[Federal Register Volume 61, Number 194 (Friday, October 4, 1996)] [Notices] [Pages 51904-51907] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-25537] ----------------------------------------------------------------------- DEPARTMENT OF COMMERCE [A-351-817] Certain Cut-to-Length Carbon Steel Plate From Brazil: Preliminary Results of Antidumping Duty Administrative Review AGENCY: Import Administration, International Trade Administration, Department of Commerce. ACTION: Notice of Preliminary Results of Antidumping Duty Administrative Review. ----------------------------------------------------------------------- SUMMARY: In response to a request from the respondent, Companhia Siderurgica de Tubarao (CST), the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain cut-to-length carbon steel plate from Brazil. This review covers the above manufacturer/exporter of the subject merchandise to the United States. The period of review (POR) is August 1, 1994, through July 31, 1995. We preliminarily determine the dumping margin for CST to be 2.58 percent during the POR. Interested parties are invited to comment on these preliminary results. Parties who submit argument in this proceeding should also submit with the argument (1) a statement of the issue, and (2) a brief summary of the argument. EFFECTIVE DATE: October 4, 1996. FOR FURTHER INFORMATION CONTACT: Helen Kramer or Linda Ludwig, Enforcement Group III, Import Administration, International Trade [[Page 51905]] Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482- 0405 or (202) 482-3833, respectively. SUPPLEMENTARY INFORMATION: The Applicable Statute Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made 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 Fed. Reg. 25130). Background On July 9, 1993, the Department published in the Federal Register (58 Fed. Reg. 37136) the final affirmative antidumping duty determination on certain cut-to-length carbon steel plate from Brazil. We published an antidumping duty order on August 19, 1993 (58 Fed. Reg. 44164). On August 1, 1995, the Department published the Opportunity to Request an Administrative Review of this order for the period August 1, 1994-July 31, 1995 (60 Fed. Reg. 39150). The Department received a request for an administrative review of CST's exports from CST, a producer/exporter of the subject merchandise. We initiated the review on September 8, 1995 (60 Fed. Reg. 46817). In a separate proceeding, the product produced by the respondent is the subject of an ongoing scope inquiry. Under the Act, the Department may extend the deadline for completion of administrative reviews if it determines that it is not practicable to complete the review within the statutory time limit of 365 days. On April 1, 1996, the Department extended the time limits for the preliminary and final results in this case. See Extension of Time Limit for Antidumping Duty Administrative Reviews, 61 Fed. Reg. 14291 (1996). The Department is conducting this review in accordance with section 751 of the Act. Scope of the Review The products covered by this administrative review constitute one ``class or kind'' of merchandise: certain cut-to-length carbon steel plate. These products include hot-rolled carbon steel universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 millimeters but not exceeding 1,250 millimeters and of a thickness of not less than 4 millimeters, not in coils and without patterns in relief), of rectangular shape, neither clad, plated nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances; and certain hot-rolled carbon steel flat-rolled products in straight lengths, of rectangular shape, hot rolled, neither clad, plated, nor coated with metal, whether or not painted, varnished, or coated with plastics or other nonmetallic substances, 4.75 millimeters or more in thickness and of a width which exceeds 150 millimeters and measures at least twice the thickness, as currently classifiable in the Harmonized Tariff Schedule (HTS) under item numbers 7208.31.0000, 7208.32.0000, 7208.33.1000, 7208.33.5000, 7208.41.0000, 7208.42.0000, 7208.43.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045, 7211.90.0000, 7212.40.1000, 7212.40.5000, and 7212.50.0000. Included are flat-rolled products of nonrectangular cross-section where such cross-section is achieved subsequent to the rolling process (i.e., products which have been ``worked after rolling'')--for example, products which have been beveled or rounded at the edges. Excluded is grade X-70 plate. These HTS item numbers are provided for convenience and Customs purposes. The written description remains dispositive. Verification As provided in section 782(i) of the Tariff Act, we verified information provided by the respondent by using standard verification procedures, including on-site inspection of the manufacturer's facilities, the examination of relevant sales and financial records, and selection of original documentation containing relevant information. Our verification results are outlined in the verification report, the public version of which is available in Import Administration's Central Records Unit. Transactions Reviewed In accordance with Section 751 of the Act, the Department is required to determine the normal value and export price (EP) of each entry of subject merchandise during the relevant review period. Product Comparisons In accordance with section 771(16) of the Act, we considered profile slabs sold in the home market during the POR and produced by the respondent to be covered by the description in the Scope of the Review section above, and