[Federal Register Volume 61, Number 238 (Tuesday, December 10, 1996)]
[Notices]
[Pages 65022-65025]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31250]


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DEPARTMENT OF COMMERCE
[A-412-810]


Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From 
the United Kingdom; Preliminary Results of Antidumping Administrative 
Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review; certain hot-rolled lead and bismuth carbon steel 
products from the United Kingdom.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain hot-
rolled lead and bismuth carbon steel products from the United Kingdom 
in response to requests by respondent, British Steel Engineering Steels 
Limited (BSES), and petitioner, Inland Steel Bar Company. This review 
covers the period March 1, 1995 through February 29, 1996.
    We have preliminarily determined that sales have been made below 
normal value (NV). Interested parties are invited to comment on these 
preliminary results. Parties who submit comments are requested to 
submit with each comment (1) a statement of the issue and (2) a brief 
summary of the comment.

EFFECTIVE DATE: December 10, 1996.

FOR FURTHER INFORMATION CONTACT:G. Leon McNeill or Maureen Flannery, 
AD/CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
4733.

SUPPLEMENTARY INFORMATION:

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 FR 25130).

Background

    The Department published in the Federal Register the antidumping 
duty order on certain hot-rolled lead and bismuth carbon steel products 
from the United Kingdom on March 22, 1993 (58 FR 15324). On March 4, 
1996, we published in the Federal Register (61 FR 8238) a notice of 
opportunity to request an administrative review of the antidumping duty 
order on certain hot-rolled lead and bismuth carbon steel products from 
the United Kingdom covering the period March 1, 1995 through February 
29, 1996.
    In accordance with 19 CFR 353.22(a)(1), BSES and the petitioner, 
Inland Steel Bar Company, requested that we conduct an administrative 
review of BSES's sales. We published a notice of initiation of this 
antidumping duty administrative review on April 25, 1996 (61 FR 18378). 
The Department is conducting this administrative review in accordance 
with section 751 of the Act.

Scope of the Review

    The products covered by this review are hot-rolled bars and rods of 
nonalloy or other alloy steel, whether or not descaled, containing by 
weight 0.03 percent or more of lead or 0.05 percent or more of bismuth, 
in coils or cut lengths, and in numerous shapes and sizes. Excluded 
from the scope of this review are other alloy steels (as defined by the 
Harmonized Tariff Schedule of the United States (HTSUS) Chapter 72,

[[Page 65023]]

note 1 (f)), except steels classified as other alloy steels by reason 
of containing by weight 0.4 percent or more of lead, or 0.1 percent or 
more of bismuth, tellurium, or selenium. Also excluded are semi-
finished steels and flat-rolled products. Most of the products covered 
in this review are provided for under subheadings 7213.20.00 and 
7214.30.00.00 of the HTSUS. Small quantities of these products may also 
enter the United States under the following HTSUS subheadings: 
7213.31.30.00, 60.00; 7213.39.00.30, 00.60, 00.90; 7214.40.00.10, 
00.30, 00.50; 7214.50.00.10, 00.30, 00.50; 7214.60.00.10, 00.30, 00.50; 
and 7228.30.80.00. HTSUS subheadings are provided for convenience and 
Customs purposes. The written description of the scope of this order 
remains dispositive.
    This review covers the subject merchandise manufactured by BSES, 
and the period March 1, 1995 through February 29, 1996.

Duty Absorption

    On May 17, 1996, the petitioner requested that the Department 
determine whether antidumping duties had been absorbed by BSES during 
the period of review (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 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 antidumping regulations 
provides that the Department will make a duty absorption determination, 
if requested, for any administrative review initiated in 1996 or 1998. 
See 61 FR 7308, 7366 (February 27, 1996). The preamble to the proposed 
antidumping 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 antidumping 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 determination 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 certain hot-rolled lead and bismuth carbon 
steel products from the United Kingdom 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 
determination during a review initiated in 1996. This being a review 
initiated in 1996, we are making a duty-absorption determination as 
part of this segment of the proceeding.
    The statute provides for a determination on duty absorption if the 
subject merchandise is sold in the United States through an affiliated 
importer. In this case, BSES is itself the importer of record, i.e., 
the exporter and the importer are the same entity. Therefore, the 
importer and the exporter are ``affiliated'' within the meaning of 
751(a)(4). Furthermore, we have preliminarily determined that there is 
a dumping margin for BSES on 50 percent of its U.S. sales during the 
POR. In addition, we cannot conclude from the record that the 
unaffiliated purchaser in the United States will pay the ultimately 
assessed duty. Under these circumstances, therefore, we preliminarily 
find that antidumping duties have been absorbed by BSES on 50 percent 
of its U.S. sales.

