[Federal Register Volume 62, Number 236 (Tuesday, December 9, 1997)]
[Notices]
[Pages 64803-64806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32213]


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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; 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 respondents, British Steel Engineering 
Steels Limited (BSES) and Glynwed Metal Processing Ltd. (Glynwed), and 
petitioner, Inland Steel Bar Company. This review covers the period 
March 1, 1996 through February 28, 1997.
    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 9, 1998.

FOR FURTHER INFORMATION CONTACT: G. Leon McNeill, Gideon Katz 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.

Applicable Statute and Regulations

    Unless otherwise stated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act. In addition, unless otherwise stated, all 
citations to the Department's regulations are references to the 
regulations as codified at 19 CFR Part 353 (1996).

SUPPLEMENTAL INFORMATION:

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 7, 
1997 we published in the Federal Register (62 FR 10521) 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, 1996 through February 
28, 1997.
    In accordance with 19 CFR 353.22(a)(1), BSES and Glywed requested 
that we conduct an administrative review of their sales, 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 24, 
1997 (62 FR 19988). 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, 
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 two manufacturers/exporters, BSES and Glynwed, 
and the period March 1, 1996 through February 28, 1997.

Verification

    As provided in section 782(1) of the Act, we verified information 
provided by BSES using standard verification procedures, including on-
site inspection of the manufacturer's facilities, the examination of 
relevant sales and financial records, and selection of original 
documentation containing relevant information. Our verification results 
are outlined in public versions of the verification reports.

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

    The Department calculated EP for BSES 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 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,

[[Page 64804]]

e.g., Final Determination of Sales at Less Than Fair Value; Certain 
Hot-Rolled Lead and Bismuth Carbon Steel Products from the United 
Kingdom, 58 FR 6207, January 27, 1993; and Final Results of Antidumping 
Duty Administrative Review; Certain Hot-Rolled Lead and Bismuth Carbon 
Steel Products from the United Kingdom, 62 FR 18744, April 17, 1997.

Glynwed

    The Department calculated EP for Glynwed based on packed, delivered 
prices to customers in the United States. We made deductions, where 
applicable, for international freight (including foreign inland 
freight, U.S. inland freight, ocean freight, and vessel loading and 
handling charges), marine insurance, U.S. Customs duties, brokerage and 
handling charges, in accordance with 19 CFR 353.41(d). We also made an 
adjustment for invoice corrections (billing adjustments) made after 
shipment.

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, 
the Department compared each company's volume of home market sales of 
the foreign like product to its volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(B) of the Act. 
Because each company'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.
    Many of BSES's and Glynwed'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 Results, 59 FR 9463, 
February 28, 1994, for discussion.) Because both BSES and Glynwed made 
home market sales to affiliated OEMs during the period of review (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, for each 
company, 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 each company's sales to the 
affiliated OEM customers in the home market where the prices charged to 
these affiliated customers were less than 99.5 percent of the prices 
charged to unaffiliated customers. See Final Results of Antidumping 
Duty Administrative Review; Certain Welded Carbon Steel Pipes and Tubes 
from Thailand, 62 FR 53817, October 16, 1997. We did not require 
respondents to provide downstream sales by the affiliated OEM customers 
because these customers further manufactured the subject merchandise 
into merchandise not covered by the order. Both BSES and Glynwed also 
sold through affiliated resellers to unaffiliated customers and 
reported these unaffiliated-customer transactions. We used these 
unaffiliated transactions in our determination of NV.

Leaded Rod Sales

    BSES did not report its home market sales of leaded rod produced by 
Scunthorpe Rod Mill (SRM) and Templeborough Rod Mill (TRM), affiliated 
parties of BSES, claiming that such merchandise would not match to its 
sales of leaded bar to the United States. (Neither BSES nor its 
affiliates sold leaded rod to the United States during the POR.) BSES 
provided a list of all SRM's and TRM's leaded rod products, including 
their product characteristics and product identification control 
numbers. In addition, BSES provided a sales file that identified every 
leaded rod product that SRM and TRM produced or sold during the POR. 
Upon examination of this information, we preliminarily determine that 
the leaded rod produced by SRM and TRM was neither identical to nor 
most similar to BSES's sales of leaded bar to the United States during 
the POR.

