[Federal Register Volume 61, Number 236 (Friday, December 6, 1996)]
[Notices]
[Pages 64666-64669]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31104]


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DEPARTMENT OF COMMERCE

[A-122-601]


Brass Sheet and Strip From Canada; 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 a request from one respondent, Wolverine, the 
Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty order on brass sheet and strip from 
Canada. The review covers one manufacturer/exporter of the subject 
merchandise to the United States for the period January 1, 1995 through 
December 31, 1995.
    We have preliminarily determined that U.S. sales have not been made 
below the normal value (NV). If these preliminary results are adopted 
in our final results of administrative review, we will not require cash 
deposits. Following our final determination, we will instruct U.S. 
Customs to assess antidumping duties on all appropriate entries. 
Interested parties who submit arguments in this proceeding are 
requested to submit with the argument (1) a statement of the issue, and 
(2) a brief summary of the argument.

EFFECTIVE DATE: December 6, 1996.

FOR FURTHER INFORMATION CONTACT: Maureen McPhillips or Linda Ludwig, 
Office of AD/CVD Enforcement, Group III, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, D.C. 20230; telephone: 
(202) 482-3019 or 482-3833, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On January 12, 1987, the Department published in the Federal 
Register (52 FR 1217) the antidumping duty order on brass sheet and 
strip (BSS) from Canada. On January 26, 1996, the Department published 
in the Federal Register a notice of ``Opportunity to Request an 
Administrative Review'' of this

[[Page 64667]]

antidumping duty order for the period January 1, 1995 through December 
31, 1995 (61 FR 2488). We received a timely request for review from the 
respondent, Wolverine Tube (Canada), Inc. (Wolverine). On February 20, 
1996, the Department initiated an administrative review of Wolverine 
(61 FR 6348). The period of review is January 1, 1995 through December 
31, 1995.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Tariff Act), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Tariff 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).
    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 October 1, 1996, the Department extended the time limit 
for preliminary results in this case. See Brass Sheet and Strip from 
Canada; Antidumping Administrative Review; Extension of Time Limit, 61 
FR 51261.

Scope of the Review

    Imports covered by this review are shipments of BSS, other than 
leaded and tin BSS. The chemical composition of the covered products is 
currently defined in the Copper Development Association's (C.D.A.) 200 
series or the Unified Numbering System (U.N.S.) C2000. Products whose 
chemical composition is defined by other C.D.A. or U.N.S. series are 
not covered by this order.
    The physical dimensions of the products covered by this review are 
BSS of solid rectangular cross section over 0.006 inches (0.15 
millimeters) in finished thickness or gauge, regardless of width. Coil, 
wound-on-reels (traverse wound), and cut-to-length products are 
included. These products are currently classifiable under Harmonized 
Tariff Schedule (HTS) subheadings 7409.21.00 and 7409.29.00. Although 
the HTS subheadings are provided for convenience and for Customs 
Service (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 Canadian manufacturer/exporter, Wolverine, 
and the period January 1, 1995 through December 31, 1995.

United States Price (USP)

    In calculating USP for Wolverine, the Department treated 
respondent's sales as export price (EP) sales, as defined in section 
772(a) of the Tariff Act, because the subject merchandise was sold to 
unaffiliated U.S. purchasers prior to the date of importation and the 
use of constructed export price was not indicated by the facts of 
record.
    We calculated EP based on packed, delivered, duty-paid prices to 
unaffiliated customers in the United States. We made deductions from 
the gross unit price, where appropriate, for inland freight from the 
plant/warehouse to the port of exit, brokerage and handling, 
international freight, and U.S. customs duty, in accordance with 
section 772(c)(2)(A) of the Tariff Act. No other adjustments to USP 
were claimed or allowed.

Cost of Production Analysis

    Based on the fact that the Department disregarded sales below the 
cost of production (COP) in the 1992 administrative review of Wolverine 
(the most recently completed review at the time of initiation in this 
review), the Department found reasonable grounds, in this review, in 
accordance with section 773(b)(2)(A)(ii) of the Tariff Act, to believe 
or suspect that respondent made sales in the home market at prices 
below the cost of producing the merchandise. See Brass Sheet and Strip 
from Canada; Final Results of Antidumping Administrative Review, 60 FR 
49582 (September 26, 1995). Therefore, pursuant to section 773(b)(1) of 
the Tariff Act, the Department initiated an investigation to determine 
whether Wolverine made home market sales during the POR at prices below 
their cost of production.

