[Federal Register Volume 59, Number 217 (Thursday, November 10, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27917]


[[Page Unknown]]

[Federal Register: November 10, 1994]


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DEPARTMENT OF COMMERCE
[A-588-834]

 

Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Antidumping Duty Investigation of 
Stainless Steel Angle From Japan

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

EFFECTIVE DATE: November 10, 1994.

FOR FURTHER INFORMATION CONTACT: Bill Crow, Office of Antidumping 
Investigations, Import Administration, U.S. Department of Commerce, 
14th Street and Constitution Avenue NW., Washington, D.C. 20230; 
telephone (202) 482-0116.

PRELIMINARY DETERMINATION: We preliminarily determine that stainless 
steel angle (SSA) from Japan is being sold in the United States at less 
than fair value, as provided in section 733 of the Tariff Act of 1930, 
as amended (the Act). The estimated margins are shown in the 
``Suspension of Liquidation'' section of this notice.

Case History

    Since the initiation of this investigation on April 28, 1994 (59 FR 
23052, May 4, 1994), the following events have occurred.
    On May 23, 1994, the International Trade Commission (ITC) issued an 
affirmative preliminary injury determination in this proceeding (see 
ITC Investigation No. 731-TA-699).
    On June 2, 1994, the Department of Commerce (the Department) issued 
an antidumping questionnaire to Aichi Steel Works, Ltd., (Aichi). Aichi 
submitted responses to the Department's questionnaire in June and July 
1994.
    On August 23, 1994, the Department issued a supplemental sales 
questionnaire to the respondent. Aichi submitted its response to the 
supplemental questionnaire on September 19, 1994.
    On August 17, 1994, the petitioners, Slater Steels Corporation and 
United Steelworkers of America, requested that the Department postpone 
the preliminary determination until November 4, 1994, pursuant to 19 
CFR 353.15(c)(1994). The Department granted this request on August 24, 
1994 (59 FR 44966, August 31, 1994).
    On August 10, 1994, the petitioners alleged that Aichi was selling 
the subject merchandise in the home market at below its cost of 
production. On August 16, 1994, the respondent submitted comments which 
questioned the methodology employed in the petitioners' below-cost 
allegation. On August 22, 1994, the petitioners revised their original 
cost allegation. After analyzing the petitioners' allegation, we found 
reasonable grounds to believe or suspect that sales in the home market 
were being made at less than the cost of production. Consequently, on 
September 7, 1994, the Department initiated an investigation of sales 
below cost for Aichi's home market sales, in accordance with section 
773(b) of the Act and 19 CFR 353.51. On this date, we presented Aichi 
with Section D of the antidumping questionnaire concerning cost of 
production. Aichi submitted its response to Section D of the 
questionnaire on October 17, 1994.
    On November 2, 1994, in accordance with 19 CFR 353.20(b), the 
respondent requested that, in the event of an affirmative preliminary 
determination, the Department postpone the final determination due to 
the complexity of the cost information, and the problems associated 
with scheduling verification because of the year-end holidays.

Scope of Investigation

    For purposes of this investigation, the term ``stainless steel 
angle'' includes hot-rolled, whether or not annealed or descaled, 
stainless steel products angled at 90 degrees, that are not otherwise 
advanced.
    The stainless steel angle subject to this investigation is 
currently classifiable under subheadings 7222.40.30.20 and 
7222.40.30.60 of the Harmonized Tariff Schedules of the United States 
(HTSUS). Although the HTSUS subheadings are 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 November 1, 1993, through 
April 30, 1994.

Such or Similar Comparisons

    For purposes of the preliminary determination, we have determined 
that stainless steel angle constitutes a single ``such or similar'' 
category of merchandise.
    The respondent reported that there were no sales of identical 
merchandise in the home market during the POI. Because 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: (1) 
stainless steel grade; (2) leg-length; (3) thickness; (4) spine length; 
and (5) other characteristics. The Department used Aichi's reported 
costs to adjust for physical differences in merchandise.