to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We matched sales of foreign like products to U.S. sales based on the physical characteristics reported by the respondent and verified by the Department. To take into account the high rate of inflation in Brazil during the POR, we compared foreign like products and products exported to the United States which were sold in the same month. Where there were no sales of identical merchandise in the home market to compare to U.S. sales within the same month, we compared U.S. sales to the next most similar foreign like product (on the basis of the characteristics listed in Appendix III of the Department's September 14, 1995, antidumping questionnaire) which was sold in the same month. Fair Value Comparisons To determine whether sales of certain cut-to-length carbon steel plate by CST to the United States were made at less than fair value, we compared the export price (EP) to the normal value (NV), as described in the ``Export Price'' and ``Normal Value'' sections of this notice. In accordance with section 777A(d)(2), we calculated monthly weighted- average prices for NV and compared these to individual U.S. transactions. Export Price (EP) We used EP as defined in section 772(a) of the Act. We calculated EP based on FOB prices to unaffiliated customers in the United States. We made deductions from the starting price for foreign inland freight and foreign brokerage and handling. Based on our verification of CST's U.S. sales response, we made minor adjustments to CST's reported foreign brokerage and handling. The material costs of stowing and lashing the merchandise on vessels are the only packing costs on U.S. sales, and are included in foreign brokerage and handling. Normal Value Based on a comparison of the aggregate quantity of home market and U.S. sales, we determined that the quantity of the foreign like product sold in the exporting country was sufficient to permit a proper comparison with the sales of the subject merchandise to the United States, pursuant to section 773(a) of the Act. On January 17, 1996, petitioners alleged that CST made home market sales of the subject merchandise at [[Page 51906]] prices below the cost of production (COP) during the POR. The Department has determined that when appropriate adjustments to petitioners' methodology are made, there is no evidence of below cost sales. (See internal memorandum to Joseph A. Spetrini from Roland L. MacDonald and Christian B. Marsh, ``Petitioners' Allegation of Sales Below the Cost of Production for Companhia Siderurgica de Tubarao (CST).'') Therefore, in accordance with section 773(a)(1)(B)(i) of the Act, we based NV on the price at which the foreign like product was first sold for consumption in the home market, in the usual commercial quantities and in the ordinary course of trade. During verification, we found that an order acknowledgement and production specification sheet are issued each time agreement is reached with a customer on price, quantity and product. We therefore conclude that the appropriate date of sale in the home market, when all the essential terms of sale are set, is the order acknowledgement date, the same as the reported date of sale in the U.S. market. Consequently, we have preliminarily rejected CST's reported home market date of sale, which is the invoice date. We have preliminarily disallowed an adjustment for credit expenses, because the respondent did not provide the interest rates requested by the Department for use in calculating these expenses. CST did not report any packing expenses. To achieve tax neutrality, we deducted value-added taxes (CONFINS, PIS and IPI) included in home market prices, but not assessed on the subject merchandise, from the reported gross unit price. As 95 percent of the IPI tax paid is rebated, we deducted only five percent of the reported IPI tax paid from the home market price. To equalize the rates of ICMS tax included in home market and U.S. prices, we subtracted the amount of the ICMS tax included in the home market price and added back 2.21 percent of the reported net home market price (which is the rate of ICMS tax included in the price of subject merchandise). We made adjustments to NV for differences in cost attributable to differences in physical characteristics of the merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act. As set forth in section 773(a)(1)(B)(i) of the Act and in the Statement of Administrative Action (SAA) at pages 829-831, to the extent practicable, the Department will calculate normal values based on sales at the same level of trade as the U.S. sales. When the Department is unable to find sales in the comparison market at the same level of trade as the U.S. sale(s), the Department may compare sales in the U.S. and foreign markets at different levels of trade. See, Final Determination of Sales at Less Than Fair Value: Certain Pasta from Italy, 61 FR. 30326, June 14, 1996. In accordance with section 773(a)(7)(A), if sales at different levels of trade are compared, the Department will adjust the normal value to account for the difference in level of trade if two conditions are met. First, there must be differences between the actual selling functions performed by the seller at the level of trade of the U.S. sale and the level of trade of the normal value sale. Second, the differences between the levels of trade must affect price comparability, as evidenced by a pattern of consistent price differences between sales at the different levels of trade in the market in which normal value is determined. In its questionnaire