[Federal Register Volume 59, Number 56 (Wednesday, March 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6845]


[[Page Unknown]]

[Federal Register: March 23, 1994]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-401-601]

 

Brass Sheet and Strip From Sweden; Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: International Trade Administration/Import Administration 
Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: The Department of Commerce (the Department) has conducted an 
administrative review of the antidumping duty order on brass sheet and 
strip from Sweden. The review covers exports of this merchandise to the 
United States by one manufacturer/exporter during the period March 1, 
1991 through February 29, 1992. The review indicates the existence of 
dumping margins for this period.
    As a result of this review, the Department has preliminarily 
determined to assess antidumping duties equal to the difference between 
United States price (USP) and foreign market value (FMV).
    We invite interested parties to comment on these preliminary 
results.

EFFECTIVE DATE: March 23, 1994.

FOR FURTHER INFORMATION CONTACT: Valerie Turoscy, Chip Hayes, or John 
Kugelman, Office of Antidumping Compliance, International Trade 
Administration, U.S. Department of Commerce, Washington, DC 20230; 
telephone: (202) 482-5253.

SUPPLEMENTARY INFORMATION:

Background

    On March 6, 1987, the Department published in the Federal Register 
(52 FR 6998) the antidumping duty order on brass sheet and strip from 
Sweden. On April 13, 1992, in accordance with 19 CFR 353.22(c), we 
initiated an administrative review of Outokumpu Copper Rolled Products 
AB (OAB) for the period March 1, 1991 through February 29, 1992 (57 FR 
12797). The Department is now conducting this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Tariff Act). In addition, from December 6, 1993 to December 10, 1993 we 
verified OAB's responses for this administrative review and found that, 
in general, OAB's records supported the information which OAB submitted 
to the Department.

Scope of Review

    Imports covered by this review are sales or entries of brass sheet 
and strip, other than leaded and tinned brass sheet and strip, from 
Sweden. The chemical composition of the products under review is 
currently defined in the Copper Development Association (C.D.A.) 200 
Series or the Unified Numbering System (U.N.S.) C20000 series. This 
review does not cover products the chemical compositions of which are 
defined by other C.D.A. or U.N.S. series. The merchandise is currently 
classified under Harmonized Tariff Schedule (HTS) item numbers 
7409.21.00 and 7409.29.20. The HTS item numbers are provided for 
convenience and Customs purposes. The written description remains 
dispositive. This review covers one manufacturer/exporter, OAB.

United States Price

    We based USP on purchase price (PP), in accordance with section 
772(b) of the Tariff Act, because the subject merchandise was sold to 
unrelated purchasers in the United States prior to importation into the 
United States. We calculated PP based on C.I.F., duty paid prices, 
delivered either to independent U.S. warehouses or to the customers' 
premises. In accordance with section 772(d)(2) of the Tariff Act we 
made deductions, where appropriate, for U.S. point-to-point freight, 
point-to-point insurance, brokerage and handling, customs duty, and 
cash discounts.
    We also adjusted USP for imputed consumption tax in accordance with 
the decision made by the Court of International Trade (CIT) in Federal-
Mogul Corporation and the Torrington Company v. United States, Slip Op. 
93-194 (CIT, October 7, 1993) (Federal-Mogul). In Federal-Mogul, the 
CIT rejected the Department's methodology for calculating an addition 
to USP under section 772(d)(1)(C) of the Tariff Act to account for 
taxes that the exporting country would have assessed on the merchandise 
had it been sold in the home market. The CIT held that the addition to 
USP under section 772(d)(1)(c) of the Tariff Act should be the result 
of applying the foreign market tax rate to the price of the U.S. 
merchandise at the same point in the chain of commerce that the foreign 
market tax was applied to the foreign market sales (Federal-Mogul at 
12).
    In accordance with the Court's decision, the Department has added 
to USP the result of multiplying the foreign market tax rate by the 
price of the U.S. merchandise at the same point in the chain of 
commerce that the foreign market tax was applied to foreign market 
sales. The Department has also adjusted the USP tax adjustments and the 
amount of tax included in FMV. These adjustments deduct the portions of 
the foreign market tax and the USP tax adjustment that are the result 
of expenses that are included in the foreign market price used to 
calculate foreign market tax and are included in the U.S. merchandise 
price used to calculate the USP tax adjustment. These adjustments to 
the amount of the foreign market tax and the USP tax adjustment are 
necessary to prevent our methodology for calculating the USP tax 
adjustment from creating antidumping duty margins where no margins 
would exist if no taxes were levied upon foreign market sales.
    This margin creation effect is due to the fact that the basis for 
calculating both the amount of tax included in the price of the foreign 
market merchandise and the amount of the USP tax adjustment includes 
many expenses that are later deducted when calculating USP and FMV. 
After these deductions are made, the amount of tax included in FMV and 
the USP tax adjustment still reflects the amounts of these expenses. 
Thus, a margin may be created that is not dependent upon a difference 
between USP and FMV, but is the result of the price of the U.S. 
merchandise containing more expenses than the price of the foreign 
market merchandise. The Department's policy to avoid the margin 
creation effect is in accordance with the United States Court of 
Appeals' holding that the application of the USP tax adjustment under 
section 772(d)(1)(C) of the Tariff Act should not create an antidumping 
duty margin if pre-tax FMV does not exceed USP (Zenith Electronics 
Corp. v. United States, 988 F.2d 1573, 1581 (Fed. Cir. 1993)). In 
addition, the CIT has specifically held that an adjustment should be 
made to mitigate the impact of expenses that are deducted from FMV and 
USP upon the USP tax adjustment and the amount of tax included in FMV 
(Daewoo Electronics Co., Ltd. v. United States, 760 F. Supp. 200, 208 
(CIT, 1991) (Daewoo)). However, the mechanics of the Department's 
adjustments to the USP tax adjustment and the foreign market tax amount 
as described above are not identical to those suggested in Daewoo.
    No other adjustments were claimed or allowed.

