[Federal Register Volume 62, Number 130 (Tuesday, July 8, 1997)]
[Notices]
[Pages 36495-36498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-17725]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-401-040]


Stainless Steel Plate From Sweden: 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 the petitioners, the Department 
of Commerce (the Department) is conducting an administrative review of 
the antidumping finding on stainless steel plate from Sweden. The 
review covers two manufacturers/exporters of the subject merchandise to 
the United States and the period June 1, 1995 through May 31, 1996. 
Record evidence at this stage of the review indicates the existence of 
sales below normal value during the period of review.
    If these preliminary results are adopted in our final results of 
review, we will instruct the U.S. Customs Service to assess antidumping 
duties on all appropriate entries.
    Interested parties are invited to comment on these preliminary 
results. 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 (no longer than five pages, including 
footnotes).

EFFECTIVE DATE: July 8, 1997.

FOR FURTHER INFORMATION CONTACT: Michael J. Heaney or Linda Ludwig, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone (202) 482-4475/3833.

APPLICABLE STATUTE: Unless otherwise indicated, all citations to the 
Tariff Act of 1930, as amended (the Act) are references to the 
provisions effective January 1, 1995, the effective date of the 
amendments made to the Act by the Uruguay Round Agreements Act (URAA). 
In addition, unless otherwise indicated, all references to the 
Department's regulations are to Part 353 of 19 C.F.R., (1997).

SUPPLEMENTARY INFORMATION:

Background

    The Department of the Treasury published an antidumping finding on 
stainless steel plate from Sweden on June 8, 1973 (38 Fed. Reg. 15079). 
The Department of Commerce published a notice of ``Opportunity To 
Request Administrative Review'' of the antidumping finding for the 
1995/1996 review period on June 6, 1996 (61 Fed. Reg. 28840). On June 
28, 1996, the petitioners, Allegheny Ludlum Steel Corp., G.O. Carlson, 
Inc., and Washington Steel Corporation filed a request for review of 
Uddeholms AB (Uddeholm), and Avesta Sheffield AB (Avesta). We initiated 
the review on August 8, 1996 (61 Fed. Reg. 41374).

Scope of the Review

    Imports covered by this review are shipments of stainless steel 
plate which is commonly used in scientific and industrial equipment 
because of its resistance to staining, rusting and pitting. Stainless 
steel plate is classified under Harmonized Tariff schedule of the 
United States (HTSUS) item numbers 7219.11.00.00, 7219.12.00.05, 
7209.12.00.15, 7219.12.00.45, 7219.12.00.65, 7219.12.00.70, 
7219.12.00.80, 7219.21.00.05, 7219.21.00.50, 7219.22.00.05, 
7219.22.00.10, 7219.22.00.30, 7219.22.00.60, 7219.31.00.10, 
7219.31.00.50, 7220.11.00.00, 7222.30.00.00, and 7228.40.00.00. 
Although the subheading is provided for convenience and customs 
purposes, the written description of the merchandise under 
investigation is dispositive.
    On July 11, 1995, the Department determined that Stavax ESR 
(Stavax), UHB Ramax (Ramax), and UHB 904L (904L) when flat-rolled are 
within the scope of the antidumping finding.
    On November 3, 1995, the Department determined that stainless steel 
plate products Stavax, Ramax, and 904L when forged, are within the 
scope of the antidumping finding.
    The review covers the period June 1, 1995 through May 31, 1996. The 
Department is conducting this review in accordance with section 751 of 
the Act, as amended.

United States Price (USP)

    In calculating USP, the Department treated respondent's sales as 
export price (EP) sales, as defined in section 772(a) of the Act, when 
the merchandise

[[Page 36496]]

was first sold to unaffiliated U.S. purchasers by an exporter or 
producer outside the U.S., prior to the date of importation. The 
Department treated respondent's sales as constructed export price (CEP) 
sales, as defined in section 772(b) of the Act, when the merchandise 
was first sold to unrelated U.S. purchasers before or after 
importation, by an affiliated seller in the United States.
    EP was based on the delivered price to unrelated purchasers in the 
United States. We made adjustments, where applicable, for ocean 
freight, U.S. inland freight and insurance, U.S. customs duties, and 
early payment discounts in accordance with section 772(c) of the Act.
    We based CEP on the delivered price to unrelated customers in the 
United States. We made adjustments, where applicable, for ocean 
freight, U.S. inland freight, U.S. brokerage and handling expenses. 
U.S. customs duties, early payment discounts, and rebates. In 
accordance with section 772(d)(1) of the Act, we made deductions for 
warranty expenses, royalties, slitting and cutting expenses, credit 
expenses and indirect selling expenses associated with economic 
activity in the United States.
    With respect to merchandise to which value was added in the U.S. by 
Avesta prior to sale to unaffiliated customers, we deducted the cost of 
further manufacturing in accordance with section 772(d)(2) of the Act. 
Pursuant to section 772(d)(3) of the Act, the price was further reduced 
by an amount for profit to arrive at the CEP.

