[Federal Register Volume 64, Number 173 (Wednesday, September 8, 1999)]
[Notices]
[Pages 48775-48778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23321]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-421-804]
Cold-Rolled Carbon Steel Flat Products From the Netherlands:
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 from the petitioners and respondent,
the Department of Commerce (the Department) is conducting an
administrative review of the antidumping duty order on cold-rolled
carbon steel flat products from the Netherlands. The review covers one
manufacturer/exporter of the subject merchandise to the United States
during the period August 1, 1997 through July 31, 1998.
We preliminarily determine that a de minimis dumping margin exists
for this period of review. If these preliminary results are adopted in
our final results of review, we will instruct the U.S. Customs Service
to assess antidumping duties on entries of Hoogovens merchandise during
the period of review, in accordance with the Department's regulations
(19 CFR 353.6).
Interested parties are invited to comment on these preliminary
results. Parties who submit argument in this proceeding are requested
to submit with the argument (1) a statement of the issue and (2) a
brief summary of the argument (no longer than five pages, including
footnotes).
EFFECTIVE DATE: September 8, 1999.
FOR FURTHER INFORMATION CONTACT: Ilissa A. Kabak or Robert M. James,
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 482-5222,
respectively.
Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Tariff Act), are references to the provisions
effective January 1, 1995, the effective date of the amendments made to
the Tariff Act by the Uruguay Round Agreements Act of 1994 (URAA). In
addition, unless otherwise indicated, all references to the
Department's regulations are to 19 CFR Part 351 (1998).
SUPPLEMENTARY INFORMATION:
Background
The Department of Commerce published an antidumping duty order on
cold-rolled carbon steel flat products from the Netherlands on August
19, 1993 (58 FR 44172). The Department published a notice of
``Opportunity To Request Administrative Review'' of the antidumping
duty order for the 1997/1998 review period on August 11, 1998 (63 FR
42821). On August 31, 1998, both the respondent, Hoogovens Staal BV
(Hoogovens), and petitioners (Bethlehem Steel Corporation, U.S. Steel
Company (a Unit of USX Corporation), Ispat/Inland Steel, Inc., LTV
Steel Company, and National Steel Corporation) filed requests for
review. We published a notice of initiation of the review on September
29, 1998 (63 FR 51893).
Due to the complexity of the issues involved in this case, the
Department extended the time limit for completion of the preliminary
results until August 31, 1999, in accordance with section 751(a)(3)(A)
of the Tariff Act. The deadline for the final results of this review
will continue to be 120 days after the date of publication of this
notice. The Department is conducting this review in accordance with
section 751 of 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 Harmonized Tariff Schedule (HTS) under item numbers
7209.15.0000, 7209.16.0030, 7209.16.0060, 7209.16.0090, 7209.17.0030,
7209.17.0060, 7209.17.0090, 7209.18.1530, 7209.18.1560, 7209.18.2550,
7209.18.6000, 7209.25.0000, 7209.26.0000, 7209.27.0000, 7209.28.0000,
7209.90.0000, 7210.70.3000, 7210.90.9000, 7211.23.1500, 7211.23.2000,
7211.23.3000,
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7211.23.4500, 7211.23.6030, 7211.23.6060, 7211.23.6085, 7211.29.2030,
7211.29.2090, 7211.29.4500, 7211.29.6030, 7211.29.6080, 7211.90.0000,
7212.40.1000, 7212.40.5000, 7212.50.0000, 7215.50.0015, 7215.50.0060,
7215.50.0090, 7215.90.5000, 7217.10.1000, 7217.10.2000, 7217.10.3000,
7217.10.7000, 7217.90.1000, 7217.90.5030, 7217.90.5060, and
7217.90.5090. 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
beveled 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
of the scope of this order remains dispositive.
Verification
As provided in section 782(i)(3) of the Tariff Act, we verified
information provided by Hoogovens at its headquarters in Beverwijk and
IJmuiden, the Netherlands, using standard verification procedures,
including inspection of the manufacturing facilities, examination of
relevant sales and financial records, and selection of original
documentation containing relevant information. We also verified
information provided by Hoogovens Steel USA, Inc. at its office in
Scarsdale, New York.
