[Federal Register Volume 59, Number 149 (Thursday, August 4, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19069]
[[Page Unknown]]
[Federal Register: August 4, 1994]
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DEPARTMENT OF COMMERCE
[A-475-813]
Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Stainless Steel Bar From Italy
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: August 4, 1994.
FOR FURTHER INFORMATION CONTACT: Kate Johnson or Irene Darzenta, Office
of Antidumping Investigations, Import Administration, U.S. Department
of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC
20230; telephone (202) 482-4929 or 482-6320, respectively.
Preliminary Determination
The Department of Commerce (the Department) preliminarily
determines that stainless steel bar (SSB) from Italy is being, or is
likely to be, sold in the United States at less than fair value, as
provided in section 733 of the Tariff Act of 1930, as amended (the
Act). The estimated margins are shown in the ``Suspension of
Liquidation'' section of this notice.
Scope of Investigation
The merchandise covered by this investigation is SSB. For purposes
of this investigation, the term ``stainless steel bar'' means articles
of stainless steel in straight lengths that have been either hot-
rolled, forged, turned, cold-drawn, cold-rolled or otherwise cold-
finished, or ground, having a uniform solid cross section along their
whole length in the shape of circles, segments of circles, ovals,
rectangles (including squares), triangles, hexagons, octagons or other
convex polygons. SSB includes cold-finished SSBs that are turned or
ground in straight lengths, whether produced from hot-rolled bar or
from straightened and cut rod or wire, and reinforcing bars that have
indentations, ribs, grooves, or other deformations produced during the
rolling process.
Except as specified above, the term does not include stainless
steel semi-finished products, cut length flat-rolled products (i.e.,
cut length rolled products which if less than 4.75 mm in thickness have
a width measuring at least 10 times the thickness, or if 4.75 mm or
more in thickness having a width which exceeds 150 mm and measures at
least twice the thickness), wire (i.e., cold-formed products in coils,
of any uniform solid cross section along their whole length, which do
not conform to the definition of flat-rolled products), and angles,
shapes and sections.
The SSB subject to this investigation is currently classifiable
under subheadings 7222.10.0005, 7222.10.0050, 7222.20.0005,
7222.20.0045, 7222.20.0075 and 7222.30.0000 of the Harmonized Tariff
Schedule of the United States (HTSUS). Although the HTSUS subheading is
provided for convenience and customs purposes, our written description
of the scope of this investigation is dispositive.
Period of Investigation
The period of investigation (POI) is July 1, 1993, to December 31,
1993.
Case History
Since the notice of initiation on January 19, 1994 (59 FR 3844,
January 26, 1994), the following events have occurred.
On February 14, 1994, the International Trade Commission (ITC)
issued an affirmative preliminary injury determination (USITC
Publication 2734, February 1994).
On February 28, 1994, we named Acciaierie Valbruna S.r.l.
(Valbruna) and Foroni S.p.A. (Foroni) as respondents in this
investigation and issued antidumping questionnaires to both companies.
These companies accounted for at least 60 percent of the exports of the
subject merchandise to the United States during the POI, in accordance
with 19 CFR 353.42(b). We presented the questionnaire to Valbruna at
its facility in Vicenza, Italy, on March 3, 1994, and to Foroni at its
facility in Gorle Minore, Italy, on March 7, 1994.
We received responses to Section A of the Department's
questionnaire on March 21, 1994, from Foroni and on March 22, 1994 from
Valbruna.
On March 25, 1994, we received comments on the issue of class or
kind of merchandise from interested parties, per the Department's
invitation for such comments in its notice of initiation. On April 13,
1994, we received rebuttal comments on this issue. On May 11, 1994, we
determined that SSB constitutes one class or kind of merchandise. (See
May 11, 1994, Decision Memorandum to Barbara Stafford from The Team Re:
Class or Kind of Merchandise.)
On March 31, 1994, we sent Sections A through D of the Department's
questionnaire to Cogne S.p.A. (Cogne) because it requested that it be
included in the investigation as a voluntary respondent. On April 14,
1994, Cogne notified the Department that it had decided not to
participate as a voluntary respondent in the investigation.
On April 26, 1994, the Department received a request from
petitioners to postpone the preliminary determination until July 28,
1994. On May 16, 1994, we published in the Federal Register (59 FR
25447), a notice announcing the postponement of the preliminary
determination until not later than July 28, 1994, pursuant to
petitioners' request, in accordance with 19 CFR 353.15(c) and (d).