Normal Value

    In order to determine whether there were sufficient sales of 
stainless steel plate in the home market (HM) to serve as a viable 
basis for calculating normal value (NV), we compared the volume of home 
market sales of subject merchandise to the volume of subject 
merchandise sold in the United States, in accordance with section 
773(a)(1)(C) of the Act. Avesta's aggregate volume of HM sales of the 
foreign like product was greater than five percent of its respective 
aggregate volume of U.S. sales of the subject merchandise. Therefore, 
for Avesta, we have based NV on HM sales. Uddeholm's aggregate volume 
of HM sales was less than five percent of U.S. sales of the subject 
merchandise. Because Canada constituted Uddeholm's largest third-
country market, we based NV for Uddeholm on sales to that market.
    Avesta made sales to both affiliated and unaffiliated distributors 
during the period of review. We included sales to affiliated 
distributors when we determined those sales to be at arms-length (i.e., 
at average prices that were 99.5 percent or more of prices to 
unaffiliated distributors). When the price to affiliated distributors 
was less than 99.5 percent of the price to unaffiliated distributors, 
we excluded those sales to affiliated distributors from our calculation 
of NV. See, e.g., Rules and Regulations, Antidumping Duties; 
Countervailing Duties 62 Fed. Reg. 27296, 27355 (May 19, 1997). (The 
Department's current policy is to consider transactions between 
affiliated parties as ``arm's length'' if the prices to affiliated 
purchasers are on average at least 99.5 percent of the prices charged 
to unaffiliated purchasers.)
    For Avesta, we made deductions to NV for HM inland freight, 
quantity discounts, distributor discounts, credit expenses, warehousing 
expenses, and warranties.
    For Uddeholm, we made deductions to NV for ocean freight, third-
country inland freight, and early payment discounts. For comparisons to 
EP, we made an addition to NV for differences in credit expenses.

Level of Trade

    In accordance with section 773(a)(1)(A) of the Act, and the 
Statement of Administrative Action (SAA) accompanying the URAA (at 
pages 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 
(either EP or CEP). When there are no 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 a different level of trade, 
and adjust NV if appropriate. The NV level of trade is that of the 
starting-price sales in the home market. (See e.g., Certain Circular 
Welded Carbon Steel Pipes and Tubes from Taiwan; Preliminary Results of 
Antidumping Duty Administrative Review, 62 Fed. Reg. 31070 (June 6, 
1997).
    As the Department explained in Gray Portland Cement and Clinker 
from Mexico: Final Results of Antidumping Duty Administrative Review, 
(Cement from Mexico) 62 Fed. Reg. 17148, 17156 (April 9, 1997), for 
both EP and CEP, the relevant transaction for the level of trade 
analysis is the sale from the exporter to the importer. While the 
starting price for CEP is that of a subsequent resale to an 
unaffiliated buyer, the construction of the CEP results in a price that 
would have been charged if the importer had not been affiliated. We 
calculate the CEP by removing from the first resale to an independent 
U.S. customer the expenses under section 772(d) of the Act and the 
profit associated with these expenses. These expenses represent 
activities undertaken by the affiliated importer. Because the expenses 
deducted under section 772(d) represent selling activities in the 
United States, the deduction of these expenses normally yields a 
different level of trade for the CEP than for the later resale (which 
we use for the starting price). Movement charges, duties, and taxes 
deducted under section 772(c) do not represent activities of the 
affiliated importer, and we do not remove them to obtain the CEP level 
of trade.
    To determine whether home market sales are at a different level of 
trade than U.S. sales, we examine whether the home market sales are at 
different stages in the marketing process than the U.S. sales. The 
marketing process in both markets begins with goods being sold by the 
producer and extends to the sale to the final user. The chain of 
distribution between the producer and the final user may have many or 
few links, and each respondent's sales occur somewhere along this 
chain. In the United States, the respondent's sales are generally to an 
importer, whether independent or affiliated. We review and compare the 
distribution systems in the home market and the United States, 
including selling functions, class of customer, and the extent and 
level of selling expenses for each claimed level of trade. Customer 
categories such as distributor, retailers or end-users are commonly 
used by respondents to describe levels of trade, but, without 
substantiation, they are insufficient to establish that a claimed level 
of trade is valid. An analysis of the chain of distribution and of the 
selling functions substantiates or invalidates the claimed levels of 
trade. If the claimed levels are different, the selling functions 
performed in selling to each level should also be different. 
Conversely, if levels of trade are nominally the same, the selling 
functions performed should also be the same. Different levels of trade 
necessarily involve differences in selling functions, but differences 
in selling functions, even substantial ones, are not alone sufficient 
to establish a difference in the levels of trade. Differences in levels 
of trade are characterized by purchasers at different stages of 
marketing or their equivalent which, in this case, are the different 
stages in the chain of distribution and sellers performing 
qualitatively different functions in selling to them.
    When we compare U.S. sales to home market sales at a different 
level of trade, we make a level-of-trade adjustment if the difference 
in level of trade affects price comparability. We determine any

