[Federal Register Volume 63, Number 16 (Monday, January 26, 1998)]
[Notices]
[Pages 3704-3708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1806]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-427-811]
Certain Stainless Steel Wire Rods From France: Preliminary
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
[[Page 3705]]
ACTION: Notice of Preliminary Results of Antidumping Duty
Administrative Review.
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SUMMARY: In response to a request by Imphy S.A. and Ugine-Savoie
(respondents), the Department of Commerce (the Department) is
conducting an administrative review of the antidumping duty order on
certain stainless steel wire rods from France. This review covers the
above manufacturers/exporters of the subject merchandise to the United
States. The period of review (POR) is January 1, 1996 through December
31, 1996.
We preliminarily determine that respondents sold subject
merchandise at less than normal value (NV) during the POR. If these
preliminary results are adopted in our final results of this
administrative review, we will instruct U.S. Customs to assess
antidumping duties based on the difference between the export price
(``EP'') or constructed export price (``CEP'') and the NV.
We invite interested parties to comment on these preliminary
results. Parties who submit arguments in this proceeding should also
submit with the argument (1) A statement of the issue, and (2) a brief
(no longer than five pages, including footnotes) summary of the
argument.
EFFECTIVE DATE: January 26, 1998.
FOR FURTHER INFORMATION CONTACT: Robert Bolling or Stephen Jacques, AD/
CVD Enforcement Group III, Office 9, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230; telephone:
(202) 482-3434 or (202) 482-1391, respectively.
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department's regulations are
to 19 CFR part 353 (1997).
Background
On December 29, 1993, the Department published in the Federal
Register (58 FR 68865) the final affirmative antidumping duty
determination on certain stainless steel wire rods from France, and
published an amended final determination and antidumping duty order on
January 28, 1994. On January 14, 1997, the Department published the
Opportunity to Request an Administrative Review of this order for the
period January 1, 1996-December 31, 1996 (62 FR 1874). The Department
received a request for an administrative review from Imphy, S.A.
(``Imphy'') and Ugine-Savoie (``Ugine''), affiliated producers/
exporters of the subject merchandise, on January 29, 1997. We published
a notice of initiation of the review on March 3, 1997 (62 FR 9413).
The Department is now conducting this review in accordance with
section 751 of the Act. The review covers sales of certain stainless
steel wire rods by Imphy, Ugine, and their affiliated companies,
Metalimphy Alloys Corp. (``MAC''), and Techalloy Company, Inc.
(``Techalloy'').
Scope of the Review
The products covered by this administrative review are certain
stainless steel wire rod (SSWR) products which are hot-rolled or hot-
rolled annealed, and/or pickled rounds, squares, octagons, hexagons, or
other shapes, in coils. SSWR are made of alloy steels containing, by
weight, 1.2 percent or less of carbon and 10.5 percent or more of
chromium, with or without other elements. These products are only
manufactured by hot-rolling, are normally sold in coiled form, and are
of solid cross section. The majority of SSWR sold in the United States
is round in cross-sectional shape, annealed, and pickled. The most
common size is 5.5 millimeters in diameter.
The SSWR subject to this review is currently classifiable under
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0020, 7221.00.0030,
7221.00.0040, 7221.00.0045, 7221.00.0060, 7221.00.0075, and
7221.00.0080 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and Customs purposes, our written description of the scope of the order
is dispositive.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by the respondents, covered by the description in the
Scope of the Review section, above, and sold in the home market during
the POR, to be foreign like products for purposes of determining
appropriate product comparisons to U.S. sales. Where there were no
sales of identical merchandise in the home market to compare to U.S.
sales, we compared U.S. sales to the most similar foreign like product
on the basis of the characteristics listed in Appendix III of the
Department's March 24, 1997 antidumping questionnaire. In making the
product comparisons, we matched foreign like products based on the
physical characteristics reported by the respondents.
Fair Value Comparisons
To determine whether sales of subject merchandise to the United
States were made at less than fair value, we compared the EP or CEP to
the NV, as described in the ``Export Price and Constructed Export
Price'' and ``Normal Value'' sections of this notice. In accordance
with section 777A(d)(2), we calculated monthly weighted-average prices
for NV and compared these to individual U.S. transactions.
Export Price and Constructed Export Price
We used EP, in accordance with subsections 772 (a) and (c) of the
Act, where the subject merchandise was sold directly or indirectly to
the first unaffiliated purchaser in the United States prior to
importation because CEP was not otherwise warranted based on the facts
of record. In addition, we used CEP in accordance with subsections 772
(b), (c) and (d) of the Act, for those sales to the first unaffiliated
purchaser that took place after importation into the United States.
