[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