United States Price

    We based United States price on export price (EP), as defined in 
section 772(a) of the Act, because the merchandise was sold directly by 
the exporter to unaffiliated U.S. purchasers prior to the date of 
importation and constructed export price was not indicated by other 
facts of record. BSES reported that EP was based on packed, delivered 
prices to customers in the United States. We made deductions, where 
applicable, for foreign inland freight, FOB charges in the United 
Kingdom, ocean freight, marine insurance, U.S. Customs duties, 
brokerage and handling charges, merchandising processing fees, and U.S. 
inland freight charges, in accordance with 19 CFR 353.41(d). We also 
made an adjustment for invoice corrections (billing adjustments) made 
after shipment.
    BSES's sales in the United Kingdom and to the United States were 
made in quantities of less than 25 metric tons and 25 metric tons or 
more. As in all prior segments of the proceeding, where possible we 
matched U.S. sales to U.K. sales within the same quantity group: 25 
tons or more, or less than 25 tons. (See Final Determination of Sales 
at Less Than Value; Certain Hot-Rolled Lead and Bismuth Carbon Steel 
Products from the United Kingdom, 58 FR 6207, January 27, 1993; and 
Preliminary Results of Antidumping Duty Administrative Review; Certain 
Hot-Rolled Lead and Bismuth Carbon Steel Products from the United 
Kingdom, 50 FR 10063, February 23, 1995.)
    No other adjustments to EP were claimed or allowed.

Normal Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared BSES's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(B) of the Act. Because BSES's 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its aggregate volume of U.S. sales of the 
subject merchandise, we determined that the home market provides a 
viable basis for calculating NV for BSES.
    Many of BSES's home market sales were made to affiliated original 
equipment manufacturers (OEMs). It is the Department's practice, in 
situations where home market sales are made to affiliated parties, to 
determine whether sales to affiliated parties might be appropriate to 
use as the basis of NV by comparing prices of those sales to prices of 
sales to unaffiliated parties, on a model-by-model basis. See Final 
Results of Antidumping Duty Administrative Reviews, Partial Termination 
of Administrative Reviews, and Revocation in Part of Antidumping Duty 
Orders; Antifriction Bearings (Other Than Tapered Roller Bearings) and 
Parts Thereof from France, et al. 60 FR 10900, February 28, 1995. (See 
preliminary notice for discussion.) Because BSES made home market sales 
to affiliated OEMs during the POR, we tested these OEM sales to ensure 
that, on average, the affiliated-party sales were made at arm's length. 
To conduct this test, we compared the gross unit prices of sales to 
affiliated and unaffiliated customers net of all movement charges, 
direct selling expenses, invoice corrections, rebates and packing. As a 
result of our arm's-length test, we disregarded sales to the affiliated 
OEM customers in the home market because the prices charged to 
affiliated customers were less than 99.5 percent of the prices charged 
to

[[Page 65024]]

unaffiliated customers. We did not require respondent to provide 
downstream sales by these customers because these customers further 
manufactured the subject merchandise into merchandise not comparable to 
the merchandise covered by the order. BSES also sold through affiliated 
resellers to unaffiliated customers and reported these unaffiliated-
customer transactions. We used these unaffiliated transactions in our 
determination of NV.
    BSES did not report its home market sales of leaded rod produced by 
Scunthorpe Rod Mill (SRM), an affiliated party, because it claimed that 
such merchandise was not a match to its sales of leaded bar to the 
United States. BSES provided a list of all SRM's potential products, 
including their product characteristics and product identification 
control numbers. In addition, BSES provided a theoretical sales file 
that identified every leaded rod product that SRM could possibly have 
produced or sold in each of the months of the POR. Upon examination of 
this information, we determined that the leaded rod produced by SRM was 
never the identical or most similar match to BSES's sales of leaded bar 
to the United States during the POR.

Cost of Production Analysis

    Pursuant to section 773(b) of the Act, in this review we initiated 
a COP investigation of BSES. We did this because, in the administrative 
review of BSES for the most recent period (as of the time our decision 
to initiate a COP investigation was made), we disregarded from our 
calculations BSES's home market sales found to be below the cost of 
production (COP). See Final Results of Antidumping Administrative 
Review; Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from 
the United Kingdom, 60 FR 44009, August 24, 1995. Therefore, in 
accordance with section 773(b)(2)(A)(ii) of the Act, the Department had 
reasonable grounds to believe or suspect that sales below the COP may 
have occurred during this review period.
    Before making any NV comparisons, we conducted the COP analysis 
described below.

A. Calculation of COP

    We calculated the COP based on the sum of BSES's cost of materials 
and fabrication employed in producing 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. We relied on the home market sales and COP information provided by 
BSES in its questionnaire responses.

B. Test of Home Market Prices

    After calculating COP, we tested whether home market sales of lead 
and bismuth steel were made at prices below COP within an extended 
period of time in substantial quantities, and whether such prices 
permitted recovery of all costs within a reasonable period of time. We 
compared the model-specific COP to the reported home market prices less 
any applicable movement charges, rebates, 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 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 
disregarded the below-cost sales because we determined that the below-
cost sales were made within an extended period of time in ``substantial 
quantities'' in accordance with sections 773(b)(2) (B) and (C) of the 
Act, and because, based on our comparisons of prices to weighted-
average COPs for the POR, we determined that the below-cost sales of 
the product were at prices which would not permit recovery of all costs 
within a reasonable period of time, as defined in section 773(b)(2)(D) 
of the Act. Based on this test, we disregarded below-cost sales made by 
BSES.

