[Federal Register Volume 61, Number 194 (Friday, October 4, 1996)]
[Notices]
[Pages 51907-51910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25539]


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DEPARTMENT OF COMMERCE
[A-428-816]


Certain Cut-to-Length Carbon Steel Plate from Germany: 
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.

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SUMMARY: In response to requests from the respondent, AG der Dillinger 
Huttenwerke (Dillinger), and from petitioners (Bethlehem Steel 
Corporation, U.S. Steel Group a Unit of USX Corporation, Inland Steel 
Industries, Inc., Geneva Steel, Gulf States Steel Inc. of Alabama, 
Sharon Steel Corporation, and Lukens Steel Company), 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 
Germany. 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 no dumping margin exists for Dillinger 
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: Nancy Decker or Linda Ludwig, 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
5811 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 Rounds 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 Germany. 
We published an amended final determination and an antidumping duty 
order on August 19, 1993 (58 Fed. Reg. 44170). 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 requests for an 
administrative review of Dillinger's exports from Dillinger itself, a 
producer/exporter of the subject merchandise, and from the petitioners. 
We initiated the review on September 8, 1995 (60 Fed. Reg. 46817).
    On November 20, 1995, the petitioners requested that the Department 
determine whether antidumping duties had been absorbed by Dillinger 
during the POR, pursuant to section 751(a)(4) of the Act. Section 
751(a)(4) provides for the Department, if requested, to determine 
during an administrative review initiated two years or four years after 
publication of the order whether antidumping duties have been absorbed 
by a foreign producer or exporter subject to the order if the subject 
merchandise is sold in the United States through an importer who is 
affiliated with such foreign producer or exporter. Section 751(a)(4) 
was added to the Act by the URAA. The

[[Page 51908]]

Department's interim regulations do not address this provision of the 
Act.
    For transition orders as defined in section 751(c)(6)(C) of the 
Act, i.e., orders in effect as of January 1, 1995, section 
351.213(j)(2) of the Department's proposed regulations provides that 
the Department will make a duty absorption determination, if requested, 
for any administrative review initiated in 1996 or 1998. See Notice of 
Proposed Rulemaking and Request for Public Comments, 61 Fed. Reg. 7308, 
7366 (February 27, 1996) (``Proposed Regulations''). The commentary to 
the proposed regulations explains that reviews initiated in 1996 will 
be considered initiated in the second year and reviews initiated in 
1998 will be considered initiated in the fourth year. Id. at 7317. 
Although these proposed regulations are not yet binding upon the 
Department, they do constitute a public statement of how the Department 
expects to proceed in construing section 751(a)(4) of the amended 
statute. This approach assures that interested parties will have the 
opportunity to request a duty absorption study on entries for which the 
second and fourth years following an order have already passed, prior 
to the time for sunset review of the order under section 751(c). 
Because the order on carbon steel plate from Germany has been in effect 
since 1993, this is a transition order. Therefore, based on the policy 
stated above, the Department will first consider a request for an 
absorption study if a review is initiated in 1996.
    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 
reports, the public versions of which are available.

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.
    In determining normal value, based on a review of Dillinger's 
submissions and verification findings, the Department determined that 
Dillinger need not report its home market downstream sales because that 
they would not be used in the calculation of normal value. See Decision 
Memorandum on Reporting Downstream Sales, April 11, 1996.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent, covered by the description in the 
Scope of the Review section, above, and sold in the home market during 
the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, 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. In 
making the product comparisons, we matched foreign like products based 
on the physical characteristics reported by the respondent and verified 
by the Department.

Fair Value Comparisons

    To determine whether sales of certain cut-to-length carbon steel 
plate by Dillinger 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

    We used EP as defined in sections 772(a) of the Act.
    We calculated EP based on packed prices to unaffiliated customers 
in the United States. Where appropriate, we made deductions from the 
starting price for foreign inland freight, foreign brokerage and 
handling, international freight, marine insurance, U.S. brokerage and 
handling, and U.S. Customs duties. Based on our verification of 
Dillinger's U.S. sales response, we made adjustments to Dillinger's 
reported foreign inland freight.

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. 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

[[Page 51909]]