Residuals

    BSES's product identification number (CONNUM) contains a residual 
code as one of the physical characteristics in the model matching 
criteria. Residuals result from impurities in the scrap used for the 
production of leaded bar. Petitioner claims that, with the inclusion of 
the residual code, the model match is too narrowly defined, thereby 
significantly reducing the number of matches possible between U.S. and 
home market sales. During verification, we found that customers specify 
the residual level on purchase orders as part of the description of 
chemical composition. Therefore, we preliminarily determine that 
residuals are an essential part of the product, and have continued to 
use residuals, as we have done in prior reviews, as a physical product 
characteristic for purpose of model matching. See, e.g., Final Results 
of Antidumping Duty Administrative Review; Certain Hot-Rolled Lead and 
Bismuth Carbon Steel Products from the United Kingdom, 62 FR 18744, 
April 17, 1997.

Dimensional Ranges

    Petitioner argues that respondent should have reported dimensional 
ranges rather than specific dimensions, claiming that small differences 
in dimensions will have no effect on cost or commercial value.
    The Department found at verification that customers request certain 
specific dimensions for the home market products and the U.S. products, 
and BSES produces to those exact dimensional specifications. In 
addition, we have no information on the record indicating what, if any, 
dimensional ranges might be more appropriate than specific dimensions 
for matching purposes. Therefore, the Department is continuing to use 
specific dimension as one of the physical characteristics for matching 
purposes for these preliminary results.

Home Market Rebates

    During the POR, BSES offered rebates to its customers in the home 
market.
    Petitioner argues that the Department should require BSES to tie 
rebates to individual transactions and calculate each individual rebate 
over only those sales benefitting from the rebate rather than over all 
sales made by the purchaser. During verification, we found that BSES 
has reported rebates that were specific to individual transactions. 
Therefore, for these preliminary results, the Department has adjusted 
home market prices for rebates as reported.

General and Administrative Expenses

    Petitioner contends that BSES's reported general and administrative 
(G&A) expenses appear to be low.
    During verification, we examined G&A expenses and found that all 
such expenses were reported in total.

Cost of Production Analysis

    Pursuant to section 773(b) of the Act, for this POR, we initiated 
an

[[Page 64805]]

investigation of sales at less than cost of production (COP) 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 COP. See Final Results of 
Antidumping Duty Administrative Review; Certain Hot-Rolled Lead and 
Bismuth Carbon Steel Products from the United Kingdom, 62 FR 18744, 
April 17, 1997. Therefore, in accordance with section 773(b)(2)(A)(ii) 
of the Act, the Department had reasonable grounds to believe or suspect 
that sales at less than the cost of production may have occurred during 
this review period.
    Glynwed was not covered in a prior review or the original 
investigation of sales at less than fair value (LTFV), and the 
Department did not receive a sales below cost allegation for Glynwed. 
Therefore, the COP analysis is only applicable to BSES.
    Before making any NV comparisons for BSES, 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. As we deducted selling expenses 
from home market prices, we also deducted selling expenses from 
calculated COPs.

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 specific model 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 
specific model 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 certain 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, and to affiliated 
purchasers in the home market to the extent that prices were at arm's-
length. 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. Because home market credit 
insurance expenses and product liability insurance expenses are 
incurred on a sale-by-sale basis and directly related to sales, we have 
treated these expenses as direct selling expenses in both the home 
market and the U.S. market. 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

    We only used constructed value with respect to BSES. 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. 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. 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 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 home market sales of the 
foreign like product in the ordinary course of trade, 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.

Commission Offset

    Because there are commissions on U.S. sales and not on home market 
sales for both BSES and Glynwed, 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 margins exist:

[[Page 64806]]



------------------------------------------------------------------------
                                                                Margin  
          Manufacturer/exporter                 Period        (percent) 
------------------------------------------------------------------------
British Steel Engineering Steels Limited                                
 (BSES) (formerly United Engineering                                    
 Steels Limited)........................     3/1/96-2/28/97        11.90
Glynwed Metal Processing Ltd. (Glynwed).     3/1/96-2/28/97         7.69
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within 5 business 
days of the date of publication of this notice. Any interested party 
may request a hearing within 10 days of publication. Pursuant to 19 CFR 
353.38, 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, not 
later than 120 days after the date of publication of this notice.
    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 percentages 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 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 1, 1997.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-32213 Filed 12-8-97; 8:45 am]
BILLING CODE 3510-DS-P