[Federal Register Volume 63, Number 16 (Monday, January 26, 1998)]
[Notices]
[Pages 3704-3708]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1806]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-427-811]


Certain Stainless Steel Wire Rods From France: Preliminary 
Results of Antidumping Duty Administrative Review

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


[[Page 3705]]


ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to a request by Imphy S.A. and Ugine-Savoie 
(respondents), the Department of Commerce (the Department) is 
conducting an administrative review of the antidumping duty order on 
certain stainless steel wire rods from France. This review covers the 
above manufacturers/exporters of the subject merchandise to the United 
States. The period of review (POR) is January 1, 1996 through December 
31, 1996.
    We preliminarily determine that respondents sold subject 
merchandise at less than normal value (NV) during the POR. If these 
preliminary results are adopted in our final results of this 
administrative review, we will instruct U.S. Customs to assess 
antidumping duties based on the difference between the export price 
(``EP'') or constructed export price (``CEP'') and the NV.
    We invite interested parties to comment on these preliminary 
results. Parties who submit arguments in this proceeding should also 
submit with the argument (1) A statement of the issue, and (2) a brief 
(no longer than five pages, including footnotes) summary of the 
argument.

EFFECTIVE DATE: January 26, 1998.

FOR FURTHER INFORMATION CONTACT: Robert Bolling or Stephen Jacques, AD/
CVD Enforcement Group III, Office 9, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-3434 or (202) 482-1391, respectively.

SUPPLEMENTARY INFORMATION:

The 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 citations to the Department's regulations are 
to 19 CFR part 353 (1997).

Background

    On December 29, 1993, the Department published in the Federal 
Register (58 FR 68865) the final affirmative antidumping duty 
determination on certain stainless steel wire rods from France, and 
published an amended final determination and antidumping duty order on 
January 28, 1994. On January 14, 1997, the Department published the 
Opportunity to Request an Administrative Review of this order for the 
period January 1, 1996-December 31, 1996 (62 FR 1874). The Department 
received a request for an administrative review from Imphy, S.A. 
(``Imphy'') and Ugine-Savoie (``Ugine''), affiliated producers/
exporters of the subject merchandise, on January 29, 1997. We published 
a notice of initiation of the review on March 3, 1997 (62 FR 9413).
    The Department is now conducting this review in accordance with 
section 751 of the Act. The review covers sales of certain stainless 
steel wire rods by Imphy, Ugine, and their affiliated companies, 
Metalimphy Alloys Corp. (``MAC''), and Techalloy Company, Inc. 
(``Techalloy'').

Scope of the Review

    The products covered by this administrative review are certain 
stainless steel wire rod (SSWR) products which are hot-rolled or hot-
rolled annealed, and/or pickled rounds, squares, octagons, hexagons, or 
other shapes, in coils. SSWR are made of alloy steels containing, by 
weight, 1.2 percent or less of carbon and 10.5 percent or more of 
chromium, with or without other elements. These products are only 
manufactured by hot-rolling, are normally sold in coiled form, and are 
of solid cross section. The majority of SSWR sold in the United States 
is round in cross-sectional shape, annealed, and pickled. The most 
common size is 5.5 millimeters in diameter.
    The SSWR subject to this review is currently classifiable under 
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0020, 7221.00.0030, 
7221.00.0040, 7221.00.0045, 7221.00.0060, 7221.00.0075, and 
7221.00.0080 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheadings are provided for convenience 
and Customs purposes, our written description of the scope of the order 
is dispositive.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondents, covered by the description in the 
Scope of the Review section, above, and sold in the home market during 
the POR, to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the most similar foreign like product 
on the basis of the characteristics listed in Appendix III of the 
Department's March 24, 1997 antidumping questionnaire. In making the 
product comparisons, we matched foreign like products based on the 
physical characteristics reported by the respondents.

Fair Value Comparisons

    To determine whether sales of subject merchandise to the United 
States were made at less than fair value, we compared the EP or CEP to 
the NV, as described in the ``Export Price and Constructed Export 
Price'' and ``Normal Value'' sections of this notice. In accordance 
with section 777A(d)(2), we calculated monthly weighted-average prices 
for NV and compared these to individual U.S. transactions.

