[Federal Register Volume 61, Number 172 (Wednesday, September 4, 1996)]
[Notices]
[Pages 46618-46621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22520]
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DEPARTMENT OF COMMERCE
[A-122-601]
Brass Sheet and Strip from Canada; Final Results of Antidumping
Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Final Results of Antidumping Duty Administrative
Review.
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SUMMARY: On February 27, 1996, the Department of Commerce (the
Department) published the preliminary results of its administrative
review of the antidumping duty order on brass sheet and strip from
Canada. The review covers exports of this merchandise to the United
States by one manufacturer/exporter, Wolverine Tube (Canada) Inc.
(Wolverine), during the period January 1, 1994, through December 31,
1994.
The review indicates the existence of no dumping margins for this
period.
We gave interested parties an opportunity to comment on our
preliminary results. Based on our analysis of the comments received, we
have made certain changes for these final results.
EFFECTIVE DATE: September 4, 1996.
FOR FURTHER INFORMATION CONTACT: Thomas Killiam or John Kugelman,
Office of AD/CVD Enforcement, Group III, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230;
telephone: (202) 482-2704 or 482-0649, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
Background
On February 27, 1996, the Department published in the Federal
Register (61 FR 7238) the preliminary results of its administrative
review of the
[[Page 46619]]
antidumping duty order on brass sheet and strip (BSS) from Canada (51
FR 44319). The preliminary results indicated that no dumping margin
existed for Wolverine.
Scope of the Review
Imports covered by this review are shipments of BSS, other than
leaded and tinned BSS. The chemical composition of the covered products
is currently defined in the Copper Development Association (C.D.A.) 200
Series or the Unified Numbering System (U.N.S.) C2000. This review does
not cover products the chemical compositions of which are defined by
other C.D.A. or U.N.S. series. In physical dimensions, the products
covered by this review have a solid rectangular cross section over
0.006 inches (0.15 millimeters) through 0.188 inches (4.8 millimeters)
in finished thickness or gauge, regardless of width. Coiled, wound-on-
reels (traverse wound), and cut-to-length products are included. The
merchandise is currently classified under Harmonized Tariff Schedule
(HTS) item numbers 7409.21.00 and 7409.29.00. Although the HTS item
numbers are provided for convenience and Customs purposes, the written
description of the scope of this order remains dispositive.
Pursuant to the final affirmative determination of circumvention of
the antidumping duty order, we determined that brass plate used in the
production of BSS falls within the scope of the antidumping duty order
on BSS from Canada. See Brass Sheet and Strip from Canada: Final
Affirmative Determination of Circumvention of Antidumping Duty Order,
58 FR 33610 (June 18, 1993).
The review covers one manufacturer/exporter, Wolverine, and the
period January 1, 1994, through December 31, 1994.
Analysis of Comments Received
We received a case brief from the petitioners, Hussey Copper, Ltd.,
The Miller Company, Olin Corporation-Brass Group, Outokumpu American
Brass, Revere Copper Products, Inc., International Association of
Machinists and Aerospace Workers, International Union, Allied
Industrial Workers of America (AFL-CIO), Mechanics Educational Society
of America (Local 56), United Steelworkers of America (AFL-CIO/CLC). We
received a rebuttal brief from the respondent.
Comment 1: The petitioners argue that the Department must match
Wolverine's U.S. and home market sales based on the actual physical
characteristics of the finished brass sheet and strip, rather than
Wolverine's product control number system. The petitioners contend that
Wolverine has not defined its product control numbers and that
Wolverine's system contains an element that does not reflect the
physical characteristics of the finished brass sheet and strip, namely,
alloy designations which distinguish between reroll and non-reroll
materials. Reroll materials are those which Wolverine purchases from
outside suppliers that do not require casting. Non-reroll materials are
those which Wolverine processes from the casting stage. The petitioners
argue that no distinction should be made or allowed for model-matching
purposes because products made from either source of brass are
physically identical.
The respondent counters that the petitioners' claims are untimely
and incorrect, and that the Department was correct in using Wolverine's
control numbers. The respondent notes that the petitioners raised this
issue for the first time in their March 28, 1996, case brief, and not
in their September 12 or 19, 1995, comments, in which the petitioners
urged the Department to reject certain other aspects of Wolverine's
response, including other aspects of the product code numbering system
not pertaining to the distinction between reroll and non-reroll brass.
The respondent argues that to adopt the petitioners' arguments for
changing the product codes to erase the distinction between the
Wolverine sources of raw material would deprive Wolverine of the
opportunity to meaningfully participate in this proceeding, since it
could not respond or place new information on the record to rebut the
petitioners' claim.
Concerning the substance of the petitioners' complaint, the
respondent answers that certain applications require low impurities,
which produce a fine grain size at a heavy finished gauge and,
therefore, require reroll inputs, not material cast by Wolverine.
Department's Position: We agree with the respondent. The
respondent's distinction between the two metal categories is supported
by the record evidence and was used in prior reviews of this order.