On April 29 and May 2, 1994, we received responses to Sections B
and C of the Department's questionnaire from Foroni and Valbruna,
respectively.
On May 18, 1994, petitioners alleged that Valbruna sold the subject
merchandise in Italy at prices below its cost of production (COP).
Petitioners supplemented their original allegation on June 3, 13, and
22, 1994. Respondent rebutted the allegation on May 24, June 9, 15, 27,
and 28, 1994. On June 24, 1994, we determined that petitioners'
allegation provided a reasonable basis to believe or suspect below cost
sales, pursuant to section 353.51(a) of the Department's regulations.
Accordingly, we initiated a sales below cost investigation for Valbruna
on June 24, and issued Section D of the Department's questionnaire on
the same date.
On May 20, 1994, we issued a supplemental questionnaire to both
respondents. Valbruna submitted its supplemental response on June 6,
1994, and Foroni on June 8, 1994.
On July 19, 1994, Valbruna requested an extension of time until
August 5, 1994, to respond to the Section D questionnaire. The
Department granted such an extension on July 20, 1994.
Also, on July 20, 1994, respondent Valbruna requested that, in the
event of an affirmative determination in this investigation, the
Department postpone the final determination until 135 days after the
date of publication of the preliminary determination in the Federal
Register.
Such or Similar Comparisons
We have determined that all the products covered by this
investigation constitute a single category of such or similar
merchandise. We made fair value comparisons on this basis. In
accordance with the Department's standard methodology, we first
compared identical merchandise. Where there were no sales of identical
merchandise in the home market to compare to U.S. sales, we made
similar merchandise comparisons on the basis of the criteria defined in
Appendix V to the antidumping questionnaire, on file in Room B-099 of
the main building of the Department of Commerce.
We altered the order of the SSB grades specified within the grade
criterion of Appendix V to account for certain other SSB grades which
Foroni sold during the POI, but which were not taken into account in
Appendix V.
We also reversed the order of the size and shape criteria in
Appendix V. In our original questionnaire issued on February 28, 1994,
the fifth and sixth matching criteria were shape and size,
respectively. However, based on the advice of our in-house technical
expert, we reversed the order of these two criteria. Subsequently,
Valbruna requested that the Department reconsider the reversal of these
criteria in Appendix V. Specifically, it argued that the distinguishing
factor of SSBs as compared to all other stainless steel products is
that they can be supplied in a variety of shapes and that the COP and
price of SSBs are influenced significantly more by shape than size. In
light of the arguments raised by Valbruna, we reversed the hierarchy of
these criteria to reflect the order in our original Appendix V.
Fair Value Comparisons
To determine whether sales of SSB from Italy to the United States
were made at less than fair value, we compared the United States price
(``USP'') to the foreign market value (``FMV''), as specified in the
``United States Price'' and ``Foreign Market Value'' sections of this
notice. In accordance with 19 CFR 353.58, we made comparisons at the
same level of trade, where possible.
United States Price
Foroni
All of Foroni's U.S. sales to the first unrelated purchaser took
place after importation into the United States. Therefore, we based USP
on exporter's sales prices (ESP), in accordance with section 772(c) of
the Act. In accordance with section 772(d) of the Act, we calculated
ESP based on FOB warehouse and FOB port prices to unrelated customers
in the United States. We made deductions, where appropriate, for
foreign brokerage, ocean freight (including foreign inland freight and
loading/unloading charges), U.S. brokerage and handling, U.S. inland
freight, U.S. import duties, and export taxes. For those sales of
subject merchandise with FOB U.S. port sales terms, we made no
deduction for the U.S. inland freight charges reported in respondent's
U.S. sales listing.
We also deducted credit expenses, warranty expenses, product
liability premiums, quality control expenses, and commissions paid to
an employee, in accordance with section 772(e)(2) of the Act. We also
deducted U.S. indirect selling expenses, including pre-sale warehousing
costs incurred in the United States, advertising, and inventory
carrying costs.
We did not make an adjustment for payroll taxes reported by Foroni
for the preliminary determination because Foroni did not provide
sufficient explanation as to how these expenses should be treated. We
will review these expenses at verification and reconsider the issue for
the final determination. In addition, we made no adjustment for U.S.
packing expenses because Foroni claims that it does not pack the
subject merchandise and, therefore, did not report this expense.
