[Federal Register Volume 62, Number 74 (Thursday, April 17, 1997)]
[Notices]
[Pages 18744-18747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9971]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-412-810]


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

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

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

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SUMMARY: On December 10, 1996, the Department of Commerce (the 
Department) published the preliminary results of its administrative 
review of the antidumping duty order on certain hot-rolled lead and 
bismuth carbon steel products from the United Kingdom. The review 
covers one manufacturer/exporter and the period March 1, 1995 through 
February 29, 1996.
    We gave interested parties an opportunity to comment on our 
preliminary results. Based on our analysis of the comments received, 
and the correction of certain clerical errors, we have changed the 
results from those presented in the preliminary results of review.

EFFECTIVE DATE: March 17, 1997.

FOR FURTHER INFORMATION CONTACT: G. Leon McNeill or Maureen Flannery, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-4733.

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).

SUPPLEMENTARY INFORMATION:

Background

    On December 10, 1996, the Department published in the Federal 
Register (61 FR 65022) the preliminary results of its administrative 
review of the antidumping duty order on certain hot-rolled lead and 
bismuth carbon steel products from the United Kingdom (58 FR 15324, 
March 22, 1993). The Department has now completed the 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, 
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 one manufacturer/exporter of certain hot-rolled 
lead and bismuth steel products, British Steel Engineering Steels 
limited (BSES), formerly United Engineering Steels Limited (UES), and 
the period March 1, 1995 through February 29, 1996.

Duty Absorption

    As part of this review, we are considering, in accordance with 
section 751(a)(4) of the Act, whether BSES absorbed antidumping duties. 
See the preliminary results of this review (61 FR 65022, December 10, 
1996). For these final results of review, we find that antidumping 
duties have been absorbed by BSES. For a further discussion of this 
issue, see comments 1 and 2 below.

Analysis of the Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results of review. We received comments and rebuttal 
comments from the petitioner, Inland Steel Bar Co., and BSES.
    Comment 1: BSES contends that the Department lacks the authority to 
conduct a duty absorption inquiry in this, the third administrative 
review of this case, because the Act only permits such inquiries to be 
made in the second and fourth administrative reviews after the order is 
published.
    Petitioner maintains that the Department was correct in conducting 
this duty absorption inquiry. Petitioner contends that BSES ignores the 
fact that, because this order was in effect on January 1, 1995, it is a 
transition order under the Act. Petitioner argues that the issue date 
for transition orders, as prescribed by the Act for the interpretation 
of sunset-related deadlines, is not the date of the original Federal 
Register publication, but rather the effective date of the World Trade 
Organization (WTO) agreement, January 1, 1995. As support for its 
argument, petitioner cites the URAA, Statement of Administrative Action 
(SAA) in H.R. Doc. No. 316, 103d Cong., 2nd Sess. (1994) at 882.
    Petitioner also contends that section 351.213(j) of the 
Department's proposed antidumping regulations follows this timing 
interpretation and provides that for transition orders, if requested, 
the Department will make an absorption inquiry for administrative 
reviews initiated in 1996. According to petitioner, the preamble to the 
proposed antidumping regulations states explicitly that, for transition 
orders, ``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.''
    Department's Position: We disagree with BSES that the Department 
lacks the authority to conduct a duty absorption inquiry in this 
review. Because the order for the subject merchandise was in existence 
as of the date the WTO agreement entered into force with respect to the 
United States, it is deemed to be a transition order. See section 
751(c)(6)(C) of the Act. See also the SAA at 882. With respect to 
transition orders, section 351.213(j)(2) of the Department's proposed 
antidumping regulations explains that the Department will conduct a 
duty

[[Page 18745]]

