[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: 94-19071]


[[Page Unknown]]

[Federal Register: August 4, 1994]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE
[A-469-805]

 

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

Agency: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: August 4, 1994.

FOR FURTHER INFORMATION CONTACT: Mary Jenkins or Kate Johnson, Office 
of Antidumping Investigations, Import Administration, U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone (202) 482-1756 or 482-4929, respectively.

Preliminary Determination

    The Department of Commerce (the Department) preliminarily 
determines that stainless steel bar (SSB) from Spain 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 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 subheadings 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 (POI) is July 1, 1993, to December 31, 1993.

Case History

    Since the notice of initiation on January 19, 1994 (59 FR 3844, 
January 26, 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 Roldan, S.A. (Roldan) and Acenor, 
S.A. (Acenor) as respondents in this investigation and on February 28, 
1994, issued antidumping questionnaires to both companies. These 
companies represent 100 percent of U.S. imports of subject merchandise 
from Spain during the POI. We presented the questionnaire to Roldan at 
its facility in Madrid, Spain on March 7, 1994, and to Acenor at its 
facility in Bilbao, Spain on March 10, 1994.
    We received Roldan's response to Section A of the Department's 
questionnaire on March 28, 1994. We received Roldan's responses to 
Sections B and C of the Department's questionnaire on April 21, 1994. 
We received Acenor's responses to Sections A, B, and C of the 
Department's questionnaire on May 18, 1994.
    On March 25, 1994, we received comments on the issue of class or 
kind of merchandise from interested parties, per the Department's 
invitation of 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 May 27, 1994, the Department rescinded the COP investigations 
against Roldan and Acenor that were initiated on January 19, 1994, 
because the Department had reason to believe that petitioners did not 
base their cost allegations on information reasonably available to 
them. (See May 27, 1994, Decision Memorandum to Barbara Stafford from 
David L. Binder Re: Rescinding the COP investigations for Acenor and 
Roldan.) On June 13, 1994, the Department re-initiated COP 
investigations against Roldan and Acenor based on the allegations 
submitted by petitioners on May 9, 1994, and May 24, 1994, pursuant to 
section 19 CFR 353.51(a) (1994). (See June 13, 1994, Decision 
Memorandum to Barbara R. Stafford from Richard Moreland Re: 
Petitioners' Allegations of Sales Below the Cost of Production for 
Roldan and Acenor.) We received Roldan's and Acenor's responses, to 
Section D of the Department's questionnaire on June 23, and June 27, 
1994, respectively.
    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, in accordance with 
sections 19 CFR 353.15 (c) and (d).
    On July 13, 1994, the Department issued to each respondent a 
supplementary questionnaire regarding Section D of the Department's 
original questionnaire. The due dates for Acenor's and Roldan's 
supplementary responses have been extended until August 3 and August 4, 
1994, respectively. Consequently, this information will be received too 
late for purposes of the preliminary determination, but will be 
analyzed, verified, and considered for the final determination.
    On July 26, 1994, pursuant to 19 CFR 353.20(b), respondents 
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.

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 home 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 of Commerce.
    We altered the order of the SSB grades specified within the grade 
criterion of Appendix V to account for certain other SSB grades which 
Roldan sold 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, it 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.

Related Party Sales

    On April 21, 1994, Roldan reported sales made to both related and 
unrelated distributors, and unrelated end users in the home market. We 
compared related party prices to unrelated party prices using the test 
set forth in Appendix II to Final Determination of Sales at Less than 
Fair Value; Certain Cold-rolled Carbon Steel Flat Products from 
Argentina, 58 FR 37062 (July 9, 1994), and determined that the sales 
made to related parties were not at arm's length. We subsequently 
requested that Roldan and Acenor report all sales made by their related 
parties to the first unrelated customer in the home market. These 
sales, reported on June 29, and July 1, for Acenor and Roldan, 
respectively, were submitted too late to be properly analyzed for use 
in the preliminary determination.
    On June 13, 1994, Roldan submitted a revised home market sales 
listing including Roldan's sales to both related and unrelated parties. 
However, for the preliminary determination we did not use portions of 
the revised sales listing containing related party sales because we 
found certain discrepancies between the related party sales data 
contained in respondent's original and revised responses. However, we 
intend to clarify these discrepancies prior to verification and 
consider respondent's revised related party sales listing for the final 
determination based on verification findings. Therefore, for purposes 
of the preliminary determination, we only used the portion of Roldan's 
sales listing pertaining to sales made directly to unrelated parties in 
our analysis.
    For Acenor, we compared prices to a related party with prices to 
unrelated parties using the test referenced above and determined that 
the sales made to the related party were not at arm's length. 
Accordingly, we used only sales made directly to unrelated parties 
reported in Acenor's June 29, 1994, sales listing.

