[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: 94-19068]


[[Page Unknown]]

[Federal Register: August 4, 1994]


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DEPARTMENT OF COMMERCE
[A-533-810]

 

Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Stainless Steel Bar From India

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 India 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 (the Act), as 
amended. The estimated margins are shown in the ``Suspension of 
Liquidation'' section of this notice.

Scope of Investigation

    The merchandise covered by this investigation is stainless steel 
bar (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 subheading 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 27, 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 25, 1994 we named Grand Foundry, Limited (Grand 
Foundry) and Mukand, Limited (Mukand) as respondents in this 
investigation, and on February 28, 1994, we issued antidumping 
questionnaires to these companies. These companies accounted for at 
least 60 percent of the exports of the subject merchandise to the 
United States during the POI.
    On February 26, 1994, Isibars, Limited (Isibars), an Indian 
producer/exporter of subject merchandise which was not selected as a 
mandatory respondent, requested that it be allowed to participate in 
the investigation as a voluntary respondent. On March 9, 1994, we sent 
Isibars a brief questionnaire requesting sales volume and value data 
and noted that based upon Isibars response we would determine if it was 
appropriate to issue a complete questionnaire to the company. On March 
14, 1994, Isibars submitted its response to this questionnaire. 
Subsequently, on March 15, the Department issued Isibars a 
questionnaire, noting its policy with respect to voluntary respondents. 
On March 28, 1994, Isibars requested via facsimile a 30-day extension 
in order to respond to the Department's questionnaire. On March 28, 
1994, we granted Isibars a partial extension contingent upon receipt of 
an officially filed extension request. However, because Isibars never 
submitted such an extension request or a response to any section of our 
questionnaire, we never deemed it to be a mandatory respondent.
    On March 4, 1994, Akai Impex Ltd. (Akai), another Indian producer/
exporter of subject merchandise, requested that it be allowed to 
participate in the investigation. Subsequently, on March 7, 1994, we 
sent Akai a brief questionnaire requesting sales volume and value data 
and noted that based upon Akai's response we would determine if it was 
appropriate to issue it a questionnaire. Akai's response to this 
questionnaire was received on March 14, 1994. Our examination of this 
response revealed that Akai had not made sales of the subject 
merchandise to the United States during the POI, and on this basis, we 
denied its request for voluntary respondent status on March 17, 1994.
    On March 23, 1994, we received a response to Section A of the 
Department's questionnaire from Grand Foundry. In that response, 
respondent reported that it made no sales of export-quality merchandise 
in the home market during the POI. On April 4, 1994, we received 
petitioners' comments on Grand Foundry's Section A response. On April 
5, 1994, the Department determined that Grand Foundry's third country 
sales to Germany were the appropriate basis for foreign market value 
(FMV), pursuant to 19 C.F.R. 353.49.
    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 April 22, 1994, we received a response to Sections B and C of 
the Department's questionnaire from Grand Foundry. On May 4, 1994, we 
received petitioners' comments regarding Grand Foundry's responses to 
Sections B and C. On May 10, 1994, we issued a supplemental 
questionnaire to Grand Foundry. Grand Foundry submitted its 
supplemental response on June 20, 1994. Mukand never responded to any 
section of our antidumping questionnaire.
    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 C.F.R. 353.15(c) and (d).
    On May 25, 1994, petitioners alleged that Grand Foundry sold the 
subject merchandise in Germany at prices below its cost of production 
(COP). Respondent rebutted the allegation on June 2, 1994. Petitioners 
supplemented their original allegation on June 7, 1994. On June 15, 
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 Grand Foundry on June 15, 1994, and 
subsequently issued Section D of the Department's questionnaire on June 
16. On July 8, 1994, Grand Foundry requested an extension of time until 
August 1, 1994, to respond to Section D of the questionnaire. The 
Department granted such an extension on July 12, 1994.
    Also on July 12, Grand Foundry requested that the Department 
postpone the final determination until 135 days after the date of 
publication of the Department's preliminary determination, if that 
determination is affirmative.

Best Information Available

    In accordance with section 776(c) of the Act, we have determined 
that the use of best information available (BIA) is appropriate for 
Mukand. Mukand did not respond to the Department's questionnaire issued 
on February 28, 1994. Because Mukand failed to answer the Department's 
questionnaire, we find it has not cooperated in this investigation.
    As BIA, we are assigning the highest margin among the margins 
alleged in the petition, in accordance with the two-tiered BIA 
methodology under which the Department imposes the most adverse rate 
upon a respondent who refuses to cooperate or otherwise significantly 
impedes the proceeding, and as outlined in the Antifriction Bearings 
(Other Than Tapered Roller Bearings) and Parts Thereof from the Federal 
Republic of Germany; Final Results of Antidumping Duty Administrative 
Review (56 FR 31692, 31704, July 11, 1991). The Department's 
methodology for assigning BIA has been upheld by the U.S. Court of 
Appeals for the Federal Circuit (see Allied-Signal Aerospace Co. v. 
United States, Slip Op. 94-1112 (June 30, 1994); and Allied Signal 
Aerospace Co. v. United States, 996 F.2d 1185 (Fed. Cir. 1993); see 
also Krupp Stahl, AG et al. v. United States, 822 F. Supp. 789 (CIT 
1993)).