Valbruna
For Valbruna, we based USP on both ESP and purchase price (PP), in
accordance with section 772 of the Act, because Valbruna made sales
both before and after importation into the United States. We calculated
both PP and ESP based on packed prices to unrelated customers. In
accordance with section 772(d)(2)(A) of the Act, for both PP and ESP
sales we made deductions, where appropriate, for ocean freight
(including foreign inland freight, foreign inland insurance, marine
insurance and foreign brokerage and handling), U.S. import duties, U.S.
merchandise processing and harbor maintenance fees, U.S. inland
freight, U.S. brokerage and handling, and containerization expenses
(including drayage, stripping, and storage expenses). We added freight
income (i.e., freight charges paid by the customer but not included in
the gross price) to both ESP and PP sales.
For ESP sales only, we further deducted credit expenses and
warranty expenses, in accordance with section 772(e)(2) of the Act. We
also deducted indirect selling expenses incurred in Italy on sales to
the United States, as well as indirect selling expenses incurred in the
United States, and inventory carrying costs. We recalculated indirect
selling expenses incurred in the United States to reflect respondent's
reported methodology.
We also made an adjustment to USP for the value-added tax (VAT)
paid on the comparison sales in Italy in accordance with our practice,
pursuant to the Court of International Trade (CIT) decision in Federal-
Mogul Corp. and The Torrington Co. v. United States, Slip Op. 93-194
(CIT October 7, 1993). (See Final Determination of Sales at Less Than
Fair Value: Calcium Aluminate Cement, Cement Clinker and Flux from
France, 59 FR 14136, March 25, 1994).
Foreign Market Value
In order to determine whether there were sufficient sales of SSB in
the home market to serve as a viable basis for calculating FMV, we
compared the volume of home market sales of SSB to the volume of third
country sales of SSB in accordance with section 773(a)(1)(B) of the
Act. Based on this comparison, we determined that both respondents had
viable home markets with respect to sales of SSB during the POI.
Foroni
We calculated FMV based on ex-factory prices charged to unrelated
customers in the home market.
Pursuant to 19 CFR 353.56(a)(2), we deducted credit expenses and
quality control expenses. We also deducted home market indirect selling
expenses capped by the sum of U.S. commissions and indirect selling
expenses (including inventory carrying costs), in accordance with 19
CFR 353.56(b).
We made adjustments, where appropriate, for differences in the
physical characteristics of the merchandise, in accordance with section
773(a)(4)(C) of the Act.
We did not make an adjustment for VAT for Foroni based on its claim
that it and its home market customers qualify for exemptions under the
Italian VAT program.
We also made no adjustment for home market packing expenses because
Foroni claims that it does not pack the subject merchandise and,
therefore, did not report this expense.
Valbruna
We calculated FMV based on packed prices charged to related and
unrelated customers in the home market. For purposes of the preliminary
determination, we included arm's-length sales to related customers,
pursuant to 19 CFR 353.45.
We deducted cash discounts. We added freight income (i.e., freight
charges paid by the customer but not included in the gross price) to
both ESP and PP sales.
In light of the Court of Appeals for the Federal Circuit's (CAFC)
decision in Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray Portland
Cement V. United States, 13 F.3d 398 (Fed. Cir. 1994), the Department
no longer can deduct home market movement charges from FMV pursuant to
its inherent power to fill in gaps in the antidumping statute. Instead,
we will adjust for those expenses under the circumstance-of-sale
provision of 19 CFR 353.56(a) and the exporter's sales price offset
provision of 19 CFR 353.56(b)(2), as appropriate. Accordingly, in the
present case, we deducted post-sale home market movement charges from
FMV under the circumstance-of-sale provision of 19 CFR 353.56(a). This
adjustment included home market inland freight (including inland
insurance). We adjusted for pre-sale warehousing charges associated
with pre-sale movement charges in the ESP offset.
For comparison to ESP sales, we also deducted credit expenses and
home market commissions from FMV. We then deducted home market indirect
selling expenses capped by the sum of U.S. indirect selling expenses
and inventory carrying costs.
For comparison to PP sales, we made a circumstance-of-sale
adjustment for differences in credit expenses and warranty expenses,
pursuant to 19 CFR 353.56(a)(2). We also deducted home market
commissions from FMV and added to FMV the U.S. indirect selling
expenses capped by the amount of home market commissions.