absorption inquiry, if requested, beginning in the second year of 
review of such orders. See 61 FR 7307, 7366 (February 27, 1996). The 
preamble to the proposed antidumping regulations states that, for 
transition orders, ``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.'' 61 FR 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. Because this review was initiated in 1996, the Department's 
duty absorption is deemed to be undertaken in the second year of 
review.)
    Comment 2: BSES maintains that, if the Department declines to 
terminate the absorption inquiry, it must find that BSES has not 
absorbed antidumping duties. BSES further maintains that the existence 
of dumping margins does not necessarily mean that duty absorption has 
occurred. If this were the case, then the Department's obligation to 
conduct an absorption review would be meaningless, and there would be 
no need for a separate inquiry by the Department and the International 
Trade Commission (ITC).
    BSES further maintains that the question of liability for 
antidumping duties is fundamentally different from the question of 
absorption in that the absorption inquiry involves at least two very 
distinct concepts that differentiate it from the ordinary dumping 
analysis. First, the absorption inquiry is intended to provide 
information to the ITC for consideration in a future sunset review. See 
sections 751(a)(4) and 752(a)(1)(D) of the Act. Secondly, BSES 
maintains that the Department should recognize that the small dumping 
margins that BSES has not yet succeeded in eliminating are not evidence 
of absorption.
    BSES contends that, in determining whether a respondent's pricing 
policies demonstrate an intent to pass on or absorb duties, the 
Department may and should consider a respondent's sales prices in the 
aggregate and thus should offset the sale-specific dumping margins 
found in the review by the negative margins found in the review. BSES 
notes that the Department's preliminary review results found that BSES 
had a very low dumping margin and argues that the Department should 
recognize that BSES's pattern of pricing shows that it has 
conscientiously raised its prices and reduced its margin and thus has 
not absorbed antidumping duties. BSES recognizes the Department's 
traditional methodology of setting negative dumping margins at zero in 
the calculation of the weighted-average dumping margin, but argues that 
there is no policy reason to ignore negative margins in duty absorption 
inquiries, and that there certainly is no such requirement in the 
statute or regulations.
    Petitioner maintains that, during the debates over the URAA, the 
domestic industry pointed out that the full remedial impact of dumping 
duties was not always reflected in the marketplace. Petitioner argues 
that, although 19 CFR 353.26 (1994) prohibited an exporter from 
reimbursing an importer of record for antidumping duties, nothing 
prohibited a respondent from acting as an importer of record, and 
thereby absorbing underpayment of duties. As a result, Congress amended 
the statute to direct the Department to identify these instances of 
duty absorption because they could be relevant in the Commission's 
sunset review determination on the likelihood of continuing or 
recurring material injury if an antidumping order is revoked.
    Department's Position: We disagree with BSES. An investigation as 
to whether there is duty absorption does not simply involve reading the 
margin of the final results. As the Department noted in the preliminary 
results of this review, the determination that duty absorption exists 
is also based on the lack of any information on the record that the 
first unrelated customer will be responsible for paying the duty that 
is ultimately assessed. Absent such an irrevocable agreement between 
the affiliated U.S. respondent and the first unrelated customer, there 
is no basis for the Department to conclude that the duty attributable 
to the margin is not being absorbed by the respondent.
    This is an instance where the existence of a margin raises an 
initial presumption that the respondent is, in fact, absorbing the 
duty. As such, the burden of producing evidence to the contrary shifts 
to the respondent. See Creswell Trading Co., Inc. v. United States, 15 
F.3d 1054 (Fed. Cir. 1994). Here, the respondent has failed to place 
evidence on the record in support of its position that it is not 
absorbing the duties. Further, while the fact that respondent's margin 
has fallen indicates that the level of dumping has decreased, it does 
not indicate the absence of duty absorption in this review period, as 
there is still a positive margin.
    We disagree with BSES that negative and positive margins should be 
aggregated. The Department treats so-called ``negative'' margins as 
being equal to zero in calculating a weighted-average margin because 
otherwise exporters would be able to mask their dumped sales with non-
dumped sales. See Final Determination of Sales at Less Than Fair Value; 
Professional Electric Cutting Tools and Professional Electric Sanding/
Grinding Tools from Japan, 58 FR 30149 (May 26, 1993). It would be 
inconsistent on one hand to calculate margins using positive margin 
sales, which is the Department's practice, and then argue, in effect, 
that there are no margins because credit should be given for nonmargin 
sales. Thus, those sales which are used to determine whether there are 
margins should also be used to determine whether there is duty 
absorption.
    Whether or not respondents ``intended'' to absorb duties is also 
irrelevant to the Department's inquiry. The Act does not provide a 
basis for the Department to render judgements on the intentions of 
respondents, but instead to make an empirical finding as to whether 
absorption is occurring.
    Comment 3: Petitioner claims that some grades of scrap purchased by 
BSES from its affiliated parties were not at arm's-length transaction 
prices. If the scrap price from BSES's affiliated supplier is less than 
the scrap price from its unaffiliated supplier, petitioner claims, it 
is not an arm's-length transaction. To account for such grades that 
were not at arm's-length prices, petitioner maintains that the 
Department should increase BSES's total cost of production by the 
difference between the price paid to affiliated parties and the price 
paid to unaffiliated parties. Petitioner contends that the overall 
average for all grades of scrap does not recognize that individual 
grades of scrap may not have been purchased from affiliated parties in 
an arm's-length transaction. As support for its argument, petitioner 
cites 19 U.S.C.A. 1677b(f)(2) (1996 Supp.); also, Final Results of 
Antidumping Duty Administrative Review; Dynamic Random Access Memory 
Semiconductors of One Megabit or Above From the Republic of Korea, 61 
FR 20216, 20221 (May 6, 1996); Final Results of Antidumping Duty 
Administrative Review; Tapered Roller Bearings, Four Inches or Less in 
Outside Diameter, and Certain Components Thereof, from Japan, 56 FR 
65228, 65237 (December 16, 1991); and Final Determination of Sales at 
Less Than Fair Value; Certain Granite Products From Italy, 53 FR 27187, 
27193 (July 19, 1988).
    BSES contends that scrap is not a uniform commodity with a single, 
stable, established price. The market is