Price-to-Price Comparisons

    Pursuant to section 777A(d)(2), we compared the EPs of individual 
transactions to the monthly weighted-average price of sales of the 
foreign like product where there were sales at prices above COP, as 
discussed above. We based NV on packed, delivered prices to 
unaffiliated purchasers in the home market. We made adjustments, where 
applicable, in accordance with section 773(a)(6) of the Act. Where 
applicable, we made adjustments to home market price for invoice 
corrections, rebates, and inland freight. We also made a circumstance-
of-sale adjustment for differences in credit insurance and product 
liability insurance expenses pursuant to section 773(a)(6)(C)(iii) of 
the Act. Respondent claimed home market credit insurance expenses and 
product liability insurance expenses as direct adjustments to NV. Since 
such expenses are on a sale-by-sale basis and directly related to sales 
of the foreign like product, we have treated these home market expenses 
as direct selling expenses. U.S. credit insurance and product liability 
insurance are U.S. direct selling expenses. Accordingly, we made the 
circumstance-of-sale adjustments by adding the amounts of U.S. credit 
insurance and product liability insurance for each U.S. sale to the NV, 
and subtracting the home market amounts from NV. We also added U.S. 
commissions for each U.S. sale to the NV. In order to adjust for 
differences in packing between the two markets, we increased home 
market price by U.S. packing costs and reduced it by home market 
packing costs. Prices were reported net of value added taxes (VAT) and, 
therefore, no deduction for VAT was necessary. We made adjustments, 
where appropriate, for physical differences in merchandise in 
accordance with section 773(a)(6)(C)(ii) of the Act.

Constructed Value

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of BSES's cost of materials and fabrication employed 
in producing the subject merchandise, SG&A and profit incurred and 
realized in connection with production and sale of the foreign like 
product, and U.S. packing costs. In accordance with section 
773(e)(2)(A), we based SG&A and profit on the amounts incurred and 
realized by BSES in connection with the production and sale of the 
foreign like product in the ordinary course of trade, for consumption 
in the foreign country. We used the costs of materials, fabrication, 
and general and administrative expenses as reported in the CV portion 
of BSES's questionnaire response. We used the U.S. packing costs as 
reported in the U.S. sales portion of BSES's questionnaire response. We 
based selling expenses and profit on the information reported in the 
home market sales portion of BSES's questionnaire response. For selling 
expenses, we used the average per-unit home market selling expenses of 
home market sales of the foreign like product, exclusive of sales 
disregarded under the cost test, weighted by the total quantity sold 
for these sales. For actual profit, we first calculated the difference 
between the home market sales value and home market COP, for all above-
cost home market sales of the foreign like product, exclusive of sales 
disregarded under the cost test, and divided the sum of these 
differences by the total home market COP for these sales. We then 
multiplied this percentage by the COP for each U.S. model to derive an 
actual profit.

[[Page 65025]]

Commission Offset

    Because there are commissions on U.S. sales and not on home market 
sales, we made an adjustment for indirect selling expenses in the home 
market to offset the U.S. commissions, in accordance with 19 CFR 
353.56(b)(1).
    We based the commission offset amount on the amount of the home 
market indirect selling expenses. We limited the home market indirect 
selling expense deduction by the amount of the commissions incurred on 
sales to the United States.

Preliminary Results of the Review

    As a result of our comparison of EP and NV, we preliminarily 
determine that the following weighted-average dumping margin exists:

------------------------------------------------------------------------
                                                                Margin  
          Manufacturer/exporter                 Period        (percent) 
------------------------------------------------------------------------
British Steel Engineering Steels Limited                                
 (BSES) (formerly United Engineering                                    
 Steels Limited)........................     3/1/95-2/29/96         2.84
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within 5 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 publication of this notice, 
or the first workday thereafter. Interested parties may submit case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, which must be limited to issues raised in the case 
briefs, may be filed not later than 37 days after the date of 
publication. The Department will publish a notice of final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such comments.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between EP and NV may vary from the percentage stated 
above. Upon completion of this review, the Department will issue 
appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of the final results of this administrative review for all 
shipments of certain hot-rolled lead and bismuth carbon steel products 
from the United Kingdom entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided for by 
section 751(a)(2)(c) of the Act: (1) The cash deposit rate for the 
reviewed company will be the rate established in the final results of 
this review; (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 company-specific rate published for the most recent 
period; (3) if the exporter is not a firm covered in this or 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; and (4) for all other 
producers and/or exporters of this merchandise, the cash deposit rate 
shall be 25.82 percent, the ``all others'' rate established in the LTFV 
investigation (58 FR 6207, January 27, 1993).
    These deposit rates, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.
    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 Act (19 U.S.C. 1675(a)) and 19 CFR 353.22.

    Dated: December 2, 1996.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-31250 Filed 12-9-96; 8:45 am]
BILLING CODE 3510-DS-P