Fair Value Comparisons

    To determine whether sales of stainless steel angle from Japan 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. When comparing the U.S. sales to sales of 
similar merchandise in the home market, we made adjustments for 
differences in physical characteristics, pursuant to 19 CFR 353.57. In 
accordance with 19 CFR 353.58, we made comparisons at the same level of 
trade, where possible.

United States Price

    We based USP on purchase price, in accordance with section 772(b) 
of the Act, because the subject merchandise was sold to an unrelated 
purchaser before importation into the United States and because 
exporter's sales price methodology was not otherwise indicated.
    We made deductions from the U.S. sales price, where appropriate, 
for foreign brokerage, foreign inland freight, and insurance.
    We recalculated U.S. credit expense based on Aichi's lending rate 
to its customers as opposed to Aichi's investment return rate.
    We made an adjustment to U.S. price for a consumption tax levied on 
comparison sales in Japan in accordance with our practice, pursuant to 
the decision of the Court of International Trade (CIT) in Federal-Mogul 
Corporation and The Torrington Company v. United States, 834 F. Supp. 
1391 (CIT 1993). See Preliminary Antidumping Duty Determination: Color 
Negative Photographic Paper and Chemical Components from Japan (59 FR 
16177, 16179, April 6, 1994), for an explanation of this methodology.

Foreign Market Value

    We compared the volume of home market sales of SSA to the volume of 
third-country sales to determine whether there was a sufficient volume 
of sales in the home market to serve as a viable basis for calculating 
FMV, in accordance with section 773 (a)(1)(B) of the Act. We found that 
the home market was viable for sales of stainless steel angle, in 
accordance with 19 CFR 353.48(a).
    We excluded from our analysis those sales in the home market 
database with negative quantities or negative sales prices.
    We used the Department's arm's-length test to determine whether 
sales to related customers were made on an arm's-length basis. Where 
possible, we compared related and unrelated party sales at the same 
level of trade. For purposes of the preliminary determination, we 
considered a party as related to respondent whenever respondent had 
substantial ownership in the party. See Appendix II to the Final 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Carbon Steel Flat Products from Argentina (58 FR 37077, July 9, 1993) 
for more information on the Department's arm's-length test.
    In the home market, Aichi sells SSAs through several distribution 
channels. Where Aichi sold SSAs through its subsidiary, that 
subsidiary's sales to unrelated parties formed the basis of our FMV 
calculation. Only a minuscule proportion of Aichi's sales were made to 
related parties, either directly, or through its subsidiary. We only 
included sales to the related parties that were made at arm's length. 
We also excluded certain related party sales from our analysis because 
those products could not be compared to unrelated sales and because 
these were made in insignificant quantities.
    We calculated FMV based on delivered prices. We made deductions for 
discounts and rebates, where applicable.
    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), as appropriate. Accordingly, in the 
present case, we deducted post-sale home market inland freight and 
insurance from FMV under the circumstance-of-sale provision of 19 CFR 
353.56(a).
    For one expense claimed as a rebate by Aichi, we preliminarily 
determined that the expense was, in fact, a transfer of funds from the 
parent to its subsidiary. This rebate was not passed on to the 
unrelated purchaser. Consequently, we did not make any adjustments to 
FMV for this claimed rebate.
    We deducted home market packing costs and added U.S. packing costs 
in accordance with section 773(a)(1) of the Act. We also made 
circumstance of sale adjustments for home market direct selling 
expenses, which included credit, in accordance with 19 CFR 
353.56(a)(2). We reclassified pre-sale warehousing expenses as indirect 
selling expenses.
    We adjusted for the consumption tax in accordance with our practice 
(see ``United States Price'' section of this notice).

