[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