adjusted FMV for differences in
physical characteristics of the merchandise. Finally, we adjusted FMV
for differences in packing by deducting home-market packing expenses
from, and adding U.S. packing expenses to, FMV.
Union
In accordance with section 773 of the 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,
f.o.b., ex-factory, or delivered prices to unrelated purchasers in the
home market. We made adjustments, where applicable, for post-sale
inland freight, for home-market direct selling expenses, i.e., credit
expenses, and for the Korean value-added tax.
We treated Union's warehousing expense as an indirect selling
expense, rather than direct, as Union had claimed, because Union evenly
allocated this expense to all home market sales across-the-board,
rather than calculating a discrete warehousing expense for each home-
market sale.
We also treated Union's pre-sale inland freight as an indirect
selling expense, rather than direct, as Union had claimed, pursuant to
the decision by the Court of Appeals for the Federal Circuit in Ad Hoc
Committee v. United States, 13 F.3d 398 (Fed. Cir. 1994). The
Department considers pre-sale movement expenses as direct selling
expenses only if the movement expenses in question are directly related
to the home-market sales under consideration. In order to determine
whether pre-sale movement expenses
[[Page 44009]]
are direct under the facts of a particular case, the Department
examines the respondent's pre-sale warehousing expenses, since the pre-
sale movement charges incurred in positioning the merchandise at the
warehouse are, for analytical purpose, inextricably linked to pre-sale
warehousing expenses. If the pre-sale warehousing constitutes an
indirect expense, the expense involved in getting the merchandise to
the warehouse must also be indirect. conversely, a direct pre-sale
warehousing expense necessarily implies a direct pre-sale movement
expense. We note that, although pre-sale warehousing expenses in most
cases have been found to be indirect selling expenses, these expenses
may be deducted from FMV as a circumstance-of-sale adjustment in a
particular case if the respondent is able to demonstrate that the
expenses are directly related to the sales under consideration. In the
instant review, Union did not distinguish between pre- and post-sale
warehousing expenses, nor did it demonstrate that these expenses were
directly tied to the home-market sales under consideration. The
Department, therefore, determined to treat home-market warehousing
expenses as indirect selling expenses.
We also adjusted FMV for differences in packing by deducting home-
market packing expenses from, and adding U.S. packing expenses to, FMV.
During the verification of Union's responses, the Department was
unable to fully verify the accuracy of Union's reported home-market
product characteristics, because Union did not retain the relevant
information in its records, thereby casting doubt on the accuracy of
the model match. It is the Department's preference to calculate
antidumping duties on the basis of price-to-price comparisons whenever
possible. It is also the Department's preference to use as much of
respondent's data as possible. For purposes of this review, therefore,
the Department has decided to use Union's model-matching product
characteristics, but to apply to all of Union's price-to-price sales
comparisons a flat, across-the-board adjustment for differences in
physical characteristics of the merchandise (``difmer'') of 20 percent
as the best information otherwise available (``BIA''). Twenty percent
is the maximum difmer allowed between U.S. and home-market models for
the purposes of comparison. See the Department's internal memorandum
from Joseph A. Spetrini to Susan G. Esserman, dated August 8, 1995.
In a letter dated May 24, 1995, petitioners formally requested that
the Department consider Union and Dongkuk Industries Co., Ltd.
(``DKI''), which is not a respondent, as a single producer of
corrosion-resistant carbon steel flat products. This request to
``collapse'' Union and DKI was not made until well after the 180-day
deadline for the submission of new factual information and after
verification had been completed. Because petitioner's request was
untimely, and the record evidence to collapse Union and DKI is
insufficient, the Department has rejected petitioners' request to
consider the issue of collapsing Union and DKI as a single producer of
corrosion-resistant carbon steel flat products (see the Department's
internal memorandum from Joseph A. Spetrini to Susan G. Esserman, dated
July 28, 1995).
Preliminary Results of Review
As a result of our comparison of USP to FMV, we preliminarily
determine that the following margins exist for the period February 4,
1993, through July 31, 1994:
Certain Corrosion-Resistant Carbon Steel Flat Products
------------------------------------------------------------------------
Weighted-
average
Producer/manufacturer/exporter margin
(percent)
------------------------------------------------------------------------
Dongbu..................................................... 1.74
Union...................................................... 5.72
------------------------------------------------------------------------
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 Customer 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 Act. A cash deposit of estimated antidumping duties
shall be required on shipments of certain corrosion-resistant carbon
steel flat products from Korea as follows: (1) The cash deposit rates
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 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 this review, the
cash deposit rate for this case will be 17.88 percent, which is the
``all others'' rate for the LTFV investigation. See Final Determination
of Sales at Less Than Fair Value: Certain Corrosion-Resistant Carbon
Steel Flat Products from Korea, 58 FR 37176 (July 9, 1993).
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR Sec. 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.
This administrative review and this notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR
Sec. 353.22.
Dated: August 16, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-21067 Filed 8-23-95; 8:45 am]
BILLING CODE 3510-DS-M