Fair Value Comparisons

    To determine whether sales of SSB from Spain to the United States 
were made at less than fair value, we compared the United States price 
(``USP'') to the foreign market value (``FMV''), as specified in the 
``United States Price'' and ``Foreign Market Value'' sections of this 
notice. In accordance with 19 CFR 353.58, we made comparisons at the 
same level of trade, where possible.

United States Price

    For both Roldan and Acenor, 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 exporter's sales price methodology was not 
otherwise indicated.
    We made an adjustment to USP for the value-added tax (VAT) paid on 
the comparison sales in Spain, in accordance with our practice, 
pursuant to the Court of International Trade (CIT) decision in Federal-
Mogul Corp. and The Torrington Co. v. United States, Slip Op. 93-194 
(CIT, October 7, 1993). (See Final Determination of Sales at Less than 
Fair Value: Calcium Aluminate Cement, Cement Clinker and Flux from 
France, 59 FR 14136, March 25, 1994).
    We re-calculated the VAT for both Roldan and Acenor because the 
methodology they employed in reporting the VAT was not clearly defined. 
The VAT will be examined at verification and re-analyzed for the final 
determination.

Roldan

    We calculated PP based on CIF delivered prices to unrelated 
customers in the United States. We made deductions, where appropriate, 
for foreign brokerage and handling, foreign inland freight, ocean 
freight, marine insurance, U.S. brokerage and handling (including 
insurance), U.S. inland freight and U.S. import duties.
    We made no adjustment for freight charge differentials claimed by 
Roldan because of the lack of data on the record concerning the nature 
of the adjustment claimed. We intend to obtain further information and 
to verify the reported data. We will revisit this issue in our final 
determination based on verification findings.

Acenor

    We calculated PP based on ex-factory packed prices to unrelated 
customers. Accordingly, we made no adjustments to these reported 
prices.

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 both respondents had 
viable home markets with respect to sales of SSB during the POI.

Cost of Production

    Petitioners alleged that Roldan and Acenor were selling in the home 
market at prices below COP in the petition filed in this investigation. 
The Department initiated COP investigations for both respondents on 
January, 19, 1994. However, as stated above, the Department rescinded 
the original COP investigations. After reviewing petitioners' revised 
allegations, we re-initiated COP investigations. We requested that 
respondents reply to Section D of our antidumping questionnaires issued 
on February 28, 1994. Roldan and Acenor submitted their responses to 
Section D of our questionnaire on June 23, and June 27, 1994, 
respectively. On July 13, 1994, the Department sent Roldan and Acenor a 
Section D deficiency questionnaire.
    In order to determine whether home market prices were below COP 
within the meaning of section 773(b) of the Act, we calculated COP 
based on the sum of the respondents' cost of materials, fabrication, 
general expenses and home market packing costs. We compared individual 
home market prices with the COPs. We tested the home market prices on a 
product-specific basis using Roldan's sales to unrelated customers from 
the database received on June 13, 1994, and Acenor's sales to unrelated 
customers from the database received on June 29, 1994. We compared 
model-specific COP to reported prices that were net of movement 
charges.
    Following our standard practice, where we found over 90 percent of 
a respondent's sales of a given product were at prices above the COP, 
we did not disregard any below-cost sales because we determined that 
the respondent's below-cost sales were not made in substantial 
quantities. If between ten and 90 percent of a respondent's sales of a 
given product were at prices above the COP, we discarded only the 
below-cost sales if made over an extended period of time. Where we 
found that more than 90 percent of a respondent's sales of a given 
product were at prices below the COP and were sold over an extended 
period of time, we disregarded all sales for that model and calculated 
FMV based on constructed value (CV), in accordance with section 773(b) 
of the Act.
    If sales below cost occurred in three or more months of the POI, 
they are considered to be made over an extended period of time. For 
sales made in less than three months of the POI, the extended period of 
time is the number of months in which the sales occur. (See, 19 U.S.C. 
1677b(b)(1)).
    Roldan and Acenor provided no indication that the disregarded sales 
were at prices that would permit recovery of all costs within a 
reasonable period of time and in the normal course of trade. (See, 19 
U.S.C. 1677b(b)(2)).

Constructed Value (CV)

    We calculated CV based on the sum of the cost of materials, 
fabrication, general expenses, U.S. packing costs and profit. In 
accordance with section 773(e)(1)(B)(i) and (ii) of the Act we: (1) 
Included the greater of respondents' reported general expenses or the 
statutory minimum of ten percent of the COM, as appropriate and; (2) 
for profit, we used the statutory minimum of eight percent of the sum 
of COM and general expenses.