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 third country 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.
    We altered the order of the SSB grades specified within the grade 
criterion of Appendix V to account for certain other SSB grades which 
respondent sold in the third country market 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, 
Acciaierie Valbruna (Valbruna), a respondent in the concurrent 
antidumping investigation of SSB from Italy requested that the 
Department reconsider the reversal of these criteria in Appendix V. 
Specifically, Valbruna 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. Although the 
issue was not raised by any interested party in the instant 
investigation, we reversed the order of these criteria to ensure 
consistent treatment of respondents in performing product comparisons 
across all concurrent SSB investigations.

Fair Value Comparisons

    As discussed above, we are using BIA with regard to Mukand and thus 
did not make fair value comparisons with regard to this company. For 
the remaining company, Grand Foundry, we made fair value comparisons as 
discussed below.
    To determine whether sales of SSB from Grand Foundry to the United 
States were made at less than fair value, we compared the United States 
price (``USP'') to the FMV, as specified in the ``United States Price'' 
and ``Foreign Market Value'' sections of this notice. In accordance 
with 19 C.F.R. 353.58, we made comparisons at the same level of trade, 
where possible.

United States Price

    We based USP on purchase price (PP), in accordance with section 
772(b) of the Act, because the subject merchandise was sold to 
unrelated purchasers in the United States before importation and 
because exporter's sales price methodology was not otherwise indicated.
    We calculated PP based on packed CNF prices to unrelated customers. 
In accordance with section 772(d)(2)(A) of the Act, we made deductions, 
where appropriate, for foreign brokerage (including containerization, 
foreign inland freight and port charges) and ocean freight.

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 Grand Foundry had a 
viable home market with respect to sales of SSB during the POI. 
However, based on Grand Foundry's claim that its home market sales made 
during the POI consisted only of SSB scrap and rejects and that its 
U.S. sales during the same period consisted only of first (or export) 
quality SSB, we determined that third country sales would be a more 
appropriate basis for FMV. (See April 5, 1994 Decision Memorandum To 
Richard W. Moreland From The Team Re: Appropriate Basis for FMV.)
    In order to select the appropriate third country in this case, we 
examined three factors in accordance with 19 C.F.R. 353.49(b): (1) The 
degree of similarity in terms of physical characteristics between the 
products sold in the United States and the individual third country 
markets; (2) the volume of sales in each third country market relative 
to that in the United States; and (3) the similarity of the market 
organization and development between the U.S. market and third country 
market. Based on these factors, we selected sales to Germany as the 
appropriate basis on which to calculate FMV.
    In accordance with 19 CFR 353.46, we calculated FMV based on CIF or 
CNF prices charged to unrelated customers in Germany.
    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 foreign brokerage (including 
containerization, foreign inland freight, loading and port fees), ocean 
freight, and marine insurance.
    Pursuant to 19 CFR 353.56(a)(2), we made further circumstance-of-
sale adjustments, where appropriate, for differences in credit 
expenses, and bank charges (including bank interest, courier charges 
and commissions) between the U.S. and third country markets. We 
recalculated credit expenses to reflect the revised short-term interest 
rate reported by respondent. We deducted third country commissions and 
added U.S. indirect selling expenses capped by the amount of third 
country commissions.
    We also deducted third country packing 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.

Cost of Production

    Based on petitioner's allegation, and in accordance with section 
773(b) of the Act, the Department initiated an investigation to 
determine whether Grand Foundry made third country sales of subject 
merchandise at prices below its COP, and over an extended period of 
time. Although Grand Foundry's COP questionnaire response will be 
received too late for consideration 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 
India, 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 estimated preliminary dumping margins are as 
follows:

------------------------------------------------------------------------
                                                                 Margin 
               Manufacturer/Producer/Exporter                   Percent 
------------------------------------------------------------------------
Grand Foundry................................................       2.67
Mukand.......................................................      21.02
All Others...................................................      11.85
------------------------------------------------------------------------

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 12, 1994, 
Grand Foundry, 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 8, 1994, and 
rebuttal briefs no later than November 15, 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 17, 1994 at 9:30 a.m. at the U.S. Department of Commerce, Room 
3708, 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. 94-19068 Filed 8-3-94; 8:45 am]
BILLING CODE 3510-DS-P