[Federal Register Volume 61, Number 205 (Tuesday, October 22, 1996)]
[Notices]
[Pages 54774-54776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27055]



[[Page 54774]]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE
[A-533-810]


Stainless Steel Bar From India: Preliminary Results of New 
Shipper Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: October 22, 1996.

FOR FURTHER INFORMATION CONTACT: Vincent Kane or Todd Hansen, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230; telephone (202) 482-2815 or 482-1276, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise stated, 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. 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 August 31, 1995, the Department received requests from Akai 
Asian Ltd. (``Akai'') and Viraj Impoexpo Ltd. (``Viraj'') for new 
shipper reviews pursuant to section 751(a)(2)(B) of the Act and section 
353.22(h) of the Department's interim regulations. On November 28, 
1995, the Department initiated new shipper reviews of Akai and Viraj 
(60 FR 58598). On June 20, 1996, we published an extension of the time 
limit for the preliminary results of this review until October 15, 
1996. (61 FR 31508) The Department is now conducting this review in 
accordance with section 751 of the Act and section 353.22 of its 
regulations.

Scope of the Review

    For purposes of this administrative review, the term ``stainless 
steel bar'' means articles of stainless steel in straight lengths that 
have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or 
otherwise cold-finished, or ground, having a uniform solid cross 
section along their whole length in the shape of circles, segments of 
circles, ovals, rectangles (including squares), triangles, hexagons, 
octagons, or other convex polygons. Stainless steel bar includes cold-
finished stainless steel bars that are turned or ground in straight 
lengths, whether produced from hot-rolled bar or from straightened and 
cut rod or wire, and reinforcing bars that have indentations, ribs, 
grooves, or other deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness have a width which exceeds 150 mm and measures at 
least twice the thickness), wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes and sections.
    The stainless steel bar subject to this administrative review is 
currently classifiable under subheadings 7222.11.0005, 7222.11.0050, 
7222.19.0005, 7222.19.0050, 7222.20.0005, 7222.20.0045, 7222.20.0075, 
and 7222.30.0000 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). Although the HTSUS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of these orders is dispositive.
    The review covers two producers/exporters. The period of review 
(POR) is February 1, 1995 through July 31, 1995.

Verification

    We verified information provided by the respondents using standard 
verification procedures, including on site inspection of the 
manufacturers' facilities, the examination of relevant sales and 
financial records, and selection of original documentation containing 
relevant information. Our verification results are outlined in the 
public versions of the verification report.

Export Price

    For both Viraj and Akai, sales of the subject merchandise for 
export to the United States were made to unaffiliated customers prior 
to importation. Therefore, we used export price (``EP'') as defined in 
section 772(a) of the Act, for determining whether, and to what extent, 
antidumping duties might apply.
    For Viraj, we based EP on the packed, c.& f. or c.i.f., as 
appropriate, price to an unaffiliated customer in the United States. We 
made deductions for foreign brokerage, containerization, foreign inland 
freight, ocean freight, and marine insurance, where applicable, in 
accordance with section 772(c)(2) of the Act. No other adjustments were 
claimed or allowed.
    For Akai, we based the EP on the packed, c.i.f. price to an 
unaffiliated customer in the United States. We made deductions for 
foreign brokerage, inland freight, and ocean freight and insurance in 
accordance with section 772(c)(2) of the Act. No other adjustments were 
claimed or allowed.

Normal Value

Viraj

    We found that section 773(a)(1)(C)(i) of the Act applied to this 
review because no home market sales were made during the POR. In 
addition, Viraj's only third country sale of the subject merchandise 
was for export to Canada. In accordance with section 773(a)(1)(B)(ii) 
of the Act, we based normal value (``NV'') on that sale of the foreign 
like product for export to Canada because the price was representative, 
the aggregate quantity of that sale in Canada exceeded five percent of 
the aggregate quantity of the subject merchandise sold for export to 
the United States, and we did not find that the particular market 
situation prevented a proper comparison with export price or 
constructed export price. We based NV on the Canadian price for the 
comparison product when the difference in merchandise adjustment for 
that product did not exceed 20 percent, and on constructed value when 
the difference in the merchandise adjustment for the comparison product 
exceeded 20 percent, in accordance with sections 773(a)(1)(C)(i) and 
773(a)(4) of the Act.
    When NV for Viraj was based on price, we calculated NV based on the 
packed, c.&f. price to an unaffiliated customer in Canada. We made 
deductions for foreign brokerage, containerization, foreign inland 
freight, and ocean freight. We adjusted for differences in packing cost 
between the two markets.
    We made a circumstance of sale adjustment for differences in credit 
costs between the two markets. Viraj incurred no actual credit cost on 
the U.S. sale because it elected to sell the 90-day, dollar denominated 
letter of credit received in payment for this sale on the forward 
currency market in exchange for rupees. It then discounted the 90-day-
Rupees receivable to receive immediate payment from its bank. We found 
that the premium received by selling its U.S. dollar receivable on the 
forward currency market more than offset the interest expense for 
discounting the 90-day-Rupee receivable and bank fees. For a more