responses, CST stated that there were no differences in its selling activities by customer categories within each market. In order independently to confirm the absence of separate levels of trade within or between the U.S. and home markets, we examined CST's questionnaire responses for indications that CST's function as a seller differed among customer categories. Pursuant to section 773(a)(1)(B)(i) of the Act, and the SAA at 827, in identifying levels of trade for directly observed (i.e., not constructed) export price and normal values sales, we considered the selling functions reflected in the starting price, before any adjustments. Where possible, we further examined whether each selling function was performed on a substantial portion of sales. (See Proposed Rulemaking, 61 Fed. Reg. at 7348). CST sold to trading companies in the U.S. market. In the home market, CST sold to distributors and performed the same selling functions with respect to sales to all its home market customers, as well as with respect to U.S. customers. Thus, our analysis of the questionnaire response leads us to conclude that sales within each market and between markets are not made at different levels of trade. At verification, we interviewed CST's sales manager, who confirmed our conclusion. Accordingly, we preliminarily find that all sales in the home market and the U.S. market are made at the same level of trade. Therefore, all price comparisons are at the same level of trade and an adjustment pursuant to section 773(a)(7)(A) is unwarranted. Review Limited to CST On April 3, 1996, petitioners alleged that CST failed to disclose significant interlocking directorships and other business relationships between CST and two other companies included in the original investigation, Companhia Siderurgica Paulista (COSIPA) and Usinas Siderurgica de Minas Gerais S.A. (USIMINAS). COSIPA and USIMINAS are not respondents in this proceeding. The Department has determined that although CST, COSIPA and USIMINAS are affiliated parties, as defined in section 351.102 (b) of the Proposed Regulations, they should not be treated as a single enterprise for margin calculation purposes. (See the Department's internal memorandum from Richard O. Weible to Joseph A. Spetrini dated September 10, 1996.) Thus, we have based EP and NV solely on CST's own sales. Currency Conversion For purposes of the preliminary results, we made currency conversions based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York. Section 773A(a) directs the Department to use a daily exchange rate in order to convert foreign currencies into U.S. dollars, unless the daily rate involves a ``fluctuation.'' In accordance with the Department's practice, we have determined as a general matter that a fluctuation exists when the daily exchange rate differs from a benchmark by 2.25 percent. The benchmark is defined as the rolling average of rates for the past 40 business days. When we determine a fluctuation exists, we substituted the benchmark for the daily rate. However, for the preliminary results in this review we have not determined that a fluctuation exists, and we have not substituted the benchmark for the daily rate. Preliminary Results of the Review As a result of this review, we preliminarily determine that the following weighted-average dumping margin exists: [[Page 51907]] ------------------------------------------------------------------------ Margin Manufacturer/exporter Period (percent) ------------------------------------------------------------------------ Companhia Siderurgica de Tubarao........... 8/1/94-7/31/95 2.58 ------------------------------------------------------------------------ Parties to the proceeding may request disclosure within five days of the date of publication of this notice. Any interested party 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 other written comments from interested parties may be submitted not 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 not later than 37 days after the date of publication of this notice. The Department will publish the final results of this administrative review, including its analysis of issues raised in any written comments or at a hearing, not later than 180 days after the date of publication of this notice. The following deposit requirements will be effective upon publication of the final results of this antidumping duty review for all shipments of certain cut-to-length carbon steel plate from Brazil entered, or withdrawn from warehouse for consumption, on or after the publication date, as provided by section 751(a) of the Tariff Act: (1) The cash deposit rate for the reviewed company will be the rate established in the final results of this administrative review; (2) for exporters not covered in this review, but covered in the LTFV investigation, the cash deposit rate will continue to be the company- specific rate from the LTFV investigation; (3) if the exporter is not a firm covered in this review, or the original 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; (4) the cash deposit rate for all other manufacturers or exporters will continue to be 75.54 percent, the ``All Others'' rate made effective by the LTFV investigation. These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review. This notice 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 published in accordance with section 751(a)(1) of the Act and 19 CFR 353.22. Dated: September 25, 1996. Robert S. LaRussa, Acting Assistant Secretary for Import Administration. [FR Doc. 96-25537 Filed 10-3-96; 8:45 am] BILLING CODE 3510-DS-P