Export Price (EP)
Sales made by Hoogoven's selling office in the Netherlands directly
to unaffiliated customers in the United States were treated as EP
sales. We calculated EP based on the delivered, duty-paid price to
unaffiliated customers in the United States. We made adjustments for
discounts and post-sale price adjustments. We also made deductions,
where applicable, for foreign inland freight, ocean freight and marine
insurance, brokerage and handling, U.S. inland freight, and U.S.
customs duties in accordance with section 772(c) of the Tariff Act. See
Preliminary Analysis Memorandum (Analysis Memo), August 31, 1999, at 8.
Constructed Export Price (CEP)
Sales made by Hoogoven's selling office in the Netherlands through
the affiliated Rafferty-Brown companies, located in the United States,
to unaffiliated U.S. customers were treated as CEP sales. We based CEP
on the delivered price to unaffiliated customers in the United States.
We made deductions for foreign inland freight, ocean freight and marine
insurance, brokerage and handling, U.S. inland freight, and U.S.
customs duties, in accordance with section 772(c) of the Tariff Act.
Furthermore, in accordance with section 772(d)(1) of the Tariff Act, we
deducted selling expenses associated with economic activities occurring
in the United States, including credit expenses, indirect selling
expenses, and inventory carrying costs. In accordance with section
772(d)(2) of the Tariff Act, for sales made through the affiliated
Rafferty-Brown companies, we also deducted the cost of further
manufacturing, including repacking expenses. Finally, we made an
adjustment for an amount of profit allocated to these expenses in
accordance with section 772(d)(3) of the Tariff Act. See Analysis Memo
at 10.
In the absence of cost of production (COP) data for home market
sales,1 we estimated COP for calculation of the CEP profit
allocation as follows:
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\1\ Hoogovens reported CV data, which provide the cost of
manufacturing the products sold in the United States. As the product
mix is very different in the home market, the CV data are not
representative of total costs.
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1. We estimated the home market fixed costs by calculating the
weighted average ratio of fixed costs to variable costs for U.S. sales
(using the reported VCOMU and TCOMU variables) and multiplying the
reported home market variable costs (VCOMH) by this ratio;
2. We obtained the total cost of manufacturing (COM) by adding the
reported total variable costs and the estimated fixed costs;
3. We obtained general and administrative expenses and interest
expenses from the constructed value (CV) data base and added them to
the total COM to obtain COP.
Normal Value (NV)
In order to determine whether sales of the foreign like product in
the home market are a viable basis for calculating NV, we compared the
volume of home market sales of the foreign like product to the volume
of subject merchandise sold in the United States, in accordance with
section 773(a)(1)(C) of the Tariff Act. Hoogovens's aggregate volume of
home market sales of the foreign like product was greater than five
percent of its aggregate volume of U.S. sales of the subject
merchandise. Therefore, we have based NV on home market sales.
Hoogovens made sales to both affiliated and unaffiliated customers
in the home market during the period of review. We included sales to
affiliated customers when we determined those sales to be at arm's
length (i.e., at weighted-average prices that were 99.5 percent or more
of weighted average prices for identical products sold to unaffiliated
customers in the home market). When the weighted-average price to an
affiliated customer was less than 99.5 percent of the weighted-average
price to unaffiliated customers, or there were no sales of identical
merchandise to unaffiliated customers for purposes of the arm's-length
test, we excluded sales to that affiliated customer from our
calculation of NV. See Antidumping Duties; Countervailing Duties, Final
Rule 62 FR 27296, 27355 (May 19, 1997).
Home market prices were based on the packed, ex-factory or
delivered prices to customers, net of early payment discounts and
rebates. We made deductions from NV for inland freight, pursuant to
section 773(a)(6)(B) of the Tariff Act. In accordance with section
773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410(c), we made
circumstance-of-sale (COS) adjustments for credit and, where
appropriate, warranty expenses.
We deducted home market packing costs and added U.S. packing costs,
in accordance with section 773(a)(6) of the Tariff Act. Where
appropriate, we made adjustments to NV to account for differences in
the physical characteristics of the merchandise, in accordance with
section 773(a)(6)(C)(ii) of the Tariff Act and 19 CFR 351.411.
Level of Trade
In accordance with section 773(a)(1)(B) of the Tariff Act, to the
extent practicable, we determine NV based on sales in the comparison
market at the same level of trade (LOT) as the EP or CEP transaction.