Wolverine explained the physical differences between the two types
of brass in its September 1, 1995, response. The petitioners furnished
no evidence in rebuttal to support their claim that the product codes
wrongly differentiate between what it alleges to be physically
identical materials.
The petitioners' claim that the respondent never defined its
product control numbers in the CONNUMH/U fields is correct; however, we
derived and used this information from the PRODCODH/U fields.
Comment 2: The petitioners argue that the Department should revise
Wolverine's reported general and administrative (G&A) expenses to
include expenses incurred by the U.S. parent in support of Wolverine.
The respondent argues that the cost of production (COP) data which it
submitted accurately reflected G&A expenses, and that the Department
correctly determined not to artificially inflate Wolverine's G&A
expenses by adding a portion of the U.S. parent's G&A expenses to COP
and constructed value. The respondent also argues that to allocate the
U.S. parent's G&A to the Canadian facility's COP would double-count the
subsidiary's G&A, because the latter is included in the parent's
consolidated financial statements.
The respondent further argues that it complied with our
questionnaire by including a proportionate amount of G&A expenses from
its Canadian headquarters, which supplies it with administrative,
computer, and other services, whereas the U.S. parent provides no
services which would warrant an allocation of the latter's G&A
expenses.
Department's Position: We agree with the respondent, in light of
the record evidence in this case and our policy as stated in Certain
Hot-Rolled Carbon Steel Flat Products et al., from Japan (58 FR 37154,
37166, July 9, 1993) (Certain Steel/Japan):
The Department normally computes the G&A and other non-operating
income and expense ratio of a company based on its unconsolidated
operations and includes an amount of G&A from related companies
which pertains to the product under investigation. G&A and other
non-operating income and expense items are not considered fungible
in nature. Thus, other non-operating income and expenses realized by
a related company does not necessarily affect the general activity
of [the respondent].
Since the record shows the U.S. headquarters provides no support
services to Wolverine, allocating a portion of the U.S. G&A expenses to
Wolverine would be inappropriate.
Comment 3: The petitioners argue that Wolverine's submitted G&A
expenses fail to reflect expenses which the respondent's parent company
incurred in holding an inactive manufacturing facility in New
Westminster, Canada. The petitioners note that in the 1992 review of
this order, the respondent also did not report the same expense item,
and the Department included an allocated amount for it in Wolverine's
G&A in the final review results.
[[Page 46620]]
The respondent argues that such an adjustment would be
inappropriate because 1) information concerning the inactive facility
which the petitioners submit in its brief was available in the
response, but the petitioners did not raise the issue earlier, 2) the
Department's supplemental questionnaire did not request additional
information or calculations concerning the respondent's G&A, and 3) the
Department altered its treatment of this expense in its preliminary
results of review of the 1993 period of review because it verified that
the inactive plant had handled only non-subject merchandise, whereas
the Department only accounts for G&A expenses that relate to covered
merchandise. The respondent cites the Department's position in Certain
Steel/Japan in this regard.
Department's Position: We agree with the respondent. The plant in
question never handled subject merchandise, and, as explained in
Certain Steel/Japan, we allocate G&A based on expenses associated with
subject merchandise.
Comment 4: The petitioners argue that the Department must consider
Wolverine's selling functions when performing its level-of-trade (LOT)
analysis. The petitioners state that Wolverine neglected to identify
the selling functions corresponding to what it claimed to be three
different home market levels of trade.
The petitioners note that the Statement of Administrative Action
accompanying the Uruguay Round Agreements Act requires the Department
to calculate normal value for sales at the same level of trade as the
U.S. sales, to the extent possible. The petitioners claim that ``in
recent cases the Department has expressed its emphasis on the seller's
functions in its level of trade analysis.'' To support this contention
the petitioners cite the Notice of Preliminary Determination of Sales
at Less than Fair Value and Postponement of Final Determination:
Certain Pasta From Italy, 61 FR 1344, 1347 (January 19, 1996) and
Certain Stainless Steel Wire Rods from France: Preliminary Results of
Antidumping Administrative Review, 61 FR 8915, 8916 (March 6, 1996).
The respondent argues that the Department would err if it were to
reject Wolverine's LOT claim on the basis of a perceived change in the
Department's policy, after issuing the preliminary review results. The
respondent claims that it fully documented the fact that it sells to
three different levels of trade in the home market, that it maintains
separate price lists for each of these customer categories, and that it
performs significantly different processing services for each.
The respondent claims that in a recent final determination, ``the
Department appeared to disregard the criteria where there were sales at
identical levels of trade in U.S. and home markets,'' citing Polyvinyl
Alcohol from Taiwan, 61 FR 14064, 14069 (March 29, 1996)(Polyvinyl
Alcohol).