A. Calculation of COP

    In accordance with section 773(b)(3) of the Tariff Act, we 
calculated the COP based on the sum of the costs of materials and 
fabrication employed in producing the foreign like product, plus 
amounts for home market selling, general and administrative expenses 
(SG&A) and the cost of all expenses incidental to placing the foreign 
like product in condition packed ready for shipment. We relied on the 
home market sales and COP information provided by Wolverine in its 
questionnaire responses.

B. Test of Home Market Prices

    We used the respondent's weighted-average COP, as adjusted (see 
above), for the period January 1995 to December 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, less any applicable movement charges, rebates, 
discounts, and direct and indirect selling expenses.

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 the below-cost 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. In this review we disregarded those home market sales below 
cost.

Level of Trade

    As set forth in section 773(a)(1)(B)(i) of the Act and in the SAA 
accompanying the URAA at 829-831, to the extent practicable, the 
Department will calculate NV based on sales at the same level of trade 
as the U.S. sale. When the Department is unable to find sale(s) 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 a

[[Page 64668]]

different level 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) of the Act, if we compare 
U.S. sales at one level of trade to NV sales at a different level of 
trade, the Department will adjust the NV 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 difference 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 
NV is determined.
    In order to determine that there is a difference in level of trade, 
the Department must find that two sales have been made at different 
phases of marketing, or the equivalent. Different phases of marketing 
necessarily involve differences in selling functions, but differences 
in selling functions (even substantial ones) are not alone sufficient 
to establish a difference in the level of trade. Similarly, seller and 
customer descriptions (such as ``distributor'' and ``wholesaler'') are 
useful in identifying different levels of trade, but are insufficient 
to establish that there is a difference in the level of trade.
    In implementing this principle in the Department's reviews, we 
obtain information about the selling activities of the producers/
exporters associated with each phase of marketing, or the equivalent. 
We ask each respondent to establish any claimed LOTs based on these 
marketing activities and selling functions.
    In reviewing the selling functions reported by the respondents, we 
consider all types of selling activities performed on both a 
qualitative and quantitative basis. In analyzing whether separate LOTs 
existed in this review, we found that no single selling activity in the 
brass sheet and strip industry was sufficient to warrant a separate LOT 
(see Proposed Regulations, 61 FR, at 7348).
    In determining whether separate LOTs exist in the home market, the 
Department considers the level-of-trade claims of each respondent after 
all adjustments. To test the claimed LOTs, we analyze the selling 
activities associated with the classes of customers and marketing 
phases respondents report. In applying this test, we expect that, if 
claimed LOTs are the same, the functions and activities of the seller 
should be similar. Conversely, if a party claims that LOTs are 
different for different groups of sales, the functions and activities 
of the seller should be dissimilar. The Department does not only count 
activities, but weighs the overall function performed by each claimed 
level of trade.
    In its initial questionnaire response and in response to the 
Department's supplemental questionnaire for this administrative review, 
Wolverine maintains that it sells to three distinct levels of trade 
(LOT) in the home market: Original equipment manufacturers (OEMs), 
general jobber distributors, and processing distributors. Wolverine 
sells only to processing distributors in the United States market.
    In the final results of the previous administrative review, 61 FR 
46618 (September 4, 1996), we agreed with petitioners' contention that 
Wolverine did not adequately identify the differences among the selling 
functions corresponding to what it claimed to be three different home 
market levels of trade. For these preliminary results we requested and 
received further information from Wolverine. In its response Wolverine 
distinguished between two levels of trade; sales to OEMS and sales to 
distributors. To test Wolverine's claimed LOTs, we analyzed home market 
selling activities associated with each class of customer and marketing 
phase reported by Wolverine (see discussion above). We analyzed the 
evidence on the record for this administrative review and concluded 
that Wolverine had sufficiently documented and justified its claimed 
differences in level of trade between sales to OEMs and sales to 
distributors in the home market. For example, the selling functions in 
the areas of technical and product support, customer service, freight 
and delivery, administrative resources expended, procurement and 
resourcing services, and packing requirements are significantly 
different between the two levels of trade. In addition, since the vast 
majority of the home market sales of the subject merchandise was to 
distributors and not to OEMs, a pattern of ``consistent'' price 
differences between the two levels of trade could not be established. 
However, the relatively few sales made to OEMs were at prices 
considerably higher than the prices charged to distributors for the 
same merchandise.
    The evidence on record in this period of review indicates that the 
home market data base has sales of the identical subject merchandise 
within the same month to the same level of trade (i.e., processing 
distributors) as Wolverine's U.S. sales. Therefore, the Department 
compared Wolverine's U.S. sales only to those home market sales at the 
same level of trade. No LOT adjustment was, therefore, necessary.