The NV LOT is that of the starting-price sales in the comparison market
or, when NV is based on CV, that of the sales from which we derive
selling, general and administrative expenses and profit. For EP, the
U.S. LOT is also the level of the starting-price sale, which is
normally the sale from exporter to importer. In this case the exporter
sells directly to unaffiliated customers. For CEP, the U.S. LOT is the
level of the constructed sale from the exporter to the importer.
To determine whether NV sales are at a different LOT than EP or
CEP, we
[[Page 48777]]
examine stages in the marketing process and selling functions along the
chain of distribution between the producer and the unaffiliated
customer. If the comparison-market sales are at a different LOT, and
the difference affects price comparability, as manifested in a pattern
of consistent price differences between the sales on which NV is based
and comparison-market sales at the LOT of the export transaction, we
make an LOT adjustment under section 773(a)(7)(A) of the Tariff Act.
Finally, for CEP sales, if the NV level is more remote from the factory
than the CEP level and there is no basis for determining whether the
difference in the levels between NV and CEP affects price
comparability, we adjust NV under section 773(a)(7)(B) of the Tariff
Act (the CEP-offset provision). See Notice of Final Determination of
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate
from South Africa, 62 FR 61731 (November 19, 1997).
To examine LOT in this review, we requested information concerning
the selling functions associated with sales to service centers and to
several categories of end-users in each of Hoogovens's markets and
interviewed sales and technical service managers. In both the home and
U.S. markets larger customers received more frequent visits from sales
personnel. In the home market a higher level of technical service was
provided to automotive customers than to other end-users. However,
Hoogovens stated that ``it cannot differentiate among the selling
functions performed and services offered to different classes of home
market or export price customers.'' Hoogovens's October 21, 1998
section A questionnaire response (Section A response) at 14. Hoogovens
further noted that the higher level of service provided to large end-
users, such as auto makers, was related to the higher volumes of
merchandise purchased by these customers, and not any specific features
of this market sector. Id. at 26. Therefore, based upon the information
on the record we preliminarily determine that there are no significant
differences between the selling functions performed and services
offered to service centers and end-user customers in the home market.
We also preliminarily determine that there are no differences between
the selling functions performed and services offered to service centers
and end-user customers in the U.S. market. Lastly, evidence on the
record indicates that Hoogovens has not changed its selling functions
since the fourth (1996-1997) administrative review (see ``Home Market
Sales Verification Report,'' at 8 (July 8, 1999); see also Certain
Cold-rolled Carbon Steel Flat Products from the Netherlands: Final
Results of Antidumping Duty Administrative Review, 64 FR 11825, (March
10, 1999)).
As for CEP sales, Hoogovens claims it has no home market sales at a
LOT equivalent to the CEP LOT, alleging, ``while the CEP sales have
been adjusted to create, in effect, an ex-factory level of trade, the
starting price of the home market sales reflects many selling
activities not reflected in the adjusted CEP price. These include
indirect selling activities, indirect warranty and technical service
expenses, and inventory carrying costs incurred on home market sales.''
See Section A response (October 21, 1998), at 45 and 46.
We disagree with Hoogovens's claim that the prices used to
determine NV reflect many selling activities not reflected in CEP. In
accordance with section 772(d)(1) the Department calculated CEP by
deducting the imputed credit expenses incurred by the Rafferty-Brown
companies as direct selling expenses. The Department also deducted
indirect selling expenses (ISE), including imputed inventory carrying
costs (ICC) incurred in the United States by the Rafferty-Brown
companies for sales to the first unaffiliated buyers. The Department
did not deduct from CEP those ISE incurred in the Netherlands
pertaining to U.S. sales (reported in computer data fields DINDIRSU and
DINVCARU), nor certain expenses of the U.S. sales office, on the
grounds that these expenses were associated with the sale to
Hoogovens's U.S. affiliates rather than with the sales by the
affiliates to the first unaffiliated buyers. Thus, the CEP includes
Hoogovens's warranty and technical service expenses for U.S. sales, as
well as ISE, including the expenses of the sales offices in IJmuiden
and New York, incurred in connection with the sales to the affiliated
service centers.
For the purposes of the LOT analysis, we found no distinguishable
difference between the selling functions included in the home market
starting price and the selling functions included in the CEP;
Hoogovens's starting price for home market sales includes the provision
of services reflected in the direct warranty and technical service
expenses, ICC, the expenses of the sales office in IJmuiden, and other
indirect selling expenses incurred for home market sales. On the basis
of this analysis, the Department has preliminarily determined that the
record does not support Hoogovens's claim that home market sales are at
a different, more advanced LOT than the adjusted CEP sales.