[[Page 36497]]

effect on price comparability by examining sales at different levels of 
trade in a single market, the home market; or the third-country market 
used to calculate NV when the aggregate volume of sales in the home 
market is less than five percent of the aggregate volume of U.S. sales. 
Any price effect must be manifested in a pattern of consistent price 
differences between home market (or third-country) sales used for 
comparison and sales at the equivalent level of trade of the export 
transaction. (See, e.g. Granular Polytetrafluorethylene Resin from 
Italy; Preliminary Results of Antidumping Duty Administrative Review, 
62 Fed. Reg. 26283, 26285 (May 13, 1997); Cement from Mexico, at 
17148.) To quantify the price differences, we calculate the difference 
in the average of the net prices of the same models sold at different 
levels of trade. We use the average percentage difference between these 
net prices to adjust NV when the level of trade of NV is different from 
that of the export sale. If there is a pattern of no price differences, 
then the difference in level of trade does not have a price effect and, 
therefore, no adjustment is necessary.
    Section 773 of the statute also provides for an adjustment to NV 
when NV is based on a level of trade different from that of the CEP if 
the NV is more remote from the factory than the CEP and we are unable 
to determine whether the difference in levels of trade between CEP and 
NV affects the comparability of their prices. This latter situation 
might occur when there is no home market (or third-country) level of 
trade equivalent to the U.S. sales level or where there is an 
equivalent home market (or third-country) level but the data are 
insufficient to support a conclusion on price effect (See e.g., Certain 
Corrosion Resistant Carbon Steel Flat Products and Cut-to-Length Carbon 
Steel Plate from Canada Final Results of Antidumping Duty 
Administrative Reviews Fed. Reg. 18448, 18466 (April 15, 1997)). This 
adjustment, the CEP offset, is identified in section 773(a)(7)(B) and 
is the lower of the following:
    *The indirect selling expenses of the home market (or third-
country) sale.
    *The indirect selling expenses deducted from the starting price 
used to calculate CEP.
    The CEP offset is not automatic each time we use CEP. (See 
Mechanical Transfer Presses from Japan, Final Results of Antidumping 
Administrative Review 62 Fed. Reg. 17148, 17156 (October 9, 1996). The 
CEP offset is made only when the home market (or third country) sale is 
more advanced than the level of trade of the U.S. CEP sale and there is 
not an appropriate basis for determining whether there is an effect on 
price comparability. (See e.g., Cement from Mexico, at 17156.)
    We requested information concerning the selling functions 
associated with each phase of marketing, or the equivalent, in each of 
Uddeholm's and Avesta's markets. For Avesta, we determined that one 
level of trade existed in the home market. Avesta offered the same 
selling terms and conditions, and provided the same level of marketing 
assistance, customer service, and technical service to each of its home 
market customers. We also determined that one level of trade exists for 
Uddeholm's third-country sales. Uddeholm offered the same level of 
inventory maintenance, technical advice, and after sale servicing to 
each of its Canadian customers.
    On its EP sales, Uddeholm provided no inventory maintenance or 
advertising, and a lesser degree of technical advice than it did on its 
third-country sales. Uddeholm however, provided after-sales servicing, 
and freight and delivery assistance on both its EP and third-country 
sales. Accordingly, for purposes of this review, we determined that the 
differences in selling functions between Uddeholm's EP and third-
country sales were not sufficiently large to constitute separate levels 
of trade.
    To determine whether Avesta and Uddeholm's CEP and NV sales were at 
the same level of trade, we reviewed information submitted in their 
questionnaire responses regarding selling functions and marketing 
processes associated with both categories of sales.
    The U.S. subsidiary's sales entailed selling functions such as 
inventory maintenance, after sales servicing, technical advice, 
advertising, freight and delivery arrangement, and warranties. Although 
Avesta's sales in the home market and Uddeholm's sales in Canada were 
made at a marketing stage similar to that in the U.S., and entailed 
essentially the same selling functions as described above, we are using 
the CEP methodology in making price comparisons. In determining the 
level of trade for the U.S. sales, we only considered the selling 
activities reflected in the price after making the appropriate 
adjustments under section 772(d) of the Act. (See e.g., Certain 
Stainless Wire Rods from France: Final Results of Antidumping 
Administrative Review, (61 Fed. Reg. 47874, (September 11, 1996).
    Based on a comparison of the home market (or third-country market) 
and this CEP level of trade, we find significantly different levels of 
selling functions. Further, based on the distribution phase at which 
the home market or third-country transaction takes place and the nature 
of the selling functions they entail, we find the home market sales of 
Avesta and the third-country sales of Uddeholm to be at a different 
level of trade from and more remote from the factory than the CEP 
sales.
    As explained above, all of Uddeholm's third country sales, and 
Avesta's home market sales, were at a single level of trade which is 
different from the CEP level of trade. Section 773(a)(7)(A) of the Act 
directs us to make an adjustment for differences in levels of trade 
where such differences affect price comparability. However, we were 
unable to quantify such price differences from information on the 
record. As indicated above, in accordance with section 773(a)(7)(B) of 
the Act, a CEP offset is warranted where normal value is established at 
a level of trade which constitutes a more advanced stage of 
distribution (or the equivalent) than the level of trade of the CEP 
sale and the data available do not provide an appropriate basis to 
determine a level of trade adjustment. Because we have determined that 
the home market or third-country level of trade is more remote from the 
factory than the CEP level of trade but the data necessary to calculate 
the level of trade adjustment are unavailable, we made a CEP offset 
pursuant to section 773(a)(7)(B) of the Act.