For purposes of the preliminary determination, we considered pre-
sale warehousing expenses to be indirect selling expenses because
respondent has not adequately demonstrated that such expenses are
directly attributable to particular sales of the subject merchandise.
We also did not allow Valbruna's claim of imputed VAT expenses.
While there may be an opportunity cost or income associated with the
payment of VAT, that fact alone is not a sufficient basis for the
Department to make an adjustment. (See Final Determination of Sales at
Less Than Fair Value: Sulfur Dyes, Including Sulfur Vat Dyes, from the
United Kingdom, 58 FR 3253, January 8, 1993.)
For both ESP and PP sales, we deducted home market packing costs
and added U.S. packing costs, in accordance with section 773(a)(1) of
the Act.
We made adjustments, where appropriate, for differences in the
physical characteristics of the merchandise, in accordance with section
773(a)(4)(C) of the Act.
We adjusted for VAT in accordance with our practice. (See the
``United States Price'' section of this notice, above.)
Cost of Production
Petitioners alleged that Valbruna made home market sales of subject
merchandise at prices below its COP. Based on petitioners' allegation,
and in accordance with section 773(b) of the Act, we initiated a COP
investigation to determine whether Valbruna made home market sales at
prices below its COP over an extended period of time. Although
Valbruna's COP questionnaire response will be received too late to be
considered for the preliminary determination, it will be verified and
considered for the final determination.
Currency Conversion
We made currency conversions based on the official exchange rates
in effect on the dates of the U.S. sales as certified by the Federal
Reserve Bank of New York. See 19 CFR 353.60(a).
Verification
As provided in section 776(b) of the Act, we will verify the
information used in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(1) of the Act, we are directing
the Customs Service to suspend liquidation of all entries of SSB from
Italy, as defined in the ``Scope of Investigation'' section of this
notice, that are entered, or withdrawn from warehouse, for consumption
on or after the date of publication of this notice in the Federal
Register. The Customs Service shall require a cash deposit or the
posting of a bond equal to the estimated preliminary dumping margins,
as shown below. The suspension of liquidation will remain in effect
until further notice. The weighted-average dumping margins are as
follows:
------------------------------------------------------------------------
Margin
Manufacturer/producer/exporter percent
------------------------------------------------------------------------
Acciaierie Valbruna S.r.l.................................... 0.57
Foroni S.p.A................................................. 6.13
All Others................................................... 4.11
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine whether imports of the subject merchandise are
materially injuring, or threaten material injury to, the U.S. industry,
before the later of 120 days after the date of the preliminary
determination or 45 days after our final determination.
Postponement of Final Determination
Pursuant to section 735(a)(2)(A) of the Act, on July 20, 1994,
respondent Valbruna, a significant producer of the subject merchandise,
requested that, in the event of an affirmative preliminary
determination in this investigation, the Department postpone its final
determination until 135 days after the date of publication of an
affirmative preliminary determination. Pursuant to 19 CFR 353.20(b),
because our preliminary determination is affirmative, and no compelling
reasons for denial exist, we are postponing the final determination
until the 135th day after the date of publication of this notice in the
Federal Register.
Public Comment
In accordance with 19 CFR 353.38, case briefs or other written
comments in at least ten copies must be submitted to the Assistant
Secretary for Import Administration no later than November 9, 1994, and
rebuttal briefs no later than November 16, 1994. In accordance with 19
CFR 353.38(b), we will hold a public hearing, if requested, to give
interested parties an opportunity to comment on arguments raised in
case or rebuttal briefs. Tentatively, the hearing will be held on
November 18, 1994 at 9:30 a.m. at the U.S. Department of Commerce, room
1414, 14th Street and Constitution Avenue, NW., Washington, DC 20230.
Parties should confirm by telephone the time, date, and place of the
hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing must submit a
written request to the Assistant Secretary for Import Administration,
U.S. Department of Commerce, room B-099, within ten days of the
publication of this notice in the Federal Register. Request should
contain: (1) The party's name, address, and telephone number; (2) the
number of participants; and (3) a list of the issues to be discussed.
In accordance with 19 CFR 353.38(b), oral presentation will be limited
to issues raised in the briefs.
This determination is published pursuant to section 733(f) of the
Act (19 U.S.C. 1673b(f)) and 19 CFR 353.15(a)(4).
Dated: July 28, 1994.
Barbara R. Stafford,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-19069 Filed 8-3-94; 8:45 am]
BILLING CODE 3510-DS-P