Normal Value

    Based on the comparison of the aggregate quantity of home market 
and U.S. sales, and absent any information that a particular market 
situation in the exporting country does not permit a proper comparison, 
we determined that the quantity of the foreign like products 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 Tariff Act. Therefore, in accordance with section 
773(a)(1)(B)(i) of the Tariff Act, we based NV on the prices at which 
the foreign like products were first sold for consumption in the 
exporting country.
    Pursuant to section 777A(d)(2) of the Tariff Act, we compared the 
EPs of individual transactions to the monthly weighted-average price of 
sales of the foreign like product. We compared EP sales to sales in the 
home market of identical merchandise.
    We based NV on the price at which the foreign like product is first 
sold for consumption in the exporting country, in the usual commercial 
quantities, and in the ordinary course of trade and, to the extent 
practicable, at the same level of trade as the EP sale, in accordance 
with section 773(a)(1)(B)(i) of the Tariff Act. We adjusted for 
movement expenses in accordance with section 773(a)(6)(B)(ii) of the 
Tariff Act. We made circumstance-of-sale (COS) adjustments pursuant to 
section 773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 353.56 by 
deducting home market credit expenses and adding U.S. credit expenses. 
We increased home market price by U.S. packing costs in accordance with 
section 773(a)(6)(A) of the Tariff Act and reduced it by home market 
packing costs in accordance with section 773(a)(6)(B) of the Tariff 
Act. Prices were reported net of value-added taxes (VAT) and, 
therefore, no adjustment for VAT was necessary. No other adjustments 
were claimed or allowed.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average dumping margin exists:

[[Page 64669]]



------------------------------------------------------------------------
                                                                 Margin 
      Manufacturer/exporter                  Period            (percent)
------------------------------------------------------------------------
Wolverine Tube (Canada), Inc....  01/01/95-12/31/95..........      0.20 
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    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 workday thereafter. Case briefs and/or 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 the case briefs and comments, may be filed 
not later than 37 days after the date of publication. Parties who 
submit argument in this proceeding are requested to submit with the 
argument (1) a statement of the issue and (2) a brief summary of the 
argument. The Department will issue the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written comments or at a hearing, within 120 days of 
publication of these preliminary results.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between USP and NV may vary from the percentage stated 
above. The Department will issue appraisement instructions directly to 
the Customs Service. The final results of this review shall be the 
basis for assessment of antidumping duties, if any, on entries of 
merchandise covered by the determination and for future deposits of 
estimated duties, if any.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of BSS from Canada entered, or withdrawn from warehouse, 
for consumption on or after the publication date of the final results 
of this administrative review, as provided by section 751(a)(1) of the 
Tariff Act: (1) The cash deposit rate for Wolverine will be the rate 
established in the final results of this administrative review (except 
that if the weighted-average margin is less than 0.5 percent, i.e., is 
de minimis, no cash deposit will be required); (2) for merchandise 
exported by manufacturers or exporters not covered in this review, but 
covered in the original less-than-fair-value (LTFV) investigation or a 
previous review, the cash deposit will continue to be the most recent 
rate published in the final determination or final results for which 
the manufacturer or exporter received a company-specific rate; (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; and (4) for all other producers and/or exporters of 
this merchandise, the cash deposit rate will be 8.10 percent, the rate 
established in the LTFV investigation, 52 FR 1217 (January 12, 1987).
    This notice serves as a preliminary reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 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 sanctionable violation.
    This notice also 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 in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: December 2, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-31104 Filed 12-5-96; 8:45 am]
BILLING CODE 3510-DS-P