[Federal Register Volume 61, Number 172 (Wednesday, September 4, 1996)] [Notices] [Pages 46618-46621] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-22520] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE [A-122-601] Brass Sheet and Strip from Canada; Final Results of Antidumping Duty Administrative Review AGENCY: Import Administration, International Trade Administration, Department of Commerce. ACTION: Notice of Final Results of Antidumping Duty Administrative Review. ----------------------------------------------------------------------- SUMMARY: On February 27, 1996, the Department of Commerce (the Department) published the preliminary results of its administrative review of the antidumping duty order on brass sheet and strip from Canada. The review covers exports of this merchandise to the United States by one manufacturer/exporter, Wolverine Tube (Canada) Inc. (Wolverine), during the period January 1, 1994, through December 31, 1994. The review indicates the existence of no dumping margins for this period. We gave interested parties an opportunity to comment on our preliminary results. Based on our analysis of the comments received, we have made certain changes for these final results. EFFECTIVE DATE: September 4, 1996. FOR FURTHER INFORMATION CONTACT: Thomas Killiam or John Kugelman, Office of AD/CVD Enforcement, Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 482-2704 or 482-0649, respectively. SUPPLEMENTARY INFORMATION: Applicable Statute and Regulations Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to the current regulations, as amended by the interim regulations published in the Federal Register on May 11, 1995 (60 FR 25130). Background On February 27, 1996, the Department published in the Federal Register (61 FR 7238) the preliminary results of its administrative review of the [[Page 46619]] antidumping duty order on brass sheet and strip (BSS) from Canada (51 FR 44319). The preliminary results indicated that no dumping margin existed for Wolverine. Scope of the Review Imports covered by this review are shipments of BSS, other than leaded and tinned BSS. The chemical composition of the covered products is currently defined in the Copper Development Association (C.D.A.) 200 Series or the Unified Numbering System (U.N.S.) C2000. This review does not cover products the chemical compositions of which are defined by other C.D.A. or U.N.S. series. In physical dimensions, the products covered by this review have a solid rectangular cross section over 0.006 inches (0.15 millimeters) through 0.188 inches (4.8 millimeters) in finished thickness or gauge, regardless of width. Coiled, wound-on- reels (traverse wound), and cut-to-length products are included. The merchandise is currently classified under Harmonized Tariff Schedule (HTS) item numbers 7409.21.00 and 7409.29.00. Although the HTS item numbers are provided for convenience and Customs purposes, the written description of the scope of this order remains dispositive. Pursuant to the final affirmative determination of circumvention of the antidumping duty order, we determined that brass plate used in the production of BSS falls within the scope of the antidumping duty order on BSS from Canada. See Brass Sheet and Strip from Canada: Final Affirmative Determination of Circumvention of Antidumping Duty Order, 58 FR 33610 (June 18, 1993). The review covers one manufacturer/exporter, Wolverine, and the period January 1, 1994, through December 31, 1994. Analysis of Comments Received We received a case brief from the petitioners, Hussey Copper, Ltd., The Miller Company, Olin Corporation-Brass Group, Outokumpu American Brass, Revere Copper Products, Inc., International Association of Machinists and Aerospace Workers, International Union, Allied Industrial Workers of America (AFL-CIO), Mechanics Educational Society of America (Local 56), United Steelworkers of America (AFL-CIO/CLC). We received a rebuttal brief from the respondent. Comment 1: The petitioners argue that the Department must match Wolverine's U.S. and home market sales based on the actual physical characteristics of the finished brass sheet and strip, rather than Wolverine's product control number system. The petitioners contend that Wolverine has not defined its product control numbers and that Wolverine's system contains an element that does not reflect the physical characteristics of the finished brass sheet and strip, namely, alloy designations which distinguish between reroll and non-reroll materials. Reroll materials are those which Wolverine purchases from outside suppliers that do not require casting. Non-reroll materials are those which Wolverine processes from the casting stage. The petitioners argue that no distinction should be made or allowed for model-matching purposes because products made from either source of brass are physically identical. The respondent counters that the petitioners' claims are untimely and incorrect, and that the Department was correct in using Wolverine's control numbers. The respondent notes that the petitioners raised this issue for the first time in their March 28, 1996, case brief, and not in their September 12 or 19, 1995, comments, in which the petitioners urged the Department to reject certain other aspects of Wolverine's response, including other aspects of the product code numbering system not pertaining to the distinction between reroll and non-reroll brass. The respondent argues that to adopt the petitioners' arguments for changing the product codes to erase the distinction between the Wolverine sources of raw material would deprive Wolverine of the opportunity to meaningfully participate in this proceeding, since it could not respond or place new information on the record to rebut the petitioners' claim. Concerning the substance of the petitioners' complaint, the respondent answers that certain applications require low impurities, which produce a fine grain size at a heavy finished gauge and, therefore, require reroll inputs, not material cast by Wolverine. Department's Position: We agree with the respondent. The respondent's distinction between the two metal categories is supported by the record evidence and