We made adjustments as follows:
We calculated EP based on packed prices to unaffiliated customers
in the United States. Where appropriate, we made deductions from the
starting price for discounts, foreign inland freight, foreign brokerage
and handling, international freight, U.S. inland freight, U.S.
brokerage and handling, marine insurance and U.S. Customs duties. We
also adjusted the starting price for billing adjustments to the invoice
price.
We calculated CEP based on packed prices to unaffiliated customers.
Where appropriate, we made deductions for early payment discounts,
credit expenses, warranty expenses, other direct selling expenses and
commissions. We deducted those indirect selling expenses, including
inventory carrying costs and product liability premiums, that related
to commercial activity in the United States. We also made deductions
for foreign brokerage and handling, foreign inland freight,
international freight, U.S. inland freight, U.S. brokerage and
handling, marine insurance, U.S. repacking expenses and U.S. Customs
duties. We also adjusted the starting price for billing adjustments to
the invoice price and for interest revenue. Finally, we made an
adjustment for CEP profit in accordance with section 772(d)(3) of the
Act.
[[Page 3706]]
The Department has recalculated credit expenses for those sales
with missing payment dates. For sales with missing payment dates, the
Department set the date of payment to the projected final results date.
Further Manufacturing
For products that were further manufactured after importation, we
adjusted for all costs of further manufacturing in the United States,
and the proportional amount of profit allocated to such costs. In
accordance with section 772(f) of the Act, we computed profit based on
total revenues realized on sales in both the U.S. and home markets,
less all expenses associated with those sales. We then allocated profit
to expenses incurred with respect to U.S. economic activity (including
further manufacturing costs), based on the ratio of total U.S. expenses
to total expenses for both the U.S. and home market.
Normal Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared respondents' volume of home market sales of the foreign
like product to the volume of U.S. sales of the subject merchandise, in
accordance with section 773(a)(1) of the Act. Since respondents'
aggregate volume of home market sales of the foreign like product was
greater than five percent of its aggregate volume of U.S. sales for the
subject merchandise, we determined that the home market was viable.
Therefore, we have based NV on home market sales.
Where appropriate, we deducted discounts, credit expenses, warranty
expenses, inland freight and inland insurance. We also adjusted the
starting price for billing adjustments to the invoice price and
interest revenue. We did not adjust the starting price for commissions
in the home market (please see the Concurrence Memorandum for a
discussion of this issue).
For reasons discussed below in the ``Level of Trade'' section, we
allowed a CEP offset for comparisons made at different levels of trade.
To calculate the CEP offset, we deducted the home market indirect
selling expenses from normal value, on home market sales which were
compared to U.S. CEP sales. We limited the home market indirect selling
expense deduction by the amount of the indirect selling expenses
deducted in calculating the CEP under section 772(d)(1)(D) of the Act.
We made adjustments, where appropriate, for physical differences in
the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act.
In addition, in accordance with section 773(a)(6) (A) and (B), we
deducted home market packing costs and added U.S. packing costs.
We also made adjustments, where applicable, for home market
indirect selling expenses to offset U.S. commissions in EP and CEP
comparisons.
The Department has recalculated credit expenses for those home
market sales with missing payment and shipment dates. For sales with
missing payment dates, the Department calculated payment date based on
the average time period between invoice date and shipment date for
those sales where both invoice date and shipment date appeared in the
database. For sales with missing shipment dates, the Department
calculated shipment date based on the average time period between
invoice date and shipment date for those sales where both invoice date
and shipment date appeared in the database.
Price to CV Comparisons
When we based NV on CV, we calculated CV in the manner described
below. See ``Cost of Production Analysis'' section. Where we compared
CV to EP, we deducted from CV the weighted-average home market direct
selling expenses and added the U.S. direct selling expenses.
Cost of Production Analysis
We had reasonable grounds to believe or suspect that sales of the
foreign like product under consideration for the determination of NV in
this review may have been made at prices below the COP because the
Department disregarded sales below the cost of production (COP) in the
second administrative review (see Final Results of Antidumping Duty
Administrative Review: Certain Stainless Steel Wire Rods from France,
62 FR 7206 (February 18, 1997)). Therefore, pursuant to section
773(b)(1) of the Act, we initiated a COP investigation of sales by
respondents in the home market.
