[Federal Register Volume 59, Number 248 (Wednesday, December 28, 1994)]
[Unknown Section]
[Page ]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31795]


[Federal Register: December 28, 1994]


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DEPARTMENT OF COMMERCE
International Trade Administration
[A-421-701]


Brass Sheet and Strip From the Netherlands; Preliminary Results 
of Antidumping Administrative Review

AGENCY: Import Administration, International Trade 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 the Netherlands. The review covers one manufacturer/exporter 
of this merchandise to the United States and the period August 1, 1990, 
through July 31, 1991. 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: December 28, 1994.

FOR FURTHER INFORMATION CONTACT: Thomas Killiam, Chip Hayes, or John 
Kugelman, Office of Antidumping Compliance, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230; 
telephone: (202) 482-5253.

SUPPLEMENTARY INFORMATION:

Background

    On August 12, 1988, the Department published in the Federal 
Register (53 FR 30455) the antidumping duty order on brass sheet and 
strip from the Netherlands. Based on timely requests for review, on 
September 18, 1991, in accordance with 19 CFR 353.22(c), we initiated 
an administrative review of Outokumpu Copper Rolled Products AB (OBV) 
for the period August 1, 1990 through July 31, 1991 (56 FR 47185). The 
Department is now conducting this administrative review in accordance 
with section 751 of the Tariff Act of 1930, as amended (the Tariff 
Act).

Scope of the Review

    Imports covered by this review are brass sheet and strip, other 
than leaded and tin brass sheet and strip, from the Netherlands. 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 physical dimensions of the products 
covered by this review are brass sheet and strip of solid rectangular 
cross section over 0.006 inch (0.15 millimeter) through 0.188 inch (4.8 
millimeters) in gauge, regardless of width. Coiled, wound-on-reels 
(traverse wound), and cut-to-length products are included. The 
merchandise is 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, OBV, and the period August 1, 1990, 
through July 31, 1991.

United States Price

    We based USP on purchase price (PP) and exporter's sales price 
(ESP), as appropriate, in accordance with section 772 of the Tariff 
Act. We calculated PP and ESP 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 movement expenses and customs 
duty.
    For ESP transactions, we made deductions for U.S. movement 
expenses, direct selling expenses, indirect selling expenses and U.S. 
manufacturing costs. U.S. direct selling expenses included warranty and 
credit expenses, and commissions. U.S. indirect selling expenses 
included U.S. pre-sale storage costs, U.S. selling, general, and 
administrative expenses (SG&A), parent company headquarters sales and 
marketing expenses allocated to U.S. sales, and storage and inventory 
carrying costs prior to overseas shipment. U.S. manufacturing costs 
included further processing costs, allocated general and administrative 
expenses, and allocated profit.
    For PP transactions, we made deductions for rebates and movement 
expenses. Movement expenses included brokerage and handling, duty, 
ocean freight, and U.S. freight.
    We adjusted USP for taxes in accordance with our practice as 
outlined in Siliconmanganese From Venezuela; Preliminary Determination 
of Sales at Less than Fair Value, 59 FR 31204 (June 17, 1994) 
(Siliconmanganese).
    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, delivered prices to unrelated purchasers in the home market. We 
made adjustments, where applicable, for discounts, post-sale inland 
freight, credit, warranty expenses, and packing.
    On January 5, 1994, the Court of Appeals for the Federal Circuit, 
in The Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray Portland 
Cement v. United States, No. 93-1239, held that the Department could 
not deduct home market movement charges from FMV pursuant to its 
inherent power to fill in gaps in the antidumping statute. Accordingly, 
we have instead adjusted for those expenses, which were post-sale 
freight expenses, under the circumstance-of-sale provision of 19 CFR 
353.56.
    We added to FMV packing expenses incurred in the home market for 
all U.S. sales, and home market VAT. Where USP was based on PP, we 
further adjusted FMV by adding U.S. direct selling expenses (credit, 
warranties, post-sale warehousing, and commission expenses). We 
followed our practice of adjusting for indirect selling expenses when 
there is a commission in only one market, as called for in 19 CFR 
353.56(b)(1):

the Secretary normally will make a reasonable allowance for other 
selling expenses if the Secretary makes a reasonable allowance for 
commissions in one of the markets under consideration and no 
commission is paid in the other market under consideration.