[[Page 54775]]

detailed discussion of this offset, see the October 7, 1996 concurrence 
memorandum from team to Barbara R. Stafford, Deputy Assistant Secretary 
for AD/CVD/Enforcement/Group I, Import Administration (concurrence 
memorandum). No other adjustments were claimed or allowed.
    When NV for Viraj was based on constructed value, we calculated the 
constructed value in accordance with section 773(e) of the Act, based 
on the company's cost of (1) materials and fabrication, (2) selling, 
general and administrative (SG&A) expenses, (3) packing labor and 
materials and other expenses incidental to placing the subject 
merchandise in condition packed ready for shipment to the United 
States, and (4) Viraj's profit.
    In accordance with section 773(e)(2)(A) of the Act, we used Viraj's 
SG&A expenses and profit in producing and selling a foreign like 
product in the foreign country.
    Viraj reported selling expenses consisting of testing expenses and 
the expenses of providing samples to prospective customers. For testing 
expenses, Viraj did not provide a breakdown by market. At verification, 
we found that Viraj's financial accounting system included an account 
for testing expenses but not a breakdown by market. We did obtain, 
however, the testing certificates for testing done during production of 
the U.S. and the Canadian sales. Therefore, for constructed value, we 
allocated testing expenses to the Canadian market in proportion to the 
number of testing certificates issued to the Canadian buyer over the 
total number of certificates issued.
    For the expenses incurred providing samples, we divided total 
expenses by combined sales in the two markets and used this percentage 
to allocate selling expenses to the Canadian market.
    We found that certain expenses, such as travel and promotion 
expenses, were classified by Viraj as administrative expenses but are 
more appropriately classified as selling expenses. Therefore, in 
calculating constructed value, we treated these expenses as selling 
expenses.
    For certain employees engaged in both selling and administrative 
activities, Viraj allocated all of the salaries and expenses of these 
employees to general and administrative expenses. At verification, we 
confirmed that Viraj's accounting system did not provide a basis for 
allocating these salaries and expenses between the selling and general 
and administrative activities. Therefore, we have treated these 
salaries and expenses as general and administrative expenses.

Akai

    Because Akai had no sales of the subject merchandise in the home 
market or for export to third countries during the POR, we based normal 
value on constructed value in accordance with section 773(a)(4) of the 
Act. In accordance with section 773(e) of the Act, we calculated 
constructed value based on Akai's cost of (1) materials and fabrication 
in producing the merchandise, (2) selling, general and administrative 
expenses (3) packing and other expenses incidental to placing the 
merchandise in condition packed ready for shipment to the United 
States, and (4) Akai's profit.
    Akai subcontracted labor and fabrication to an unrelated processor. 
We based labor and processing costs on the amount paid by Akai to the 
processor. We did not take into account scrap, which was kept by the 
processor as part of its processing charges. Instead, we included in 
the cost of materials the gross value of the input. See the concurrence 
memorandum for a more detailed discussion of our treatment of scrap.
    In accordance with section 773(e)(2)(B)(i) of the Act, we used 
Akai's SG&A expenses and profit in producing and selling in the foreign 
country merchandise that is in the same general category of products as 
the subject merchandise.
    Akai claimed that it had no selling expenses on its U.S. sale. At 
verification, we found that Akai's accounting system did not segregate 
selling expenses by market. Therefore, for constructed value, we 
calculated selling expenses based on overall company selling expenses 
as a percent of the company's total cost of goods sold less total cost 
of the subject merchandise sold for export to the U.S.

Preliminary Results of the Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margin exists for the period 
February 1, 1995 through July 31, 1995:

------------------------------------------------------------------------
                     Manufacturer/exporter                        Margin
------------------------------------------------------------------------
Akai Asian.....................................................     4.83
Viraj..........................................................     0.00
------------------------------------------------------------------------

    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 as early as 
convenient for the parties but not later than November 22, 1996. If a 
hearing is requested, case briefs and/or written comments from 
interested parties should be submitted no later than 14 days prior to 
the hearing and rebuttal briefs should be submitted not later than 7 
days prior to the hearing. If no hearing is requested, case briefs 
should be submitted by November 8, 1996, and rebuttal briefs by 
November 15, 1996. Rebuttal briefs and rebuttal comments should be 
limited to issues raised in the case briefs. The Department will issue 
the final results of this new shipper administrative review, including 
the results of its analysis of issues raised in any such written 
comments or at a hearing, within 90 days of issuance of these 
preliminary results.
    Upon completion of this new shipper review, the Department will 
issue appraisement instructions directly to the Customs Service. The 
results of this review shall be the basis for the assessment of 
antidumping duties on entries of merchandise covered by this review and 
for future deposits of estimated duties.
    Furthermore, upon completion of this review, the posting of a bond 
or security in lieu of a cash deposit, pursuant to section 
751(a)(2)(B)(iii) of the Act and section 353.22(h)(4) of the 
Department's interim regulations, will no longer be permitted and, 
should the final results yield a margin of dumping, a cash deposit will 
be required for each entry of the merchandise.
    The following deposit requirements will be effective upon 
publication of the final results of this new shipper antidumping duty 
administrative review for all shipments of stainless steel bar from 
India entered, or withdrawn from warehouse, for consumption on or after 
the publication date, as provided by section 751(a)(1) of the Act: (1) 
The cash deposit rate for the reviewed companies will be those 
established in the final results of this new shipper administrative 
review; (2) for exporters not covered in this review, but covered in 
previous reviews or the original less-than-fair-value (LTFV) 
investigation, 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, previous reviews, or the original 
LTFV investigation, but the manufacturer is, the cash deposit rate will 
be that established for the most recent period for the manufacturer of 
the merchandise; and (4) the cash deposit rate for all other 
manufacturers or exporters will continue to be 12.45 percent, the all 
others rate established in

[[Page 54776]]

the LTFV investigation (59 FR 66915, December 28, 1994).
    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 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 new shipper administrative review and notice are in accordance 
with section 751(a)(2)(B) of the Act (19 U.S.C. 1675(a)(2)(B)) and 19 
CFR 353.22(h).

    Dated: October 15, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-27055 Filed 10-21-96; 8:45 am]
BILLING CODE 3510-DS-P