Export Price and Constructed Export Price

    We used EP, in accordance with subsections 772 (a) and (c) of the 
Act, where the subject merchandise was sold directly or indirectly to 
the first unaffiliated purchaser in the United States prior to 
importation because CEP was not otherwise warranted based on the facts 
of record. In addition, we used CEP in accordance with subsections 772 
(b), (c) and (d) of the Act, for those sales to the first unaffiliated 
purchaser that took place after importation into the United States.
    We made adjustments as follows:
    We calculated EP based on packed prices to unaffiliated customers 
in the United States. Where appropriate, we made deductions from the 
starting price for discounts, foreign inland freight, foreign brokerage 
and handling, international freight, U.S. inland freight, U.S. 
brokerage and handling, marine insurance and U.S. Customs duties. We 
also adjusted the starting price for billing adjustments to the invoice 
price.
    We calculated CEP based on packed prices to unaffiliated customers. 
Where appropriate, we made deductions for early payment discounts, 
credit expenses, warranty expenses, other direct selling expenses and 
commissions. We deducted those indirect selling expenses, including 
inventory carrying costs and product liability premiums, that related 
to commercial activity in the United States. We also made deductions 
for foreign brokerage and handling, foreign inland freight, 
international freight, U.S. inland freight, U.S. brokerage and 
handling, marine insurance, U.S. repacking expenses and U.S. Customs 
duties. We also adjusted the starting price for billing adjustments to 
the invoice price and for interest revenue. Finally, we made an 
adjustment for CEP profit in accordance with section 772(d)(3) of the 
Act.

[[Page 3706]]

    The Department has recalculated credit expenses for those sales 
with missing payment dates. For sales with missing payment dates, the 
Department set the date of payment to the projected final results date.

Further Manufacturing

    For products that were further manufactured after importation, we 
adjusted for all costs of further manufacturing in the United States, 
and the proportional amount of profit allocated to such costs. In 
accordance with section 772(f) of the Act, we computed profit based on 
total revenues realized on sales in both the U.S. and home markets, 
less all expenses associated with those sales. We then allocated profit 
to expenses incurred with respect to U.S. economic activity (including 
further manufacturing costs), based on the ratio of total U.S. expenses 
to total expenses for both the U.S. and home market.

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 respondents' 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) of the Act. Since respondents' 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its aggregate volume of U.S. sales for the 
subject merchandise, we determined that the home market was viable. 
Therefore, we have based NV on home market sales.
    Where appropriate, we deducted discounts, credit expenses, warranty 
expenses, inland freight and inland insurance. We also adjusted the 
starting price for billing adjustments to the invoice price and 
interest revenue. We did not adjust the starting price for commissions 
in the home market (please see the Concurrence Memorandum for a 
discussion of this issue).
    For reasons discussed below in the ``Level of Trade'' section, we 
allowed a CEP offset for comparisons made at different levels of trade. 
To calculate the CEP offset, we deducted the home market indirect 
selling expenses from normal value, on home market sales which were 
compared to U.S. CEP sales. We limited the home market indirect selling 
expense deduction by the amount of the indirect selling expenses 
deducted in calculating the CEP under section 772(d)(1)(D) of the Act.
    We made adjustments, where appropriate, for physical differences in 
the merchandise in accordance with section 773(a)(6)(C)(ii) of the Act. 
In addition, in accordance with section 773(a)(6) (A) and (B), we 
deducted home market packing costs and added U.S. packing costs.
    We also made adjustments, where applicable, for home market 
indirect selling expenses to offset U.S. commissions in EP and CEP 
comparisons.
    The Department has recalculated credit expenses for those home 
market sales with missing payment and shipment dates. For sales with 
missing payment dates, the Department calculated payment date based on 
the average time period between invoice date and shipment date for 
those sales where both invoice date and shipment date appeared in the 
database. For sales with missing shipment dates, the Department 
calculated shipment date based on the average time period between 
invoice date and shipment date for those sales where both invoice date 
and shipment date appeared in the database.

Price to CV Comparisons

    When we based NV on CV, we calculated CV in the manner described 
below. See ``Cost of Production Analysis'' section. Where we compared 
CV to EP, we deducted from CV the weighted-average home market direct 
selling expenses and added the U.S. direct selling expenses.