    For the PP sales, where a commission was granted in the U.S. market 
only, we limited the amount classified as home market indirect selling 
expenses by the sum of the U.S. commission and U.S. indirect selling 
expenses, and deducted this amount from FMV.
    For comparison to ESP sales, we adjusted FMV for home market 
indirect selling expenses, limited to the amount of indirect selling 
expenses incurred on U.S. sales (19 CFR Sec. 353.56(b)(2)).
    We made adjustments for differences in merchandise.
    We adjusted the amount of the home market VAT included in FMV in 
accordance with our decision in Siliconmanganese.
    We calculated FMV using monthly weighted-average prices of sales of 
brass sheet and strip having the same characteristics as to alloy, 
gauge group, width group, temper, form, and coating, as was done in 
earlier proceedings.
    The respondent requested that for sales comparison purposes we use 
different groups of gauges and widths than were requested in the 
questionnaire. The respondent's suggested gauge groups were more 
narrowly defined than the gauge groups in the questionnaire, and the 
respondent's width groups were defined differently than the width 
groups in the questionnaire.
    At verification we examined the respondent's manufacturing 
techniques, costing methodology, and record-keeping systems. We found 
that the respondent's suggested gauge and width groups correspond more 
closely to variations in production costs and cost records than the 
groups in the questionnaire. Therefore, we used the respondent's 
suggested groups in our analysis.

Cost Test

    Because of petitioner's allegations, we investigated whether OBV 
sold such or similar merchandise in the home market at prices below the 
cost of production (COP). In accordance with section 773(b) of the 
Tariff Act, in determining whether to disregard home market sales made 
at prices below the COP, we examined whether such sales were made in 
substantial quantities over an extended period of time, and whether 
such sales were made at prices which permitted recovery of all costs 
within a reasonable period of time in the normal course of trade.
    COP was reported as the sum of costs of materials, labor, factory 
overhead, selling and general expenses, and packing. We compared COP to 
home market prices, net of discounts, on a month-by-month basis.
    When less than 10 percent of the home market sales of a model were 
at prices below the COP, we did not disregard any sales of that model. 
When 10 percent or more, but not more than 90 percent, of the home 
market sales of a particular model were determined to be below cost, we 
excluded the below-cost home market sales from our calculation of FMV, 
provided that these below-cost home market sales were made over an 
extended period of time. When more than 90 percent of the home market 
sales of a particular model were made below cost over an extended 
period of time, we disregarded all home market sales of that model in 
our calculation of FMV.
    To determine whether sales below cost had been made over an 
extended period of time, we compared the number of months in which 
sales below cost occurred for a particular model to the number of 
months in which that model was sold. If the model was sold in fewer 
than three months, we did not disregard below-cost sales unless there 
were below-cost sales of that model in each month sold. If a model was 
sold in three or more months, we did not disregard below-cost sales 
unless there were sales below cost in at least three of the months in 
which the model was sold.

Results of Cost Test

    We compared individual home market prices with the monthly COP. We 
tested the home market prices on the basis of the six physical criteria 
used for product matches, and found that, for certain models, between 
10 and 90 percent of home market sales were made at below-COP prices. 
Since the respondent provided no indication that these sales were at 
prices that would permit recovery of all costs within a reasonable 
period of time and in the normal course of trade, we disregarded the 
below-cost sales for those models, if those sales were made over an 
extended period of time. We used the remaining above-cost sales for 
comparison purposes.
    For certain models, we used constructed value (CV) as the basis for 
FMV when there were no contemporaneous home market sales of such or 
similar merchandise.
    We calculated CV in accordance with section 773(e) of the Tariff 
Act. We included the cost of materials, labor, and factory overhead in 
our calculations. For the respondent's SG&A, we used the statutory 
minimum of 10 percent of the cost of manufacture (COM), or actual SG&A 
expenses, whichever was greater. For the respondent's profit we used 
the statutory minimum of eight percent of the sum of the COM and SG&A, 
or actual profit, whichever was greater. We adjusted the CV for 
warranty and credit expenses, and the lesser of home market indirect 
selling expenses or U.S. commissions.
    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 August 1, 
1990 through July 31, 1991:

------------------------------------------------------------------------
                                                                Margin  
                   Manufacturer/exporter                      (percent) 
------------------------------------------------------------------------
OBV........................................................         7.44
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    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 or any previous 
review, the cash deposit rate will be the ``all others'' rate 
established in the LTFV investigation.
    On May 25, 1993, the Court of International Trade, in Floral Trade 
Council v. United States, 822 F. Supp. 766 (1993), and Federal-Mogul 
Corporation v. United States, 822 F. Supp. 782 (1993), 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. Accordingly, the ``all others'' rate for this 
proceeding is 9.49 percent, the rate from the LTFV investigation.
    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: December 16, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-31795 Filed 12-27-94; 8:45 am]

BILLING CODE 3510-DS-P