Foreign Market Value

    The Department used home market price, as defined in section 773 of 
the Tariff Act, to calculate FMV. Because the home market was viable, 
we compared U.S. sales with sales of such or similar merchandise in the 
home market. Home market prices were based on the monthly weighted-
average, packed, F.O.B., ex-factory, or delivered prices to unrelated 
purchasers in the home market. Where applicable, we made adjustments 
for home market warranty expenses, home market rebates, packing 
expenses incurred in Sweden, home market credit, and home market inland 
freight. We further adjusted FMV by adding U.S. direct selling expenses 
(credit, warranties, and post-sale warehousing and commission 
expenses). However, since commissions were paid only in the U.S. 
market, we offset the U.S. commission expenses by deducting home market 
indirect selling expenses from FMV in an amount not exceeding the 
amount of U.S. commissions.
    We also adjusted FMV for imputed consumption tax in accordance with 
the Federal-Mogul decision as described above, and for differences in 
physical characteristics. However, because we did not receive the 
information necessary to support OAB's reported difference-in-
merchandise (difmer) amounts, for all U.S. sales to which we matched 
home market sales of most similar merchandise, we used the largest 
positive gauge and alloy difmer amounts reported by OAB (i.e., the most 
adverse difmer amounts) as the best information available. See analysis 
memorandum of February 24, 1994 for further explanation.
    OAB also claimed a tool-setting expense as a circumstance-of-sale 
(COS) adjustment. Based on information obtained at verification, we 
determined that because this expense was a manufacturing cost and not a 
selling expense, it did not warrant a COS adjustment. As a result, we 
did not adjust for this expense in these preliminary results. See 
analysis memorandum of February 24, 1994 for further explanation. No 
other adjustments were claimed or allowed.

Preliminary Results of Review

    As a result of our comparison of USP to FMV, we preliminarily 
determine that the following margin exists for the period March 1, 1991 
through February 29, 1992: 

------------------------------------------------------------------------
                                                                Margin  
                   Manufacturer/exporter                       (percent)
------------------------------------------------------------------------
OAB.........................................................        7.19
------------------------------------------------------------------------


    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 no 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 the 
hearing.
    The Department will determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between USP and FMV may vary from the percentage stated 
above. The Department will issue appraisement instructions directly to 
the Customs Service.
    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 by section 
751(a)(1) of the Tariff Act: (1) The cash deposit rate for the reviewed 
company will be that rate established in the final results of this 
review; (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 
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 will be the ``all others'' rate established in the 
LTFV investigation.
    On May 25, 1993, the CIT, in Floral Trade Council v. United States, 
Slip. Op. 93-79, and Federal-Mogul Corporation v. United States, Slip. 
Op. 93-83, decided that once an ``all others'' rate is established for 
a company, it can only be changed through an administrative review. The 
Department has determined that in order to implement these decisions, 
it is appropriate to reinstate the original ``all others'' rate from 
the LTFV investigation (or that rate as amended for correction for 
clerical errors or as a result of litigation) in proceedings governed 
by antidumping duty orders. Therefore, the ``all others'' rate for this 
proceeding is 9.49 percent.
    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.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: March 15, 1994.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 94-6845 Filed 3-22-94; 8:45 am]
BILLING CODE 3510-DS-P