Cost of Production Analysis

    We had reasonable grounds to believe or suspect that sales of the 
foreign like product under consideration for the determination of NV in 
this review may have been made at prices below the COP because the 
Department disregarded sales below the cost of production (COP) in the 
second administrative review (see Final Results of Antidumping Duty 
Administrative Review: Certain Stainless Steel Wire Rods from France, 
62 FR 7206 (February 18, 1997)). Therefore, pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by 
respondents in the home market.
    In accordance with section 773(b)(3) of the Act, we calculated the 
COP based on the sum of the costs of materials and fabrication employed 
in producing the foreign like product plus selling, general and 
administrative (SG&A) expenses and all costs and expenses incidental to 
placing the foreign like product in condition packed ready for 
shipment. In our COP analysis, we used the home market sales and COP 
information provided by respondents in their questionnaire responses.
    After calculating COP, we tested whether home market sales of SSWR 
were made at prices below COP within an extended period of time in 
substantial quantities and whether such prices permit recovery of all 
costs within a reasonable period of time. We compared model-specific 
COPs to the reported home market prices less any applicable movement 
charges, discounts, and rebates.
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of respondents' sales of a given product were at prices less 
than COP, we did not disregard any below-cost sales of that product 
because the below-cost sales were not made in substantial quantities 
within an extended period of time. Where 20 percent or more of 
respondents' sales of a given product during the POR were at prices 
less than the COP, we disregarded the below-cost sales because they (1) 
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 (2) 
based on comparisons of prices to weighted-average COPs for the POR, 
were at prices which would not permit recovery of all costs within a 
reasonable period of time in accordance with section 773(b)(2)(D) of 
the Act. Based on this test, we disregarded certain below-cost sales in 
these preliminary results.
    In accordance with section 773(a)(4) of the Act, we used CV as the 
basis for NV when there were no usable sales of the foreign like 
product in the comparison market. We calculated CV in accordance with 
section 773(e) of the Act. We included the cost of materials and 
fabrication, SG&A expenses, and profit. In accordance with section 
773(e)(2)(A) of the Act, we based SG&A expenses and profit on the 
amounts incurred and realized by the respondents in connection with the 
production and sale of the foreign like product in the ordinary course 
of trade for consumption in the foreign country. For selling expenses, 
we used the weighted-average home market selling expenses.

Arm's-Length Sales

    Sales to affiliated customers in the home market not made at arm's 
length were excluded from our analysis. To test whether these sales 
were made at arm's length, we compared the starting prices of sales to 
affiliated and unaffiliated customers net of all movement charges, 
direct selling expenses, discounts and packing. Where prices to the 
related party were on average 99.5 percent or

[[Page 3707]]

more of the price to the unrelated party, we determined that sales made 
to the related party were at arm's-length. Where no related customer 
ratio could be constructed because identical merchandise was not sold 
to unrelated customers, we were unable to determine that these sales 
were made at arm's length and, therefore, excluded them from our 
analysis. See Final Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Carbon Steel Flat Products from Argentina, (58 FR 
37062, 37077 (July 9, 1993)). Where the exclusion of such sales 
eliminated all sales of the most appropriate comparison product, we 
made comparison to the next most similar model.

Currency Conversion

    For purposes of the preliminary results, we made currency 
conversions based on the official exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank of New York. 
Section 773A(a) of the Act directs the Department to use a daily 
exchange rate in order to convert foreign currencies into U.S. dollars, 
unless the daily rate involves a ``fluctuation.'' For these preliminary 
results of review, we have determined that a fluctuation exists when 
the daily exchange rate differs from a benchmark by 2.25 percent. The 
benchmark is defined as the rolling average of rates for the past 40 
business days. Therefore, when we determine a fluctuation exists, we 
substitute the benchmark for the daily rate. (For a detailed 
explanation, see Policy Bulletin 96-1: Currency Conversions, 61 FR 
9434, March 8, 1996).

Level of Trade (``LOT'')