[[Page 18746]]

volatile, with prices varying from period to period and from supplier 
to supplier. BSES claims that each month it and its suppliers assess 
the market and negotiate the price for each grade of scrap to be 
purchased in the coming month. The relationship does not affect the 
negotiated price. BSES further claims that both affiliated and 
unaffiliated suppliers sell to BSES in a tight cluster of prices that 
hover closely to theoretical market price, which sometimes is slightly 
higher than the average and sometimes slightly lower, but always 
dictated by the going market price. BSES notes that, out of 21 grades 
supplied by both affiliated and unaffiliated suppliers, affiliated 
suppliers' average prices were higher for 12 of these grades and 
unaffiliated suppliers higher for 9 grades. BSES maintains that the 
affiliated scrap prices for many of the grades are understated, since 
its most important affiliated suppliers do not include freight to 
BSES's location in their prices while the unaffiliated suppliers sell 
on a delivered basis. BSES notes that, where scrap sales were made on 
an ex-factory basis, BSES included its freight expense in the material 
cost used in the reporting of the cost of production and constructed 
value (CV). BSES claims that petitioner has distorted its scrap data, 
to conclude that the data show affiliated prices to be generally lower 
than unaffiliated prices.
    Department's Position: We agree with BSES that scrap purchases from 
affiliated suppliers were made at arm's-length prices, and that 
therefore no adjustment to scrap prices is warranted. As BSES notes, 
the overall weighted-average price for all grades of scrap during the 
fiscal year is somewhat higher from affiliated suppliers than from 
unaffiliated suppliers. See memorandum to the file from Leon McNeill, 
April 9, 1997.
    Comment 4: Petitioner argues that, for the upcoming administrative 
review, the Department should require respondent to allocate each 
individual rebate over only those sales benefitting from the rebate 
rather than over all sales.
    BSES contends that no changes should be made to the Department's 
analysis in either this review or future reviews.
    Department's Position: Since this comment refers to an upcoming 
administrative review of this order, it is not relevant to this review. 
Therefore, for these final results, the Department has not taken any 
action on this issue.
    Comment 5: BSES argues that the Department failed to make a 
circumstance-of-sale (COS) adjustment for home market imputed credit 
expenses for CV comparisons. BSES notes that, in the preliminary 
results, the Department added imputed U.S. credit expenses to the 
foreign unit prices in dollars (FUPDOL). However, it failed to make a 
corresponding adjustment for home market credit expenses by subtracting 
such expenses from the CV. BSES suggests that the Department make this 
correction by calculating separately a weighted-average imputed home 
market credit expense in addition to the total actual direct selling 
expenses, and then deducting the weighted average home market credit 
expenses from CV. BSES maintains that the Department's normal value 
calculation methodology recognizes that home market price includes all 
cost and expenses, including imputed credit expense, since the 
Department makes a COS adjustment for this expense in price-to-price 
comparisons. Similarly, a COS adjustment is also required for CV, since 
imputed credit expenses are included in CV. BSES cites section 773(e) 
of the Act, which directs the Department to calculate CV as the sum of 
actual expenses incurred in the manufacture of the product sold in the 
United States, plus the actual selling expenses from the home market 
sales file, plus general and administrative expenses (including net 
interest expense), plus the actual profit realized on home market 
sales. BSES argues that since the Department added imputed U.S. credit 
to the FUPDOL, to ensure a fair comparison it must correspondingly 
deduct home market credit from CV. BSES contends that the Department's 
Office of Accounting has endorsed the methodology and it is also 
reflected in the following cases: Final Results of Administrative 
Review: Certain Welded Carbon Steel Pipe and Tube from Turkey, 61 FR 
69067 (December 31, 1996) and Final Determination of Sales at Less Than 
Fair Value; Large Newspaper Printing Presses from Japan (LNPPs from 
Japan), 61 FR 38139, 38147-48 (July 23, 1996).
    Petitioner argues that since the Department did not include home 
market imputed credit in CV, it is not appropriate to deduct a home 
market credit expense from CV. Petitioner notes that although the 
Department has reached the opposite conclusion in several recent cases, 
including LNPPs from Japan, as cited by BSES, it should apply the pre-
URAA policy of adjusting CV for imputed credit expenses.
    Department's Position: We agree with BSES that a COS adjustment 
should be made for home market imputed credit expenses in CV 
comparisons. Under the URAA, for both COP and CV, the statute provides 
that selling, general and administrative expenses be based on actual 
amounts incurred by the exporter for production and sale of the foreign 
like product. Consistent with section 773(a)(6) of the Act, adjustments 
to normal value are appropriate where CV is the basis of normal value. 
The Department uses imputed credit expenses to measure the effect of a 
specific respondent's selling practices in the United States and the 
comparison market. See Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof from France, Germany, Italy, Japan, 
Singapore, and the United Kingdom; Final Results of Administrative 
Reviews, 62 FR 2119-20 (January 15, 1997). Because export price is the 
basis for United States price in this review, the adjustment entails 
adding U.S. imputed credit to the CV, and subtracting home market 
imputed credit from the CV. The U.S. imputed credit was added for the 
preliminary results; for these final results, we have also subtracted 
the home market imputed credit. See section 773(a)(6)(c)(iii) of the 
Act.
    Comment 6: BSES contends that the Department inadvertently deducted 
the home market quantity adjustment twice at lines 149 and 321 of the 
preliminary margin program.
    Department's Position: We agree with BSES and have revised our 
computer programming language accordingly for these final results of 
review.
    Comment 7: BSES argues that the Department erroneously applied a 
conversion factor to U.S. credit insurance. BSES claims that, since 
U.S. credit insurance is denominated in U.S. dollars, applying the 
conversion factor is incorrect.
    Department's Position: We agree with BSES and have revised our 
computer programming language accordingly for these final results of 
review.
    Comment 8: BSES maintains that the Department erred in converting 
U.S. packing from pounds sterling to U.S. dollars twice in calculating 
the FUPDOL for both price-to-price and CV comparisons.
    Department's Position: We agree with BSES and have revised our 
computer programming language accordingly for these final results.
    Comment 9: BSES claims that the Department misspelled the 
commission offset variable in the preliminary margin program. As a 
result, the commission offset was not applied to the FUPDOL for price-
to-price comparisons where the U.S. commissions are greater than or 
equal to the home market indirect selling expenses.
    Department's Position: We agree with BSES, and have revised our 
computer