was used in prior reviews of this order. Wolverine explained the physical differences between the two types of brass in its September 1, 1995, response. The petitioners furnished no evidence in rebuttal to support their claim that the product codes wrongly differentiate between what it alleges to be physically identical materials. The petitioners' claim that the respondent never defined its product control numbers in the CONNUMH/U fields is correct; however, we derived and used this information from the PRODCODH/U fields. Comment 2: The petitioners argue that the Department should revise Wolverine's reported general and administrative (G&A) expenses to include expenses incurred by the U.S. parent in support of Wolverine. The respondent argues that the cost of production (COP) data which it submitted accurately reflected G&A expenses, and that the Department correctly determined not to artificially inflate Wolverine's G&A expenses by adding a portion of the U.S. parent's G&A expenses to COP and constructed value. The respondent also argues that to allocate the U.S. parent's G&A to the Canadian facility's COP would double-count the subsidiary's G&A, because the latter is included in the parent's consolidated financial statements. The respondent further argues that it complied with our questionnaire by including a proportionate amount of G&A expenses from its Canadian headquarters, which supplies it with administrative, computer, and other services, whereas the U.S. parent provides no services which would warrant an allocation of the latter's G&A expenses. Department's Position: We agree with the respondent, in light of the record evidence in this case and our policy as stated in Certain Hot-Rolled Carbon Steel Flat Products et al., from Japan (58 FR 37154, 37166, July 9, 1993) (Certain Steel/Japan): The Department normally computes the G&A and other non-operating income and expense ratio of a company based on its unconsolidated operations and includes an amount of G&A from related companies which pertains to the product under investigation. G&A and other non-operating income and expense items are not considered fungible in nature. Thus, other non-operating income and expenses realized by a related company does not necessarily affect the general activity of [the respondent]. Since the record shows the U.S. headquarters provides no support services to Wolverine, allocating a portion of the U.S. G&A expenses to Wolverine would be inappropriate. Comment 3: The petitioners argue that Wolverine's submitted G&A expenses fail to reflect expenses which the respondent's parent company incurred in holding an inactive manufacturing facility in New Westminster, Canada. The petitioners note that in the 1992 review of this order, the respondent also did not report the same expense item, and the Department included an allocated amount for it in Wolverine's G&A in the final review results. [[Page 46620]] The respondent argues that such an adjustment would be inappropriate because 1) information concerning the inactive facility which the petitioners submit in its brief was available in the response, but the petitioners did not raise the issue earlier, 2) the Department's supplemental questionnaire did not request additional information or calculations concerning the respondent's G&A, and 3) the Department altered its treatment of this expense in its preliminary results of review of the 1993 period of review because it verified that the inactive plant had handled only non-subject merchandise, whereas the Department only accounts for G&A expenses that relate to covered merchandise. The respondent cites the Department's position in Certain Steel/Japan in this regard. Department's Position: We agree with the respondent. The plant in question never handled subject merchandise, and, as explained in Certain Steel/Japan, we allocate G&A based on expenses associated with subject merchandise. Comment 4: The petitioners argue that the Department must consider Wolverine's selling functions when performing its level-of-trade (LOT) analysis. The petitioners state that Wolverine neglected to identify the selling functions corresponding to what it claimed to be three different home market levels of trade. The petitioners note that the Statement of Administrative Action accompanying the Uruguay Round Agreements Act requires the Department to calculate normal value for sales at the same level of trade as the U.S. sales, to the extent possible. The petitioners claim that ``in recent cases the Department has expressed its emphasis on the seller's functions in its level of trade analysis.'' To support this contention the petitioners cite the Notice of Preliminary Determination of Sales at Less than Fair Value and Postponement of Final Determination: Certain Pasta From Italy, 61 FR 1344, 1347 (January 19, 1996) and Certain Stainless Steel Wire Rods from France: Preliminary Results of Antidumping Administrative Review, 61 FR 8915, 8916 (March 6, 1996). The respondent argues that the Department would err if it were to reject Wolverine's LOT claim on the basis of a perceived change in the Department's policy, after issuing the preliminary review results. The respondent claims that it fully documented the fact that it sells to three different levels of trade in the home market, that it maintains separate price lists for each of these customer categories, and that it performs significantly different processing services for each. The respondent claims that in a recent final determination, ``the Department appeared to disregard the criteria where there were sales at identical levels of trade in U.S. and home markets,'' citing Polyvinyl Alcohol from Taiwan, 61 FR 14064, 14069 (March 29, 1996)(Polyvinyl Alcohol). The respondent argues that we should not apply a new set of criteria at this stage of the review, that ``it would be an even greater abuse of the Department's discretion to apply such a standard when it has not requested the pertinent information from Wolverine,'' and cites Usinor Sacilor v. United States, 893 F. Supp. 1112, 1141-42 (CIT 1995) and Creswell Trading Co., Inc. v. United States, 15 F. 3d 1054, 1062 (Fed. Cir. 1994) to