    In accordance with section 773(a)(1)(b) of the Act, to extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (``LOT'') as the EP or CEP transaction. The NV 
LOT is that of the starting price sales in the comparison market or, 
when NV is based on constructed value (``CV''), that of the sales from 
which we derive selling, general and administrative expenses and 
profit. For EP, the U.S. LOT is also the level of the starting-price 
sale, which is usually from exporter to importer. For CEP, it is the 
level of the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP offset provision). See Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate from South Africa, 62 FR 61731 (November 19, 1997).
    In implementing these principles in this review, we obtained 
information about the selling activities of the producers/exporters 
associated with each phase of marketing or the equivalent. We asked 
respondents to identify the specific differences and similarities in 
selling functions and/or support services between all phases of 
marketing in the home market and the United States.
    In reviewing the selling functions reported by the respondents, we 
examined all types of selling functions and activities reported in 
respondents' questionnaire response on LOT. In analyzing whether 
separate LOT existed in this review, we found that no single selling 
function was sufficient to warrant a separate LOT in the home market 
(see Antidumping Duties; Countervailing Duties; Proposed Rule, 
(Proposed Regulations), 61 FR 7308, 7348).
    In determining whether separate levels of trade existed in or 
between the U.S. and home market, the Department considered the LOT 
claims of respondents. To test the claimed LOT, we analyzed, inter 
alia, the selling activities associated with the phases of marketing 
respondents reported. For the home market, respondents reported one 
LOT, sales to end-users. Also, respondents stated that they make their 
home market sales through two channels of distribution: (1) Indirect 
sales through Ugine-Service and its local field offices; and (2) direct 
sales made through the commercial departments of Imphy and Ugine-
Savoie. We examined record evidence from this review and have 
determined that there is only one LOT in the home market, regardless of 
channel of distribution.
    For the U.S. market, respondents reported two LOTs: (1) Sales to 
end-users through MAC (EP sales); and (2) sales to distributors, e.g., 
MAC, Techalloy (CEP sales). The Department examined the selling 
functions performed for both LOT. We found that the selling functions 
were sufficiently different in customer sales contacts (i.e., visiting 
customers/potential customers, receiving orders, promotion of new 
products and following-up on unpaid invoices), technical services, 
computer systems and administrative functions to warrant two levels of 
trade in the United States.
    In order to determine whether separate LOT actually existed between 
the U.S. and home markets, we reviewed the selling activities 
associated with each channel of distribution. When we compared EP sales 
to home market sales, we determined that sales were made at the same 
LOT (i.e., to end-users) in both markets. However, for CEP sales, we 
determined that fewer and different selling functions were performed 
for CEP sales to MAC and Techalloy than for home market sales to end-
users. We also found that the selling functions were sufficiently 
different in customer sales contacts, technical services, inventory 
maintenance, computer systems and administrative functions to warrant 
treating CEP sales and home market sales to end-users as different LOT. 
In addition, we found that the home market sales involved a more 
advanced stage of distribution (to end-users) as compared to 
respondents' CEP sales in the United States (distributor).
    To the extent practicable, we compared normal value at the same LOT 
as the U.S. sale. In this review, there were no sales of the foreign 
like product in the home market at the same LOT as that of the CEP 
sales. Because we compared CEP sales to home market sales at a 
different LOT, we examined whether a level of trade adjustment may be 
appropriate. In this case, respondents only sold at one LOT in the home 
market; therefore, there is no basis upon which respondents can 
demonstrate a pattern of consistent price differences between LOTs with 
respect to the foreign like product. Further, we do not have 
information which would allow us to examine pricing patterns based on 
respondents' sales of other products and there are no other respondents 
or other record information on which such an analysis could be based.
    Because the data available do not provide an appropriate basis for 
making a LOT adjustment, but the LOT in the home market is at a more 
advanced stage of distribution than the LOT of the CEP sale, a CEP 
offset is appropriate. Respondents claimed a CEP offset for

[[Page 3708]]

those U.S. CEP and CEP/Further Manufactured (CEP/FM) sales compared to 
sales in France through Ugine Service. We included a CEP offset for all 
sales in France which are compared with CEP and CEP/FM sales in the 
United States since the comparison of home market sales to CEP sales is 
at a different level of trade. We applied the CEP offset to normal 
value or constructed value, as appropriate.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margins (in percent) for the period January 1, 1996, 
through December 31, 1996, to be as follows:

------------------------------------------------------------------------
                                                                Margin  
                   Manufacturer/exporter                      (percent) 
------------------------------------------------------------------------
Imphy/Ugine-Savoie.........................................        10.51
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held 44 days after the date of publication or the 
first business day thereafter. Case briefs and/or other written 
comments from interested parties may be submitted not later than 30 
days after the date of publication. Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in those comments, may be 
filed not later than 37 days after the date of publication of this 
notice. The Department will publish the final results of this 
administrative review, including its analysis of issues raised in any 
written comments or at a hearing, not later than 120 days after the 
date of publication of this notice.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. We have 
calculated importer-specific ad valorem duty assessment rates based on 
the ratio of the total amount of dumping margins calculated for the 
examined sales made during the POR to the total customs value of the 
sales used to calculate those duties. These rates will be assessed 
uniformly on all entries of each 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 statutory 
NV and statutory EP or CEP, by the total statutory EP or CEP value of 
the sales compared, and adjusting the result by the average difference 
between EP or CEP and customs value for all merchandise examined during 
the POR).
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise 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 the reviewed 
companies will be the rate established in the final results of this 
review (except that no deposit will be required for firms with zero or 
de minimis margins, i.e., margins less than 0.5 percent); (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 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) the cash deposit rate for all other 
manufacturers or exporters will continue to be 24.51 percent, the ``All 
Others'' rate made effective by the LTFV investigation. These deposit 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative reviews.
    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.
    These administrative reviews 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(c)(5).

    Dated: January 16, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-1806 Filed 1-23-98; 8:45 am]
BILLING CODE 3510-DS-P