Cost of Production (COP)

    In order to determine whether home market sales prices were below 
COP within the meaning of section 773(b) of the Act, we calculated COP 
based on the sum of the respondent's cost of materials, fabrication, 
general, and packing expenses, in accordance with 19 CFR 353.51(c). 
(See e.g., Preliminary Results of Antidumping Duty Administrative 
Review: Polyethylene Terrephthalate Film, Sheet, and Strip from the 
Republic of Korea (59 FR 35098, 35099, July 8, 1994). We then compared 
the COP to the home market selling prices, net of movement charges and 
discounts and rebates.
    In accordance with Section 773(b) of the Act, we followed our 
standard methodology to determine whether the home market sales of each 
product were made at prices below their COP in substantial quantities 
over an extended period of time, and whether such sales were made at 
prices that would permit recovery of all costs within a reasonable 
period of time in the normal course of trade.
    To satisfy the requirement of 773(b)(1) that below-cost sales be 
disregarded only if made in substantial quantities, we applied the 
following methodology. Where we found that 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 
respondent's below-cost sales are 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 disregarded 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.
    In accordance with section 773(b)(1) of the Act, in order to 
determine whether below-cost sales had been made over an extended 
period of time, we compared the number of months in which below-cost 
sales occurred for each product to the number of months in the POI in 
which that product was sold. If a product was sold in three or more 
months of the POI, we did not exclude below-cost sales unless there 
were below-cost sales in at least three months during the POI. When we 
found that sales of a product only occurred in one or two months, the 
number of months in which the sales occurred constituted the extended 
period of time; i.e., where sales of a product were made in only two 
months, the extended period of time was two months, where sales of a 
product were made in only one month, the extended period of time was 
one month. (See, Preliminary Results and Partial Termination of 
Antidumping Duty Administrative Reviews: Tapered Roller Bearings, Four 
Inches or Less in Outside Diameter, and Components Thereof, From Japan 
(58 FR 69336, 69338, December 10, 1993).

Constructed Value (CV)

    We calculated constructed value based on the sum of the cost of 
materials, fabrication, general expenses, profit, and U.S. packing 
cost. In accordance with section 773 (e)(1)(B) of the Act, for general 
expenses, which include selling and financial expenses (SG&A), we used 
the greater of the reported general expenses or the statutory minimum 
of ten percent of the cost of production. For profit, we used the 
statutory minimum of eight percent of the cost of manufacturing and 
general expenses, because Aichi's reported profit was less than eight 
percent of the total of cost of manufacturing and general expenses.

Currency Conversion

    We have made currency conversions based on the official exchange 
rates, certified by the Federal Reserve Bank of New York, in effect on 
the dates of the U.S. sales.

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 stainless 
steel angle from Japan, 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 posting of a 
bond equal to the estimated preliminary dumping margin, as shown below. 
The suspension of liquidation will remain in effect until further 
notice.

------------------------------------------------------------------------
                                                                Margin  
               Producer/manufacturer/exporter                 percentage
------------------------------------------------------------------------
Aichi Steel Works, LTD......................................      14.92 
All others..................................................      14.92 
------------------------------------------------------------------------

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 these imports are materially injuring, or threaten material 
injury to, the U.S. industry before the later of 120 days after the 
date of this preliminary determination or 45 days after our final 
determination.

Postponement of Final Determination

    On November 1, 1994, in accordance with 19 CFR 353.20(b), 
respondent requested that, in the event of an affirmative preliminary 
determination by the Department, the Department postpone the final 
determination due to the complexity of the cost information and 
problems associated with scheduling verifications with the year-end 
holidays. We find no compelling reason to deny the request. 
Accordingly, we are postponing the date of the final determination 
until not later than 135 days after the date of publication of this 
notice.

Public Comment

    In accordance with 19 CFR 353.38, case briefs or other written 
comments in at least ten copies may be submitted by any interested 
party to the Assistant Secretary for Import Administration no later 
than February 10, 1995, and rebuttal briefs no later than February 17, 
1995. We request that parties in this case provide an executive summary 
of no more than 2 pages in conjunction with case briefs on the major 
issues to be addressed. Further, briefs should contain a table of 
authorities. Citations to Commerce determinations and court decisions 
should include the page number where cited information appears. In 
preparing the briefs, please begin each issue on a separate page. 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 February 23, 1995, at 9 a.m. at the U.S. Department of 
Commerce, Room 3708, 14th Street and Constitution Avenue NW, 
Washington, D.C. 20230. Parties should confirm 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. Requests should 
contain: (1) the party's name, address, 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 presentations will be limited 
to the 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: November 4, 1994.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 94-27917 Filed 11-9-94; 8:45 am]
BILLING CODE 3510-DS-P