support this point. The respondent also notes that in the cases cited by the petitioners, the Department issued specific questions to elicit detailed LOT data. Department's Position: We agree with the petitioners. Contrary to the respondent's claims, in our questionnaire we specifically asked the respondent to describe the functions performed and services offered in each distribution channel, for each customer or class of customer in the U.S. market and the comparison market. We gave examples of selling functions and asked the respondent to specify whether sales services were provided by the respondent or by an affiliate. Wolverine stated only that it provides customized slit-to-width products to original equipment manufacturers, and not to processing distributors. The respondent did not mention any other of the selling functions identified in our questionnaire, or provide any further information to document, justify, or quantify the differences it claims the Department should recognize between three different LOTs in the home market. As documentation to support its LOT claim, the respondent supplied price lists, but these lists do not identify any particular LOT or show any differences in selling functions. On the contrary, if anything, the price lists show that Wolverine offers identical terms, services, and service charges to all customers. Wolverine's assertion that it provided information on different selling functions to three different LOTs is not supported by information on the record. Here, just as in Carbon and Alloy Steel Wire Rod From Canada, 59 FR 18791, 18794 (April 20, 1994), the respondent ``did not demonstrate that any differences in sales process or expenses were directly related to differences in selling at the claimed levels of trade.'' We note that the case which Wolverine cites as evidence that the Department may overlook the selling function criteria, Polyvinyl Alcohol, does not support the respondent's argument. On the contrary, rather than overlooking these criteria in that case, we applied them and determined that the respondent provided ``nearly all of the same or very similar selling functions to all customers,'' and that there was only one level of trade in the home market. Because Wolverine performed similar selling functions in all channels of distribution, we determined that there is only one LOT in the home market. Furthermore, we determined that this level is comparable to the LOT in the U.S. market and, therefore, no LOT adjustment is necessary. We also disagree with the respondent's claim that to disallow the claimed differences in home market LOTs would be an unwarranted reversal of our preliminary determination. Although the Department allowed the LOT distinctions in its preliminary determination, further analysis of the LOT claim, the petitioners' arguments, and the evidence on the record indicates that our preliminary results were in error, and that there was only one LOT in the home market. The respondent's argument that, in making its final determination, Commerce cannot apply the LOT standards associated with the new statute is incorrect. This statute, and the interpretive approach taken in the SAA, clearly apply to this review. As for the respondent's argument that it would be unfair to place it at risk of losing its LOT distinctions without having been asked for detailed information, in our original questionnaire we clearly asked Wolverine for detailed information on the selling functions it provided at each claimed LOT. We acknowledge that in our supplemental questionnaire we did not repeat our earlier request for this information. However, we are not obligated by law or practice to repeat every original request in a supplemental questionnaire. The Department's practice of requesting additional information or clarification of a previous response does not relieve a respondent of its obligation to answer every question in an original questionnaire. Comment 5: The petitioners argue that the Department's computer program for the preliminary results omitted selling expenses that Wolverine reported in its [[Page 46621]] home market COP database under the category ``INDSELEX''. The respondent did not address this claim. Department's Position: We agree with the petitioners, and have amended our final results to include these indirect selling expenses in our COP calculations. Final Results of Review As a result of our analysis of the comments received, we determine that the following margin exists for Wolverine: ------------------------------------------------------------------------ Margin Manufacturer/exporter Period (percent) ------------------------------------------------------------------------ Wolverine.......................... 1/1/94-12/31/94....... 0 ------------------------------------------------------------------------ Individual differences between the U.S. price and normal value may vary from the above percentage. The Department shall instruct the U.S. Customs Service to assess antidumping duties on all appropriate entries. Furthermore, the following deposit requirements will be effective for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of these final results, as provided for by section 751(a)(1) of the Act. (1) 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 conducted by the Department, the cash deposit rate will be 8.10 percent, the ``all others'' rate established in the LTFV investigation. This notice also serves as a final reminder to importers of their responsibility under 19 CFR Sec. 353.26 to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the 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 notice also serves as a reminder to parties subject to administrative protective order (APOs) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR Sec. 353.34(d). Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction. This administrative review and this notice are in accordance with section 751(a)(1) of the Act (19 U.S.C. Sec. 1675(a)(1)) and 19 CFR Sec. 353.22. Dated: August 26, 1996. Robert S. LaRussa, Acting Assistant Secretary for Import Administration. [FR Doc. 96-22520 Filed 9-03-96; 8:45 am] BILLING CODE 3510-DS-P