Roldan

    For purposes of calculating FMV, we used the sales from Roldan to 
its unrelated customers and CV, as described above.
    For price-to-price comparisons, we calculated FMV based on 
delivered prices, inclusive of packing to unrelated customers in the 
home market.
    In light of the Court of Appeals for the Federal Circuit's 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 
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 the FMV under the 
circumstance-of-sale provision of 19 CFR 353.56(a). This adjustment 
included home market inland freight (including inland insurance).
    For both price-to-price comparisons and comparisons to CV, we made 
circumstance-of-sale adjustments, where appropriate, for differences in 
credit expenses, pursuant to 19 CFR 353.56(a)(2). We re-calculated home 
market and U.S. credit expenses because Roldan reported an average 
interest rate for a seven-month period, rather than the six-month POI. 
In addition, for those sales with missing shipment dates and payment 
dates, we calculated credit expenses based on the average payment 
period for the respondent's sales reported with shipment and payment 
dates.
    We did not make a circumstance-of-sale adjustment for commissions 
claimed by Roldan that were paid to its parent company for export sales 
services performed by the parent company's commercial department. We 
also did not adjust for commissions paid by Roldan to the U.S. 
subsidiary of its parent company for marketing Roldan's products in the 
United States. We consider these payments to be intra-company transfers 
not tied directly to sales of the subject merchandise. Furthermore, we 
have no appropriate benchmark against which to test whether the 
commission arrangements between Roldan and its related party 
commissionaires are at arm's length. (See Final Determination of Sales 
at Less than Fair Value; Coated Groundwood Paper from Belgium, Finland, 
France, Germany and the United Kingdom, 56 FR 56359, November 4, 1992.)
    We also deducted home market packing and added U.S. packing costs, 
in accordance with section 773(a)(1) of the Act.
    For price-to-price comparisons only, we also made adjustments, 
where appropriate, for differences in the physical characteristics of 
the merchandise in accordance with section 773(a)(4)(C) of the Act. We 
adjusted for VAT in accordance with our practice. (See the ``United 
States Price'' section of this notice, above.)
    We made no adjustment for freight charge differentials claimed by 
Roldan because of the lack of data on the record concerning the nature 
of the adjustment claimed. We intend to obtain further information and 
to verify the reported data. We will revisit this issue in our final 
determination based on verification findings.

Acenor

    For purposes of calculating FMV, we used the sales from Acenor to 
its unrelated customers and CV, as described above.
    For price-to-price comparisons, we calculated FMV based on packed, 
ex-factory and delivered prices, where applicable. We made an 
adjustment for home market inland freight (including inland insurance), 
where applicable, under the circumstance-of-sale provision of 19 CFR 
353.56(a), as described above.
    For price-to-price comparisons and comparisons to CV, we made 
circumstance-of-sale adjustments, where appropriate, for differences in 
credit expenses, pursuant to 19 CFR 353.56(a)(2). We re-calculated home 
market and U.S. credit expenses because Acenor reported its U.S. 
imputed credit expense in pesetas and its calculation overstated this 
expense because of an error in decimal placement. In addition, for 
those sales with missing shipment dates and payment dates, we 
calculated credit expenses based on the average payment period for the 
respondent's sales reported with shipment and payment dates.
    We also deducted home market packing and added U.S. packing costs, 
in accordance with section 773(a)(1) of the Act.
    For price-to-price comparisons only, we also made adjustments, 
where appropriate, for differences in the physical characteristics of 
the merchandise, in accordance with section 773(a)(4)(C) of the Act. We 
adjusted for VAT in accordance with our practice. (See the ``United 
States Price'' section of this notice, above.)

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 
Spain, 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 weighted-average dumping margins are as 
follows:

------------------------------------------------------------------------
                                                                  Margin
                Manufacturer/producer/exporter                   percent
                                                                        
------------------------------------------------------------------------
Roldan, S.A....................................................    25.21
Acenor, S.A....................................................     8.96
All Others.....................................................    17.89
------------------------------------------------------------------------

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 26, 1994, 
respondents accounting for all exports to the United States during the 
POI 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 date of 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 9, 1994, and 
rebuttal briefs no later than November 16, 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 18, 1994, at 2:00 p.m. at the U.S. Department of Commerce, 
Room 1414, 14th Street and Constitution Avenue, NW., Washington, D.C. 
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 Investigations.
[FR Doc. 94-19071 Filed 8-3-94; 8:45 am]
BILLING CODE 3510-DS-P