usual commercial quantities and in the ordinary course of trade.
    Where appropriate, we deducted rebates, credit expenses, global 
credits and debits, inland freight, inland insurance, and packing. We 
also deducted value-added tax (VAT) from the reported gross unit price, 
since the reported price included VAT. We did not adjust the starting 
price for commissions in the home market because Dillinger did not 
demonstrate that the commissions, paid to related parties, were at 
arm's-length. Based on our verification of Dillinger's home market 
sales response, we made adjustments on certain sales to Dillinger's 
reported indirect selling expenses and weight conversion factors.
    We also increased NV by U.S. packing costs in accordance with 
section 773(a)(6)(A) of the Act. 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. In accordance with the Department's 
practice, where for the most similar product match the difference in 
merchandise adjustment for any product comparison exceeded 20 percent, 
we based NV on CV.
    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 Fed. Reg. 30326, June 14, 1996) (``Pasta from Italy'').
    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, Dillinger stated that there were no 
differences in its selling activities by customer categories within 
each market. In order to independently confirm the absence of separate 
levels of trade within or between the U.S. and home markets, we 
examined Dillinger's questionnaire responses for indications that 
Dillinger'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)).
    Dillinger sold to end-users in the U.S. market. In the home market, 
Dillinger sold to two categories of customers and performed the same 
selling functions between sales to all its home market customers, as 
well as 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. 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.
    Further, we added U.S. commissions to NV, and because we disallowed 
all home market commissions (because as noted above Dillinger did not 
demonstrate that the commissions paid to related parties were at arm's 
length), we deducted from NV the lesser of either (1) the amount of 
commission paid on a U.S. sale for a particular product, or (2) the 
amount of indirect selling expenses incurred on the home market sales 
for a particular product.

Cost of Production Analysis

    Based on the fact that the Department had disregarded sales in the 
LTFV investigation (the most recently completed investigation/review of 
Dillinger at the time of initiation in this review) because they were 
made below the cost of production (COP), the Department found 
reasonable grounds in this review, in accordance with section 
773(b)(2)(A)(ii) of the Act, to believe or suspect that respondent made 
sales in the home market at prices below the cost of producing the 
merchandise. As a result, the Department initiated an investigation to 
determine whether the respondent made home market sales during the POR 
at prices below their COP within the meaning of section 773(b) of the 
Act.
    Before making any fair value comparisons, we conducted the COP 
analysis described below.

A. Calculation of COP

    We calculated the COP based on the sum of respondents' cost of 
materials and fabrication for the foreign like product, plus amounts 
for home market selling, general, and administrative expenses (SG&A), 
and packing costs in accordance with section 773(b)(3) of the Act. 
Based on our verification of Dillinger's cost response, we adjusted 
Dillinger's reported COP to reflect certain adjustments to the cost of 
manufacturing, general and administrative expenses, and indirect 
selling expenses.

B. Test of Home Market Prices

    We used the respondent's weighted-average COP, as adjusted (see 
above), for the period July 1994 to June 1995. We compared the 
weighted-average COP figures to home market sales of the foreign like 
product as required under section 773(b) of the Act. In determining 
whether to disregard home-market sales made at prices below the COP, we 
examined whether (1) within an extended period of time, such sales were 
made in substantial quantities, and (2) such sales were made at prices 
which permitted the recovery of all costs within a reasonable period of 
time. On a product-specific basis, we compared the COP to the home 
market prices (not including VAT), less any applicable movement 
charges, rebates, and global credits and debits.

C. Results of COP Test

    Pursuant to section 773(b)(2)(C), where less than 20 percent of 
respondent's sales of a given product were at prices less than the COP, 
we did not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product during the POR were at prices less than the COP, we found 
that sales of that model were made in ``substantial quantities,'' in 
accordance with section 773(b)(2)(B) of the Act, and were not at prices 
which would permit recovery of all costs within a reasonable period of 
time, in accordance with section 773(b)(2)(D) of the Act. When we found 
that below-cost sales had been made in ``substantial quantities'' and 
were not at prices which would permit recovery of all costs within a 
reasonable period of time, we disregarded the below-cost sales in 
accordance with section 773(b)(1) of the Act. Where all sales of a 
specific product were at prices

[[Page 51910]]

below the COP, we disregarded all sales of that product, and calculated 
NV based on CV.

D. Calculation of CV

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of respondents' cost of materials, fabrication, SG&A, 
U.S. packing costs, interest expenses and profit as reported in the 
U.S. sales database. In accordance with sections 773(e)(2)(A), we based 
SG&A and profit on the amounts incurred and realized by the respondent 
in connection with the production and sale of the foreign like product 
in the ordinary course of trade, for consumption in the foreign 
country. For selling expenses, we used the weighted-average home market 
selling expenses. Based on our verification of Dillinger's cost 
response, we adjusted Dillinger's reported CV to reflect adjustments to 
cost of manufacturing, general and administrative expenses, and 
indirect selling expenses. Where we compared CV to EP, we added U.S. 
commissions to CV, and then we deducted from CV the lesser of either 
(1) the amount of commission paid on a U.S. sale for a particular 
product, or (2) the amount of indirect selling expenses incurred on the 
home market sales for a particular product.

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 determined a fluctuation existed, 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 no 
margin exists for AG der Dillinger Huttenwerke during the period 8/1/
94-7/31/95.
    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 Germany, 
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 that established 
in the final results of review; (2) for exporters not covered in this 
review, but covered in the LTFV investigation or a previous review, 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, a previous 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 36.00 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. 96-25539 Filed 10-3-96; 8:45 am]
BILLING CODE 3510-DS-P