In accordance with section 773(b)(3) of the Act, we calculated the
COP based on the sum of the costs of materials and fabrication employed
in producing the foreign like product plus selling, general and
administrative (SG&A) expenses and all costs and expenses incidental to
placing the foreign like product in condition packed ready for
shipment. In our COP analysis, we used the home market sales and COP
information provided by respondents in their questionnaire responses.
After calculating COP, we tested whether home market sales of SSWR
were made at prices below COP within an extended period of time in
substantial quantities and whether such prices permit recovery of all
costs within a reasonable period of time. We compared model-specific
COPs to the reported home market prices less any applicable movement
charges, discounts, and rebates.
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of respondents' sales of a given product were at prices less
than COP, we did not disregard any below-cost sales of that product
because the below-cost sales were not made in substantial quantities
within an extended period of time. Where 20 percent or more of
respondents' sales of a given product during the POR were at prices
less than the COP, we disregarded the below-cost sales because they (1)
were made within an extended period of time in substantial quantities
in accordance with sections 773(b)(2)(B) and (C) of the Act, and (2)
based on comparisons of prices to weighted-average COPs for the POR,
were at prices which would not permit recovery of all costs within a
reasonable period of time in accordance with section 773(b)(2)(D) of
the Act. Based on this test, we disregarded certain below-cost sales in
these preliminary results.
In accordance with section 773(a)(4) of the Act, we used CV as the
basis for NV when there were no usable sales of the foreign like
product in the comparison market. We calculated CV in accordance with
section 773(e) of the Act. We included the cost of materials and
fabrication, SG&A expenses, and profit. In accordance with section
773(e)(2)(A) of the Act, we based SG&A expenses and profit on the
amounts incurred and realized by the respondents in connection with the
production and sale of the foreign like product in the ordinary course
of trade for consumption in the foreign country. For selling expenses,
we used the weighted-average home market selling expenses.
Arm's-Length Sales
Sales to affiliated customers in the home market not made at arm's
length were excluded from our analysis. To test whether these sales
were made at arm's length, we compared the starting prices of sales to
affiliated and unaffiliated customers net of all movement charges,
direct selling expenses, discounts and packing. Where prices to the
related party were on average 99.5 percent or
[[Page 3707]]
more of the price to the unrelated party, we determined that sales made
to the related party were at arm's-length. Where no related customer
ratio could be constructed because identical merchandise was not sold
to unrelated customers, we were unable to determine that these sales
were made at arm's length and, therefore, excluded them from our
analysis. See Final Determination of Sales at Less Than Fair Value:
Certain Cold-Rolled Carbon Steel Flat Products from Argentina, (58 FR
37062, 37077 (July 9, 1993)). Where the exclusion of such sales
eliminated all sales of the most appropriate comparison product, we
made comparison to the next most similar model.
Currency Conversion
For purposes of the preliminary results, 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.
Section 773A(a) of the Act directs the Department to use a daily
exchange rate in order to convert foreign currencies into U.S. dollars,
unless the daily rate involves a ``fluctuation.'' For these preliminary
results of review, we have determined that a fluctuation exists when
the daily exchange rate differs from a benchmark by 2.25 percent. The
benchmark is defined as the rolling average of rates for the past 40
business days. Therefore, when we determine a fluctuation exists, we
substitute the benchmark for the daily rate. (For a detailed
explanation, see Policy Bulletin 96-1: Currency Conversions, 61 FR
9434, March 8, 1996).
Level of Trade (``LOT'')
In accordance with section 773(a)(1)(b) of the Act, to 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 constructed value (``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 usually from exporter to importer. For CEP, it 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 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 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 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).
In implementing these principles in this review, we obtained
information about the selling activities of the producers/exporters
associated with each phase of marketing or the equivalent. We asked
respondents to identify the specific differences and similarities in
selling functions and/or support services between all phases of
marketing in the home market and the United States.
In reviewing the selling functions reported by the respondents, we
examined all types of selling functions and activities reported in
respondents' questionnaire response on LOT. In analyzing whether
separate LOT existed in this review, we found that no single selling
function was sufficient to warrant a separate LOT in the home market
(see Antidumping Duties; Countervailing Duties; Proposed Rule,
(Proposed Regulations), 61 FR 7308, 7348).