[[Page 18747]]

programming language accordingly for these final results.
    Comment 10: Petitioner argues that the Department inadvertently 
used the field MONTHU to establish the year for a concordance entry.
    Department's Position: We agree with petitioner. Accordingly, for 
these final results, we have revised our computer programming language 
to make the appropriate clerical error correction.

Correction of Clerical Error

    For the preliminary results, we failed to include direct selling 
expenses, indirect selling expenses, and U.S. packing expenses in the 
amount by which the profit ratio was multiplied in calculating CV 
profit. For these final results, we have included these expenses in the 
calculation of CV profit.

Final Results of Review

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

------------------------------------------------------------------------
                                                                 Margin 
           Manufacturer/exporter             Period of review  (percent)
------------------------------------------------------------------------
British Steel Engineering Steels Limited                                
 (BSES)(formerly United Engineering Steels                              
 Limited).................................     3/1/95-2/29/96       4.56
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between export price and normal value may vary from the 
percentage stated above. Because there is a concurrent review of the 
countervailing duty order on the subject merchandise, final assessments 
for BSES will reflect the final results of the countervailing duty 
administrative review in accordance with 19 CFR 353.41(d)(iv). The 
Department will issue appraisement instructions directly to the Customs 
Service.
    Furthermore, the following deposit requirements will be effective 
upon publication of this notice of final results of 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 by section 
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed 
company will be the rate listed above; (2) for previously reviewed or 
investigated companies not listed above, 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, a 
prior review, or the original less-than-fair-value (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 requirements shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a final 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 subsequent assessment 
of double antidumping duties.

Notification to Interested Parties

    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification of 
return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: April 9, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-9971 Filed 4-16-97; 8:45 am]
BILLING CODE 3510-DS-P