The respondent argues that we should not apply a new set of
criteria at this stage of the review, that ``it would be an even
greater abuse of the Department's discretion to apply such a standard
when it has not requested the pertinent information from Wolverine,''
and cites Usinor Sacilor v. United States, 893 F. Supp. 1112, 1141-42
(CIT 1995) and Creswell Trading Co., Inc. v. United States, 15 F. 3d
1054, 1062 (Fed. Cir. 1994) to support this point. The respondent also
notes that in the cases cited by the petitioners, the Department issued
specific questions to elicit detailed LOT data.
Department's Position: We agree with the petitioners. Contrary to
the respondent's claims, in our questionnaire we specifically asked the
respondent to describe the functions performed and services offered in
each distribution channel, for each customer or class of customer in
the U.S. market and the comparison market. We gave examples of selling
functions and asked the respondent to specify whether sales services
were provided by the respondent or by an affiliate. Wolverine stated
only that it provides customized slit-to-width products to original
equipment manufacturers, and not to processing distributors. The
respondent did not mention any other of the selling functions
identified in our questionnaire, or provide any further information to
document, justify, or quantify the differences it claims the Department
should recognize between three different LOTs in the home market.
As documentation to support its LOT claim, the respondent supplied
price lists, but these lists do not identify any particular LOT or show
any differences in selling functions. On the contrary, if anything, the
price lists show that Wolverine offers identical terms, services, and
service charges to all customers.
Wolverine's assertion that it provided information on different
selling functions to three different LOTs is not supported by
information on the record. Here, just as in Carbon and Alloy Steel Wire
Rod From Canada, 59 FR 18791, 18794 (April 20, 1994), the respondent
``did not demonstrate that any differences in sales process or expenses
were directly related to differences in selling at the claimed levels
of trade.''
We note that the case which Wolverine cites as evidence that the
Department may overlook the selling function criteria, Polyvinyl
Alcohol, does not support the respondent's argument. On the contrary,
rather than overlooking these criteria in that case, we applied them
and determined that the respondent provided ``nearly all of the same or
very similar selling functions to all customers,'' and that there was
only one level of trade in the home market.
Because Wolverine performed similar selling functions in all
channels of distribution, we determined that there is only one LOT in
the home market. Furthermore, we determined that this level is
comparable to the LOT in the U.S. market and, therefore, no LOT
adjustment is necessary.
We also disagree with the respondent's claim that to disallow the
claimed differences in home market LOTs would be an unwarranted
reversal of our preliminary determination. Although the Department
allowed the LOT distinctions in its preliminary determination, further
analysis of the LOT claim, the petitioners' arguments, and the evidence
on the record indicates that our preliminary results were in error, and
that there was only one LOT in the home market.
The respondent's argument that, in making its final determination,
Commerce cannot apply the LOT standards associated with the new statute
is incorrect. This statute, and the interpretive approach taken in the
SAA, clearly apply to this review.
As for the respondent's argument that it would be unfair to place
it at risk of losing its LOT distinctions without having been asked for
detailed information, in our original questionnaire we clearly asked
Wolverine for detailed information on the selling functions it provided
at each claimed LOT. We acknowledge that in our supplemental
questionnaire we did not repeat our earlier request for this
information. However, we are not obligated by law or practice to repeat
every original request in a supplemental questionnaire. The
Department's practice of requesting additional information or
clarification of a previous response does not relieve a respondent of
its obligation to answer every question in an original questionnaire.
Comment 5: The petitioners argue that the Department's computer
program for the preliminary results omitted selling expenses that
Wolverine reported in its
[[Page 46621]]
home market COP database under the category ``INDSELEX''. The
respondent did not address this claim.
Department's Position: We agree with the petitioners, and have
amended our final results to include these indirect selling expenses in
our COP calculations.
Final Results of Review
As a result of our analysis of the comments received, we determine
that the following margin exists for Wolverine:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Period (percent)
------------------------------------------------------------------------
Wolverine.......................... 1/1/94-12/31/94....... 0
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Individual differences between the U.S. price and normal value may
vary from the above percentage. The Department shall instruct the U.S.
Customs Service to assess antidumping duties on all appropriate
entries.
Furthermore, the following deposit requirements will be effective
for all shipments of subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of these
final results, as provided for by section 751(a)(1) of the Act.
(1) 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, a prior
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 or any previous review conducted by the Department, the cash
deposit rate will be 8.10 percent, the ``all others'' rate established
in the LTFV investigation.
This notice also serves as a final 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 the 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 notice also serves as a reminder to parties subject to
administrative protective order (APOs) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR Sec. 353.34(d). Timely written
notification of the return/destruction of APO materials or conversion
to judicial protective order is hereby requested.
Failure to comply with the regulations and terms of an APO is a
violation which is subject to sanction. This administrative review and
this notice are in accordance with section 751(a)(1) of the Act (19
U.S.C. Sec. 1675(a)(1)) and 19 CFR Sec. 353.22.
Dated: August 26, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-22520 Filed 9-03-96; 8:45 am]
BILLING CODE 3510-DS-P