Sales Comparisons

    To determine whether sales of stainless steel plate in the United 
States were made at less than NV, we compared USP to the NV, as 
described in the ``United States Price'' and ``Normal Value'' sections 
of this notice. In accordance with section 777(A) of the Act, we 
calculated monthly weighted-average prices for NV and compared these to 
individual U.S. transactions.

Preliminary Results of Review

    We preliminarily determine that the following margins exist for the 
period June 1, 1995 through May 31, 1996:

------------------------------------------------------------------------
                                                                Margin  
                          Company                             (percent) 
------------------------------------------------------------------------
Avesta.....................................................        33.91
Uddeholm...................................................         4.57
------------------------------------------------------------------------

    Parties to this proceeding may request disclosure within five days 
of publication of this notice and any interested party may request a 
hearing within 10 days of publication. Any hearing, if requested, will 
be held 44

[[Page 36498]]

days after the date of publication, or the first working day 
thereafter. Interested parties may submit case briefs and/or written 
comments no later than 30 days after the date of publication. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 37 days after the 
date of publication. The Department will publish the final results of 
this administrative review, which will include the results of its 
analysis of issues raised in any such written comments or at a hearing, 
within 120 days after the publication of this notice.
    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Because the inability to 
link sales with specific entries prevents calculation of duties on an 
entry-by-entry basis, we have calculated an importer specific ad 
valorem duty assessment rate for the merchandise based on the ratio of 
the total amount of antidumping duties calculated for the examined 
sales made during the POR to the total customs value of the sales used 
to calculate these duties. This rate will be assessed uniformly on all 
entries of that particular importer made during the POR. (This is 
equivalent to dividing the total amount of antidumping duties, which 
are calculated by taking the difference between NV and U.S. Price, by 
the total U.S. value of the sales compared, and adjusting the result by 
the average difference between U.S. price and customs value for all 
merchandise examined during the POR.) The Department will issue 
appraisement instructions directly to Customs. The final results of 
this review shall be the basis for the assessment of antidumping duties 
on entries of merchandise covered by the determination and for future 
deposits of estimated duties.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of these administrative reviews 
for all shipments of stainless steel plate from Sweden entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date of the final results of these administrative reviews, as provided 
by section 751(a)(1) of the Act: (1) the cash deposit rate for reviewed 
firms will be the rate established in the final results of 
administrative review, except if the rate is less than 0.50 percent, 
and therefore, de minimis within the meaning of 19 CFR 353.6, in which 
case the cash deposit rate will be zero; (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 
investigation, but the manufacturer is, the cash deposit rate will be 
that established for the manufacturer of the merchandise in the final 
results of these reviews, or the LTFV investigation; and (4) if neither 
the exporter nor the manufacturer is a firm covered in this or any 
previous review or the original fair value investigation, the cash 
deposit rate will be 4.46%.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 353.26(b) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during these review periods. 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)(1)) and 19 CFR 353.22.

    Dated: June 30, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-17725 Filed 7-7-97; 8:45 am]
BILLING CODE 3510-DS-M