Sales Comparisons
To determine whether sales of cold-rolled carbon steel flat
products in the United States were made at prices below normal value,
we compared EP or CEP to NV, as described in the ``Export Price,''
``Constructed Export Price'' and ``Normal Value'' sections of this
notice. In accordance with section 777(A) of the Tariff Act, we
calculated monthly weighted-average prices for NV and compared these to
individual U.S. transactions. For comparisons to EP, we made COS
adjustments by deducting direct selling expenses incurred on home
market sales and adding U.S. direct selling expenses. For comparisons
to CEP, we made deductions for direct selling expenses incurred on home
market sales. There were no comparisons to CV for these preliminary
results.
Reimbursement
Section 351.402(f) of the antidumping regulations requires the
Department to deduct from EP or CEP the amount of any antidumping duty
that is reimbursed to the importer. Based on verified evidence on the
record in this review, including the revised agency agreement between
Hoogovens and Hoogovens Steel USA, Inc. (HSUSA) and the refund to
Hoogovens by HSUSA of a portion of the cash deposits advanced to HSUSA
for merchandise entered during the second and fourth administrative
reviews, the Department has preliminarily determined that HSUSA is
solely responsible for the payment of antidumping duties. Further,
evidence on the record in this review shows that HSUSA has sufficient
assets to establish its ability to pay the antidumping duties to be
assessed (see ``United States Verification Report,'' at 3 (July 8,
1999)). Therefore, for this period of review we have determined that
Hoogovens has not reimbursed HSUSA for antidumping duties to be
assessed.
Preliminary Results of Review
We preliminarily determine that the following margin exists for the
period August 1, 1997 through July 31, 1998:
------------------------------------------------------------------------
Margin
Company (percent)
------------------------------------------------------------------------
Hoogovens Staal BV......................................... 0.25
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Parties to this proceeding may request disclosure within five days
of publication of this notice and any interested party may request a
hearing within 30 days of publication. Any
[[Page 48778]]
hearing, if requested, will be held 44 days after the date of
publication, or the first working day thereafter. Interested parties
may submit case briefs and/or written comments no later than 30 days
after the date of publication. Rebuttal briefs and rebuttals to written
comments, limited to issues raised in such briefs or comments, may be
filed no later than 37 days after the date of publication. The
Department will publish the final results of this administrative
review, which will include the results of its analysis of issues raised
in any such written comments or at a hearing, within 120 days after the
publication of this notice.
The Department shall determine, and Customs shall assess,
antidumping duties on all appropriate entries. Individual differences
between United States price and NV may vary from the percentage given
above. The Department will issue appraisement instructions directly to
Customs. The final results of this review shall be the basis for the
assessment of antidumping duties on entries of merchandise covered by
this review and for future deposits of estimated duties. For assessment
purposes we intend to calculate importer-specific assessment rates for
cut-to-length carbon steel plate. For both EP and CEP sales we will
divide the total dumping duties for each importer (calculated as the
difference between NV and EP or CEP) by the entered value of the
merchandise. Upon completion of this review we will direct Customs to
assess the resulting ad valorem rates against the entered value of each
entry of subject merchandise by each importer during the POR.
Furthermore, the following deposit requirements will be effective
upon completion of the final results of this administrative review for
all shipments of cold-rolled carbon steel flat products from the
Netherlands entered, or withdrawn from warehouse, for consumption on or
after the publication date of the final results of this administrative
review, as provided by section 751(a)(1) of the Tariff Act: (1) The
cash deposit rate for the reviewed firm will be the rate established in
the final results of administrative review, except if the rate is less
than 0.5 percent, and therefore, de minimis within the meaning of 19
CFR 351.106(c), in which case the cash deposit rate will be zero; (2)
if the exporter is not a firm covered in this review or the original
investigation, but the manufacturer is, the cash deposit rate will be
that established for the manufacturer of the merchandise in the final
results of this review; and (3) if neither the exporter nor the
manufacturer is a firm covered in this or any previous review or the
original fair value investigation, the cash deposit rate will be 19.32
percent.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during these review periods. 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 notice are in accordance with
sections 751(a)(1) and 777(i)(1) of the Tariff Act.
Dated: August 31, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-23321 Filed 9-7-99; 8:45 am]
BILLING CODE 3510-DS-P