In determining whether separate levels of trade existed in or
between the U.S. and home market, the Department considered the LOT
claims of respondents. To test the claimed LOT, we analyzed, inter
alia, the selling activities associated with the phases of marketing
respondents reported. For the home market, respondents reported one
LOT, sales to end-users. Also, respondents stated that they make their
home market sales through two channels of distribution: (1) Indirect
sales through Ugine-Service and its local field offices; and (2) direct
sales made through the commercial departments of Imphy and Ugine-
Savoie. We examined record evidence from this review and have
determined that there is only one LOT in the home market, regardless of
channel of distribution.
For the U.S. market, respondents reported two LOTs: (1) Sales to
end-users through MAC (EP sales); and (2) sales to distributors, e.g.,
MAC, Techalloy (CEP sales). The Department examined the selling
functions performed for both LOT. We found that the selling functions
were sufficiently different in customer sales contacts (i.e., visiting
customers/potential customers, receiving orders, promotion of new
products and following-up on unpaid invoices), technical services,
computer systems and administrative functions to warrant two levels of
trade in the United States.
In order to determine whether separate LOT actually existed between
the U.S. and home markets, we reviewed the selling activities
associated with each channel of distribution. When we compared EP sales
to home market sales, we determined that sales were made at the same
LOT (i.e., to end-users) in both markets. However, for CEP sales, we
determined that fewer and different selling functions were performed
for CEP sales to MAC and Techalloy than for home market sales to end-
users. We also found that the selling functions were sufficiently
different in customer sales contacts, technical services, inventory
maintenance, computer systems and administrative functions to warrant
treating CEP sales and home market sales to end-users as different LOT.
In addition, we found that the home market sales involved a more
advanced stage of distribution (to end-users) as compared to
respondents' CEP sales in the United States (distributor).
To the extent practicable, we compared normal value at the same LOT
as the U.S. sale. In this review, there were no sales of the foreign
like product in the home market at the same LOT as that of the CEP
sales. Because we compared CEP sales to home market sales at a
different LOT, we examined whether a level of trade adjustment may be
appropriate. In this case, respondents only sold at one LOT in the home
market; therefore, there is no basis upon which respondents can
demonstrate a pattern of consistent price differences between LOTs with
respect to the foreign like product. Further, we do not have
information which would allow us to examine pricing patterns based on
respondents' sales of other products and there are no other respondents
or other record information on which such an analysis could be based.
Because the data available do not provide an appropriate basis for
making a LOT adjustment, but the LOT in the home market is at a more
advanced stage of distribution than the LOT of the CEP sale, a CEP
offset is appropriate. Respondents claimed a CEP offset for
[[Page 3708]]
those U.S. CEP and CEP/Further Manufactured (CEP/FM) sales compared to
sales in France through Ugine Service. We included a CEP offset for all
sales in France which are compared with CEP and CEP/FM sales in the
United States since the comparison of home market sales to CEP sales is
at a different level of trade. We applied the CEP offset to normal
value or constructed value, as appropriate.
Preliminary Results of Review
As a result of our review, we preliminarily determine the weighted-
average dumping margins (in percent) for the period January 1, 1996,
through December 31, 1996, to be as follows:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
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Imphy/Ugine-Savoie......................................... 10.51
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Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party 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 other written
comments from interested parties may be submitted not 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 its analysis of issues raised in any
written comments or at a hearing, not later than 120 days after the
date of publication of this notice.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries. We have
calculated importer-specific ad valorem duty assessment rates based on
the ratio of the total amount of dumping margins calculated for the
examined sales made during the POR to the total customs value of the
sales used to calculate those duties. These rates will be assessed
uniformly on all entries of each particular importer made during the
POR. (This is equivalent to dividing the total amount of antidumping
duties, which are calculated by taking the difference between statutory
NV and statutory EP or CEP, by the total statutory EP or CEP value of
the sales compared, and adjusting the result by the average difference
between EP or CEP and customs value for all merchandise examined during
the POR).
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 by section
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed
companies will be the rate established in the final results of this
review (except that no deposit will be required for firms with zero or
de minimis margins, i.e., margins less than 0.5 percent); (2) 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 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) the cash deposit rate for all other
manufacturers or exporters will continue to be 24.51 percent, the ``All
Others'' rate made effective by the LTFV investigation. These deposit
requirements, when imposed, shall remain in effect until publication of
the final results of the next administrative reviews.
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 Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
These administrative reviews and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR
353.22(c)(5).
Dated: January 16, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-1806 Filed 1-23-98; 8:45 am]
BILLING CODE 3510-DS-P
